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04 April 2014

Trade Agreements? The EU can do better than this

Italy's upcoming presidency of the EU and the European Elections are opportunities to change the approach of transatlantic relations.

Monica Frassoni Co-President, the European Greens

Renzi's government, who will soon take on the presidency of the EU, has on its table an issue that has not made it into public debate recently but that we need to talk about urgently: TTIP.

On March 14th the fourth round of negotiations on the Transatlantic Trade and Investment Partnership -  known as TTIP -  took place between the EU and the U.S.  It ended with a very optimistic press release and an appointment to meet again in the summer. TTIP might be the largest and most complex commercial agreement ever attempted.

According to the supporters of the deal, the elimination or reduction of burdens to free trade, such as laws and different kinds of controls, would lead to an increase of up to 0.5-1 percent of GDP. 

Too bad that this estimate refers to increases only in 2027- and that until now, the costs associated with loosening rules on health and the environment have not been taken into account. These facts are left unsaid. If we look carefully, we discover that the predictions are based on inaccurate figures, that don't  take into account all the other potential negative consequences, with gains in the short term only amounting to an estimated € 40 per family per year.

There is also another problem - we are not allowed to know all the details. TTIP is being negotiated in the strictest confidence, with MEPs and national deputies having no access to the concrete terms of what the Commission is negotiating with the United States. In this secret mandate, talks continue to press on, and your representatives remain in the dark. 

The only exception to this is the leak of a confidential text, dating from last June, which was released on March 7th by Sven Giegold, MEP and former President of the Greens of Attac Germany. 

Let me be clear, we are more than in favour of expanding transatlantic cooperation in areas of common interest, and we consider it important that trading partners are the protagonists in the transition to a new model of development: a model that could be, for instance, be less "intense" in the consumption of resources and more sensible on the topics of climate change and the rights of workers. 

We know that in the business world there are good industries and bad industries. The problem is that today TTIP as it stands is an attack on freedom and to the democratic right of citizens to express their preferences. Despite the disasters of the crisis of 2008, TTIP is built on the concept of an economy that does not take into account the ideas of social and environmental “quality”. It is based on the belief that multinational corporations are the holy suppliers of jobs and cannot be hindered by such trifles as rules on environment, finance and health. We believe that May’s European elections represent an opportunity for massive mobilisation,for creating majorities capable of changing the approach of transatlantic relations.

Not only does the agreement have questionable content, but it also poses a problem for democratic legitimacy. It might for instance include a provision called the Investor State Dispute Mechanism (ISDS) that would allow foreign investors to bypass domestic courts and direct their complaints to international arbitration tribunals, often composed of corporate lawyers. Why have such legal privileges for international investors when they could rely on our well-developed judicial systems?

This would mean that whenever regulations, standards, national or European laws in the field of environment, health, finance, etc... are in conflict with the interests of businesses, the Member state may be brought to court and forced to pay a fine. It is obvious that if you can oblige a State to pay a fine because it introduced minimum wage or environmental rules that may reduce profits, freedom to legislate by democratic public bodies is greatly reduced.

We are facing a very dangerous situation: imagine what would happen if ISDS was introduced and 14,000 American companies would be allowed to question the national laws of EU countries, via their 50,800 companies based in Europe.  This is not science fiction! Just listen to what Stuart Eizenstat from the Transatlantic business council has said publicly: "Many European standards are unjustifiably high, and this has no scientific basis. What is good to eat for an American family, should also be good for a European one".

TTIP therefore risks becoming a means for businesses to circumvent all the inconvenient rules: after GMOs, the first target would be the "precautionary principle", which is seen by some in the business world as a real brake on research and economic development. But every business has its pet target: the chemical industry that wants to soften REACH, the cosmetic industry wants to soften the controls on its products and the agri-food industry wants to lower the protections and standards regarding, for example, meat.

Obviously, the Commission rejects the accusation that it wants to reduce European standards. But the point is that if you accept the principle of "mutual recognition" of very different standards, multinational subsidiaries operating in different countries could take advantage of regulatory differences and actually reduce their efficacy. 

Only when EU standards are in no way compromised would it be possible to allow certain standards to be harmonised with the US.Moreover, it is interesting to note, speaking of the "quality" of trade,  TTIP does not include the promotion of technologies that encourage the transition to a "low carbon" economy. It doesn't mention of the positive consequences of promoting environmentally friendly technology and methods of production. Therefore it is likely that TTIP will be yet another roadblock in the move toward a safe, ecological low carbon future. 

Is there another way to build a transatlantic alliance? 

Yes, with a multilateral agreement that is consistent with the "Green New Deal”, it would include policies to fight climate change and the excessive consumption of resources. It could be an agreement that promotes social justice and the rights of workers.

Is it a dream? No, and the example of the defeat of ACTA proves it. Recently, more than 200 European and American groups protested against TTIP, and in the U.S voices are coming out against this agreement in Congress. It is now important to increase awareness and spread information. The European elections is a good time to do so. Italy is now getting ready for the EU Presidency and we must remember that by working together with civil society organisations, trade unions, consumer groups and also the parties like the Greens, we can still stop TTIP.

http://trade.ec.europa.eu/doclib/press/index.cfm?id=1041

http://europeangreens.eu/brussels2014/content/position-paper-ttip

3 «Pagate con soldi pubblici per mandare in tilt il clima, le fonti fossili ricevono 100 $ per ogni tonnellata di CO2 che rilasciano. Aiuti di Stato per 523 miliardi di dollari contro gli 88 andati alle rinnovabili. E solo il 20% per aiutare i ceti deboli. Fatih Birol, capo economista della IEA, torna a denunciare i sussidi pubblici alle fossili. In Italia sono oltre 9 miliardi di euro all'anno. » http://www.qualenergia.it/articoli/20130206-troppi-sussidi-alle-fonti-fossili-il-messaggio-di-fatih-birol

La riproduzione di questo articolo è autorizzata a condizione che sia citata la fonte: www.sbilanciamoci.info. 
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Zeke Rosenberg

Excellent points. I really agree with you here: TTIP might be beneficial on the corporation level, but ultimately erodes freedom and solidifies absolute capitalism. Excellent analysis of the EU's attack against U.S. minimum wage - passing TTIP could really harm our ability to provide for the lower-classes and ensure fair living for the bourgeois. Once again, excellent.

Dayle Record

Zeke and EU TTIP - the thesis that you all are positing is completely uncalled for and, somewhat consequently, glaringly false. No rational thinker or competent IR analyst could, or would (for that matter), agree with this.

Dayle Record

To EU TTIP and Zeke. There’s a power to modeling that, in its simplest terms, cannot be underestimated. Citing IR theorists like Chomsky, the EU has evolved greatly. The lens of historical deconstruction in this is invaluable, though thinkers like Mearsheimer would value a more theoretical construction – a thought experiment per se. But what one loses by subscribing to one mode is often balanced several fold by its eventual ends, as cliché as the phrase has become. The EU was initially formed as a union, but has, as often noted by observant watchers, morphed into a more autonomous entity. Like Chomsky notes, the EU’s role has shifted from a conglomerate to an institution; from a multinational to its own nation-state. From the economic geography to geopolitics, its thingness is no longer defined by cluster of European entities, but now a personal set of interests, analogous to the psychology of the nation-state or politik-al entity. Like Nietzsche, the death of the grave can mean only, psychologically, a new resurrection; with death comes reformation, followed by new life. And, the irony manifest, as Nietzsche inserts life into death, he recreates the Judeo-Christianic tradition that he deems philosophically bankrupt. But moving beyond this irony, an application of this concept is apparent in the EU’s thingness, its very psychology. Rosenberg argues that the EU is pushing the TTIP, which would obstruct our ability to increase current levels of minimum wages, on the federal (U.S.) or on a level of smaller subdivision. However, this is false on several levels. First of all, the TTIP is secretive for a reason – it isn’t a real piece of agreement being bargained or negotiated. But moving beyond this, second: agreement on the TTIP would be completely out of line, given the EU’s past track record and psychological tendencies. Remember that months ago, the EU complained about absolute capitalism and Chomsky’s “profit over people.” They, in fact, want the U.S. to enact a minimum wage of up to 60% of the average. The EU, who wants to establish a standard of minimum wage across European entities, wants to do the same with us, perhaps. The EU has become an entity of its own: the most benevolent of all nation-states perhaps, but undeniably a nation-state. And like what is, there isn’t; with what isn’t, there is. The EU, like I have stated earlier, has ambitions to project its desires onto other nations. This is somewhat analogous to the behavior of a nation-state – the U.S. forcing democracy on developing countries, or setting up military bases in the Middle East under the name of “anti-terrorism.” And, continuing the fitting metaphor, geopolitics becomes leverage, a source of blackmail. The EU knows that all nation-states, including the U.S., depend on the ability to aid them in their own, realist geopolitical ambitions. And while the EU would never explicitly blackmail the U.S. (and nor is the modeling of European minimum wage likely to ever be a source of monocausality), my point is clear: I don’t think that there is any way that the TTIP will be passed. The EU’s commitment to the minimum wage as a political bargaining chip is simply too great, in my opinion, to allow agreement on the TTIP. It just seems out of line, in my humble opinion, with the EU’s pattern(s) of behavior for them to undo years of work and suddenly reverse their commitment to the working class. I’ll be the first to admit it – I am by no means qualified to posit these ideas myself – however, I feel that many IR theorists would agree (though many would also disagree, perhaps). Thus I retract the absolute-ness of my previous statement: TTIP could be passed, potentially, but there are good reasons to believe otherwise also. Realism is usually that way – unpredictable.

Zeke Rosenberg

Hey Dayle. I agree with about half of what you said :), and that's everything except for your conclusion. Yes, the EU has used the minimum wage as "political leverage" (not sure if that's the right term, but moving on) against European states and the U.S. But, like you admit yourself, it's not monocausal to other forms of cooperation. Economic cooperation doesn't necessarily equate to any other form of relations. For example, it probably doesn't shift over into cooperation, relations, or actual foreign policy. Thus, while it is "technically" "political leverage", it isn't quite the "political bargaining chip" that you describe it to be. The EU, therefore, wouldn't be so reluctant to reverse a commitment that never existed. To reference pessimistic thought (cough cough Nietzsche), that which never was never will be, and never is because it never was :) And ultimately, I don't think that your idea is a real reason why TTIP won't be agreed on.

Dayle Record

To Zeke. I think that our conflict ultimately comes down to a fundamental disagreement over how the EU operates - its behavior patterns, per se. And I could reposit my beliefs, but I feel that it would likely be a replica of my previous rant. But one last thing: I do think that economic cooperation influences other facets. Look at Turkey and the U.S. - historically, relations between the two nations has tended to be highest when economic engagement concurrently peaked. To be honest, I don't think that this was a coincidence.

Zeke Rosenberg

No. Just no.

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