TTIP Trade Deal: Bad for Democracy

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European and American civil society have deemed the Transatlantic Trade & Investment Partnership (TTIP) an anti-democratic threat to the environment, food safety and workers’ rights. Barry Finnegan explains.

Barry Finnegan is a lecturer at the Faculty of Journalism & Media Communications, Griffith College; and is a researcher with the Irish branch of the international civil society group ATTAC and with the TTIP Information Network

Barry Finnegan is a lecturer at the Faculty of Journalism & Media Communications, Griffith College; and is a researcher with the Irish branch of the international civil society group ATTAC and with the TTIP Information Network

While likely to generate increased profits for large companies by removing and reducing production costs associated with health and safety standards (referred to as ‘unnecessary and burdensome, restrictive barriers to trade’), neither citizens nor parliamentarians can get access to the details of the TTIP currently being negotiated by the European Commission and the US Department of Trade; while claims of economic and job growth have been exposed as mere marketing messages.

Private Corporate Courts

Despite the fact that the EU and the US have the world’s most advanced and well-financed legal systems, the TTIP makes provision for a new private ‘court’ called an Investor-State Dispute Settlement (ISDS) which would allow a company who imagines its future profits being reduced as a result of legislation, to sue a government by way of a private arbitration case.

In the absence of a list of clearly identified problems with the Irish and European justice system, only one conclusion can be drawn from the TTIP negotiators’ desire for a private international court for foreign investors which would allow them to bypass Irish and European courts: namely to avoid the jurisprudence and constitutional rights accompanying the application of justice in democratic societies.

This point was well made by Business Europe (the lobby organisation for 35 European national business federations – including our own IBEC) in their document, Why TTIP Matters To European Business, where they explained how they want to be able to use ISDS in TTIP to overthrow the right of the Americans to use the US constitution to protect themselves. They explicitly state: “If in the US a domestic law is adopted after TTIP enters into force and its content violates the [TTIP] Agreement, it can still be found constitutional by domestic courts. So the only possibility for the investor to ensure its adequate protection is to bring the claim to international arbitration”.

Undermining Judicial Accountability

There are approximately 2,800 investment agreements signed by governments around the world which contain provisions for these business V’s government private courts and in the past ten years they have been undermining the cherished principles of judicial accountability and independence in democratic societies. ISDS goes beyond other forms of international adjudication giving arbitrators comprehensive jurisdiction to determine the legality of sovereign acts and to award public funds to businesses that sustain loss as a result of government regulation. Also remember that in the ISDS envisaged under TTIP, there will be no public gallery, no parliamentary oversight, no scope for judicial review or appeal, and no access to the European Court of Human Rights.

Arbitrators adjudicating these private cases lack the usual safeguards of judicial independence and fairness. They are not tenured judges, they are private contractors who sell their services case-by-case, yet they have comprehensive jurisdiction to review sovereign acts of the state; they apply broadly worded texts of investment treaties open to a range of interpretations and are empowered to resolve core matters of public law.

Law Professors’ Views

In a detailed submission to the European Commission, distinguished professors of law such as David Kennedy at the Harvard Law School, along with 120 of his colleagues at prestigious faculties of law at universities across 17 countries have recently expressed, “deep concern about the planned Treaty in general and” voiced “strong criticism of the proposed [investor-state] provisions in particular”. They say that the proposal “profoundly challenges” Member States’ “judicial, legal and regulatory systems”, and that the Commission has failed to provide evidence as to why they are “including investor-state arbitration in the TTIP at all”.

Indeed, the ‘Trade & Development Report, 2014’ from the United Nations Conference on Trade and Development states that, “the lack of transparency and coherence often observed in the operations of those ad hoc tribunals, and their apparent pro-investor bias, have given rise to concerns about the entire dispute settlement mechanism”.

ISDS In Action

To illustrate the overthrowing of our concept of democracy which ISDS represents, some examples will assist:

French multinational Veolia is using the ISDS provisions in an investment treaty between France and Egypt to sue the Egyptian Government for increasing the minimum wage. That was one the key demands of the Egyptian ‘Arab Spring’ democracy-movement which overthrew the Mubarak dictatorship. When we see on Veolia Water Ireland’s website that, “we have installed in excess of 20,000 [non-domestic water] meters on behalf of our current clients Galway City Council, Sligo County Council and Roscommon County Council”, it brings these private corporate courts a lot closer to home.

Vattenfall, a Swedish energy company, is suing Germany for billions of euro under the ISDS provisions of the Energy Charter Treaty for their decision to phase out nuclear power – – which included the mothballing of the company’s nuclear plants at Krümmel and Brunsbüttel.

Other ISDS cases with deep resonance for the people of Ireland include one where US mining company, Lone Pine, is suing Canada because of Québec’s moratorium on fracking; and also one where another mining company, Oceanagold, is suing El Salvador [Pac Rim Cayman LLC v. Republic of El Salvador (ICSID Case No. ARB/09/12)] because of the country’s decision to ban mining at their sole remaining large natural source of drinkable water.

The TTIP however, involves a lot more than simply ISDS. It’s overarching aims include the removal of import tax on the few remaining aspects of EU-US trade which they still remain, as well as the harmonisation of food, chemical, employment and financial rules and regulations.

Flood of GMOs

Friends of the Earth Europe, and Compassion in World Farming, have together accused the Commission of promoting “more and faster trade” in food between the US and the EU ahead of consumer safety and animal welfare. They have highlighted that the trade negotiators’ desire to, “seek the ‘least trade restrictive’ measures” possible, basically translates into Europe accepting the more profitable, capital-and chemical-intensive US-style corporate food industry standards.

Part of the purpose of the TTIP is to illegalise what are called ‘technical barriers to trade’. These barriers include for example our European insistence that food imported to Europe from America is tested here with our higher food-safety standards, even after it has been tested as ‘safe’ in the US. Negotiators intend to designate US food-testing as being “equivalent” to EU food-testing which will no doubt lead to cost reductions and profit growth for the largest food industry producers.

However, as the US-based Institute for Agriculture and Trade Policy has highlighted, if a food “standard is approved as ‘equivalent’, but the implementation is poor – due to budget cuts or other dysfunction – consumer protection and public health may be compromised. For example, if US testing of GMO contamination in agricultural exports is recognised as ‘equivalent’ to EU rules, but is not rigorously enforced, EU consumers could be faced with hidden GMO contamination of their food. … Poor implementation of rules in the US has led to unapproved varieties of US-grown GM rice spreading to several countries, and to unauthorized GM wheat spreading last year from Oregon to Asia”.

Precautionary Principle Out

A key stated goal of negotiations is to ban the EU’s “precautionary principle” which we use to regulate the use of chemicals. These chemicals include endocrine disrupters known to be linked to learning disabilities, attention deficit disorders and cancer. By using the “precautionary principle” the EU has been able to ban the use of pesticides called neonicotinoids which are linked to the massive reductions in bee populations across the world – a reduction which threatens 80% of the human food supply. Since neonicotinoids temporary outlawing in Europe, bee populations have been recovering.

The US-based chemical industry lobby group, CropLife America, sees this as an “abuse of the precautionary principle by the EU”. In the context of lobbying on TTIP, they said they see the “categorisation of chemicals as endocrine disruptors currently taking place” as “highly problematic”, and that it “runs counter to the science-based risk assessment approach used by the US Environmental Protection Agency”.

Other serious concerns regarding food quality relate to the demands of the US food industry: they want us to accept their meat which for example involves dipping their chicken in chlorine to eliminate bacteria; speedy approval of new GMO seeds used for animal feed; unrestricted sale of meat and dairy products from the offspring of cloned animals, and the reduction of animal welfare standards across the EU. Because they use antibiotics as growth promoters, which is banned in the EU, they can financially undercut our farmers.

The Jobs & Growth Myth

The Commission’s own research predicts paltry improvements in economic growth (0.054% per annum for each of ten years) and large worker displacement. By using standard neoclassical economic modelling (Computable General Equilibrium), their TTIP economics and jobs reports are very limited in their usefulness for seeing the actual effects. For example:

  • they do not factor in the impact of human and social disruption: they assume a fixed labour-supply and perfect labour mobility, i.e. a 100% employment model, meaning that those who lose their job as a result of TTIP are assumed to automatically get a job in a different sector of the economy the next day;
  • they do not factor in the environmental and human health costs (e.g. use of previously banned chemicals, fracking-induced long-term water pollution, weakened workers’ rights, GMO crop pollution and cross-pollination, etc);
  • the reports treat regulations which protect workers, health, food quality and environment, simply as costs; their removal therefore is always calculated as an economic gain.

Claims’ of €545 per-family-of-four per annum TTIP windfall are nonsense: they calculated the assumed TTIP-induced economic growth per annum, divided that by the total population, then multiplied it by four; so that’s a best-case scenario of €136 per person per year, or €2.62 per person per week!

Sustained freedom of information requests by civil society has forced the Commission to admit that 92% off its consultations on TTIP have with business lobby groups. The USA only abides by two out of the eight core labour standards of the ILO, and workers over there do not even get ten days statutory annual leave. One would be naïve to believe, and devious to argue, that TTIP is going to do anything except drive down peoples’ pay and conditions of work. This is driving trade unions across Europe and the US to reject the TTIP.

European Day of Action

All over Europe, an alliance of hundreds of “trade unions, digital rights activists, development NGOs, environmental groups, farmers’ organisations, consumers groups, trade campaigners, health activists, political groups and concerned citizens” have designed October 11th as a European decentralised Day of Action against TTIP, the geographic and sectoral scale of which can be assessed at www.stop-ttip-ceta-tisa.eu . An Irish coalition of civil society groups, the TTIP Information Network, concerned about the implications of the TTIP will be hosting a series of public workshops on October 11th in Dublin. More information on the event and the TTIP Information Network can be found at www.ttip.ie . Sign up to the event here: www.facebook.com/events/365107606987124

Barry Finnegan is a lecturer at the Faculty of Journalism & Media Communications, Griffith College; and is a researcher with the Irish branch of the international civil society group ATTAC (the Association for the Taxation of financial Transactions for the Aid of Citizens), and with the TTIP Information Network, a coalition of Irish civil society organisations.

 

 

 

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2 Responses

  1. Frank Keoghan

    October 8, 2014 3:26 pm

    Thanks for that article Barry. This deal is as threatening as the Lisbon Treaty. However, there is another concern and that is CETA, which is due for initialing and which also includes an ISDS clause. Initialing was postponed last week because the Germans were upset, ostensibly about ISDS. The commission has said that there is no question of re-opening CETA. But even if ISDS is removed from CETA/TTIP, there are many other damaging provisions – as you point out. Those of us involved in the campaign must continually highlight these and continue campaigning for the scrapping of CETA/TTIP.