Trade deal is a vested-interest juggernaut
The Transatlantic Trade and Investment Partnership is a free trade agreement being negotiated between the EU and the US, which, between them, have 40% of world GDP and a daily trade worth €2bn.
To remove the obstacles to free trade between the two blocs — such as higher taxes on imported goods, limits on import quantities, and standards that keep goods off the others market. And with 90% of growth in the next 20 years coming from outside Europe, setting the standards when still powerful enough to do so.
Manufactured goods, agriculture, services, including financial services and their regulation, investment. The detail is stultifying — down to ensuring black pudding called Clonakilty can only come from the Cork town and champagne only from the French region.
The European Commission on behalf of the EU, as member states handed over that power to it decades ago, and the federal government in the US.
To create one massive free trade area for every aspect of commerce, from goods and services to investment, between the US and EU, serving 830m consumers.
The main negotiators get together for around a week of talks every few months — they completed their 12th round in Brussels last week, to thrash out general policy around particular sectors and issues. The expert working groups then deal with the details, figuring out how to make the policy work.
Since the collapse of the Doha World Trade agreement, countries have been trying to figure out an alternative. The EU is negotiating more than 20 trade deals involving 60 countries, as is the US.
In theory, all EU member states are in favour, but when it comes to the details, many fear their main domestic producers may not be able to compete with no-obstacle imports from the US. Big business and multinationals are especially in favour.
Absolutely, especially with such a dependency on US multinationals, on exports, on importing components for finished products. They are willing to allow the food sector to come under intense pressure, arguing that other sectors will more than make up for it.
Many individual member states have specific reservations — the French worry about an onslaught from Hollywood on its entertainment, language, and culture, as it will not be allowed insist on quotas for its own productions. The EU public is generally not enthusiastic, especially those who fear it will drive down standards for the environment, work, and social conditions, and consumer protections and the dispute procedure will dictate laws to governments. While the EU has the same standards in all member states, as shown by the CE label, there are 18 different certifiers in the US and each state has different requirements — and the US has said this will not change.
Ways to recognise one another’s standards will weaken them, especially for food and the environment, while the investor dispute system (ISDS) has galvanised opposition across the EU. This system has been in operation for some time, but putting it into TTIP raises it to a different plane. The commission has pledged not to lower consumer or environmental protection or food safety, and promises no change to GM or hormone beef rules SMEs and farmers fear low-cost US, mass-produced GM food will put them out of business. It’s not necessary to label GM food in the US and hormone beef is allowed. The legal limit for pesticide residues on food is around 5,000 times higher than in the EU.
If a company suspects a government is introducing standards or laws it believes will reduce its future profits, the company can appeal to a specially established court made up of trade lawyers. This has led to accusations of trade trumping democracy; in Canada, a mining company sued the government for protecting the St Laurence river, while in Australia, big tobacco is suing the government’s law on plain packaging.
The US is insistent — and EU companies are big users of this elsewhere. The commission has produced changes — the ‘judges’ would be full-time professionals, with an appeals court and environment, health, and social issues excluded. But it would still be a parallel justice system for business, those against it argue.
TTIP, like all trade deals, has been a closely guarded secret, with members of the European Parliament even refused access to documents and proposals. Public pressure and calls from EU Ombudsman Emily O’Reilly helped open it up somewhat. MEPs were allowed to read material individually in locked rooms but could not take notes. The commission now publishes its proposals online and holds a stakeholders day before each negotiating session to answer questions.
You should have a bigger choice of goods and services, and the cost should be reduced due to a cut in tariffs — small now — and with companies not having to adjust to two sets of standards.
It should make exports easier and mean the same information on packaging and standards will be sufficient for both blocs, cutting red tape. The EU is fighting to have the US open up tenders for public works and services to EU companies — but this is a matter for individual states.
In the US, the president must get it through Congress, but Barack Obama may not achieve this before he leaves office. In the EU, the Council of member states’ leaders and the European Parliament must agree to it. France wants all national parliaments to agree it also; the European Court of Justice will rule on this shortly.
You can try but this is a juggernaut powered by massive lobbying from vested interests and those who genuinely believe this is the best way for the EU to survive into the future. You can influence it through NGOs and lobbying your local TDs, MEPs, and ministers.
No, it will be phased in and, in fact, the EU is already making changes to facilitate the US, according to the Corporate Europe Observatory. It points to delayed laws on animal testing, o-zone-depleting substances, side-stepping data protection rules, watering down rules on waste, and protecting the insurance giant AIG.
