19 May 2014

TTIP will mean higher standards for financial services? The opposite is true.

Pressure from the European financial industry to be included in the deal is at the expense of stability and our citizens.

Philippe Lamberts MEP, Greens/EFA

As the 5th round of TTIP talks begin in Washington this week, and reports that financial services will be discussed, it may be a good time to recap on why we, the Greens, are stressing the importance of ensuring financial services remain excluded from the deal.

What has become clear over the course of 4 rounds of talks is that TTIP has been tailored to serve the interests of big business over that of ordinary citizens. The evidence is everywhere. We see it reflected in the requests from business groups  duly taken up by negotiators. We see it in the privileged access granted to corporate lobbyists before and during the talks. We see it in the plans for extra-constitutional rights for investors. And we see it in the blasé approach the Commission and USTR have taken to the many legitimate and substantial concerns raised by civil society, NGOs, consumer groups and members of the public. 

If the economic crisis of 2008 reminds us of anything, it is that an unfettered financial sector is a recipe for disaster. The EU and US have attempted to reign in this sector whose actions have threatened the stability of ordinary citizens lives and the sovereignty of entire nations. In the US, the Dodd-Frank Act has enhanced financial regulation, while the EU has moved toward a banking union and increased regulatory oversight. TTIP has the capacity to disrupt these efforts and put downward pressure on regulatory standards on both sides of the Atlantic.

Last month at one of the last meetings of the European Parliament’s ECON committee before the European elections, representatives of the European banking industry and the Commission highlighted their hopes for a comprehensive TTIP deal that included financial services. They argued that the inclusion of this sector would set global standards, and facilitate stable and resilient financial markets.

View Philippe Lamberts contribution from 47min32sec

View Philippe Lamberts contribution from 47min32sec
But we believe the opposite is true. Nowhere are the aspirations for higher regulatory standards backed up by evidence, as I made clear during the committee hearing. Many MEPs agree. The fact that even the US, whose financial regulation is largely seen as stronger than the EU’s, wants financial services off the table is a telltale sign that something is not quite right.

'[U.S Treasury Secretary] Jacob Lew's stance echoes that of other U.S. officials and lawmakers, who are concerned that putting financial rules on the table in the trade talks risks watering down or abandoning new safeguards that are part of the 2010 Dodd-Frank financial law. The U.S. is seen as having stronger rules in financial services, so there may be more regulation to lose than gain in trade talks, while Europe touts its rules as superior in food safety and other sectors.'- [WSJ]

Similarly, only last week the US Ambassador to the EU, Anthony Gardner effectively ruled out the inclusion of financial services, the only sector the US has so far called to be excluded. 

If US have reason to believe that the inclusion of financial services will negatively impact new safeguards then a question must be asked - why would we want to risk undermining these? The financial crash clearly demonstrated that a lack of US safeguards can eventually lead to negative impacts for the EU too. We in Europe have spent the best part of six years struggling to correct what has been wronged. We cannot further undermine efforts to stabilize our financial systems for the sake of trade and the corporate interests of the City.

Yet the approach taken by negotiators from the Commission has been to facilitate just that. The interests of citizens in Europe and the US are therefore secondary concerns. This is wrong. EU negotiators need to first and foremost put public interest at the heart of these talks. To do this, they must demonstrate in real terms how they see financial standards will be raised and not compromised under TTIP. As it stands, there is simply no evidence to support these claims. Therefore we Greens will continue to push for the exclusion of financial services from TTIP, along with any attempts to negatively impact US or EU regulations and standards.

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Tom Lines

I have read the banking lobby's numerous documents on this, and their strategy is this: get financial services included in TTIP so that they can then sue the US from Europe for 'loss of profits' arising from stronger US regulations. They even recycled material from 2008 calling for less regulation. Disgusting but true.

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