Transatlantic Trade Deal: Tide turning on partnership but fears of falling standards continue to rise

Opponents fear TTIP trade-offs with the US will lead to a race to the bottom on standards — particularly on food safety, climate, and workers’ rights. Sorcha Ní Coileáin reports.

A DRAFT EU-US trade deal that could affect every aspect of people’s lives — from the food they eat to the cosmetics they use to the cars they drive — has come under renewed fire.

The transatlantic trade and investment partnership (TTIP), a massive free trade deal being negotiated by the world’s two largest economies, is seen by many as a ticket to jobs and growth.

But a public push by the US to sign a deal before the November presidential elections, and the leak by Greenpeace of a raft of negotiating texts, has stirred up latent resentment across Europe.

Talks have been going on for three years without notable progress, so a swift agreement was always a long shot, but popular unrest now has the potential to spike TTIP for good.

BENEFITS

A man in Hanover, Germany, holds a poster with the slogan Stop TTIP during a protest of thousands of demonstrators against the trade deal. A majority of people in Germany now view TTIP negatively.
A man in Hanover, Germany, holds a poster with the slogan Stop TTIP during a protest of thousands of demonstrators against the trade deal. A majority of people in Germany now view TTIP negatively.

This is the biggest free trade deal ever negotiated and a lot is at stake, not only for Europe, but for Ireland.

The US is Ireland’s largest individual export partner for goods, making up 25% of our total goods trade, the highest proportion in the EU. It is also a major importer of Irish services, mainly computers.

The Government sees TTIP as an opportunity for Irish exporters to win important access to US markets in medical devices, computers and dairy products, which would be a major boost for the economy at a time when export growth has tapered off. And the evidence for their optimism is there, at least on paper.

A new study for the European Commission published Friday (May 13) found that Ireland stands to gain the most in the EU from TTIP because of existing transatlantic ties.

The study, by consultants Ecorys, says the Irish economy could grow an extra 1.4% a year as a result of the deal, and see wage increases of over 1.6%, for both low and high-skilled workers.

“We know that our already close economic ties with the US will stand to benefit even further with this deal, leading to more jobs in our exporting sectors,” said Jobs Minister Jobs Mary Mitchell O’Connor, who was in Brussels Friday to discuss TTIP with her EU counterparts.

“These EU trade deals make it easier and cheaper for Irish firms to sell abroad.”

Ibec’s Pat Ivory says that Ireland is in “prime position to gain” from TTIP and shouldn’t wait around for other countries to steal its thunder.

“We cannot ignore globalisation, with agreements being made on trade and investment with Asia and the Pacific and elsewhere,” he told the Irish Examiner.

“Someone is going to dictate the rules of global trade, why should Irish and European businesses, consumers and workers not have a say and be left behind?”

Irish people have traditionally been pro-TTIP, with a 2015 Eurobarometer survey showing 77% in favour and 12% against, but the tide in the rest of Europe is turning.

TRANSPARENCY

 ICSA president Patrick Kent has claimed that the EU Commission has no democratic mandate to push for a trade deal at such a huge cost to the European beef farming sector
ICSA president Patrick Kent has claimed that the EU Commission has no democratic mandate to push for a trade deal at such a huge cost to the European beef farming sector

A majority of people in Germany now view the deal negatively, according to a survey by the Bertelsmann Stiftung think tank, while opposition to the deal has also been growing in the UK, France, Luxembourg, Austria, and the Netherlands.

The deal has already faltered once over transparency concerns.

In 2014, a public consultation on the investor protection clause was hijacked by anti-TTIP campaigners, who flooded the Commission’s mailbox with a record 149,399 submissions to protest the deal in its entirety. The commission was forced to rewrite the section, proposing special investment tribunals to allow companies to take governments to task for expropriation or arbitrary regulations that unfairly harm profits. But the move was lambasted by Anti-Austerity alliance TD Paul Murphy, who said it would “see the State dragged before a private court by big companies”.

In Ireland, investor disputes — such as tobacco giant Philip Morris’s suit against the Government after the introduction of plain cigarette packaging in 2013 — are settled in regular courts.

The Government insists that the introduction of new private courts will not trump its democratic right to legislate, but opponents say it could have a chilling effect if the threat of a lawsuit is permanently hanging over legislators’ heads.

“The US and the EU have fully functioning legal and judicial systems, everyone can avail of when they feel their rights have been affected, and we do not need an exclusive corporate court system,” said MEP Nessa Childers.

“We must be very careful with what we are bringing into the table here, and I think there’s plenty of corporate influence over our legislation already, thank you very much.”

The investor protection outcry is the latest in a long line of complaints over TTIP’s transparency.

Childers was one of several MEPs who protested at the lack of access to documents after the start of TTIP negotiations in 2013.

EU Ombudsman Emily O’Reilly later took the commission to task and the EU executive began publishing its own negotiating positions online last year.

A reading room has also been set up in the Department of Jobs, Enterprise, and Innovation for TDs to consult TTIP documents.

REGULATORY CO-OPERATION

The Irish Cattle and Sheep Farmers’ Association (ICSA) is protesting outside the EU Commission offices today due to the potential sell-out of the EU beef farming sector in Mercosur and TTIP talks.
The Irish Cattle and Sheep Farmers’ Association (ICSA) is protesting outside the EU Commission offices today due to the potential sell-out of the EU beef farming sector in Mercosur and TTIP talks.

But the problem, say transparency campaigners Corporate Europe Observatory (CEO), is that the most sensitive texts — for instance, on pharmaceuticals, chemicals, pesticides and cars — have not been made public, and never will.

This is crucial because these parts of the deal are where the big money really lies, and where the Government wants to gain.

TTIP is not a traditional tariff-only trade deal, but a new kind of pact that also aims to align standards in nine sectors as diverse as cosmetics, food and cars.

This section of the deal is known as “regulatory co-operation”, and the commission’s latest TTIP study reckons that the bulk of the economic impact from the deal (76%) will come under this heading.

But it is extremely controversial because EU and US regulations differ widely.

For instance, the EU has banned chlorine-washed chicken and hormone-treated beef, while the US is more lenient, certifying it as long as it’s labelled accordingly.

On the other side of the coin, the US has much more stringent nitrous oxide standards, as observers of the Volkswagen Dieselgate scandal will know.

“These standards are about fundamental political choices we must make openly in a democracy. They are not like some obscure tariff level to be traded away behind closed doors,” says Nessa Childers.

Opponents fear TTIP trade-offs with the US will lead to a race to the bottom on standards, particularly on food safety, climate and workers’ rights.

European trade chief Cecilia Malmström insists that the EU operates according to the “precautionary principle” written into the EU treaty, which means the EU regulates to prevent potential risks to human, animal or plant health rather than removing products from the market after the fact.

But Childers says the US has been “extremely aggressive and ambitious when it comes to doing away with standards”.

Lore Verheecke, a campaign officer with CEO, points to the EU’s 2013 ban on animal testing, which she says was delayed by 10 years due to US opposition and threats to take the EU to the World Trade Organization.

But Fine Gael MEP Mairead McGuinness has hit out at what she says is scaremongering.

“The idea that trade and investment is a negative thing has to be taken off the agenda. What would be negative would be a bad trade deal,” she said.

“When the US orientation away from trade agreements comes to pass, that’s when we should start to get really worried,” she added, pointing to anti-free trade comments by US presidential hopefuls and the fact that the US is having a similar debate about EU standards.

OFF THE MENU

A man on stilts and dressed like the Statue of Liberty walks in front of balloons forming the slogan Stop TTIP during a protest of thousands of demonstrators against the planned Transatlantic Trade and Investment Partnership, TTIP, and the Comprehensive Economic and Trade Agreement, CETA, ahead of the visit of United States President Barack Obama in Hannover, Germany.
A man on stilts and dressed like the Statue of Liberty walks in front of balloons forming the slogan Stop TTIP during a protest of thousands of demonstrators against the planned Transatlantic Trade and Investment Partnership, TTIP, and the Comprehensive Economic and Trade Agreement, CETA, ahead of the visit of United States President Barack Obama in Hannover, Germany.

After 13 rounds of talks, TTIP negotiators have still not resolved the big ticket issues.

The holy grail for the EU is access to America’s lucrative €1.7tn public procurement market, and especially the 65% of all US government contracts that are conducted at state level, which are currently subject to “Buy America” clauses.

This is not a major area of interest for Ireland, but it could be if negotiators use beef quotas — traditionally kept in the back pocket until the end game — as a trade-off for public procurement.

The Irish Farmers’ Association says Irish agriculture should not be sacrificed by EU negotiators in pursuit of an overall deal, and says an increased supply of beef products on the market could significantly affect Irish farmers.

A 2015 US department of agriculture study estimates TTIP would boost American agricultural exports to the EU by €5.5bn, with EU exports increasing by only €800m.

Irish MEPs have called for the EU to do an impact study on the cumulative effects of TTIP and parallel trade deals with Canada and the South American Mercosur bloc.

EU agriculture chief Phil Hogan said last week that beef was “off the menu” in Mercosur talks, and the Irish government is satisfied with the quotas in the Canada deal, but Minister for Agriculture Michael Creed said there needs to be “continued vigilance in relation to the conduct of these trade negotiations”.

France is taking beef off the menu in TTIP, accusing the US of refusing to budge on public procurement and quotas for its protected products such as Champagne and Roquefort.

On this France is backed up by Italy, Greece, Cyprus, and other countries with protected products.

TIMING

John Murphy from Wexford during a protest outside the offices of the European Commission against the proposed Mercosur and TTIP trade deals on Lower Mount St, Dublin
John Murphy from Wexford during a protest outside the offices of the European Commission against the proposed Mercosur and TTIP trade deals on Lower Mount St, Dublin

But these types of national red lines could spell more trouble for TTIP.

“What could potentially derail TTIP is if certain countries are going to lose more than they are going to win,” says Lore Verheecke of Corporate Europe Observatory.

“A lot of this is going to be played nationally.”

And with upcoming elections in Germany and France, as well as the US, the danger of the deal becoming a political plaything is growing.

Even in the Netherlands, the land of traditional free traders, a petition to hold a referendum on TTIP is gathering speed following a popular vote on the EU-Ukraine agreement last month.

EU negotiators will meet for a 14th round of talks in July, but those close to the talks say it is extremely unlikely that a deal can be done by November.

The vastness and complexity of the deal — it could eventually span up to 30 chapters — will not help.

The EU-Canada deal, which was similar in scope but not in scale, took five years to conclude, and we are only three years down the line on TTIP. It will then need to be approved by the European Parliament, and EU governments before it can become law.

“Nobody’s dipping the pen in the ink to sign anything at the moment,” said Mairead McGuinness.

What’s it all about and what does it mean for us?

— Sorcha Ní Coileáin

Talks are hotting up on the EU’s transatlantic trade and investment partnership with the US — better known by its acronym, TTIP — with both sides keen to sign a deal before US President Barack Obama leaves office in January.

A leak by climate campaigners Greenpeace of almost 250 pages of negotiating texts earlier this month has stirred up latent opposition, particularly in Germany and France, but an agreement was always going to be difficult given the tight timeline.

So what is it all about and what does it mean for Ireland?

Thousands of demonstrators protest against the planned Transatlantic Trade and Investment Partnership, TTIP, and the Comprehensive Economic and Trade Agreement, CETA, ahead of the visit of United States President Barack Obama in Hannover, Germany
Thousands of demonstrators protest against the planned Transatlantic Trade and Investment Partnership, TTIP, and the Comprehensive Economic and Trade Agreement, CETA, ahead of the visit of United States President Barack Obama in Hannover, Germany

What is TTIP?

The transatlantic trade and investment partnership is a vast trade deal between the EU and the US, covering up to 30 “chapters”, or areas of interest.

It is the most ambitious trade deal in modern history, given that the EU and US together account for half of the world’s GDP and a third of global trade.

It is being negotiated by the European Commission on behalf of the EU’s 28 member countries.

Why does the EU want a trade deal with the US?

Brussels sees trade as a way to boost growth after the crisis, but fears EU producers and investors are being held back by US restrictions.

Although most customs duties have been eliminated on both sides, EU exporters still pay over €3.5bn a year in tariffs in the US, while differing safety standards mean products that are certified in the EU — for instance, Irish oysters — are banned across the Atlantic.

What is on the table in the talks?

The deal aims to lower the cost of imports and boost exports, in three ways: Removing goods tariffs and securing access to new markets, including lucrative government contracts; aligning regulations in nine sectors, including food, chemicals, cosmetics, and computers; and agreeing new rules to protect workers, the environment, investors, small companies and intellectual property rights.

Why is TTIP controversial?

Opponents say the deal falls down on health, environmental and democratic grounds, with opposition strongest in Germany, Austria and France.

A 500-strong coalition — including Greenpeace, Friends of the Earth and Irish teachers’ unions ASTI and TUI — have united under the banner ‘Stop-TTIP’, saying the deal will lower EU food safety and environmental standards, flooding the bloc with genetically modified vegetables, hormone-treated beef and fracked shale gas.

They say it panders to big business, pointing to a clause on investor-state dispute settlement (ISDS) they allege will allow foreign multinationals to sue EU governments for any losses in special ‘investment’ tribunals, bypassing domestic courts.

The group has garnered 3.2m signatures against the deal and taken a case to the European Court of Justice.

Are there any benefits from TTIP?

It’s difficult to quantify, as it is not a classic, tariff-only trade deal, but most studies say yes.

The European Commission cites a 2013 paper by the London-based Centre for Economy Policy Research (CEPR), which says the EU economy will grow by €119bn a year, which translates into 0.5% of GDP or an extra €545 for every household.

A 2015 study by the Swiss-based World Trade Institute says the deal will push consumer prices down by 0.9% in most EU countries and average wages up by 0.5% across the bloc — with Ireland one of the biggest winners.

What’s in it for Ireland?

Exploiting Ireland’s long-standing trade links with the US, particularly in pharmaceuticals, medical devices, technology and food.

The US is Ireland’s largest individual export partner for goods, worth over €2.2bn in January, or 25% of total goods exports.

Ireland also exports a significant share of services to the US. And 25% of all foreign investment into Ireland comes from the US. A 2015 study by Copenhagen Economics found that TTIP would boost Irish GDP by 1.1%, add up to 10,000 jobs and push wages up by 1.5%.

What does the US get out of it?

The US could add €95bn a year to its economy, the CEPR study estimates.

The US currently runs a trade deficit with the EU, importing almost €15bn more from the bloc than it exported in February, so a deal to further open EU markets — especially the protected beef and dairy sectors — could be very lucrative.

What happens next?

Negotiations started in 2013 and officials finished a 13th round of talks at the end of April.

While they made progress on tariffs, customs and competition rules and safeguards for small companies, there is stalemate over access to government procurement contracts, and controversial beef and dairy quotas have been left aside until later.

Another round of talks is planned for July, but a deal before President Obama leaves office looks unlikely.

More on this topic

Union calls on Government to heed public support for referendum on TTIP/CETA dealUnion calls on Government to heed public support for referendum on TTIP/CETA deal

Proposed trade agreement would allow corporations bypass courts, say protestersProposed trade agreement would allow corporations bypass courts, say protesters


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