TTIP negotiations resume in the face of political headwinds

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As American and European Union negotiators returned to the bargaining table this week for the eighth round of talks on a proposed Transatlantic Trade and Investment Partnership, political headwinds in Europe were approaching gale force. While protesters descended on the negotiation venue in Brussels, a fresh spate of leaked documents ignited new fears among the pact’s opponents. Meanwhile a deputy minister in Greece’s newly elected leftist government says his country’s parliament “will never ratify” TTIP.

With a new Congress in Washington and a new European Commission in Brussels, negotiators had promised a “fresh start” after last year’s rising tide of skepticism among European consumer, environmental and labor groups, even as the American public remained largely oblivious. Like most international trade agreements, this one is being negotiated behind closed doors. Much to the Commission’s dismay, globalization opponents have filled the resulting information vacuum with increasingly dire forebodings, from a flood of GMOs and chlorine-soaked chicken in supermarkets to forced privatization of Britain’s National Health Service.

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Much of the alarm owes more to stereotypes of the United States as home of “wild-west capitalism” and to rampant mistrust of institutions in the wake of the global financial crisis than to anything in reality. The European Commission has repeatedly denied that TTIP will weaken existing safety and environmental regulations or impair governments’ ability to regulate and is trying to counter fears by holding public consultations and publishing some of its negotiating drafts. But the “consolidated texts” documenting the outcomes of previous negotiating rounds have remained a closely guarded secret. Germany’s Tagesspiegel recently published an article detailing the restrictive rules for access to the documents that the American side has insisted on, even for European national trade officials (article in German with link to access rules document in English).

Probably the most serious objection to TTIP has centered on proposed “investor-state dispute settlement” (ISDS) mechanisms that would allow corporations to sue governments over regulatory actions in special tribunals, bypassing national court systems. Although ISDS is already part of hundreds of trade agreements, including many that individual EU member states have concluded with each other or the US, its inclusion in TTIP has drawn protests throughout Europe. An anti-TTIP petition focusing on ISDS gathered over a million signatures. Representatives of several national governments, including heavyweights like Germany and France, have also spoken out against ISDS, but so far none has proposed amending the Commission’s negotiating mandate to exclude it. Trade Commissioner Cecilia Malmström has argued that ISDS needs to be part of TTIP precisely because the existing system “needs to be quite dramatically reformed.” But proposals such as adopting UN-sponsored transparency rules seem unlikely to placate critics. For now, the Commission has suspended negotiations on ISDS pending further consultations.

Impeccably pro-business voices including the Cato Institute and the Financial Times have advocated jettisoning ISDS to smooth passage of TTIP as a whole. (For whatever it’s worth, this is my own position as well.) TTIP without ISDS would still be a landmark achievement. But fresh opposition to the pact’s proposed regulatory cooperation provisions strikes at TTIP’s heart. Measures for harmonization and/or mutual recognition of regulations and technical standards have been part of the TTIP blueprint from the beginning. Indeed, given the already-low tariffs on most goods in transatlantic trade, they would be the source of much of the agreement’s benefits. Potential cost savings for small and medium enterprises from eliminating duplicate certification and parallel product lines have been a major selling point for proponents. But the details in a draft European proposal for the Regulatory Cooperation chapter leaked this week have set off new alarm bells in the opposition camp.

The draft calls for an “early warning” procedure in which each side would periodically submit plans for future laws and regulations to the other for consultation. Foreign and domestic “stakeholders” would then be invited to “provide input through a public consultation process” — a new venue, critics say, for corporate lobbyists to block regulations and shape legislation to their own liking. Proposed new rules would undergo an “impact assessment” to gauge their potential effects on trade and investment, a procedure that critics insist is “tilted towards the interests of business, not citizens.” Moreover, the proposal would institute “regulatory exchanges” and a bilateral Regulatory Cooperation Body that would, in effect, give each side a voice in formulating the other’s future laws and regulatory framework. The normally staid Frankfurter Allgemeine Zeitung, hardly a hotbed of radical anti-globalization sentiment, responded to the draft with a startled article under the headline “America to have a say in our laws.”

Business groups have only belatedly started more actively injecting their pro-TTIP voices into the public debate. Needless to say, they’ve had a role in setting the agenda from the start, but it’s only recently that vigorous high-profile defenses of the trade pact have started appearing from organizations like the US National Association of Manufacturers, the German Bundesverband der Deutschen Industrie, the Confederation of Swedish Enterprise, the European Association of Automotive Suppliers, and the American Motor & Equipment Manufacturers Association.

The heady days of early 2013, when the parties hoped to wrap up negotiations by the end of 2014, are all but forgotten. Most recently, Commissioner Malmström suggested that “the bare bones of an agreement” might be completed by the end of this year. Without a great deal more work to counter the naysayers, winning ratification from the European Parliament and 28 member states’ parliaments will be an uphill struggle.

Want to learn more about TTIP? A good place to start is the United States Trade Representative’s online TTIP Information Center.

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