This article was written by Alessa Hartmann (German Forum on Environment and Development) and published in the “Transatlantic Colossus“.
Abstract: The elimination of tariffs and the harmonization of standards increases economic power and produces wealth for all – this is the fallacy the negotiations between the US and the EU on the ‘Transatlantic Trade and Investment Partnership’ (TTIP) also known as Trans-Atlantic Free Trade Agreement (TAFTA) are based on. But the negotiations which aim at creating the world´s largest free trade zone pose troubling risks and side effects. Big companies are massively influencing the negotiations. The interests of consumers and employees fall by the wayside. In Germany a coalition of about 30 NGOs from the field of Environment, Development, Agriculture and Nutrition and Consumer Groups i s closely following the intransparent negotiations on the TAFTA | TTIP and demands active participation in the debate on this new deal. We have developed positions on the relevant issues of the negotiations as Investor-State Dispute Settlement (ISDS), climate and environmental protection, standards and regulations concerning agriculture, health, consumer, labor and human rights, public services, financial sector regulation as well as intellectual property. The partnership cannot be negotiated ignoring people´s needs – that is why we want to make sure the voice of the public will be heard.
The elimination of tariffs and the harmonization of standards creates more economic power and wealth for all – this is the fallacy that is the basis for the negotiations between the United States (US) and the European Union (EU) on the ‘Trans-Atlantic Trade and Investment Partnership’ (TTIP), also known as ‘Trans-Atlantic Free Trade Agreement’ (TAFTA). But the negotiations that would lead to the world´s largest free trade zone pose troubling risks and side effects. Big companies are massively influencing the negotiations. The interests of consumers and employees are falling along the wayside.
The TAFTA | TTIP promises more growth to business in the EU and the US. Political Leaders want more trade and more market freedom for businesses. In reality, this could very well mean unlabeled genetically modified (GM) foods and hormone-treated meat landing on our plates. We are witnessing the previously rejected Anti-Counterfeiting Trade Agreement (ACTA) on copyright coming in through the back door – freedom of expression and data protection will lose out. Only the lowest consumer protection and environmental standards will remain (Hansen-Kuhn & Suppan 2013). Governments and the EU Commission are going for secret negotiations while excluding the public and parliaments.
The promises of more growth and wealth are questionable regarding existing free trade agreements (FTAs). The North American Free Trade Agreement (NAFTA) between the US, Canada, and Mexico clearly shows that their result is decreasing minimum working standards and lower wages (Public Citizen 2013; Seattle to Brussels Network 2013). Existing studies on TAFTA | TTIP predict a Gross Domestic Product (GDP) increase of only 0.01%, but in a period of 10 years (Clive 2013). This is a large discrepancy to the increase of 0.5% promised by the EU (European Commission 2013). These euphoric prognoses are mainly made by studies financed by the industries involved or are carried out by the European Commission itself. Both have a strong interest in a successfully concluded TAFTA | TTIP. Firstly, leading politicians want to establish a counterbalance to emerging economies such as China. Secondly, a comprehensive free trade agreement will give a boost to the expansion course of European and American corporate groups. This is the reason why these calculations are based on an ideal scenario, with all non-tariff barriers removed.
Democracy and Transparency
A High Level Working Group on Jobs and Growth (HLWG) has prepared the negotiations since 2011. The members of this group are representing the interests of companies. 130 rounds of talks have taken place in advance of the negotiations: 119 with industries and only 11 with consumer groups (Corporate Europe Observatory 2013). As the New York Times and others reported, the industries’ lobbyists have been able to place their agenda in the run-up of the negotiations (Hakim 2013).
The negotiations are taking place in secret, since not even the mandate has been made public. On the official website of the European Commission (2013), many important documents are missing and only rudimental information is available. A cornerstone of democracy – transparency – is nullified. EU Trade Commissioner Karel de Gucht (2013) is arguing that “a certain level of confidentiality is needed in the negotiations for the EU to succeed and reach its objectives.” But in ongoing comparable WTO-processes the documents are made public and in view of the NSA scandal it is certainly clear that the American side has access to all information on the European negotiating documents (Knowledge Ecology International 2013).
Rather than secret negotiations, a broad public discussion is needed to reach a social and environmental negotiating mandate on both sides. This requires comprehensive and timely information, and a full public disclosure of all negotiation documents. In addition, the Commission must provide an external sustainability check by an independent body. Building on the position paper of the German Civil Society Alliance (2013, forthcoming), this article will now outline a series of positions on various aspects of the TAFTA | TTIP:
Legal Protection for People – instead of Privileged Rights for Corporations: We do not want US corporations to have rights that go against European environmental and social laws. Special legal rights for companies in investor-state arbitration procedures, as promoted by the EU, undermine fundamental principles of the rule of law.
Core Principles of Climate and Environmental Protection: The Rio Earth Summit in 1992 agreed on the precautionary principle and the polluter pays principle. If products or technologies pose risks, these need to be proactively avoided. As a result of pressure from the US export lobby, however, the TAFTA | TTIP would declare existing and planned rules based on these principles as trade barriers. A particular thorn in the side of US lobby groups is the current slow process of approving GM foods in Europe and the requirement to label them, as well as European sustainability standards for biofuels. The further development of the EU Chemicals Directive (REACH) and the EURO standard for car emissions, alongside the EU‘s strategy to limit the risks of environmentally hazardous plastics, are further obstacles to US export interests. In addition, it is important that the precautionary principle remains in place for new technologies, such as dangerous gas extraction by way of fracking. We need a fair economy that is both climate and resource-efficient on both sides of the Atlantic. The slowest partner should not be allowed to set the pace. To achieve this, prohibitions of particularly harmful products and procedures as well as taxes and duties are required. Obviously, this is not consistent with the TAFTA | TTIP free trade logic.
Protect Small and Environment-friendly Agriculture: For Europe’s farmers and consumers, the TAFTA | TTIP carries no benefits (Hansen-Kuhn & Suppan 2013). In the US, the consumption of cloned meat and hormone-treated meat is allowed. The same goes for milk produced by doping cows with genetically modified growth hormones. Poultry meat is treated with chlorine and there is no rigorous and consistent approval process or a labeling requirement for genetically modified plants. Genetically modified salmon is about to be approved (Food and Water Watch 2013). All this would subsequently also be allowed in Europe. Patenting and liability laws greatly differ in both trading zones. The TAFTA | TTIP would open the doors for agricultural exports at dumping prices. Europe’s farmers would be subject to even greater competitive pressure. US exporters would push their soy and dairy products onto the EU market and undermine our efforts to replace soybean with indigenous protein crops (BMELV 2013). Instead of more „grow or perish“ logics, we need to protect small and environment-friendly farming.
High Consumer and Health Standards: Europe’s stricter standards must be the baseline for all negotiations. In addition, comprehensive labeling must be mandatory – even for processed products.
Labor and Human Rights: These must be protected by clear and enforceable rules that are binding. TAFTA | TTIP is sold to the general public as an engine for job creation. However, existing free trade agreements such as the NAFTA agreement between the US, Canada and Mexico have had the opposite effect. Trade unions complain about job losses, declining wages, weakened minimum labor standards, and growing income disparities as labor standards are aligned by their respective lower level (Public Citizen 2013). In the EU, mass unemployment, pressure on wages and the expansion of precarious employment are the result of weak social standards in a liberalized internal market. This is not a model for a transatlantic free trade area.
International Solidarity and Cooperation instead of ever more competitive pressures. Through the TAFTA | TTIP, both the EU and the US want to ensure their global supremacy. Emerging and developing countries will lose important market shares (Corporate Europe 2013).
Safeguard and Develop Public Services instead of more liberalization offensives. Essential public services – e.g., in the areas of education, health, water, energy or transport – should not be privatized. They have to be accessible to everybody, be of high quality and meet high social and environmental standards. This requires a regulatory leeway at the national and local level which the TAFTA | TTIP negotiations threaten to curtail further. This in return means that more pressure for privatization is to be expected (DGB 2013).
Protect and Promote the Diversity of Cultural Expressions instead of more liberalization. UNESCO’s Convention on the Protection and Promotion of the Diversity of Cultural Expressions (2005) secures film, theater, orchestra and other cultural programs as well as local public broadcasting programs. The TAFTA | TTIP negotiations will put this creative space up for grabs (Deutscher Kulturrat 2013).
Financial Sector Regulation and a Reduction of Economic Imbalances instead of more deregulation and free trade. The liberalization of financial markets and economic imbalances within the EU as a result of wage competition are a major cause of Europe‘s economic crisis (Seattle to Brussels Network 2013). With TAFTA | TTIP financial services are to be further liberalized. The political power of the financial industry would be strengthened, but wages and tax dumping and, thus, decreasing public revenues would be the result.
Innovation, Education and Freedom of Information instead of more exclusive rights to corporations’ „intellectual property“. Protected „intellectual property“ is found in many sectors – technology, pharmaceuticals, agricultural seeds, movies and music. Under the pretext of protecting inventors, we find that big publishing houses, recording labels and entertainment media companies are increasingly trying to control users of culture and information. Science and education are obstructed while more and more works are being orphaned or lost forever as their digitization is not permitted (Deutscher Kulturrat 2013). We need a fair balance of interests between creators, users and re-users. In 2012, the ACTA agreement was stopped by a wave of public outrage as the media industry would have been granted extensive monopoly rights and control of the Internet. TAFTA | TTIP is a new attempt to introduce these monopoly rights.
The people in Europe, the US, and the rest of the world do not need a large, de-regulated transatlantic market. The TAFTA | TTIP does not provide answers to many important questions: How do we want to live? What is a ‘good life’, without the exploitation of people, animals and the environment? How can we work within the planet’s natural limits and guarantee good, fairly paid work? How can we achieve food sovereignty for everyone?
We are currently in the middle of an environmental, social and economic crisis. We need more democracy, social justice, climate protection and financial market regulation. We need more economic solidarity, protection of smallholders, and an economy and agriculture orientated towards the common good. We need more effective consumer and data protection as well as protection against the financial interests of international corporations.
Free trade and investor protection strategies dating from the 20th century are not a solution to our current challenges. A transatlantic partnership that deals with the urgent socio-ecological transformation required from the 21st century must look very differently.
Corporate Europe Observatory (2013): Busting the Myths of Transparency Around the EU-US Trade Deal, 25 September 2013. Available online: http://corporateeurope.org/trade/2013/09/busting-myths-transparency-around-eu-us-trade-deal
BMELV (2013): Eiweißpflanzenstrategie, Bundesministerium für Ernährung, Landwirtschaft und Verbraucherschutz. Available online: http://www.bmelv.de/SharedDocs/Standardartikel/Landwirtschaft/Pflanze/Acker-Pflanzenbau/Eiweisspflanzenstrategie.html
De Gucht (2013): Parliamentary Question – Answer given by Mr. De Gucht on Behalf of the Commission, European Parliament, 23. September 2013. Available online: http://www.europarl.europa.eu/sides/getAllAnswers.do?reference=E-2013-009284&language=EN
Deutscher Kulturrat (2013): Kulturelle Ausnahme ist bei geplantem Freihandelsabkommen zwischen EU und USA unverzichtbar, 06 May 2013. Available online: http://www.kulturrat.de/detail.php?detail=2520&rubrik=142
DGB (2013): Stellungnahme zu den geplanten Verhandlungen für ein Handels- und Investitionsabkommen zwischen der EU und den USA, Deutscher Gewerkschaftsbund. Available online: http://www.dgb.de/themen/++co++a98b3340-bc89-11e2-bf0b-00188b4dc422
European Commission (2013): Transatlantic Trade and Investment Partnership (TTIP) – The Biggest Trade Deal in the World. Available online: http://ec.europa.eu/trade/policy/in-focus/ttip/
Food and Water Watch (2013): GE Salmon. Available online: http://www.foodandwaterwatch.org/food/genetically-engineered-foods/stop-frankenfish/
George, Clive (2013): What‘s Really Driving the EU-US trade Deal?, Open Democracy, 8 July 2013. Available online: http://www.opendemocracy.net/ourkingdom/clive-george/whats-really-driving-eu-us-trade-deal
Hakim, Danny (2013): European Officials Consulted Business Leaders on Trade Pact, New York Times, 8 November 2013. Available online: http://www.nytimes.com/2013/10/09/business/international/european-officials-consulted-business-leaders-on-trade-pact-with-us.html?_r=0
Hansen-Kuhn, Karen / Steve Suppan, Steve (2013): Promises and Perils oft he TTIP – Negotiating a Transatlantic Agricultural Market, Institute of Agriculture and Trade Policy.
Public Citizen (2013): NAFTA’s Legacy for Mexico: Economic Displacement, Lower Wages for Most, Increased Immigration. Available online: http://www.citizen.org/documents/ImpactsonMexicoMemoOnePager.pdf
Seattle to Brussels Network (2013): A Brave New Transatlantic Partnership: The proposed EU-US Transatlantic Trade and Investment Partners hip (TTIP/TAFTA), and its Socio-economic & Environmental Consequences, Corporate Europe Observatory. Available online: http://corporateeurope.org/sites/default/files/attachments/brave_new_transatlantic_partnership.pdf
UNESCO (2005): Convention on the Protection and Promotion of the Diversity of Cultural Expressions. Available online: http://portal.unesco.org/en/ev.php-URL_ID=31038&URL_DO=DO_TOPIC&URL_SECTION=201.html