LibLink: Vince Cable makes the case for TTIP and free trade

Vince Cable, who was involved in negotiations over the proposed EU-US trade deal, the Transatlantic Trade and Investment Partnership, in his role as business secretary, has been writing about the issue, and that of free trade more generally.

Vince first summarises the rationale for TTIP:

The European Commission has prioritised a bilateral agreement with the USA: TTIP, which is proving a source of unexpected controversy, although negotiations are still at an early stage. The underlying objective is to apply, on a transatlantic basis, the same approach that helped to create the EU Single Market. Since, as within the EU, tariffs and quotas are no longer a major issue the emphasis has been on preventing differences in standards, mainly technical, acting as a barrier to trade. There are, for example, different specifications for seatbelt design and testing that make it difficult to export in both directions. In effect, a different production line is required to sell into the USA, which can be prohibitive, especially for low volume manufacturers.

He then tackles three of the main arguments that have been raised against the agreement, starting with the issue of standards:

One particular theme has been that standards are bound to be ‘levelled down’, be it standards for labour protection, food quality, consumer safety or the environment. However, the EU Single Market has never been stopped on these grounds although disparities between members are often far greater than between the EU as a group and the US. Where harmonisation is not appropriate or has a levelling effect the option of mutual recognition is available. Nor is it self-evident that harmonisation will be down rather than up. And many standards are not necessarily ‘better’ or ‘worse’ but simply different: three pin or two pin plugs, right-hand or left-hand drive.

Secondly, the supposed impact on public services:

A second, and even less plausible, controversy has been over public services. The EU negotiators have made it clear that public policy is not a matter for negotiation. If a European country chooses to provide healthcare free at the point of use that is a matter for the country concerned. The reason why healthcare features in the negotiations is that providers should be able to compete without discriminatory barriers. If a US company tenders to build or supply an NHS hospital it should be treated on an equal basis to European suppliers (and conversely European companies should be allowed to compete in the US which is currently full of ‘Buy America’ provisions). Given the assault on British public services being mounted by the British Conservative government, I would have thought that the Left would have had more immediate domestic targets than a hypothetical world in which US companies somehow manage to subvert an agreement, which gives them no role in policy.

And finally Vince deals with the issue of investor protection:

A third issue is the attempt led by the US to negotiate an investment protection agreement, with new dispute settlement bodies that can potentially bypass national courts. The US government is seeking stronger protection for US companies overseas in countries where courts are seen as lacking judicial independence in the event of commercial disputes. This may be an issue in the Balkans for example and will certainly be in China when agreements are sought there, hence the argument that a good template is needed. The issue has little direct relevance for the UK since there are already numerous investment protection agreements and when disputes have arisen they have been resolved in UK courts and will continue to be (as with the threatened action by the tobacco companies against the government over plain paper packaging). In these many agreements the UK government has never lost on a matter of public policy. That said, there are important details around the proposed dispute settlement bodies, which should be negotiable. And, since there is little of direct benefit to the UK, there is no reason to go to the wire over the issue.

Vince’s piece is well worth reading in full – and you can do so here.

Read more by or more about , , or .
This entry was posted in LibLink.
Advert

41 Comments

  • I’m afraid many of us are sceptical about TTIP and would find it hard to continue to support the party if it became the centre of party policy. Corporate misbehaviour and tax avoidance are at the centre of political debate and TTIP is not reassuring. An attack on poverty and inequality would be much more welcome than a corporate sweetheart deal.

    To be specific :

    1. TTIP proposes to include the ISDS (Investor-State Dispute Settlement) mechanism. which will allow corporations to directly sue governments for introducing legislation that reduces their profits. Already, Philip Morris is trying to sue governments that legislate for plain packaging of cigarettes”

    2. Under the deal food products include chemically washed poultry, livestock treated with growth hormones, and genetically modified crops – all allowed in the US – ad could be sold in the UK.

    3. Fracking would face even less restrictions and there appears to be no clear safeguard for this.

    4. The NHS – much of the contracting is already privatised and TTIP could further extend this.

    If Vince’s article in the first stage of a ploy to edge toward changing party policy he will have a great deal of persuading to do. For some of us it may mean the parting of the ways. We have had our fill of neo-liberalism in recent years.

    .

  • Tony Greaves 14th Apr '16 - 11:39am

    Why do we think that TTIP and free trade are the same thing?

    TTIP seems like another step to world rule by global corporations.

    Anyway I thought that nowadays Liberals favoured fair trade not “free trade” for the powerful at the expense of the weak?

    Tony Greaves

  • Richard Underhill 14th Apr '16 - 11:39am

    “many standards are not necessarily ‘better’ or ‘worse’ but simply different: three pin or two pin plugs, right-hand or left-hand drive.”
    In the early 1970s euro-sceptic newspapers had screaming headlines saying that we would be compelled to drive on the left, despite frequent British government statements that changing huge numbers of road-signs would be much too expensive.
    My father, an RAF officer, worked in Belgium after World War 2, before (and again after) NATO. He bought a (Ford Prefect) car in Belgium and brought it back to England, so my parents drove around, legally, with near-side driving, which is occasionally discussed in motoring magazines. Winking indicators were illegal in the UK and had to be removed and replaced.

  • “Vince Cable, who was involved in negotiations over the proposed EU-US trade deal, the Transatlantic Trade and Investment Partnership, in his role as business secretary”

    As Vince was not a member of the EU negotiating team, he was not privy to the details of the EU’s negotiating stance or have sight of treaty drafts and hence is no more knowledgeable about the EU negotiations than the rest of us.

  • John Roffey 14th Apr '16 - 1:45pm

    Tony Greaves 14th Apr ’16 – 11:39am
    “Why do we think that TTIP and free trade are the same thing?

    TTIP seems like another step to world rule by global corporations.”

    I think we are amongst the few who believe this to be the case TG – but we are in good company:

    EU referendum: UK could be better off leaving if TTIP passes, Joseph Stiglitz says
    Stiglitz described the danger TTIP poses to society as “very significant”

    http://www.independent.co.uk/news/business/news/eu-referendum-joseph-stiglitz-ttip-labour-transatlantic-trade-investment-partnership-a6907806.html

    I think we must accept that the continual growth and power of the global corporations is in VC’s DNA – given his employment record at Shell.

    What is not normally taken into account is that from a climate change prospective – local markets are best – to avoid unnecessarily burning fossil fuels in the transportation of goods. Intercontinental trade needs to be avoided if possible.

  • Well done Vince for making the Pro TTIP case! The Lib Dems remain on the right side of history yet again. Ignore the scaremongering leftists and kippers. Globalisation benefits us all.

  • ISDS is the fairest and most efficient system possible as it does not take into account bias from national courts, nor populism. We should have far more ISDS than we already do, and I would hope corporations bring as many ISDS cases as they can if governments propose nationalisation, restrictions on foreign ownership or immigration controls.

    Privatisation, outsourcing and offshoring has improved lives dramatically for everyone. The idea of nation state provided services and protectionism is insane.

  • @ stimpson “Globalisation benefits us all”. Only up to a point, stimpson. Try telling them that it does in Port Talbot.

    I presume you also believe the consequences for the UK of the Lehmann Brothers collapse had nothing to do with globalisation, that all the tax havens in Panama et al have nothing to do with globalisation, and that Amazon, Vodaphone and Google have nothing to do with globalisation. I also suppose you think the terrible work practices at Sports Direct (of Mike Ashley/Newcastle United/Wonga) fame has nothing to do with globalisation and sweat shops in the Third World.

    I’m afraid that unlimited red in tooth and claw global capitalism is not always the producer of a parcel of delights that produces Utopia for ordinary folk in the real world.

  • David – to take each of your points in turn:

    1. TTIP proposes to include the ISDS (Investor-State Dispute Settlement) mechanism. which will allow corporations to directly sue governments for introducing legislation that reduces their profits. Already, Philip Morris is trying to sue governments that legislate for plain packaging of cigarettes”

    Actually, the European Commission has proposed a new method that moves away from the ISDS position and effectively amounts to an international court. It has recently been incorporated in the EU-Canada free trade agreement. Do you propose that the UK withdraws from the dozens of other agreements to which it is a party that incorporates ISDS?

    2. Under the deal food products include chemically washed poultry, livestock treated with growth hormones, and genetically modified crops – all allowed in the US – ad could be sold in the UK.

    Can you provide some evidence for this? Cecilia Malmström (who is a Liberal!) says that they are “myths that simply aren’t true”.

    3. Fracking would face even less restrictions and there appears to be no clear safeguard for this.

    Evidence?

    4. The NHS – much of the contracting is already privatised and TTIP could further extend this.

    Evidence? What reason have you got to doubt this unequivocal letter

  • @ the anonymous Nick T. I like the imperious “evidence ?”

    1. Do you deny that Philip Morris (former employer of Margaret Thatcher and Ken Clarke is trying to sue governments who use plain cigarette packaging.

    2. Guardian 18 October, 2015 But now Nick Dearden, director of anti-poverty group Global Justice Now, says the EU’s chief trade counsellor, Damien Levie, has let slip that free trade means undermining current minimum standards agreed by the EU. Dearden says that according to a report in the newsletter Washington Trade Daily, Levie told a conference held by US free market thinktank the Cato Institute that genetically modified crops and chemically washed beef carcasses were being allowed into the EU ahead of a deal.

    3. Guardian 5 August 2015 “The UK’s Local Government Association representative in Brussels, Dominic Rowles, imagines a situation “whereby a public authority, whether local or national, takes a democratic decision on energy generation … that TTIP then makes easier for corporations to challenge.”

    4. “Obviously in conflict with the advice that TTIP would give investors new legal rights, which extend beyond both UK and EU law as well as NHS contracts”, according to Michael Bowsher QC, a former chair of the Bar Council’s EU law committee .

  • @ (the anonymous) Nick T.

    Would you like to tell us where you get your ‘inside information’ from and whether you have any interest by way of employment or other connections (as a bag carrier ?) with any person or organisation associated with TTIP and the EU ?

    I don’t …… but do you ?

  • Stephen Hesketh 14th Apr '16 - 8:35pm

    John Roffey 14th Apr ’16 – 1:45pm
    Tony Greaves 14th Apr ’16 – 11:39am

    Not sure it is such a small club John. I believe it is a natural Liberal reaction to question the further empowering of the massively economically and politically powerful global corporations.

    Trade can not reasonably be claimed to be free if it is not also fair, non-exploitative and sustainable.

  • Stephen Hesketh 14th Apr ’16 – 8:35pm

    ‘Not sure it is such a small club John. I believe it is a natural Liberal reaction to question the further empowering of the massively economically and politically powerful global corporations.

    Trade can not reasonably be claimed to be free if it is not also fair, non-exploitative and sustainable.’

    I hope you are right Stephen, but there seemed to be a preponderance of those in favour – this should help the undecided:

    Here’s how much corporations paid US senators to fast-track the TPP bill
    Critics of the controversial Trans-Pacific Partnership are unlikely to be silenced by an analysis of the flood of money it took to push the pact over its latest hurdle

    ‘Fast-tracking the TPP, meaning its passage through Congress without having its contents available for debate or amendments, was only possible after lots of corporate money exchanged hands with senators. The US Senate passed Trade Promotion Authority (TPA) – the fast-tracking bill – by a 65-33 margin on 14 May. Last Thursday, the Senate voted 62-38 to bring the debate on TPA to a close.’

    http://www.theguardian.com/business/2015/may/27/corporations-paid-us-senators-fast-track-tpp

  • I do know that TTIP & TTP are different – but serve the same end – rule by the global corporations.

  • John Roffey 15th Apr '16 - 7:10am

    Stephen Hesketh 14th Apr ’16 – 8:35pm

    ‘Not sure it is such a small club John. I believe it is a natural Liberal reaction to question the further empowering of the massively economically and politically powerful global corporations.’

    I had wanted to highlight this article – but I could not find it last night.

    Quote: “Corporations are driven by one thing, making as much profit as possible. If they’re socially responsible in the process, that’s dandy. If not, too bad. Either way profit comes before people and planet”. “Corporations are driven by one thing, making as much profit as possible. If they’re socially responsible in the process, that’s dandy. If not, too bad. Either way profit comes before people and planet”.

    TTIP: Here’s why MEPs have been protesting it, and why you should too
    Despite all consultations on the huge trade deal being secret, 92 per cent of those involved have been corporate lobbyists

    http://www.independent.co.uk/voices/comment/ttip-heres-why-meps-have-been-protesting-it-and-why-you-should-too-10313239.html

    Disregarding whether someone is Liberal – it is difficult to think of any reason why anyone would be enthusiastic about this arrangement – unless they are one of the very few who will personally benefit from this ‘partnership’!

  • Peter Watson 15th Apr '16 - 7:40am

    @Simon Shaw
    I’m a little confused by the German example you cite. Are you saying that it is a good thing that a power company successfully sued a government and overturned a local authority’s attempt to protect the environment?

  • jedibeeftrix 15th Apr '16 - 7:58am

    @ Peter Watson – the key word is highlighted below:

    “Vattenfall, the Swedish company [[constructing]] the power station, responded by taking Germany to international arbitration under the Energy Charter treaty.”

    This is commonly known as breach of contract, so yes, successfully resisting the arbitrary application of power is indeed a good thing.

  • @ Simon Shaw

    Do you agree that your German example sounds a bit like an own goal by the Borussia Dortmund defence last night ?

    Do you agree that the Government (under pressure from Tim) have now come up with an extra £33m will be spent on new flood defences in Cumbria, including schemes for Appleby, Wigton and Braithwaite – which you claimed would be impossible to implement in Appleby and that I’d made it all up ? : evidence The Guardian 16 March.

    Did you ever get your hedges clipped ?

  • grahame lamb 15th Apr '16 - 8:37am

    Stephen Hesketh makes a very good point when he says that free trade must also be fair trade. If not, poorer and less powerful countries will certainly be at a disadvantage. Unregulated free markets ultimately are not in the interest of liberal democracy since the interest of the individual is diminished and, I fear, even eradicated.

  • NHS : I find Michael Bowsher QC, a former chair of the Bar Council’s EU law committee, a more compelling and recent witness in February, 2016 than a letter dated January 2015 produced by an anonymous poster on LDV.

    Do you know more than the Chair of the Bar Council’s EU Law Committee ? If you do, please tell.

    End of………..I’m off out now to do some canvassing….. I suggest you do the same.

  • @Simon Shaw

    Where NHS services are already privatised, a company holding a private contract could sue if the authority decided to take it into public hands again. Not only will this produce litigation, it will produce a chilling effect, which may prevent authorities taking decisions in the public interest because of the fear of litigation.

    There is a considered legal discussion giving the reasons why the NHS *is* under threat from TTIP here: http://www.unitetheunion.org/uploaded/documents/FINAL%20Legal%20implications%20of%20TTIP%20for%20the%20NHS%2012%20Feb%20201511-21864.pdf

    Britain has apparently never yet lost a case under ISDS, the main reason being that Britain is so friendly to investors that they don’t need to sue. Both Labour of recent years and Tories always tend to take the side of corporations when there is a clash between corporate and public interests.

    Much depends in the end on the wording of the treaty, which is not available to us. But such treaties can include provision that services should be privatised, and if a country fails to do so, it can be sued. I know there have been assurances, but I do not trust the assurances. Logic is against them. One of our key reasons for entering TTIP is to get access to American heatlh markets for European countries. Do you think for a minute that the USA would agree to this if there were not a quid pro quo for US companies in Europe? Whatever the wording of the assurances, they will find a way.

    TTIP might just be defensible without ISDS. ISDS is completely unnecessary. We have an admirable, public and impartial justice system. Stimpson mentions the possibility of bias in national courts. That’s a real slap in the face for British and European justice systems. What Stimpson advocates instead is secret tribunals staffed by professional litigators who have been trained to win, not judges who have been trained to administer the law fairly. Are you seriously suggesting, Stimpson that these people are less prone to bias than judges? Yes, I now the EU is proposing a new improved version, which is basically just the same thing with a few sweeteners. ISDS is simply unnecessary and it is counter to democracy. whch I would rather have more of, not less.

  • David – I get my information by choosing to read some of the hundreds of documents published by the European Commission http://ec.europa.eu/trade/policy/in-focus/ttip/documents-and-events/

    And no, I have no interest in TTIP (except as a citizen of the UK who will therefore benefit from the economic growth that it facilitates).

  • Given the agreement is still being negotiated (and for what it’s worth, once the draft is published it has to be approved by the European Parliament and every national legislature) we have to go off what we are told by the individuals involved, and the many hundreds of documents published.

    It is rather surprising to me that many people commenting on a Lib Dem site seem more willing to put their trust in the Unite union and scaremongering petition websites rather than liberals like Vince Cable and Cecilia Malmström.

  • Rob Parsons

    “Where NHS services are already privatised, a company holding a private contract could sue if the authority decided to take it into public hands again.”

    Are you suggesting that governments should be able to breach contracts voluntarily entered into without the other party being able to seek a remedy?

  • Nick T: you known perfectly well that ISDS goes well beyond the proper application of a legal contract. I am entirely in favour of governments being able to make decisions that are in the public interest. And ISDS blocks them from that becasue it allows for suit for the loss of future profits that go well beyond reasonable compensation.

    Secondly, perhaps you could read my post before saying “Are you suggesting that governments should be able to breach contracts voluntarily entered into without the other party being able to seek a remedy?” That’s what I suggest British, European and US courts can do – it’s their job. ISDS does not improve on that; it merely featherbeds corporations.

  • David Garlick 15th Apr '16 - 11:44am

    I believe that Vince is wrong to ignore the very real concerns being raised about TTIP.
    Global corporations only support what is good for them and history shows that what is good for them often turns out to be bad for the planet and for people generally.

  • Nick T 15th Apr ’16 – 10:55am
    ‘David – I get my information by choosing to read some of the hundreds of documents published by the European Commission http://ec.europa.eu/trade/policy/in-focus/ttip/documents-and-events/

    And no, I have no interest in TTIP (except as a citizen of the UK who will therefore benefit from the economic growth that it facilitates).’

    Perhaps you should be a little more suspicious the EU – which, like US Congress, is very heavily or even controlled by Global corporations. An example is that the EU have now changed the title of ISDS – because it has been so heavily criticised.

    ‘In an attempt to get around the enormous opposition generated by ISDS, the European Commission chose a different label when, in autumn 2015, it released a revised proposal for all the EU’s ongoing and future investment negotiations, including TTIP. Instead of the ‘old’ ISDS system, the Commission promised a ‘new’ and allegedly independent system, supposed to protect governments’ right to regulate: the Investment Court System or ICS.

    The analysis in this report shows that the proposed ICS does not put an end to ISDS. Quite the opposite, it would empower thousands of companies to circumvent national legal systems and sue governments in parallel tribunals if laws and regulations undercut their ability to make money. It would pave the way for billions in taxpayer money being paid out to big business. It could curtail desirable policymaking to protect people and the planet. And it threatens to lock EU member states forever into the injustices of the ISDS regime.

    In a nutshell, the proposed ‘new’ ICS is ISDS back from the dead. It’s the zombie ISDS.’

    The zombie ISDS | Corporate Europe Observatory

  • John Roffey 15th Apr '16 - 1:10pm

    Nick T 15th Apr ’16 – 11:00am

    “Where NHS services are already privatised, a company holding a private contract could sue if the authority decided to take it into public hands again.”

    Are you suggesting that governments should be able to breach contracts voluntarily entered into without the other party being able to seek a remedy?

    A remedy is ok – if this primarily includes losses to date – but history shows that these damages include decades of future profits. This gives you some idea of why the Tory government is pressing ahead with fracking – should a future government decide to ban the practice because of environmental issues – the corporations involved will be able to sue for costs to date plus huge damages in respect of future profits.

    With regard to the NHS – don’t you think that Jeremy Hunt’s appalling handling of the Service, at every level, is because he [this Tory administration] wants it to fail to provide the opportunity to privatise the most potentially profitable elements before they leave office? Have you never questioned why Blair commands £250k for his corporate speeches – even Brown gets £70k – after leaving office.

    Think what Cameron/Osborne/Hunt must be looking forward to if TTIP is ratified with ISDS/ICS, a significant increase in NHS privatisation and fracking firmly established!

  • Richard Easter 15th Apr '16 - 3:43pm

    ISDS is an illberal concept. A secret supranational system which can only be used by foreign corporations. No one else can use it, not domestic firms, trade unions, charities, individuals, religous groups, environmental groups or whatnot.

    Anything that elevates foreign corporations above any other group in society is not acceptable.

  • Costas Kitis 15th Apr '16 - 7:06pm

    I don’t think that the government winning legal battles in courts is at all a matter of public policy, as much as it is the cruicial subject of justice being done with the opposing party. Governments are not always right, and courts cannot be biased due to and by such factors as public policy, as much as being impartial instead, which should have been pointed out as a different issue.

  • John Roffey 16th Apr '16 - 8:40am

    Simon Shaw 15th Apr ’16 – 8:26pm
    @Rob Parsons
    “Where NHS services are already privatised, a company holding a private contract could sue if the authority decided to take it into public hands again. Not only will this produce litigation, it will produce a chilling effect, which may prevent authorities taking decisions in the public interest because of the fear of litigation.”

    “If you are saying 1. would mean the company holding the private contract could sue then I would say that is totally wrong.”

    Simon – it does of course depend on the final wording of TTIP – but history has shown that this is exactly what has happened. Not only suing for costs but also for decades of anticipated profits ahead.

  • @Simon Shaw ” I assume that it’s merely that he knows a lot more than you or me about the topic and is aware that most of the concerns are seriously misplaced. “

    I wouldn’t be so certain or complacent: “The underlying objective is to apply, on a transatlantic basis, the same approach that helped to create the EU Single Market.

    Based on our experience with the EEC/EU, that would seem to indicate that either the US wishes to join to EU or it wishes to move the centre of government to Washington…
    🙂

Post a Comment

Lib Dem Voice welcomes comments from everyone but we ask you to be polite, to be on topic and to be who you say you are. You can read our comments policy in full here. Please respect it and all readers of the site.

If you are a member of the party, you can have the Lib Dem Logo appear next to your comments to show this. You must be registered for our forum and can then login on this public site with the same username and password.

To have your photo next to your comment please signup your email address with Gravatar.

Your email is never published. Required fields are marked *

*
*
Please complete the name of this site, Liberal Democrat ...?

Advert



Recent Comments

  • User AvatarRichard Underhill 17th Jul - 9:05am
    It may be necessary to win Brecon and Radnorshire twice in quick succession. Please be very nice to the local people, even if they are...
  • User AvatarRichard Underhill 17th Jul - 8:41am
    Boris Johnson is not the only columnist. On 16/7/19 former Tory leader, former foreign secretary William Hague, now a peer (Con) wrote in the Daily...
  • User AvatarPeter Martin 17th Jul - 8:03am
    @MichaelBG I think we've just about exhausted this topic for now! Pavlina Tcherneva has probably done the most work on the JG. https://www.pavlina-tcherneva.net/job-guarantee Having said...
  • User AvatarJames Pugh 17th Jul - 7:59am
    @Paul Barker What is a "progressive" party? Indeed what does it mean to be "progressive"?
  • User AvatarWilliam Fowler 17th Jul - 7:48am
    Wish the new leader well with talks with Barnier but I hope they can get their minds around the idea of giving some concessions on...
  • User AvatarDavid-1 17th Jul - 4:00am
    @Michael Sammon: If every day were "non-uniform day" you would find that not many pupils would care to wear "fashionable" clothes to school.