Bozen – It is a measure of the threats that trade and investment treaties currently being negotiated pose to our democratic rights, so that even establishment newspapers now engage the service of WikiLeaks to make public their secret provisions. Only last week the New York Times leaked details of the Trans-Pacific Partnership (TPP) between the US and 11 other Pacific rim countries, whose negotiations are at a critical stage. This series of treaties is the prototype for the Transatlantic Trade and Investment Partnership (TTIP), a comprehensive free trade and investment treaty between the European Union and the US which President Obama announced in his State of the Union address in February 2013, to be completed before the end of his second term and designed to belong to his legacy.
Like the TPP the TTIP has been the subject of spectacular leaks to force public disclosure. On 15 January 2014, WikiLeaks released the secret draft text for the entire TPP Environment Chapter and the Chairs‘ Report on it. And last week, on March 27, The New York Times published the draft of the chapter on trade, dated Jan. 20, 2015, obtained in collaboration with WikiLeaks, so sensitive that this chapter is mandated to be classified until four years after TTP comes into force or trade negotiations end, should the agreement fail.
In September 2013, the European Commission claimed that TTIP poses no threat to regulations on health, safety, environment or financial security because “negotiations will be transparent”. But in fact in a letter to his US counterpart only two months prior, chief EU negotiator Ignacio Garcia Bercero confirmed that the European Commission would block public access to all documents related to the negotiation or development of TTIP, and that those documents would remain closed to the public for up to 30 years, a classification usually reserved for official secrets.
Greater transparency was forced on the European Commission after a proposed draft of the TTIP was leaked in March 2014, which prompted the Commission to launch a public consultation on a limited set of clauses and in January 2015 it published parts of an overview. The European Commission now has a website on the TTIP which advertised that it “publishes TTIP legal texts as part of transparency initiative”, and that the texts “include textual proposals and position papers”, explaining what is at stake in the EU US trade talks.
TTIP, we learn from the European Commission website, addresses regulatory, legal, and institutional barriers to the free flow of capital between the two greatest trading blocs in the world. Together the US and the EU represent 60% of global GDP, 33% of world trade in goods and 42% of world trade in services. A free trade area between the two would represent potentially the largest regional free-trade agreement in history, covering 46% of world GDP.
US investment in the EU is three times greater than US investment in the whole of Asia; and EU investment in the US is eight times that of EU investment in India and China combined. The US and EU are the largest trading partners of most other countries in the world and account for a third of world trade flows. Trade disputes affect only 2% of total trade and given that tariff barriers are already under 3%, the aim now is to remove “non-tariff” barriers. Together, the TPP and TTIP will cover more than 60 per cent of global GDP. These are staggering figures, especially because both pacts exclude China (along with Russia and Africa).
It is important to realize that the European Commission admits that the TTIP, like the TPP, is less an agreement about “tariff barriers”, which are already minimal, than an exercise to remove the “non-tariff barriers”, which are the institutional, bureaucratic and policy obstacles to free trade, much more sensitive matters and hence the secrecy. For, a key provision of the TTIP, like TPP, is that transnational corporations can sue sovereign governments at all levels for “loss of profits” in their jurisdictions due to public policies enacted as part of the democratic process. And this is the reason why the struggle for transparency is so important.
An internal EU Commission paper leaked in December 2013 confirmed that the types of regulation at risk from TTIP would include “primary EU legislation (both regulations and directives), implementing measures, delegated acts and also regulations introduced by EU member States; and, on the US side, bills passed by Congress, federal rules and also regulations adopted by individual US states”.
TTIP, like TPP, has the support of most US Republican Congressmen and Senators, but has been heavily criticized by liberal activists, like Senator Elizabeth Warren, Democrat of Massachusetts, as well as by law professors, first for its secrecy, and second for permitting corporate challenges to US sovereignty by threatening government regulations in the areas of banking, tobacco, pharmaceuticals, food safety and environmental protection.
Regarding secrecy, it has been revealed that US Members of Congress are only able to view selected portions of treaty-related documents and under strict supervision. And while only three individuals in each TPP nation have access to the full text of the agreement, 600 “trade advisers” – lobbyists for large US corporations such as Chevron, Halliburton, Monsanto and Walmart – are granted privileged access to crucial sections of the treaty text.
These treaties have the potential to create far-reaching, transnational legal and enforcement regimes, modifying or replacing existing laws in TPP member states, as the WikiLeaked 95-page Intellectual Property Chapter lays out. Its subsections include agreements relating to patents (who may produce goods or drugs), copyright (who may transmit information), trademarks (who may describe information or goods as authentic) and industrial design. The chapters longest section – ’Enforcement’ – details new policing measures, with far-reaching implications for individual rights, civil liberties, publishers, internet service providers and internet privacy.
Of particular concern in this chapter are arbitration procedures, known as “Investor-State Dispute Settlement” (ISDS) procedures, now included in some 3000 international trade treaties, as the New York Times points out in its March 27th disclosure. ISDS procedures, scheduled for inclusion in all TPP and TTIP treaties, are designed to send legal challenges to supranational litigation tribunals, which have no human rights safeguards and bypass national courts.
John Hilary, Executive Director of the London-based anti-poverty charity “War on Want”, in his 42-page analysis of the TTIP proposal, considers the anti-democratic manner in which it has been negotiated, and the right of transnational companies to sue sovereign governments for “loss of profits”, its most alarming features. ISDS provisions have even prompted some domestic companies to reinvent themselves as “foreign” investors, successfully sueing their own governments.
The power of transnational companies to roll-back public policy in such important areas as labour rights, food safety rules (including genetically modified crops), the use of toxic chemicals and energy policies can be judged by the results. For instance, the Swedish energy company Vattenfall, has successfully challenged Hamburg’s environmental regulations, and is now suing the German government for €3.7 billion over the phasing out of nuclear power in the wake of the Fukushima disaster. Canada has been hard hit by ISDS rules allowing companies to sue their own government from US offices, losing cases over fuel additives, water and timber rights, with multi-million dollar pay-outs.
Sustainability requirements under the EU’s Renewable Energy Directive have been targeted by US agrofuel producers keen to ‘harmonize’ the EU regulations with lower USstandards. The US government is also using TTIP to undermine the EU’s Fuel Quality Directive to make it easier for US refineries to export to Europe oil extracted from Canadian tar sands. Under the same rules the US will try to export oil produced by hydraulic fracturing (“fracking”) to Europe and to bypass its legislation against “fracking”, just as it is now challenging the ban against “fracking” in Quebec under NAFTA rules.
Directives for the negotiation of the TTIP issued in Brussels by the EU Council, 17 June 2013, include another set of provisions of which Hilary is highly critical, which state that the TTIP is designed “to create new markets by opening up public services and government procurement contracts” to international competitive bidding, threatening privatizations in key sectors like health and education. (A call to make this mandate a public document was rejected by the European Council of Ministers at its 18 October 2013 meeting in Luxembourg.)
UK government officials have confirmed the privatization of public service and procurement contracts as a means of achieving one of their top three goals for TTIP, which is to “complete the single market” within the EU itself, secure in the knowledge that international (Anglophone) accounting and management companies stand to be the greatest beneficiaries.
In the case of the EU, TTIP cleverly exploits a general perception of over-regulation and stifling bureaucracy thwarting further globalization. The officially acknowledged goal of the TTIP and the TTP is not free trade, but another round of “deregulation”, that love-child of the Neoliberals, taken to a higher level. But the game is not yet up. Australia is so far the only country that has managed to exclude ISDS provisions from all its bilateral and regional trade agreements, achieved by the Gillard government in 2011. If Australia can do it, the immensely more powerful EU Commission can do it too and the struggle for transparency will have been the path best taken!
The author: Patricia Springborg (D. Phil. Oxon) was foundation “professore ordinario” in Political Science at the Free University of Bozen from 2007 to 2013. She previously held a personal chair in Political Theory in the Economics Faculty at the University of Sydney. Since her retirement in November 2013 she is guest professor at the Centre for British Studies of the Humboldt University in Berlin.