Opinion: TTIP – whose freedom will it promote?

Few things press Liberal Democrat buttons like the promise of free (or freer) trade. So, London MEP Baroness Sarah Ludford’s recent post for LDV noting that the European Parliament has just given the go-ahead for negotiations towards the Transatlantic Trade and Investment Partnership (TTIP, a.k.a. TAFTA), a free trade treaty that will be the biggest in history, was generally welcomed in comments.

But what exactly is proposed? Tariffs on both sides of the Atlantic are already low – averaging only about 4% – so the possible gains from further reductions are modest. A quick root around the European Commission’s website reveals its view that: ‘… the main hurdles to trade lie ‘behind the border’ in regulations, non-tariff barriers and red tape. Estimates show that 80% of the overall potential wealth gains of a trade deal will come from cutting costs imposed by bureaucracy and regulations, as well as from liberalising trade in services and public procurement.’

This makes sense as far as it goes. It was said in the 1960s and 70s that it took foreign car manufacturers 2 or 3 years to get safety approvals to import a new model into Japan – by which time, of course, it was no longer new! But there could equally well be abuses the other way. I think (and someone please correct if wrong) that the WTO has never mandated minimum environmental or animal welfare standards setting up a race to the bottom that is not in the public interest.

And there is another problem with the proposals. As the Foundation for a Free Information Infrastructure (FFII) rightly says, aligning standards and regulations amounts to a “deep integration of laws”. That could be a good thing but it clearly needs to be done in public with absolute transparency, Parliamentary oversight and wide public support none of which is the case here. What we have is fake openness with access for companies and their lobbyists but not for civil society organizations. Moreover, investor-state dispute resolution (ISDR) procedures give multinationals the right to take disputes to an international tribunal that bypasses national courts and can award high damages if legislative changes in the host country make their profits lower than expected.

This is scandalous, wholly unacceptable and should ring all the alarm bells.

Fortunately, we have an insight into where The Powers That Be, specifically the Obama Administration, think they are going with this because a parallel treaty for Pacific nations, the Trans-Pacific Partnership (TPP), is running ahead of the TTIP. The indications are not good. Counterpunch headlines it as ‘Neoliberal overload’ and writes that: ‘The level of secrecy surrounding the agreements is unparalleled – paramilitary teams scatter outside the premise of each round of discussions while helicopters loom overhead – media outlets impose a near-total blackout of reportage on the subject and US Senator Ron Wyden, the Chair of the Congressional Committee with jurisdiction over TPP, was denied access to the negotiation texts.’ For another view of the TPP try Angry Bear who sees it as nothing less that the Constitution of a New World Order.

Meanwhile, a strong clue to what the Obama Administration is driving at is revealed by a report from the Office of the US Trade Representative in Eyes on Trade which is a must read; health, financial, religious and other sensitive policies are all seen as “trade barriers”. Well, yes, such things do complicate trading across cultural and national boundaries but they are hardly trade barriers. A one-size-fits-all approach may suit the oligarchs but laws should be written and trade conducted to benefit people, not global finance.

This is indeed deep integration of laws without public scrutiny or mandate. Describing it as ‘free trade’ is wholly Orwellian – it is freedom for financial and corporate interests, serfdom for real people, ACTA on steroids. All in all it’s a neoliberal wet dream.

Is this really what Liberal Democrats support?

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11 Comments

  • I hadn’t been aware of TTIP. Thank you for this informative article, and the links to further research.

  • Trans-Pacific Partnership (TPP) truly does not bode well. This is free trade with a wolf dressed up in sheep’s clothing – it is extremely illiberal in all matters that affect the ordinary citizen and makes states beholden (subordinated) to very opaque international legal dispute mechanisms. Thanks for the article!

  • It would be foolish to enter into another trade agreement which would be the focus of more anti-globalisation protests, regardless of the merits of its objectives.

  • “Tariffs on both sides of the Atlantic are already low – averaging only about 4% – so the possible gains from further reductions are modest.”

    The percentage rate may be low, but the value of trade across the Atlantic is huge. A small percentage multiplied by a huge number is still a huge number.

    Yes, there are clearly concerns about what “red tape” is looked at and removed. But there are some regulations on both sides of the Atlantic that are ridiculously protectionist and removing them will only benefit everyone. To take one example – agriculture. Europe’s CAP is unspeakably protectionist and does damage not just to EU citizens pockets (who have to pay for massive subsidies to farmers in higher food prices) but has knock-on effects too, such as the tariffs third world food producers have to pay to access the EU market, the “dumping” of surplus produce, also threatening third world producers. The US has “retaliated” with subsidies of their own, protecting their own farmers. If agreement can be reached (and on agriculture I’m not sure it will – more’s the pity) it would benefit everyone, except those who have a vested interest in the status quo (mainly big EU / US farmers).

    Potentially this trade agreement could be enornously beneficial to us and it’s one of the best reasons I can think of staying in the EU – with the EU we are negotiating with the US on an equal footing.

    Yes, some won’t like free trade in any guise – anti-globalisation protesters will no doubt still protest. But that doesn’t mean they’re right.

  • I suspect the US will be talking about the EU rules on genetically modified agricultural products.

  • Eddie Sammon 28th May '13 - 4:21pm

    How about we just stop taxing imports? Or we continue to tax imports, my point is: taxes of one country are nothing to do with the other.

  • Thanks for the comments everyone. I think this is one that will run and run.

    Clearly there are some inexcusable regulations on both sides – like Julian Tisi the CAP is one of my pet hates. But there are also some perfectly sensible ones – grounded in culture, environmental or other factors. The TTIP is still at a very early stage but it rather looks as if the game plan is to create a presumption that whatever multinationals want to do is a GOOD THING and MUST be permitted. In effect, this would award international capital a higher standing than any other considerations including the democratic will of the people.

    In procurement this would likely mean that local sourcing by councils would become illegal). In the NHS this would mean rapid privatisation with conglomerates moving to take over GP practices (Hunt’s recent changes on NHS contracting fling this particular door wide open).

    On the environmental front it looks as if it might indeed permit GM products and techniques in as Joe Otten surmises. However, unlike him I don’t think that would be a good thing. It looks more and more that the beneficiaries of GM are the monopoly profits of a handful of big and aggressively litigious agribusinesses while the losers are farmers, the environment and even public health.

    http://naturalsociety.com/top-us-healthcare-giant-gmos-are-devastating-health/#ixzz2DbB6KqSy

    Whatever the truth of this it should be openly debated, not smuggled through as a ‘trade liberalisation’ with no further debate necessary or even permitted.

    As for the idea of an appeals tribunal staffed by corporate lawyers that would rate above the High Court – that is surely a non-starter or have we completely taken leave of our senses and decided that the rule of law is a quaint holdover we can do without?

  • Alex Macfie 30th May '13 - 7:50pm

    @Joe Otten: I think you are being rather too charitable about the motives of the US trade in negotiating intellectual property policy. The US Trade Representative’s office behaves as if the *only* interests that matter are those of rightsholders. Yet the constant ratcheting up of IP rights are not universally beneficial even in a “high IP economy”. For example, it is certainly not in the interests of the dynamic and innovative tech sector, which would benefit from relaxing certain IP laws. It is certainly not in the interests of consumers anywhere. In IP policy, the USTR listens ONLY to Big Content and the incumbent tech companies (notably Microsoft) which stand to benefit from IP Laws designed to exclude competitors.
    And international law in relation to IP (from WIPO and TRIPS) already requires strong enough IP protection, so what is the reason for seeking to mandate even tougher IP laws? The truth is that “protecting copyright among its trading partners” is not the main objective. of the US. In the other thread about T-TIP I warned about “policy laundering”: and this is the real motive for the USTR and the corporate lobbyists to which it is in hock. For instance, SOPA was abandoned last year due to the unprecedented level of protest against it. So the lobbyists behind SOPA are writing SOPA-like laws into international trade agreements, such as ACTA, TPP and maybe T-TIP, so that they can then say to US domestic legislators, “You have to pass SOPA now, as it is required by international law.”
    I don’t think mistrust of US trade policy is targeted at Obama specifically, and nor should it be, since trade negotiators under other US administrations (Bush and Clinton — this is not a partisan thing) have played this game as well, and so have EU trade negotiators.
    It is also worth saying that the extreme IP laws that US trade negotiators wish to impose on their own and other countries’ legislators are actually the opposite of neo-liberalism and of free trade. Rather they are corporatist/mercantilist policies, designed to benefit specific corporate interests (as mentioned, content producers and large software companies).

    On GMOs, I am open minded about the technology; it is not inherently something that only benefits large corporations (and if it does, this may be because of unnecessarily strong IP law). And opponents of GM technology oppose it even when it is not being developed by the likes of Monsanto: they are primarily anti-science. Yo might as well advocate a ban on software development because of Microsoft. That being said, I do think it is something that should be democratically debated, not smuggled into trade agreements.

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