TTIP – an opportunity for big business to pick and choose

The American International Group (AIG) is a US insurance multinational that chose London as the headquarters for its financial products division. The motivation behind this decision was clear: less supervision and more freedom to maximise profits.

 

The director of the now defunct US government institution, the Office of Thrift Supervision, that was to supervise AIG in Europe during the 2008 crisis admitted that he did not know how his responsibilities extended to the AIG branch in London. The multinational, in other words, was free to operate as it wished, with no rules to abide by and no authority to supervise it.

Everyone wants to pick and choose the rules of the game. But in transatlantic politics, only big business has that privilege, as revealed by a new report from Corporate Europe Observatory and Lobby Control.

Thanks to the Financial Markets Regulatory Dialogue – created in 2002 as a forum for transatlantic regulatory cooperation on finance – US financial corporations can operate in the European Union (EU) without significant monitoring by European authorities.

This type of regulatory cooperation between the EU and the US risks becoming compulsory and widespread under TTIP, the transatlantic trade deal, making multinationals from both sides of the Atlantic far too powerful.

Regulatory cooperation will occur between US and EU administrations any time a new law is passed or revised, in Brussels and Washington, which may have a transatlantic impact. This type of “cooperation” will occur before law proposals even reach parliaments and will be so permeable to the influence of big business that it is often referred to as a “surreal institutionalisation of lobbying”.

The fact that US companies can bypass EU law through regulatory cooperation should worry any legislator working for the public interest.

With TTIP, EU or US multinationals will have the power to pick and choose the laws they believe to be most beneficial to their interests.

TTIP, and especially regulatory cooperation, is a clear example of how trade negotiators in EU and US institutions can be as allergic to democracy as big business can be averse to public demands for rights and protections.

The rising tide of citizen opposition to TTIP clearly illustrates the issues at stake, and will no doubt continue to expand as negotiations carry on.