Why We Should Rename TAFTA/TTIP As The 'Atlantic Car Trade Agreement'

from the we-could-call-it-'ACTA' dept

When TAFTA/TTIP was first announced, David Cameron said it would "have a greater impact than all the other trade deals on the table put together." We were repeatedly assured that it would boost both the US and EU economies significantly. But when people started looking at the European Commission's own projections for TTIP (pdf), they found that the reality wasn't so impressive. Here's the economist Dean Baker, in a post entitled "Why Is It So Acceptable to Lie to Promote Trade Deals?":

The most widely cited projections for the growth impact of the TTIP are from the Centre for Economic Policy Research [CEPR] in London [in a study paid for by the European Commission] which shows the pact leading to an increase in GDP of 0.4 percent in the U.S. when its effects are fully felt in 2027, and 0.5 percent in the European Union. The analysis explicitly says that it will not lead to more jobs since the models are full employment models. It may lead to somewhat higher wages, but it is not a way to employ the unemployed. Furthermore, the discussion notes that in the transition, some workers may end up unemployed as the economies adjust to the new rules.

Implying that a deal that raises GDP by 0.4 or 0.5 percent 13 years out means "job-creating opportunities for workers on both continents" is just dishonest. The increment to annual growth is on the order of 0.03 percentage points. Good luck finding that in the data.

Recognizing that claims of substantial growth don't stand up to scrutiny, boosters of TTIP in Europe have resorted to a fallback technique: anecdote. If you can't prove something is good in general, show that it will be good for someone -- anyone -- and then extrapolate. Of course, that means you need to find an example of an industry that would definitely benefit from a US-EU trade agreement. An EU document on regulatory harmonization (pdf) from September 2013 gave a strong hint of which that might be:

The safety regulations that apply to cars are different in the US and the EU -- even if the end result is comparable levels of safety. In fact, it's already possible to drive some US- approved cars on European roads, under a special European approval system. Through TTIP, the Commission would like regulators to formally recognise that important parts of our two regulatory systems are broadly the same in safety terms.

Later in the same document we read:

Electric cars offer great potential to tackle climate change and pollution while boosting growth. Many companies on both sides of the Atlantic already sell them. Making them practical however will require new infrastructure as well as technologies and standards to ensure they are safe. That is why EU and US regulators and standard setters on both sides of the Atlantic are getting together early in this process to try to find common solutions that would allow for a real transatlantic market.

And then:

One example is the whole area of car safety already mentioned. The political choice in this kind of regulation is that the car has to be safe. For example, doors need to be strong enough to withstand impact and airbags need to function perfectly.

It is striking how the anecdotal stories about the various ways in which the automotive industry would benefit from TAFTA/TTIP have become even more widespread recently. Here's the British MP John Healey, one of the main cheerleaders for TTIP in the UK, writing in October 2014 about the "potential gains" of the agreement. Guess which example he chooses?

Take the car industry -- a British success story; supporting hundreds of thousands of good manufacturing jobs across the country. Eight out of ten cars made in the UK are sold abroad, but we currently sell far fewer than we could to the US because of different regulatory rules. This needn’t mean standards are higher or lower. Just as we drive on the left and they on the right, some regulations are not better or worse, just different.

Here's the EU Commissioner for Trade, Cecilia Malmstrom, speaking to the European Parliament's trade committee in December 2014:

Take cars, we could look at the differences in our car crash tests or the way we check if the seat covers are flame-resistant. Reconciling small differences like these, without compromising on safety, would be a huge step forward.

A recent video from the German industry association BDI extolling the virtues of TTIP for small and medium-sized companies uses two examples -- one of which is cars. And here's a video from BBC News which is all about the fact that TTIP will make it easier to sell European products in the US, using cars as its example. The main CEPR study on the economic impact of TTIP does, indeed, predict that car sales will increase. In fact, as Martin Whitlock has noted, that boost to transatlantic trade in cars contributes half of TAFTA/TTIP's total projected uplift to economies:

Cars form a big part of the E.U.'s case for TTIP. They account for 47% of the increase in exports and 41% of the increase in imports in the best case scenario, with well over three times as many vehicles braving the Atlantic storms in one direction or the other than at present.

Since the gains for this industry are expected to be so large, and those for other industries so small, why not drop all the contentious stuff that threatens to derail the whole deal, and concentrate on cars? In any case, it would be more honest to rename the TTIP proposal as the "Atlantic Car Trade Agreement," since that's what it is really about. We could even call it "ACTA" for short.

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Filed Under: automobiles, cars, regulations, tafta, trade agreements, ttip

Two Leaks Reveal How TAFTA/TTIP's Regulatory Co-operation Body Will Undermine Sovereignty And Democracy

from the chilling-effects dept

It has long been evident that TAFTA/TTIP is not a traditional trade agreement -- that is, one that seeks to promote trade by removing discriminatory local tariffs on imported goods and services. That's simply because the tariffs between the US and EU are already very low -- under 3% on average. Removing all those will produce very little change in trading patterns. The original justification for TTIP recognized this, and called for "non-tariff barriers" to be removed as well.

Those "non-tariff barriers" include regulations and standards introduced to protect the public -- for example, through health and safety laws or environmental regulations. Removing those "barriers" in order to increase trade might be great for companies, but increases the social costs through weakened protection for the environment, or greater health risks. The outcry caused by this prospect has led both negotiating parties to insist that TTIP will not lower standards.

But it's hard to see how those non-tariff barriers can be harmonized without a race to the bottom in terms of regulations, since no one is calling for a race to the top. Even "mutual recognition," which would allow both standards to be used, would inevitably see the lower standard becoming the norm because it would be cheaper to implement, and thus offer competitive advantages.

However, a leak back in December 2013 gave a clue about how it might be possible for the US and EU governments to promise that the TAFTA/TTIP agreement would not lower standards, and yet provide a way to dismantle those non-tariff barriers (pdf). This would be achieved after TTIP was ratified, through the creation of a new body called the Regulatory Council, which would play a key role in how future regulations were made. Effectively, it would provide early access to all new regulations proposed by the US and EU, allowing corporations to voice their objections to any measures that they felt would impede transatlantic trade. This regulatory ratchet would push standards downwards and reduce costs for business, but only gradually, and after TTIP had come into force -- at which point, nothing could be done about it.

Since then, things have been quiet on the regulatory front, not least because corporate sovereignty in the form of investor-state dispute settlement emerged as the most contentious issue -- in Europe, at least -- which has rather eclipsed earlier concerns about this supranational regulatory body. But now, in a single week, we have had two important leaks in this area, both confirming those initial ideas sketched out in 2013 are still very much how TAFTA/TTIP aims to bring about the desired regulatory harmonization.

Corporate Europe Observatory obtained a very recent draft copy of the EU's proposals for the chapter covering regulatory co-operation (pdf), which describes a new transatlantic organization, now called the Regulatory Cooperation Body. Here's Corporate Europe Observatory's summary of how it would work:

According to the proposal, as soon as a new regulation is in the pipeline, businesses should be informed through an annual report, and be involved. This is now called "early information on planned acts", until recently called “early warning”. Already at the planning stage, "the regulating Party" has to offer business lobbyists who have a stake in a piece of legislation or regulation, an opportunity to “provide input”. This input "shall be taken into account" when finalising the proposal (article 6). This means businesses, for instance, at an early stage, can try to block rules intended to prevent the food industry from marketing foodstuffs with toxic substances, laws trying to keep energy companies from destroying the climate, or regulations to combat pollution and protect consumers.

Along with this new opportunity for lobbyists to try to shape, slow down or even block new regulations, the EU proposes to hand them a powerful weapon -- the impact assessment:

New regulations should undergo an "impact assessment", which would be made up of three questions (article 7, reduced from seven in the earlier proposal):

- How does the legislative proposal relate to international instruments?
- How have the planned or existing rules of the other Party been taken into account?
- What impact will the new rule have on trade or investment?

Those questions are primarily tilted towards the interests of business, not citizens. Thanks to the “early information” procedure, businesses can make sure their concerns are included in the report, and should it go against their interests, the report will have to cite a detrimental impact on transatlantic trade.

As Corporate Europe Observatory points out, the only criteria taken into account are impacts on trade or investment. So, for example, new environmental rules might well do wonders for reducing air pollution, but if they have an adverse effect on US or EU companies' sales or investments, they would be marked as undesirable. This is likely to have a severe chilling effect on bringing in new standards that protect the public but might impose new costs on business.

The other leak, obtained by the Greens MEP Michel Reimon, concerns regulatory co-operation in the field of finance (pdf). This is a contentious area: the US is reluctant to harmonize financial regulations through TAFTA/TTIP because Europe's are weaker; for the same reason, the European finance industry is keen to use TAFTA/TTIP as a way of undermining America's more stringent rules. The leak is of note for the following section:

The Joint EU/US Financial Regulatory Forum shall agree on detailed guidelines on mutual reliance adapted for each specific area of financial regulation no later than one year from the entry into force of this agreement.

That is, the European Commission wants the US to sign up to TTIP without any specification of exactly how the new Financial Regulatory Forum will work, or what powers it will have. This seems a clear effort to sneak in elements later that the US is currently resisting.

What these important leaks confirm is that the regulatory co-operation that lies at the heart of TAFTA/TTIP would undermine sovereignty on both sides of the Atlantic. The Regulatory Cooperation Body would provide an important new forum for corporate lobbyists to intervene even earlier in the life of proposed rules and regulations than they do now -- and long before lawmakers have a chance to express their views. The end-result is likely to be an impoverishment not just of public policy-making, but of democracy itself.

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Filed Under: regulations, sovereignty, tafta, trade, ttip

If We're Going To Fix Copyright, We Need Much More Transparency

from the a-necessary-factor dept

Glyn already covered European Parliament Member (and the EU Parliament's only Pirate Party representative) Julia Reda's report on copyright reform in the EU. However, for Day 3 of Copyright Week -- which is all about transparency, I wanted to focus on the other aspect of Reda's release of her report: just how transparent she's been. When we talk about transparency in copyright law, we're often talking about the lack of such transparency, often via international trade negotiations, like ACTA, TPP and TAFTA/TTIP, in which backroom dealing is done by unelected bureaucrats. The public is kept out of the negotiating process entirely, while lobbyists have full access. Combine that with the revolving door between the negotiators and the lobbyists themselves, and it's a recipe for non-transparent policy-making by which legacy industries get all the "gifts" they want.

Reda's approach with her report on copyright shows that it doesn't need to be that way. Along with the report, she detailed all of the 86 meeting requests she received from lobbyists regarding copyright (noting that the number went way up after she was appointed to write this report): She also noted that she really wanted to "balance out the attention paid to various interest groups" and that she really wanted to speak to content creators directly, rather than middlemen:

Most requests came from publishers, distributors, collective rights organizations, service providers and intermediaries (57% altogether), while it was more difficult to get directly to the group most often referred to in public debate: The authors. The results of the copyright consultation with many authors’ responses demonstrate that the interests of collecting societies and individual authors can differ significantly.

The end result:

Meetings requested

Meetings taken

She also includes a list of every lobbying meeting request she received on copyright:

This is great to see, and it would be nice to see others working on these issues post similar things. A few years ago, I noticed that while the USTR's FOIA website has a page for visitor logs, that page is conveniently left blank: After many months of back and forth, the USTR finally sent me visitor logs in an almost entirely unusable manner. Here's one of the many documents that were sent:

Compare and contrast the two situations. One appears to be representative government. The other seems to be doing everything possible to hide what's really going on when it comes to important things like understanding who's influencing copyright policy.

Filed Under: acta, copyright, copyright reform, julia reda, tafta, tpp, trade agreements, transparency, ttip, ustr

European Commission's Clever Ruse To Introduce Corporate Sovereignty Regardless Of Ratification Votes In EU

from the whatever-happened-to-democracy? dept

Because of the complicated nature of power-sharing in the European Union, some international agreements require the approval of both the European Parliament and of every Member State -- so-called "mixed agreements." It is generally accepted that both the Canada-EU trade agreement (CETA) and TAFTA/TTIP are mixed agreements, and will therefore require a double ratification: by the full European Parliament, and all the EU governments. Indeed, the European Commission has frequently cited this fact to bolster its assertion that both CETA and TAFTA/TTIP are being negotiated democratically, since the European public -- through their representatives -- will have their say in these final votes.

But a disturbing analysis published by Greenpeace on its Austrian pages (original in German), suggests that built into the CETA agreement, which is currently going through a "legal scrub" before being presented for ratification (pdf), are a couple of sections that will allow the European Commission to introduce the corporate sovereignty provisions anyway. According to Article X.06 3(a):

This Agreement shall be provisionally applied from the first day of the month following the date on which the parties have notified each other that their respective relevant procedures have been completed.

This means that CETA would enter into force provisionally as soon as the European Commission and the Canadian government have notified each other that "relevant procedures have been completed." There's no explicit requirement there for those "relevant procedures" to include ratification by the European Parliament or the EU Member States: the European Commission might claim that the "relevant procedures" simply meant things like the legal scrub. One of the provisions of CETA is a deeply-problematic corporate sovereignty chapter, so this too would enter into force at this point, regardless of what national governments might want.

Now suppose that the European Parliament, or one of those Member States, does not ratify CETA, perhaps because of the investor-state dispute settlement (ISDS) mechanism, in which case the entire agreement would fail. But here's what Article X.07 4 says happens in this case:

If the provisional application of this Agreement is terminated and it does not enter into force, a claim may be submitted pursuant to the provisions of this Agreement, regarding any matter arising during the period of the provisional application of this Agreement, pursuant to the rules and procedures established in this Agreement, and provided no more than three (3) years have elapsed since the date of termination of the provisional application.

In other words, even if CETA is rejected in Europe, thus causing the provisional application to be terminated, claims under the ISDS chapter would still be possible up to three years afterwards for investments made during the provisional period. This is no mere theoretical possibility: it is exactly what happened to Russia with the Energy Charter Treaty, which it never ratified, but where an ISDS tribunal made an award of $50 billion against the country because of the treaty's provisional application. What's even more troubling is that the European Commission proposes to add similar clauses to TAFTA/TTIP, as the Greenpeace article notes:

A representative of the European Commission at a press briefing session in Vienna on Tuesday confirmed to Greenpeace that the Commission intends to propose a "provisional application" for TTIP too.

This would be even worse than putting such sections in CETA, because ISDS in TAFTA/TTIP will apply retrospectively to all existing investments, as the negotiating mandate specifies (pdf):

The investment protection chapter of the Agreement should cover a broad range of investors and their investments, intellectual property rights included, whether the investment is made before or after the entry into force of the Agreement.

This would allow corporate sovereignty provisions applying to huge numbers of existing investments to enter into force and remain there for some years even if TTIP were rejected by the European Parliament or one of the national governments. So much for the European Commission's much-vaunted "democracy" -- and another compelling reason to take the ISDS chapter out of both CETA and TAFTA/TTIP.

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Filed Under: ceta, corporate sovereignty, eu commission, eu parliament, isds, ratification, tafta, trade agreements, ttip

EU Consultation On Corporate Sovereignty In TAFTA/TTIP Shows 145,000 Against It; European Commission Carries On Anyway

from the not-listening dept

As Techdirt has been reporting for a while, corporate sovereignty chapters have emerged as one of the most worrying aspects of trade agreements. Concerns about the inclusion of the investor-state dispute settlement (ISDS) mechanism in TAFTA/TTIP became so acute in the EU that the European Commission was forced to hold a consultation on the subject last year in an attempt to assuage growing fears. We pointed out at the time that this was a sham, since all it offered was the option to comment on a few minor revisions to the ISDS mechanism: it was not designed to allow the public to express their views on the idea itself.

People went ahead and used the opportunity to convey their rejection of the imposition of corporate sovereignty provisions anyway. The publication of the European Commission's analysis of the ISDS consultation (pdf) confirms just how complete that refusal is. Here's a summary from the accompanying press release:

The vast majority of replies, around 145,000 (or 97%), were submitted through various on-line platforms of interest groups, containing pre-defined, negative answers. In addition, the Commission received individual replies from more than 3,000 individuals and some 450 organisations representing a wide spectrum of EU civil society, including NGOs, business organisations, trade unions, consumer groups, law firms and academics. These replies generally go into more detail on the proposed approach.

As well as the unanimity of the rejection, what is striking is the fact that 145,000 citizens replied to a consultation on an obscure aspect of trade agreements that most people had never heard of a year ago. That alone bespeaks an unprecedented engagement by the public -- something rare enough at a time when people are generally disenchanted with politicians and their grand projects. And yet instead of celebrating this incredible interest from the public, here's how the European Commission's report chose to frame things:

It was possible to ascertain that a very large number of replies (around 145.000) were submitted collectively through various non-governmental organisations (NGOs). These organisations provided pre-defined answers which respondents adhered to. These NGOs made available dedicated on-line platforms or software, often with pre-prepared answers, permitting the loading of replies directly into the database of the public consultation, thus making it possible to submit very significant numbers of replies in a short amount of time.

In other words, the Commission clearly implies, those 145,000 replies were more or less cheating, because they used "pre-defined answers" to make things easier, and thus shouldn't really be treated as seriously as individual and unique contributions that required many days work by highly-paid lobbyists. That attitude betrays once more the inherent bias in these consultations, which are aimed at companies and their PR machines, not at the general public, whose views are rarely sought, and even more rarely listened to.

And that's the case with this corporate sovereignty consultation. Declaring that it was not meant to be a "referendum" on ISDS, the European Commission is responding by organizing yet more consultations:

In the first quarter of 2015, the Commission will organise a number of consultation meetings with EU governments, the European Parliament, and different stakeholders, including NGOs, business, trade unions, consumer and environment organisations, to discuss investment protection and ISDS in TTIP on the basis of this report.

This is the old technique of repeatedly asking a question until you get the answer you want. It confirms that the consultation was never seriously intended to solicit people's views, but was mere window-dressing, and undertaken in the hope that the general public would be too bored or confused by the technical questions posed to take part.

But this reckoned without two factors. The first is the Internet, which has allowed NGOs and other campaigners to provide tools that make it much easier for the public to understand and participate in complex discussions. That's why the European Commission singles out this aspect for scorn: it represents a very serious threat to the cosy old way of doing things, as the Net-driven rejection of the Anti-Counterfeiting Trade Agreement (ACTA) in 2012 showed most dramatically.

The other factor that the Commission overlooked was that people now understand that TAFTA/TTIP is not a typical trade agreement about tweaking tariffs. Instead, it represents an ambitious attempt to re-mold society on both sides of the Atlantic by changing regulatory norms and processes. Unlike tariffs, regulations are largely cultural, and so "harmonizing" them is about imposing cultural change from without. ISDS is part of that: it is a way for companies to challenge and shape national law-making through the use of supranational courts.

The massive rejection of corporate sovereignty by huge numbers of Europeans in the ISDS consultation is a warning to the European Commission that such anti-democratic actions are unacceptable, and that if it wants to avoid another ACTA fiasco, it had better drop ISDS from TAFTA/TTIP sooner rather than later.

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Filed Under: corporate sovereignty, eu, eu commission, isds, tafta, ttip

USTR Still Insists That 'Listening' Is 'Transparency' Even As It Keeps Details Completely Secret

from the buy-a-fucking-dictionary dept

The United States Trade Representative (USTR) office is a complete joke. For many years, we've been discussing how the office is one of the most secretive there is, despite negotiating agreements that impact every American. And for years, the USTR has responded with a series of flat out lies, while insisting that it's being transparent. As we've noted, the USTR is really about as transparent as pea soup, with an institutional focus on secrecy. The negotiating positions that it takes on various trade agreements are shrouded in secrecy. When other countries push to be more transparent, the USTR inevitably rejects those pleas. While lobbyists get full access to some of the documents (including the ability to log in and see the latest texts), members of Congress who want to see the details have to go to the USTR, aren't allowed to bring any staffers, and aren't allowed to make any copies or take any notes. And, it tries to actually make it difficult for most members of Congress to read the docs anyway.

The big lie from the USTR has long been that because it "listens" to anyone who wants to come in and talk, it's being transparent. Or it claims that because it (sorta) listens to Congress and Congress is "the people's representative" that it's being transparent. But, as we've explained over and over and over again, the USTR is confusing "listening" with "transparency." In the past, we've been fairly explicit about how the USTR is wrong about this:

• Listening: People ---- information -----> USTR
• Transparency: USTR --- information ----> The Public

But the USTR keeps trotting this one out. It's released a new, almost entirely bogus "fact sheet" on Transparency and the Obama Trade Agenda. Take a look at the "facts" and see which ones are actually about "transparency" and which ones are about pretending to listen:

The Administration is working to cast a wide net to draw in the views of the public and to share information at every step of the negotiating process. To that end, for the negotiations currently ongoing, the Administration has:

• Solicited public comments on negotiation aims, priorities and concerns, including through the Federal Register.
• Held public hearings inviting input on the negotiations.
• Organized first-of-a-kind stakeholder events where the negotiations are suspended so that a diverse group of stakeholders can meet with negotiators. These sessions are open to the public and provide a valuable opportunity for U.S. negotiators to hear and respond to critiques and suggestions.
• Shared information on the current status of negotiations through blog posts, trade policy updates, press releases, statements, conference calls with stakeholders and the press, and tweets.

That last one actually involves sharing some information, but always in a half-hearted and misleading way. It talks about the status of the negotiations, sure, but not about the actual text. And it's the actual text that matters. But in USTR-lala-land, we don't get to see the actual text until it's too late to change it. That's the whole point of the USTR seeking "fast track authority" from Congress, meaning that effectively what it hands in can't be changed at all. That allows the lobbyists to tinker with the details and change the language in dangerous ways, without giving anyone who understands the impact of these things to comment on it until it's too late.

The USTR insists that it can't "negotiate in public," but that's bullshit. Other international agreements frequently involve proposals and negotiating texts released to the public for comment. There is no good reason that the USTR can't do the same. The only real reason that's been given by the USTR is that actual transparency would lead to public opposition. And that's not a valid reason.

The USTR can fix this by changing to true transparency, but this argument has been going on for years, and instead of doing the right thing, it just issues more bogus "fact sheets" where it obfuscates reality by pretending to be transparent, while actually being anything but transparent.

Filed Under: fast track, listening, tafta, tpp, trade promotion authority, transparency, ustr

European Commission Announces Major Transparency Initiative For TAFTA/TTIP

from the now-it's-your-turn,-USTR dept

One of the biggest -- and most justified -- criticisms of the TAFTA/TTIP negotiations is that they are being conducted in almost complete secrecy. Attempts to deflect this criticism with token moves such as "stakeholder meetings" have failed, not least because so-called "civil society" sessions turned out to be packed with the usual business lobbyists. Similarly, the European Commission's release of negotiating positions meant that we had only general statements of intent, but without any meaningful detail -- and, as ever, the devil really does lie in those details.

The recent appointment of a new European Commissioner for Trade, Cecilia Malmström, offered the hope of a new era, especially when she quickly outlined two proposals for boosting transparency, showing a welcome appreciation of the importance of this topic:

First, to extend access to TTIP texts to all Members of the European Parliament, beyond the currently limited group of Members of the European Parliament's International Trade Committee.

Second, to publish texts setting out the EU's specific negotiating proposals on TTIP.

The first happened immediately, and Malmström has just started to deliver on the second:

The European Commission today published a raft of texts setting out EU proposals for legal text in the Transatlantic Trade and Investment Partnership (TTIP) it is negotiating with the US. This is the first time the Commission has made public such proposals in bilateral trade talks and reflects its commitment to greater transparency in the negotiations.

Here are some more details of what the newly-published texts include:

The so-called 'textual proposals' published today set out the EU's specific proposals for legal text that has been tabled in the proposed TTIP. They set out actual language and binding commitments which the EU would like to see in the parts of the agreement covering regulatory and rules issues. The eight EU textual proposals cover competition, food safety and animal and plant health, customs issues, technical barriers to trade, small and medium-sized enterprises (SMEs), and government-to-government dispute settlement (GGDS, not to be confused with ISDS). Today, the Commission has also published TTIP position papers explaining the EU's approach on engineering, vehicles, and sustainable development, bringing the total number of position papers it has made public up to 15.

To make the online documents more accessible to the non-expert, the Commission is also publishing a 'Reader's Guide', explaining what each text means. It is also issuing a glossary of terms and acronyms, and a series of factsheets setting out in plain language what is at stake in each chapter of TTIP and what the EU's aims are in each area.

There do seem to be some fairly important documents among the new releases. For example, there is the proposed text for the highly-contentious Sanitary and Phytosanitary measures (SPS) chapter (pdf), which covers various aspects of agricultural products. However, others are still missing: for the chapter dealing with copyright and patents, we only have a two-page factsheet giving very a broad outline of the proposed measures (pdf) -- and including the customary assurances that TTIP is not ACTA 2.0. There are other important sections missing, as the S&D group in the European Parliament has been quick to point out in a press release:

We also want the services schedule published, as the Commission has already done for the Trade in Services Agreement (TiSA), which would ensure the full protection of the public services.

Public services is an area of great concern to many in the EU, so its absence here will be seen as a disappointment. Other suggestions for how the negotiations could be opened up have come from the EU Ombudsman, who has just published her report on TAFTA/TTIP transparency:

The European Ombudsman, Emily O'Reilly, while welcoming the real progress by the European Commission, has made a series of recommendations on how to further increase the transparency of the on-going Transatlantic Trade and Investment Partnership (TTIP) negotiations with the US. The recommendations relate to public access to consolidated negotiating texts, greater proactive disclosure of TTIP documents and increased transparency as regards meetings that Commission officials hold on TTIP with business organisations, lobby groups or NGOs.

Clearly, then, there is now considerable momentum in Europe behind the move to open up TAFTA/TTIP. This raises the obvious question: so what about the US? As we noted last year, the USTR has shown no signs of softening its hard-line, anti-transparency position for either TTIP or TPP. But now that the European Commission has accepted the argument that openness is likely to help the acceptance of TTIP, rather than harm it, and aims to release key documents routinely, how long can the US negotiators plausibly maintain their outdated position?

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Filed Under: cecilia malmstrom, eu, eu commission, negotiating documents, tafta, transparency, ttip

Latest Trade Agreements Are About The Opposite Of Free Trade: Protectionism For Big Business

from the this-is-not-free-trade dept

We've been talking a lot about the various big "trade agreements" that are being worked on around the globe -- with a major focus on the TPP (Trans Pacific Partnership) and the TTIP (Trans-Atlantic Trade and Investment Pact). These are frequently referred to as "free trade agreements." But an important point that gets lost in the various debates is that, generally speaking these are not free trade agreements at all. In many ways, they're the opposite. Free trade is about removing barriers to trade -- which are, generally speaking, a good thing. But the simple fact is that for the most part we already have pretty low trade barriers with most of the countries involved in these negotiations. Instead, this is almost entirely about a combination of regulatory arbitrage, and the ability to better move money around by giant multinational companies. The economics comic artist Michael Goodwin did a nice job demonstrating all this in a comic about the TPP a while back. Here's just two panels, though I highly recommend the whole thing: Economist Dean Baker has a good article describing this in more detail as well, showing that these agreements aren't about "free trade" at all. As he notes, basic free trade generally makes sense. But, that's not what's really being discussed in these agreements:

In TPP and TTIP we are not talking about the textbook trade story. The actual trade barriers between the United States and the countries in these deals, with few exceptions, are already quite low. This means that there is little to be gained by lowering them still further.

Instead, he notes -- as we have in the past -- that these "trade agreements" are really just the opposite. They're about gifts for certain big businesses that they couldn't get through legislation:

TPP and TTIP are about getting special deals for businesses that they would have difficulty getting through the normal political process.

He lists out a bunch of examples, but here are a couple we've been focused on:

The pharmaceutical industry and entertainment industries will get longer and stronger patent and copyright protection.

Note how this is the opposite of true free trade. Longer and stronger copyrights and patents are actually barriers to trade. They're putting up regulatory barriers to the free flow of information, protecting certain legacy businesses at the expense of innovative firms. And, it's all done in secret, with basically only input from businesses. The only time voters actually get to see what's in it is when it's a done deal, and fully negotiated. At that point, the parties are too committed to actually allow any fixes that protect consumers or innovation.

So, when you hear people talking about these agreements as if they're "free trade" agreements, just recognize that calling them free trade agreements is a lie -- and it's a lie that's used to convince the gullible that these agreements must be good for the economy. And it appears to work on some people:

As Thomas Friedman once famously said in reference to his support of CAFTA, "I didn't even know what was in it. I just knew two words: free trade." Others in the media may be too sophisticated to express themselves so bluntly, but undoubtedly most share Friedman's view. Under such circumstances, there will be few politicians prepared to stand up for principle or their constituents and vote against the pacts regardless of what it is in them.

In short: people (correctly) believe that free trade is generally a good thing. Businesses recognize this -- and even though we generally have an awful lot of free trade around the globe these days, with fewer and fewer tariffs and trade barriers, governments are working on "free trade deals" because they know by calling them that, people will often support them, believing blindly that they're good things. Instead, there's very little that's actually about free trade, and an awful lot that's about propping up and protecting legacy business models, while stifling the important free flow of information.

Filed Under: corporate sovereignty, dean baker, economix, free trade, investment, isds, michael goodwin, tafta, tpp, trade agreements, ttip

EU-Canada Trade Agreement May Be Incompatible With EU Law

from the too-ambitious dept

Just as it did with the Anti-Counterfeiting Trade Agreement (ACTA), Germany is leading the fight against both TAFTA/TTIP and the recently-concluded trade agreement between the EU and Canada (CETA). That's clear from the fact that of the 1,115,000 European citizens who have signed an online petition calling for both TTIP and CETA to be dropped, 673,000 come from Germany. The most powerful anti-TTIP organisation, Campact, is also based in Germany, and points us to this legal analysis of CETA, and the extent to which it may be incompatible with EU and German law (pdf):

The following opinion assesses whether this "CETA Consolidated Text" of August 5th, 2014 complies with EU and [German] constitutional law. The opinion is limited to some selected regulatory fields of CETA. It does not claim to be exhaustive, but focuses on those provisions that dominate public discussion.

It's rigorous stuff and pretty dry, but the conclusions are clear enough. For example, it confirms that CETA is a "mixed agreement." That means it must be ratified by the EU and every one of the 28 Member States -- a much higher hurdle to clear than just EU approval. It identifies the corporate sovereignty provisions -- "investor-state dispute settlement" -- as a problem:

The establishment of investor-state arbitration tribunals in CETA violates the judicial monopoly of jurisdiction laid down in EU law (Article 19 TEU [Treaty on European Union] in conjunction with Articles 263ff TFEU [Treaty on the Functioning of the European Union]) and [German] constitutional law (Article 92 BL). Furthermore, the EU does not have the competence to extend such a procedure to portfolio investments and to the field of financial services.

This has been a common criticism of ISDS -- that it creates a parallel legal system only available to corporations, and which can overrule national courts. It's a consequence of the fact that CETA is not just a trade agreement, but affects many areas of daily life that are normally determined by politicians, not unaccountable negotiators working in secret, as is the case with the EU-Canadian agreement.

Of course, this is just one legal opinion, and doubtless the European Commission would beg to differ. But it does indicate that the very ambition of CETA -- and therefore also TAFTA/TTIP, which is very similar in this respect -- may be its downfall. By seeking to move "behind the borders", tackling "non-tariff barriers" that are actually regulations protecting health, safety, the environment, etc., these agreements may interfere with too many core functions of how a democracy works, and be struck down by the courts as a result.

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Filed Under: acta, ceta, eu, regulatory laundering, tafta, trade agreements, ttip

The True Cost Of Corporate Sovereignty For The EU: €3.5bn Already Paid, €30bn Demanded - Even Before TAFTA/TTIP

from the and-guess-who-foots-the-bill? dept

While the debate about the inclusion of a corporate sovereignty chapter in TAFTA/TTIP continues to rage in the EU, the European Commission insists there's nothing to worry about here. In a recent article published in the Frankfurter Allgemeine Zeitung (original in German), the new European Commissioner for Trade, Cecilia Malmström, wrote that EU member states have signed 1400 agreements with other nations that included corporate sovereignty provisions -- implying that such investor-state dispute settlement (ISDS) elements are perfectly normal, don't cause problems, and won't cause problems.

But there are two flaws with this logic. First, only nine of those 1400 agreements are with the US, and on the other side were Bulgaria, Croatia, Czech Republic, Estonia, Latvia, Lithuania, Poland, Romania and Slovak Republic. In other words, all countries keen to escape from Russia's influence after the break up of the Soviet Union, and therefore willing to sign up to more or less anything -- even treaties with ISDS -- that might help them do that. Most of those 1400 agreements are with small, developing nations with few investments in the EU. That naturally means there are few opportunities to bring cases under ISDS.

The other flaw with the European Commission's implied logic that ISDS hasn't been a problem in the past, and thus won't be in the future, is that even that isn't true, as an important new piece of research by Friends of Earth Europe, entitled "The Hidden Cost of EU Trade Deals" demonstrates. For the first time, it gathers together all the corporate sovereignty cases that have been brought so far against EU countries, and comes up with the following statistics:

127 known ISDS cases have been brought against 20 EU member states since 1994.

The total amount awarded to foreign investors -- inclusive of known interest, arbitration fees, and other expenses and fees, as well as the only known settlement payment made by an EU member state -- was publicly available for 14 out of the 127 cases (11%) and amounts to €3.5 billion.

That figure is almost certainly an underestimate: thanks to the shocking lack of transparency in ISDS cases, details about the often very large payments are not always made public, which means that we don't have access to information about all awards made against EU nations. Moreover:

Details of the compensation sought by foreign investors was publicly available for only 62 out of the 127 cases (48%). The compensation sought for in these 62 cases amounts to almost €30 billion.

Again, that figure of €30 billion is almost certainly an underestimate of the true value of total claims against EU governments -- and hence against the EU public, which ultimately foots the bill in the event of tribunals making awards to companies. What makes that €30 billion figure so disturbing is that it represents a lower bound for ISDS cases in a situation where few US companies were able to bring claims, because of their limited investment in Eastern European countries.

If there is a corporate sovereignty chapter in TAFTA/TTIP, more than 14,000 American firms that own more than 50,000 subsidiaries in EU countries will have the ability to sue the EU (pdf) -- 95% of them for the first time. Moreover, they will be able to do that for all their existing investments in Europe, not just new ones, as the following section in the EU negotiating mandate makes clear (pdf):

the investment protection chapter of the Agreement should cover a broad range of investors and their investments, intellectual property rights included, whether the investment is made before or after the entry into force of the Agreement.

That clearly exposes EU member states -- and their citizens -- to the threat of an even greater level of claims than the €30 billion currently in play. Indeed, it is not fanciful to expect that figure at least to quadruple if ISDS is included in TTIP. That would mean claims -- not necessarily successful, of course -- of around €120 billion.

That's exactly the maximum expected boost to the EU's economy that the European Commission claims would be provided by TTIP by 2027 (pdf). In other words, even if the most optimistic forecasts for TAFTA/TTIP in EU were realized, a big chunk of that benefit could be wiped out by a wave of ISDS cases brought by US companies. Exactly the same is true with the roles reversed: much of TAFTA's claimed benefits for the US economy are likely to be cancelled out by claims from 3,000 European firms owning more than 24,000 subsidiaries in the US that would suddenly be able to bring corporate sovereignty cases against the US government. On the basis of what is already happening, including ISDS in TAFTA/TTIP looks almost certain to nullify most of the claimed benefits of signing any treaty, and on both sides.

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Filed Under: corporate sovereignty, eu, investor state dispute settlement, isds, tafta, tpp, ttip