The European Union and the United States are discussing a new free trade agreement, known as the Transatlantic Trade and Investment Partnership (TTIP). The problem is that it is not just about trade.
Negotiators are mostly concerned with regulatory barriers. Hence the widespread fear among civil society that the deal could reduce democratic, environmental, social and labour standards in both the European Union and the United States. Due to the political and economic power of the two partners, the deal could have global impact.
The good news is that the deal is not yet signed. The bad news is that the negotiations are opaque.
No official documents are available but leaks are alarming, especially regarding two important aspects of the deal: investor-state dispute settlement, and the regulatory cooperation council.
Investor-state dispute settlement (ISDS)
This technical term hides a simple message: businesses can challenge democratic decisions outside of national courts.
ISDS grants the right to foreign corporations to challenge governments when they think the value of their investments has been reduced by government policies. Trials will occur in private trade tribunals, with panels made of corporate lawyers and without any possibility of appeal.
Examples of corporations using ISDS to challenge government measures include EU investors attacking Egypt’s minimum - wage increase.
A coalition of 177 trade unions and campaign organisations from both the European Union and the United States highlighted those risks in a joint letter to the EU and the US trade representatives. The letter calls for the removal of ISDS altogether as it gives corporations a powerful weapon to decide on the political agenda, and forces governments to use taxpayer funds to compensate corporations for public health, environmental, labour and other public interest policies and government actions.
Regulatory Cooperation Council
The idea behind the trade deal, as it currently stands, is that policies should not harm businesses. The Regulatory Cooperation Council is an illustration. It will be made of regulators and trade representatives who will have the possibility to assess whether regulations on both sides of the Atlantic do not undermine business interests.
What will US companies think of European regulations on chemicals (i.e chlorinated chickens) or GMOs (Genetically Modified Organisms)? But more importantly, why should businesses have a say on those issues before European and American citizens do?
Increasing trade ties can be beneficial for both American and European workers and the environment but discussions should focus on policies to create decent jobs, protect rights and the environment, instead of policies to maximise profits at all costs.
