Clegg pushes for transatlantic trade deal

Container Ship tradeWhen, just over a week ago, conference overwhelmingly backed motion F19, “Strengthening the UK Economy” (pdf), it voted for our party to lead the way on free trade, thanks to the following addition (in which I played a small role), which was “drafted into” the motion:

8. Increase trading opportunities by working in the EU to ensure that the success of the Transatlantic Trade and Investment Partnership, doing everything possible to revive the World Trade Organisation led Doha Development Round and further integrating the EU services market.

The party’s leadership has sometimes been critcised for ignoring the will of conference, but it can’t be said to be doing so on this vital issue.

The Telegraph reports that Nick Clegg, who is in the US to represent Britain at the UN General Assembly, has been holding talks with the key US players in the negotiations for a transatlantic trade deal:

The deputy prime minister will launch a British embassy report which argues that a free trade deal would create around 740,000 American jobs and benefit all 50 US states.

The report, seen by The Daily Telegraph, is intended to convince members of Congress to back an agreement and to help them sell the prospect of a deal to their constituents.

While the White House strongly supports the Transatlantic Trade and Investment Partnership (TTIP), the final deal is likely to involve politically-difficult US concessions on financial regulation, agriculture and “Buy America Provisions” which favour American companies in public procurement bids.

“This report scratches members of Congress where they itch, which is with an eye towards the impact of trade deals on their areas of the country,” Senator Chris Murphy, the chair of the Senate’s Europe sub-committee, told The Daily Telegraph.

In an effort to continue momentum towards a final agreement, Mr Clegg will today meet with Joe Biden, the US vice-president, and brief him on the findings of the report.

And the findings bring welcome news to wavering law-makers:

The document, entitled TTIP and the Fifty States: Jobs and Growth from Coast to Coast, will be sent to every member of Congress as well as to governors, state politicians and local business groups.

It finds that under the terms of an ambitious model agreement all 50 states would see new jobs created and an average 33 per cent rise in exports to the EU by 2027.

The report predicts that the auto sector would be one of the top beneficiaries of an agreement, providing a welcome boost to Detroit, the bankrupt home of the American car industry.

You can follow the progress of the UN General Assembly via the deputy prime minister’s official website here.

* Nick Thornsby is a day editor at Lib Dem Voice.

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11 Comments

  • Eddie Sammon 24th Sep '13 - 7:47pm

    Thanks for the article and the work on this. However, in the spirit of scrutinising policy, I have a problem with this. I just don’t see why we can’t just stop taxing imports regardless of what other countries want to do. If we believe in free-trade then we believe this could lower our prices and improve the quality of products and services in the marketplace as it opens up global competition.

    If the United States think the same then they will follow suit. If they don’t, then it is their loss and our long-term gain as the United Kingdom and the European Union become the destination of choice for business and all the latest technology, driving up living standards.

    Ed Miliband calls this trying to win the race to the bottom, but he’s living on a different planet if he thinks the world is going to become a socialist utopia and we’ll all start working for free and investing for losses.

  • Nick T Nick Thornsby 24th Sep '13 - 9:14pm

    Hi Eddie,

    You’re right that there are certainly many things individual countries can do to increase trading opportunities, and that forms the basis of the case against protectionism.

    But actually a lot of what is being negotiated is not about taxation but about regulations, safety standards etc, which can only really be done in an agreement like this.

  • “The deputy prime minister will launch a British embassy report which argues that a free trade deal would create around 740,000 American jobs and benefit all 50 US states.

    The report, seen by The Daily Telegraph, is intended to convince members of Congress to back an agreement and to help them sell the prospect of a deal to their constituents.”

    From the leaks about the content of the proposed EU-US trade deal, it is likely to have these effects, however, its effects on the EUand the UK may leave much to be desired…

  • Eddie Sammon 24th Sep '13 - 9:45pm

    Thanks, I thought so, I’ll trust the powers that be that this is the right way forward. I know from tax advice that having massively different laws in different countries is a real pain, so it makes me a natural supporter of single markets!

  • The government has already undertaken a report on the economic benefits for the UK, which found that there would be an estimated annual benefit of £4-10 billion to UK national income: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/198115/bis-13-869-economic-impact-on-uk-of-tranatlantic-trade-and-investment-partnership-between-eu-and-us.pdf

  • Michael Parsons 25th Sep '13 - 11:27am

    The problem with Free Trade is not just whether or not it benefits us (which is unlikely, since it retards diversification away from established but outclassed industries through causing competitve internal devaluation via wage-cuts) but whom it would benefit if it were allowed.Unleashing foot-loose vulture capital in this way would further render the mass of the English working population surplus to requirements; which is not an economic gain for our nation as a whole. Remember, complacent Mancheser Liberals, that the bell tolls also for you.

  • Alex Macfie 25th Sep '13 - 1:33pm

    Yes, work towards it, but do not allow any policy laundering. The secretive nature of international trade negotiations allows lobbyists and governments to write into trade agreements rules that they know would not get through a democratic process, all in the name of “harmonisation”. ACTA, overwhelmingly rejected by MEPs last year, was an exercise in pure policy laundering. I hope they look as carefully at TTIP, since it is likely that US and

  • Alex Macfie 25th Sep '13 - 1:37pm

    Yes, work towards it, but do not allow any policy laundering. The secretive nature of international trade negotiations allows lobbyists and governments to write into trade agreements rules that they know would not get through a democratic process, all in the name of “harmonisation”. ACTA, overwhelmingly rejected by MEPs last year, was an exercise in pure policy laundering. I hope they look as carefully at TTIP, since it is likely that US and EU negotiators will want to write ACTA-style IP laws (to “force” themselves to implement them at home). Red lines should include no IP law requirements beyond those already mandated by TRIPS/WIPO, and no investor-state dispute settlement (which allows foreign investors to challenge a country’s law, thus effectively putting them above the law).

  • The numbers being touted are indeed impressive – that is until you recast them into percentages and see them in context. Clive George writing in the Our Kingdom blog has trawled through the numbers and finds that on the most wildly optimistic assumptions it will add just 0.5% to EU GDP. More realistic scenarios see it adding just 0.01% to EU GDP growth rates over ten years. That a consultancy (which would have known precisely what answer was expected) could only come up with an estimate an order of magnitude lower than the rounding error is pretty desperate. And remember that’s even assuming that ‘free trade’ is an unalloyed good (it’s not as Michael Parsons notes above) and before factoring in the dodgy assumptions baked into the economic model used.

    http://www.opendemocracy.net/ourkingdom/clive-george/whats-really-driving-eu-us-trade-deal

    Moreover, as Eddie Sammon notes above, there is nothing to stop countries unilaterally (or bilaterally come to that) cutting tariffs to mutual advantage. Also it is likely that some big sectors like agriculture will be excluded.

    To be fair it’s always been admitted that 80% of the potential gains would come from eliminating “non-tariff” barriers. In this context this is code for ‘regulations that hinder corporate profiteering’. Hence, in reality it’s a stealth strategy to formalise corporate control over the economy at the expense of democracy by eviscerating the regulations designed to protect the environment, promote local sourcing, regulate financial services and a whole lot more – proposals that would never pass public scrutiny if done openly and transparently.

    The Telegraph articles wants us to believe that Clegg is doing a tough job selling this in the US. No doubt many legislators are properly wary but the Administration itself is fully on board as demonstrated by a post in ‘The Nations’ from last year about the Trans Pacific Partnership, TTIP’s ugly older sister.

    http://www.thenation.com/article/168627/nafta-steroids#

    Perhaps Nick Thornsby could help us out by publishing a link to the full draft text in the spirit of transparency which Lib Dems are signed up to.

  • peter tyzack 25th Sep '13 - 4:36pm

    I trust the US less than I trust the Tories. Any deal they enter into will always be skewed to end up with them as the main beneficiaries.. prime example is the extradition treaty which is all in their favour.. once bitten, Nick, tread carefully.

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