A vast body of critics say the proposed trade deal between the US and Europe poses a major threat to the environment and sustainable commerce
The proposed Transatlantic Trade and Investment Partnership (TTIP), joining the European Union’s 28 nations and the United States in the world’s biggest free trade deal, would be a disaster for sustainability on many levels, detractors say.
Where TTIP’s supporters cite the promise of dramatic economic growth and opportunity, its increasingly vocal and diverse opponents on both continents argue it will threaten the environment, along with food safety, health services, labour rights and small businesses.
And if another looming treaty between Canada and Europe is factored in – the Comprehensive Economic and Trade Agreement (CETA) – then TTIP’s energy chapter will increase dependence on fossil fuels from the whole of North America, particularly gas from fracking and tar sands, campaigners say.
Court rights furore
Public attention over the last year or so has focused on the powers that global corporations would wield to sue governments for loss of revenue – in special courts – whenever national policy decisions limited or ended their operations: the so called investor-state dispute settlement (ISDS).
Examples of this are rife from earlier trade deals. Lone Pine Resources is suing Canada for more than $250m, under the North American Free Trade Agreement (Nafta), because of Quebec’s moratorium on fracking. Under bilateral trade agreements, Swedish energy firm Vattenfall is seeking $6bn from Germany over its phasing out of nuclear power after the 2011 Fukushima disaster. And French utility Veolia is suing the Egyptian government for raising the minimum wage.
Such cases would proliferate under TTIP, opponents argue, leading to both regulatory chill – fear of implementing new legislation to protect public health or the environment – and regulatory snare, i.e. long and costly legal action. Assurances from Europe’s trade commissioner, Cecilia Malmström, that the right of governments to pursue public policy would not be infringed under ISDS, have failed to quell these concerns.
Rules of engagement
Campaigners are equally vexed about another key tenet: regulatory harmonisation between Europe and the US, which they see as a euphemism for race to the bottom.
Nick Dearden, director of Global Justice Now, says sustainable food production is one vital area where Europeans would lose out under TTIP. “In the US, agriculture is often far more intensive, with mega meat and dairy farms and a huge amount of chemicals used for both crops and cattle, as well as more pollution,” Dearden says. “It is bad for animals but also for humans and the planet. We don’t see how it would be possible for farmers across the EU, who are already struggling to compete with that big industrial model, to hold their own under the new system.”
What’s at stake
Negotiations between the United States and the European Union to forge an ambitious Transatlantic Trade and Investment Partnership (TTIP) started in July 2013.
If successful, the deal would cover more than 40% of global GDP and account for large shares of world trade and foreign direct investment. The EU-US trade relationship is already the biggest in the world. Traded goods and services between the two partners are worth almost $2bn daily.
Source: Center for Transatlantic Relations, Johns Hopkins University School of Advanced International Studies, Washington DC, and Centre for European Policy Studies, Brussels
More sustainable methods of food production, with stricter controls on pesticides and herbicides, are among the EU’s “real positives”, Dearden adds. Generally, the US applies a burden-of-proof approach to any fears over new drugs and chemicals whereas in Europe the precautionary principle holds sway – manufacturers must prove a product is safe before it can go onto the market.
But would harmonisation necessarily mean a downward shift? Zak Goldsmith, the Conservative MP and candidate for London mayor, told a UK parliamentary debate that it was hard to conclude otherwise. “There are relatively few barriers to trade between the EU and the US, so the main focus [of TTIP] must be standards and regulations, with the goal of trying to harmonise them,” he said. “However, it is hard to imagine that the process will involve any key standards going up. On the contrary, I suspect that we will see a spiral downwards.”
Caroline Lucas, a Green MP, agrees. She said: “TTIP transfers power from people to corporations. It vastly reduces the accountability of big businesses, but places our public services – and whole governments – at their mercy.”
Dearden says one of the reasons big business is so in favour of TTIP is that it will increase efficiencies – and large-scale production is often the route to doing that. “It would be lovely to think the deal would improve standards. Yet the people who really have the ear of negotiators are all calling for the exact opposite.”
Agribusiness, pharmaceutical and finance companies are all seeking what NGOs, think tanks, civil society organisations and small businesses regard as a worse deal in terms of standards for consumers, workers and the environment. These campaigners say they have had little influence on, or oversight of, the nine rounds of negotiations in Brussels and Washington, which have been shrouded in secrecy.
Where things stand
The EU’s chief negotiator has said that talks would have to continue into 2016, despite an initial deadline of the end of 2015.
For the deal to go ahead, the final wording first has to be presented to the European Council and the European Parliament, both of which must agree the outcome before each of the national parliaments of all 28 EU member states gives approval.
In the UK, Plaid Cymru, the Green Party and UKIP are all opposed outright. The Conservatives and the Liberal Democrats have expressed support for the agreement, with caveats if the National Health Service (NHS) is in any danger of being exploited. The SNP has also rejected the deal if ISDS is a factor and public services are not safeguarded. Labour’s new leader, Jeremy Corbyn, is against TTIP although the rest of the party has shown mixed views.
In the US, Congress must approve the deal, and there is still a chance of it being voted down.
Supporters of TTIP say gains of more than $200bn could be achieved within two decades, most of this from reforms other than lifting tariffs, i.e. via regulatory changes. The European Commission has claimed overall economic gains from TTIP would equal a one-off increase in European GDP of between 0.3% and 1.3%, and about the same again for the US.
Joint research by academics in Brussels and Washington, which was funded by the European Commission, has outlined how TTIP will not necessarily be concluded with a final document but instead represent a “living agreement” that can adapt to all kinds of change in the future.
“Taken together, these elements underscore that TTIP is not just another trade agreement, it is a new-generation negotiation aimed at repositioning the US and European economies for a more diffuse world of intensified global competition,” states the report by the Center for Transatlantic Relations, Johns Hopkins University School of Advanced International Studies and the Centre for European Policy Studies.
But critics have challenged the methods and assumptions behind the GDP estimates. Researchers at the London School of Economics (LSE) say evidence from other free trade agreements suggests economic impact is hard to measure and attribute. “Consequently, projections of net economic benefit should be treated with caution,” its report on TTIP states.
Out of 560 lobby encounters that the Directorate General Trade, which is negotiating TTIP on behalf of the European Commission, held to prepare the initial talks, 520 (92%) were with business lobbyists, while only 26 (4%) were with public interest groups, according to the research and campaign group Corporate Europe Observatory.
Therefore, for every encounter with a trade union or consumer group, there were 20 with companies and industry federations. The data covers contributions to the European Commission’s public consultations, public stakeholder meetings and lobby meetings behind closed doors.
Source: Corporate Europe Observatory www.corporateeurope.org
Damage to health
The biggest health risk from TTIP will be the increased consumption of processed foods, according to the LSE report. “If existing tariffs were to be significantly reduced or eliminated and current restrictions lifted, then evidence suggests imports into the EU of US agri-food produce could double by 2025, albeit from a low baseline,” it says.
TTIP could also lead to more imports of genetically modified (GM) crops and produce, which are currently subject to restrictions, as well as hormone-treated beef, which is currently illegal within the EU, the LSE report argues. Negotiators continue to state that the regulatory position of these goods will not change, even though the evidence base on their health impact remains highly contested and therefore potentially open to legal challenge.
“Agri-food could be impacted primarily in relation to food labelling, where the technical barriers to trade (TBT) chapter of the agreement could provide an additional platform for industry to challenge regulations,” the LSE says.
Within pharmaceuticals, the commitment to regulatory convergence could result in significant efficiencies in authorisation of clinical trials data. Better cooperation between the European Medicines Agency and the Federal Drugs Administration could reduce duplication and improve joint research. This could enable medicines to get to market faster.
However, there are also concerns that TBT provisions within the treaty could affect transparency, with some groups arguing that industry would be more able to limit the sharing of relevant data, as well as influence member state pricing and reimbursement policies and practices.
EU negotiators have made conciliatory noises about public services, including health. However, it is understood that TTIP will include a soft exclusion or “exemption” for these areas rather than a hard exclusion or “carve out”. Individual member states will have to make an explicit decision whether to include or exclude their national health services. The UK is one country where evidence suggests that the government may not seek to exclude all its health services, the LSE report concludes.
John Hilary, executive director of War on Want, says TTIP would be “a disaster for the environment and sustainability in general”. He cites the European Commission’s own initial impact assessment, which showed a likely increase of millions of tonnes of CO2 emissions and severe threats to biodiversity, all at odds with official policy of tackling climate change. International talks on that issue are due in Paris this December.
The impact assessment, which the European Commission chose not to publicise, also forecast the loss of at least one million jobs as a direct result of TTIP – 680,000 in Europe and 325,000 in the US, and far more if the final deal was “ambitious”. Publication of another sustainability impact assessment by Dutch consultancy Ecorys has been delayed by a whole year, too long for it to inform the decision-making process, Hilary says.
As of October 2015, almost 3 million people had signed War on Want’s petition to stop TTIP. “It’s a measure of how broad the discontent is among all the trade unions of Europe, the environmental, consumer and public health groups,” Hilary says. The organisation has also teamed up with cosmetics chain Lush and the designer Vivienne Westwood to oppose the deal.
Hilary believes the concessions promised by Malmström on ISDS, including greater transparency, amount to no more than cosmetic changes. “The key thing is the introduction of power for US corporations to pursue all European governments in special courts,” he says.
TTIP will do little if anything to redress inequality and social exclusion, according to NGOs. “Like all free trade agreements, there will be winners and losers,” Dearden says. Jobs will be lost mostly in areas already suffering from the most serious depressions, whether that is Greece or Italy or poorer parts of the UK, he argues. On the other hand, countries such as Germany and the Netherlands with successful export economies are likely to see growth in trade.
The European Commission has said one of its aims is to open up existing government procurement contracts to competition, for example for ethically produced food. US corporations would challenge such existing development strategies as unfair yet a mixture of economic models – including small businesses and co-operatives – is essential to a sustainable system, Dearden argues.
Prospects for passage
Although business groups such as the UK’s CBI and the Federation of Small Businesses have backed the trade deal individual companies willing to endorse it in public have been conspicuous by their absence.
Dearden says this reticence could stem from fear of brand damage by too close an association with TTIP, since politicians and businesses have been wrong-footed by the strength of popular opposition. “If you go to insider meetings with proponents of TTIP, you hear a lot of criticism from politicians that big businesses haven’t come out publicly and supported their efforts – they’re not acting as cheerleaders, and that’s annoyed politicians. They say: we’re doing all this on your behalf and taking all the flak.”
This appears to be borne out by Ethical Corporation’s attempt to contact Unilever, the food and consumer goods multinational that has made great play of its sustainability credentials in the past few years. The company declined to answer questions about its position on TTIP despite evidence from the campaign and research group Corporate Europe Observatory that Unilever has lobbied on the deal via FoodDrinkEurope, the trade association of which it is a member. By contrast, supermarket group Spar has taken out full-page ads in German and Austrian newspapers against TTIP.
Opponents of the treaty are gaining confidence. If the Canadian trade deal flounders, as many people expect – and the 12-nation Trans Pacific Partnership, which is also mired in complexity and delays, also stalls further – then the prospects for TTIP will fade too, analysts say. Barack Obama faces an election in 2016 and most of his Democratic party oppose TTIP – as well as the Pacific trade deal – because of perceived threats to US jobs.
Dearden of Global Justice Now says: “We are building a real head of steam – it is becoming difficult to see how a deal that has upset so many different groups of people can ultimately go through.”TTIP trade Investment EU fossil fuels trade deal farming employment Environment