23 January 2015

Lange’s ‘working document’ a showcase of S&D’s TTIP stance

Second largest group in the Parliament holds many TTIP cards. So what is their stance?

Simon McKeagney, Editor

On Wednesday the international trade committee (INTA) in the European Parliament debated a ‘working document’ on TTIP, produced by Bernd Lange, the committee’s chairman and TTIP rapporteur. Lange, a German member of S&D, has almost complete discretion in the writing of such a document, making it a revealing read on the stance of the second largest group in the European Parliament. 

It also sets the tone for the upcoming TTIP resolution later this year, which INTA will coordinate over the coming months in the run into a plenary vote in May. So here are the most important points to consider:

S&D “redline” on ISDS? Hazy at best

The controversial ISDS mechanism has dominated the TTIP-debate in recent months, most recently with the results of Commission consultation, showing 97% of respondents were against the provision. 

The S&D have sounded their opposition to the mechanism over the course of the last year as a “redline”, but on paper, their opposition is not as clear cut. Lange’s document in no way outright rejects ISDS, though its notes that investors can currently seek redress without it. Instead it actively contemplates the inclusion of ISDS:

‘Should ISDS provisions be included in the TTIP, it seems to be clear, that further reforms to the current model, are critical to avoid the problems that have arisen under the provisions in existing FTAs and BITs’ (4.3.2 p6)

The idea that a system like ISDS can be reformed has been largely discredited by civil society groups, with the fundamental question still remaining on why we would enshrine something which denies fair and equitable access to justice into an agreement of such far-reaching importance. But unlike a vast majority of citizens who requested ISDS be removed from TTIP in the recent consultation, Lange sides with the Commission on the need for a “reflection process” between EU institutions on how best to reform ISDS, not remove it. 

Not only this, but there are now also calls to take the issue of ISDS out of the TTIP resolution in May, and instead hold a separate vote on the ISDS system in March, before the vote. An update on this will follow soon.

Singing from the Commission’s hymn sheet

ISDS isn’t the only area where similar stances to the Commission appear, leading some to believe that the document’s over all purpose is to form part of the “fresh start” strategy Malmström and DG Trade promoted for the new year. 

[Side note on “fresh start”: In Obama’s State of the Union speech on Tuesday, he admitted that “past trade deals haven't always lived up to the hype”, a nod to the opposition by many members of his own party. The US has signalled that very little will advance in the TTIP talks until the autumn, with fast track authority unlikely to be confirmed until the summer. So while the Commission pushes the “fresh start” message in Europe, and Lange calls on the US to be “more ambitious”, in reality on the big issues like public procurement, it’s more of a non-starter. It also means a TTIP conclusion in 2015 is almost certainly no longer possible.]

On financial regulation, an area the US refuses to negotiate on for fear of Europe's financial industry weakening the Dodd-Frank Act, the working document insists that market access negotiations on financial services should be combined with convergence in financial regulation”. This is the exact stance of the Commission, and a key offensive interest for the European financial industry, despite well-grounded US fears that it could erode the gains made in regulating the financial industry in the US.

Other language could’ve been lifted straight from the pages of a Trade Commissioner speech, with aspirations that TTIP could create a regulatory framework by strengthening regulations to the highest standards on a global level”To be clear, there has been virtually no evidence to suggest standards on either side of the Atlantic will be raised to conform with its higher counterpart, but lots to suggest that the removal of non-tariff barriers will “level-off” standards to a lower level. Evidence to support the downward pressure argument is appearing now on almost a weekly basis.

[Read- CIEL ReportLowest Common Denominator, How the proposed EU-US trade deal threatens to lower standards of protection from toxic pesticides]

On sanitary and phytosanitary (SPS) measures for food safety and animal and plant health, the document merely re-submits the Commission mantra that “negotiations on SPS should recognise the right of both parties to manage risk in accordance with the level it deems appropriate…”

This is despite the area drawing huge opposition over concerns about US hormone beef and chlorinated chicken among other food related issues. Yet there seems to be no “redlines” on SPS measures at all. 

The S&D, through Lange, seem entirely unconcerned by the negative effects (including financial, health or environmental costs) of the push toward regulatory coherence between our two very different regulatory regimes. But the Greens, along with a host of NGOs and civil society groups recognise regulatory coherence to be the biggest threat of the proposed TTIP.

Things to watch

Strikingly, while Lange says he is using the working paper “to assess the main results of the negotiations after approximately 1,5 years of discussions” he seems oblivious to the fact that in that time, there has been a complete failure on both sides to reach agreement on even the minimum required for an “ambitious, comprehensive” deal. Unwillingness to critically assess TTIP’s success demonstrates the need to cast a watchful eye over the work of the INTA committee in the months ahead.

On intellectual property rights, the working document calls for an ambitious chapter, demanding “the EU and the US most ambitious FTA provisions in this area”. Given that the US has already obtained key advantages in the area of IPR in other free trade agreements, there is concern that this wording effectively suggests we should accept whatever the US has in store for TTIP.

The issue of transparency is another area worth keeping an eye on. Lange’s document refrains from putting any further demands on the Commission in this area, such as more access to the consolidated negotiation texts, or the many other steps that could be made to enhance transparency and civil society involvement. 

This is especially odd considering even members of the Council are questioning the practice of the ‘secure reading room’, with some expressing their unhappiness that it continues as a permanent solution for the handling of TTIP documents.

Instead, the Lange praises the Commission’s transparency initiative and “hopes that even more documents will be made public” later, which was the Commission’s the plan anyway.

Things to praise

But it’s not all bad. The introduction of an extra chapter called “non-negotiable issues” is a good start. It goes beyond the language in the Council’s mandate excluding audiovisual services and instead calls for ‘existing and future provisions and policies in support of the cultural sector in particular in the digital world are out of the scope of the negotiations.’

Similarly, it is equally tough when it comes to public services, stating: “anything that prevents governmental authorities from being able to regulate in the public interest or to provide services are not acceptable” and calls for the EU and US negotiators to release a joint statement with a “clear commitment to exclude these sectors.”

Grand Coalition "Dangerous Trend"

A final note on the atmosphere this week in INTA. The pro-TTIP consensus, to which Lange and the S&D still currently occupy, seem to be under the impression that the TTIP debate in Europe is “out of control”, and so needs to be brought back under control through their efforts. The upcoming ISDS and TTIP resolutions will play part of this strategy. Many MEPs are willingly playing their role in that effort too. 

On Thursday there were some extraordinary interventions from EPP's Chrisofer Fjellner, and ECR's Emma McClarkin, who questioned the credentials of citizens who took the time to respond to the ISDS public consultation, with Fjellner suggesting that only the tiny fraction of those who had a background in investment arbitration should’ve been considered worthy responses.

That was met with a fiery response from Green MEP Yannick Jadot, which I will leave you with:

English version

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