The planned investment protection provisions would force the EU and its member states to act at the behest of multinational corporations, thus depriving governments and parliaments of their right to regulate and set standards. Furthermore, regulatory cooperation will limit consumers’ freedom of choice and force upon them products that they do not want, for example genetically modified food. Above all, TTIP will be a trade barrier between the North and the emerging countries of the South. Action has to be taken while there is still time to overhaul the present corporate agenda.
On September 11, 2014, the EU Commission rejected the proposed European Citizens’ Initiative (ECI) against TTIP and CETA, thus further straining relations between civil society and the European Commission. Altogether the ECI had been backed by 230 organizations from 21 countries. This rejection marks a clear break from the Commission’s efforts to reach out to a skeptical public.
Starting in February 2014, the EU’s Directorate-General for Trade (DG Trade) had attempted to formally integrate representatives of civil society into the negotiations. However, it soon became apparent that the creation of a so-called “TTIP Advisory Board” and public consultations on investor-state dispute settlement (ISDS) could not make up for the overall lack of transparency and participation. All of this spurred suspicions that the Commission viewed the consultations as nothing but occupational therapy for the critics of the process. When a finalized text for CETA was put forward even before the comments from the consultations had been fully evaluated, this confirmed fears that DG Trade intended to conclude at least one agreement – regardless of the costs.
A new global economic order
By all means, the costs will be high, especially if compared to the 0.05% annual growth expected to be achieved with TTIP – and even lower rates from CETA. In addition, these agreements will further fragment world trade. No matter how effective bilateral treaties may turn out to be, they surely will not be able to pave the way for a new multilateral deal and they will further hamper the already difficult international processes. A deal struck between the world’s two largest trading blocs is detrimental to other countries, as common EU-US norms and regulations would serve to exclude third parties and redirect trade flows.
Consequently, countries of the Global South would be in danger of losing much of their recent economic gains, which in turn would heighten social disparities. It cannot be stressed enough that TTIP is not just a regional project but rather the large-scale attempt by the United States and Europe to establish a new global economic order. Moreover, judging from the investment agreements that the EU and the United States are negotiating with China – separately, yet well-aligned – such a new global economic order might be designed to involve certain other states, like China, but further alienate those who are not part of the deal, for example Russia.
CETA and TTIP will clearly mark a shift in power relations between business and politics. Both agreements are different than previous trade and investment agreements that aimed to lower tariffs and protect investment from expropriation. Today, this is not the case. What is really at stake is the primacy of politics. The proposed improvements of ISDS are quite insufficient and the debate about what companies consider to be “expropriation” appears to be a bottomless pit. The proposed mechanism that law firms may investigate planned legislation in order to find grounds on which to claim compensation for lost profit has to be stopped once and for all.
A truly undemocratic process
CETA seems to protect regulation that is in the public interest, however there is a loophole. The proposed text states that trading partners may regulate to achieve “legitimate policy objectives.” Yet who is to define what is legitimate? Is plain packaging for cigarettes legitimate – or is it an infringement of trademark law? Is more GMO-labeling on animal products a legitimate policy aim because consumers want to know what cows have been fed? Or would this be considered discriminatory because the GMOs in question have been tested “safe” and hence nobody needs to know? Are we really willing to let a few hundred lawyers decide such questions, that is, people who, in the past, have made their position very clear? The result would be that governments might still regulate, yet they would have to pay hefty compensations to private business.
There is no transatlantic parliament to act in the public’s best interest whenever new technologies arise or old ones are on trial. It is also unlikely that parallel legislative processes will be undertaken on both sides of the Atlantic in order to raise standards. In the end, small groups of experts – people with no democratic legitimacy – will make decisions that affect 800 million transatlantic consumers, a truly undemocratic process.
More and more people on both sides of the Atlantic are protesting against such trade agreements and are defending their rights. Parliaments are also beginning to react, getting increasingly uncomfortable with CETA and TTIP. In Europe, in the US, and across the Atlantic new alliances are promoting a YES to fair and sustainable trade – trade for the benefit of people –, and a NO to handing over power and money to those who already have plenty of both.
This article was first published on atlantic-community.org and by the Heinrich Boell Foundation.