Tuesday, August 04, 2015

What is TTIP?

TTIP stands for Transatlantic Trade and Investment Partnership. TTIP is not to be confused with TPP, which is the Trans-Pacific Partnership, involving 12 countries including the US, Australia and Brunei, and which, like TTIP, is still under negotiation. There is also Ceta, which stands for Comprehensive Economic and Trade Agreement. It is like TTIP but for Canada and Europe. Ceta is due to be ratified by the European parliament later this year.

Last month, the European parliament voted to allow the European commission to continue negotiations with the United States to create the world’s largest free-trade zone, which is what TTIP is supposedly all about. Nafta, the North American Free Trade Agreement was established in 1994 and proponents of TTIP think it demonstrates the kind of inspiring benefits and harmonisation of standards that might result.

US ambassador to the EU Anthony L Gardner argues that would “provide an economic equivalent to Nato” that would settle “the rules of world trade before others do it for us”. Instead of being dependent on Russian gas and oil, then, as a result of TTIP, the EU might become dependent on lovely American and Canadian gas and oil. That’s one reason behind the EU’s call for a dedicated chapter in TTIP on energy and raw materials. Instead of Russia isolating the EU, the EU could isolate Russia.

Jeronim Capaldo of the Global Development and Environment Institute at Tufts University argues that the commission’s econometric modelling is jejune and that, in fact, TTIP will clobber Europeans. Capaldo predicts 600,000 European job losses as a result of TTIP, a net fall in EU exports, declining GDPs for EU member states and a fall in Europeans’ personal income. Whereas, the European commission estimates that, by 2027, TTIP could boost the size of the EU economy by £94bn or 0.5% of GDP.

One worry is that the main goal of TTIP is to remove EU regulations that stop its citizens being poisoned, killed or subject to rampant pollution so that more profits can be made by corporations on both sides of the Atlantic. If TTIP involves, as the EU hopes, a commitment that would guarantee automatic licences for all future US crude oil and gas exports to Europe, that would result in a boom in US fracking to keep Europeans powered with shale gas, not to mention greater exploitation of oil from Canadian tar sands. Such developments, argue critics, would undermine not just the EU’s fuel quality directive but ruin what is left of the planet worth ruining.

Or consider food regulations. While the EU has a “farm to fork” strategy, for instance, regulating each link in the food chain, Americans pump their cattle and pigs with growth-promoting hormones banned in the EU. As a result, most US beef can’t be sold in the EU. Americans use 82 pesticides banned in the EU. They wash their chicken in chlorinated water to kill bacteria. Ninety per cent of their soya, cotton and corn is genetically modified, while the EU allows member states to ban GM production. France, for instance, has banned GM

One aspect of TTIP is ISDS, which stands for “investor-state dispute settlement”. This procedure would allow companies to sue foreign governments over claims of unfair treatment and to be entitled to compensation. Similar provisions in other treaties have allowed, for example, tobacco conglomerate Philip Morris to sue Uruguay and Australia for enacting anti-smoking legislation, and a Swedish energy company to take legal action against Germany for phasing out nuclear power. ISDS provisions undermine the power of national governments to act in the interests of their citizens. According to John Hilary, the executive director of War on Want, leaked documents show that medical and health services, social services, education, post, finance, telecommunications, transport, energy, water, environmental and cultural services are all on the table in TTIP, meaning that American corporations may have full access to them. In the UK, there are fears that ISDS could threaten the NHS because it might allow private firms running hospital services to sue the government if it chose to return the services to the public sector.

MEPs are also worried that TTIP might undermine EU data protection laws, and that’s why they have called for an “unambiguous, horizontal, self-standing provision” in it to guarantee citizens’ right to privacy.

1 comment:

ajohnstone said...

The government of Romania found itself facing a massive lawsuit from a corporate mining giant in a secret "court". There's nothing about the case that makes any sense – the corporation has said it may seek up to $4 billion in "compensation", which is half of Romania’s annual public healthcare budget.

Gabriel Resources originally wanted to develop an enormous gold mine that would involve flattening four mountain tops. There were fears that this would would leave behind a behind a toxic waste lake containing dammed water and cyanide. But in 2014 a critical environmental document that was required for the project to go-ahead was annulled in a Romanian court. In the face of mass protests inside and outside the country, Romania’s parliament decided not to push through a law that would have allowed the project to continue. Gabriel Resources has submitted a request for arbitration at the World Bank, demanding compensation for all the gold and silver that they were unable to extract. The company is using a Jersey subsidiary to bring the case, so it can make use of a UK-Romania investment deal, even though it's based in Canada. The company claims they have spent nearly $500 million on the project, yet in an interview the company’s CEO claimed he was seeking up to $4 billion in "compensation".

This is exactly the kind of case which that TTIP would promote throughout Europe. Through something called the Investor-State Dispute Settlement (ISDS) mechanism, foreign corporations get access to a secret arbitration system to sue governments for "damaging" their profits. These cases are taking place with an alarming frequency using a variety of existing trade deals, but TTIP would massively expand the possibility of this taking place. It would do this by allowing all US corporations to sue EU member states and all EU corporations to sue the US government.