White House Reverses Course: Now Allowing Lobbyists To Serve On Insider Government 'Advisory' Boards

from the just-making-it-official dept

For many years, we've talked about the very questionable practice by the USTR to set up "Industry Trade Advisory Committees" (ITACs), who had full access to the various documents concerning the trade agreements that were being negotiated. Obviously, for big companies, being one of the very small group of people on the inside, helping to shape trade agreements, is enormously powerful -- especially since industries long ago learned that you can "launder" policy changes that Congress doesn't want to make via the international trade agreement process, thereby putting pressure on Congress to act. It's why we've pointed out that it seems rather unfair that the RIAA has direct access to the TPP agreement, but Senate staffers (including experts on international trade) have been refused access.

Of course, one of the lame responses from the USTR and others is that, technically President Obama's ethics rules forbade "lobbyists" from being on those and other committees. But that was already very narrowly focused just on people who met the official definition of lobbyist. And, you could still have other people who work directly with lobbyists on the committee. So, for example, Neil Turkewitz, a VP with the RIAA is currently on the IP advisory committee. He can do that because he's not technically a "lobbyist" -- he just happens to work for an organization where the main function is lobbying, and where most of his colleagues are lobbyists.

Apparently, that sort of looseness wasn't enough. The White House has now changed the rules to make them even friendlier to lobbyists:

In new guidance issued Tuesday, the administration said registered lobbyists will once again be allowed to serve on the boards so long as they are representing a client.

The new rules now say:

Under the Memorandum and this Revised Guidance, federally registered lobbyists may not serve on an advisory committee, board, or commission (hereinafter, “committee”) in an “individual capacity.” In this Revised Guidance, the term “individual capacity” refers to individuals who are appointed to committees to exercise their own individual best judgment on behalf of the government, such as when they are designated as Special Government Employees as defined in 18 U.S.C. 202. The lobbyist ban do es not apply to lobbyists who are appointed in a “representative capacity,” meaning that they are appointed for the express purpose of providing a committee with the views of a nongovernmental entity, a recognizable group of persons or nongovernmental entities (an industry sector, labor unions, or environmental groups, etc.), or state or local government.

The original ban was one of President Obama's apparent "sweeping" changes, and which the President insisted showed how he was reducing the influence of lobbyists in government. Here's what he said back in 2010 about this:

My Administration is committed to reducing the undue influence of special interests that for too long has shaped the national agenda and drowned out the voices of ordinary Americans. Special interests exert this disproportionate influence, in part, by relying on lobbyists who have special access that is not available to all citizens. Although lobbyists can sometimes play a constructive role by communicating information to the government, their service in privileged positions within the executive branch can perpetuate the culture of special interest access that I am committed to changing.

Apparently, the administration is a little less committed to changing that these days. Admittedly, the White House was somewhat pressured into this by a lawsuit from some lobbyists who (I'm not joking) argued their First Amendment rights were being violated. While a lower court rejected this argument, earlier this year, the DC Circuit appeals court claimed it was a legitimate First Amendment issue and that "the ban pressures them to limit their constitutional right to petition."

Frankly, that's ridiculous. Almost no one is allowed on these advisory committees. The Intellectual Property Advisory Committee has a grand total of 16 people. I'm sure there's no way in hell I would be allowed on it. Does that mean that my constitutional right to petition the government has been denied? Of course not, because that's a ridiculous interpretation of the First Amendment.

The Appeals Court ruling wasn't the end of the case, as it was was sent back to the lower court for further review -- but it appears that the Obama administration has effectively thrown in the towel and will allow the lobbyists back onto the committees that none of us are likely to ever be allowed on. Because that process wasn't corrupt enough already...

Filed Under: advisory committees, first amendment, influence, itac, lobbying, lobbyists, politics, president obama, revolving door, secrecy, tafta, tpp, trade, trade agreements, transparency, ttip, ustr

Germany Says It Won't Agree To CETA With Current Corporate Sovereignty Chapter

from the so-where-does-that-leave-TTIP? dept

This is potentially huge: according to the leading German newspaper S&uumlddeutsche Zeitung, Germany will not accept CETA, the Canadian-EU trade agreement, if it contains a corporate sovereignty chapter in its present form (original in German, pointed out to us by @TeraEuro):

German EU diplomats confirmed in Brussels on Friday that the [German] federal government could not sign the agreement with Canada "as it is now negotiated." Although Germany was, in principle, ready to initial the agreement in September, the chapter on the legal protection of investors is however 'problematic' and currently not acceptable.

This confirms rumors that CETA is finally completed, and that the plan is for the EU member states to "initial" it -- accept it in principle -- in September. However, if Germany really does refuse to sign up with investor-state dispute settlement (ISDS) included in its current form, the pressure will be on the European Commission to take it out -- because of the nature of CETA, all 28 EU member states must approve it before it is fully ratified. However, here's what the Commission told S&uumlddeutsche Zeitung regarding that idea:

Without these clauses, the European Commission's trade department says, a Canadian company will hardly invest in Europe. How could an investment in Bulgaria, a country which the European Commission has, so to speak, officially certified for high-level corruption, be justified without legal protection? Or in Italy, where cases before the national courts can last eight to ten years?

But according to the European Commission's own figures, bilateral investment between the EU and Canada is flourishing (pdf): in 2012, the total investment by EU companies in Canada was €258 billion, while Canadian investment in the EU was €115 billion -- 45% of the EU's, even though Canada's population is only 7% that of the EU. In other words, contrary to the European Commission's scaremongering, Canadian companies are clearly perfectly happy to invest in Europe on a massive scale even without ISDS, which is therefore unnecessary, and can be dropped from CETA.

It's therefore not clear how the European Commission will react to this development, and whether it will try to push through the current version of ISDS, attempt to modify it by re-opening negotiations with Canada, or accept that ISDS must go if it wants to save CETA. But what is not in doubt is that this has major ramifications for TAFTA/TTIP. Germany's justified concerns about corporate sovereignty in CETA apply even more strongly to the far-bigger agreement. If it wants ISDS out of one, it will certainly want it out of the other. A refusal by the US to accept that -- quite likely, given its firm support for corporate sovereignty -- would mean that TAFTA/TTIP is dead.

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Filed Under: ceta, corporate sovereignty, germany, investor state dispute settlement, isds, tafta, ttip

Top EU Politicians Call For TAFTA/TTIP's Corporate Sovereignty Provisions To Be Removed

from the going,-going,-gone dept

Back in March, we reported on the growing rejection of corporate sovereignty in TAFTA/TTIP, even by the German government. Since then, criticism of investor-state dispute settlement (ISDS), which puts corporations above nations, has become even louder and more widespread. Some significant manifestations of that took place during a plenary session of the newly-elected European Parliament, where Karel De Gucht, the commissioner leading the negotiations for the EU, made a brief statement on TAFTA/TTIP. Here's how one member of the European Parliament (MEP) responded, as reported by The Parliament magazine:

During Tuesday's plenary session GUE/NGL deputy Helmut Scholz addressed De Gucht, saying, "You carried out a public consultation on the inclusion of an investor state dispute settlement (ISDS) clause which received over 115,000 responses.

"Citizens don't want ISDS; neither in TTIP nor in the agreement with Canada," the German deputy argued.

Many of those 115,000 responses were made using Web sites that offered a (negative) template for responding. That means the European Commission will probably try to dismiss them as bulk submissions. But others will be much harder to ignore -- like this rigorous response made by more than a hundred prominent scholars from all over Europe and across the globe.

Also speaking at the plenary session was the Scottish MEP David Martin, who issued the following warning:

The Socialists were proud to be at the birth of TTIP, and we do not want to be its assassins, and I want to tell the Commission clearly now, though, that if we have to be, we will be. And that's why we want the Commission to listen carefully to our concerns.

Martin's words are doubly significant. First, because TTIP will not pass without the support of the Socialists, so the threat to kill the agreement is not an idle one. And secondly, because Martin played a key role in stopping ACTA two years ago, when he was the rapporteur -- the European Parliament's expert -- for the brief, and advised his fellow MEPs to vote against the agreement. The video of Martin's speech linked to above begins by showing a number of MEPs holding up placards against TTIP, and that's not the only demonstration that took place recently. A small group of protesters disrupted the latest stakeholder meeting in Brussels, before being bundled fairly roughly from the room: Another senior socialist politician with serious concerns about TTIP, and about corporate sovereignty in particular, is the MEP who chairs the influential committee on international trade, the principal one for TAFTA/TTIP:

German Socialist Bernd Lange, who said procedural rules would stop [right-wing MEP] Le Pen grandstanding or using sessions for publicity, also warned that an investor-state dispute settlement mechanism should be dropped from TTIP. If it wasn't, he said, the Parliament’s next resolution on TTIP could be negative.

Perhaps even more surprisingly, the most powerful individual in the EU, Jean-Claude Juncker, has also come out against ISDS in his "Political Guidelines for the next European Commission" (pdf), published earlier this week:

As Commission President, I will also be very clear that I will not sacrifice Europe's safety, health, social and data protection standards or our cultural diversity on the altar of free trade. Notably, the safety of the food we eat and the protection of Europeans' personal data will be non-negotiable for me as Commission President. Nor will I accept that the jurisdiction of courts in the EU Member States is limited by special regimes for investor disputes. The rule of law and the principle of equality before the law must also apply in this context.

Given this resistance to corporate sovereignty at the highest levels of the European Commission and European Parliament, it's hard to see how De Gucht can continue to push for it in his negotiations with the US. After all, once TAFTA/TTIP is agreed, the European Parliament will have a yes/no vote, and will be unable to modify it. That means the only way to block ISDS is to reject the whole deal -- just as it happened with ACTA for the same reason.

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Filed Under: corporate sovereignty, david martin, eu, investor state dispute system, isds, jean-claude juncker, karel de gucht, politics, tafta, ttip

Bolivia Shows How To Dismantle Corporate Sovereignty Provisions In Treaties Without Losing Foreign Investment

from the they-said-it-couldn't-be-done dept

As Techdirt has reported, corporate sovereignty chapters in TAFTA/TTIP and TPP have emerged as some of the most controversial elements in those agreements. Meanwhile, countries that already have bilateral investment treaties (BITs) with investor-state dispute settlement (ISDS) mechanisms are looking for ways to get rid of them in order to avoid the loss of sovereignty they imply. One nation that already has considerable experience in this area is Bolivia. A new report provides fascinating background information on exactly how it has gone about this (pdf), with valuable lessons for others looking to do the same.

Things began back in 2000, during what was called the "Water war." After Aguas del Tunari, a subsidiary of the US company Bechtel, had taken control of water supplies in the central Bolivian city of Cochabamba, it raised prices to such an extent that the poorest citizens struggled to pay for drinking supplies. This led to demonstrations in the streets, with many people injured (original in Spanish.) Control of the water company was removed from Bechtel, which demanded $50 million compensation for the loss of its investment. The case was finally settled in 2006, when Bechtel agreed to sell its shares in the water company to the Bolivian state -- for 2 Bolivianos (then about $ 0.30).

That experience led the Bolivian people to give their new president of the time, Evo Morales, a mandate to withdraw from all investment agreements and tribunals that allowed claims to be made against the country. Here's how he did that:

The Evo Morales government rejected the Investor-State Dispute Settlement mechanism from the outset. This was reflected in the country’s withdrawal from ICSID -- the most widely used Investor-State Dispute Settlement forum -- in May 2007. In addition, the new [Bolivian] Constitution prohibits the state from settling investment related disputes with foreign investors in international tribunals.

...

one of the most important provisions of the new Constitution in this regard is to denounce and renegotiate all international treaties that are contrary to the constitutional text, that is to say, the BITs, which is ultimately where the power lies for corporations to do whatever they want in the countries in which they operate. The BIT's are where the rules of the game between companies and states are established. They are also the reason why Bolivia, despite regaining sovereignty from corporations and shielding itself from this system, could still be liable to further lawsuits in international tribunals similar to ICSID, which establish their jurisdiction in such treaties.

Bolivia has now cancelled all 21 of its previously-signed BITs, and its subsequent experience is instructive. The conventional wisdom is that without such treaties, foreign investment will plummet, and that the economy of the country concerned will suffer. Here's what actually happened in Bolivia:

When we asked about the reaction of other countries, [Walter Clarems Endara Vera, Deputy Minister for Trade and Integration of Bolivia] said that obviously there was concern on the part of European countries and the United States, which are among those that invest most overseas, and with which Bolivia signed most of it’s BITs. However, he also said that "in all of these cases there has not been a negative response", and that, "in conclusion, our understanding is now that we do not have bilateral investment agreements."

Deputy Minister Endara also noted that "...many countries are interested in signing a new investment agreement with Bolivia."

There are two important reasons why withdrawing from these BITs with their corporate sovereignty clauses has not been the disaster that many pundits predicted:

When we asked the Deputy Minister Endara why he believed that these countries were being so accommodating, his response was that "... chickens have now come home to roost. Countries promoting BIT's are now also being sued in forums such as ICSID as well as other tribunals, sometimes by their own investors. Unfortunately, the economic crisis in Europe has led some countries to take measures affecting foreign investments and they are now being sued. This means that the conversation with some European countries is now different. We can now talk as equals because they are suffering the same problems we have suffered ... I mean, we can now see some of the biggest defenders of the investor-state dispute settlement mechanism defending their own countries against these cases. The situation really has changed."

But perhaps the most significant reason is the following:

In the Bolivian context, it is important to note that, unlike at the time of the first case with Aguas del Tunari, the country now has a legal and constitutional framework, as well as public institutions and a clear policy, to address these Bilateral Investment Treaties and the system of international arbitration that corporations are using to undermine the actions of sovereign countries.

That is, with a functioning government and fair legal system that can resolve investment disputes, there is simply no need to hand over so much power to opaque and expensive supranational tribunals of the kind that lie at the heart of ISDS. Bolivia's success in cancelling its BITs while boosting foreign investment -- $2 billion in 2013, 35% more than in 2012 -- is clear evidence the argument that agreements like TAFTA/TTIP "must" contain corporate sovereignty chapters to achieve the same, is incorrect.

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Filed Under: bolivia, corporate sovereignty, foreign investment, isds, tafta, tpp, trade agreements, ttip

PhRMA Wants US To Use TAFTA/TTIP To Stop EU Releasing Basic Drug Safety Information

from the it's-the-law dept

Back in February, we reported that PhRMA, the Pharmaceutical Research and Manufacturers of America, was pushing to have the EU put on the US's 'Priority Watch List' for its plans to disclose basic safety information about drugs. Now a letter from PhRMA obtained by the German newsapaper Der Tagesspiegel shows that US pharmaceutical companies are trying to use TAFTA/TTIP to undermine the new EU rules on making clinical trial data available (original in German):

A letter from the U.S. pharmaceutical association (PhRMA) to the TTIP chief negotiator for the United States, Douglas Bell, states: "The disclosure of confidential data from clinical and pre-clinical study files and patient data puts at risk the health system and the well-being of patients." Why more transparency should harm the health systems, the lobby group doesn't explain, but it makes clear to the negotiator how he should conduct the negotiations with the EU: the publication of commercially-sensitive data from a market authorization, the PhRMA letter said threateningly, is not only contrary to the rules of the American FDA, but also to the internationally-accepted intellectual property rights of the World Trade Organization, the so-called TRIPS Agreement. "PhRMA and its members call on the U.S. government to influence the EU at all levels in order to eliminate this problem."

It's hard to see how the problem can be "eliminated." Back in April, the European Parliament adopted the Clinical Trials Regulation by a huge majority. Effective from 2016, it states that information from clinical study files "should not generally be considered commercially confidential" and must be made publicly available -- exactly what PhRMA is lobbying against.

What's worrying is that there's already been one attempt to water down these requirements. Der Tagesspiegel suggests this may have been as a result of pressure from the European Commission, concerned about US reaction to them. It will be interesting to see how the Commission reconciles any US demands during the TAFTA/TTIP negotiations to remove the requirement to publish drug safety information with the new EU regulation that requires it.

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Filed Under: drug safety, eu, information, phrma, tafta, ttip
Companies: phrma

Why The European Commission's Consultation On Corporate Sovereignty Is A Sham (And How To Respond To It Anyway)

from the make-your-voice-heard dept

One measure of the resistance to the inclusion of corporate sovereignty provisions in TAFTA/TTIP is that the European Commission unexpectedly announced that it would be holding a three-month public consultation on this aspect in an attempt to defuse public anger. Here's the consultation's home page:

The European Commission is consulting the public in the EU on a possible approach to investment protection and ISDS in the TTIP. The proposed approach contains a series of innovative elements that the EU proposes using as the basis for the TTIP negotiations. The key issue on which we are consulting is whether the EU's proposed approach for TTIP achieves the right balance between protecting investors and safeguarding the EU's right and ability to regulate in the public interest.

As that shows, at the heart of the exercise is the misguided belief that protecting investors is somehow comparable to protecting the public interest and national sovereignty, and that a "balance" has to be struck between the two. No wonder, then, that the consultation itself is a sham: it does not seek people's views on whether investor-state dispute settlement (ISDS) is needed at all, only what form it should take, down to extremely technical details that will be incomprehensible to anyone not an expert in international trade law.

The structure of the consultation document (pdf) reflects this: 12 highly-specific questions about aspects such as "Scope of the substantive investment protection provisions" and "Appellate mechanism and consistency of rulings", and only one more general one: "What is your overall assessment of the proposed approach on substantive standards of protection and ISDS as a basis for investment negotiations between the EU and US?" On top of that, you must answer all 13 questions in 90 minutes, and it's not possible to save your answers and return to them later (but the digital rights group EDRi has created an online tool that lets you do that.) A cynic might almost think the European Commission is trying to make it hard for the public to participate.

As the closing date of the consultation (6 July 2014) approaches, a number of organizations have put together handy guides to filling it in -- it's open to everyone, not just EU citizens. Here, for example, is the Answering Guide from EDRi (pdf), which helpfully explains what exactly the often opaque questions mean, then suggests a number of points you might like to mention in your reply. A new site with the self-explanatory name of "No 2 ISDS!" also runs through each question in turn, but offers rather more forthright suggestions. Here's a typical sample:

Question 5: Ensuring the right to regulate and investment protection

I fundamentally oppose the fact that investment protection is placed above the sovereign right to regulate because:

Rules emerging from a democratic voting process (democratic and parliamentary decision-making process), which reflect the public interest and the will of millions of people, must always be weighted more heavily than private sector vested interests.

Fundamental social rights and human rights must not be limited by economic freedoms.

Naturally, the open-ended last question provides the people behind the No 2 ISDS! site with more scope for expressing their views on the consultation:

Are there any other issues related to the topics covered by the questionnaire that you would like to address?

First of all I would like to express my deep concerns with this highly complicated and technical questionnaire. If a consultation asks for the contribution of civil society/the public, then an honest attempt should be made whereby non experts should be able enabled to contribute. This is definitely not the case with this consultation, especially because, up until this question, there has been no possibility to state that I do not want any investor-state dispute settlements at all -- in TTIP, or in any other trade agreement. Furthermore, technical obstacles that prevent me from only filling in one part of the form, or to respond through email or fax fundamentally alter the "public" character of this consultation.

A similarly robust reply is offered by the Trade Justice Movement, whose answer to Question 13 begins as follows (Microsoft Word document):

There are serious flaws in this consultation process. First: it fails to give European communities the possibility of responding to the proposed TTIP in its entirety. The EU should provide this opportunity, particularly in light of the controversy regarding issues such as the secrecy surrounding the negotiations and the undermining of basic democratic processes, regulatory harmonisation and the impact on standards, the impact on jobs and on the economies of non-Party countries.

It makes an important point about one of the serious knock-on effects of the questions' opacity:

Second, the consultation is written in such a technical (and occasionally obscure) language that it excludes everyone but investment law experts. As most of these are arbitration practitioners, the questionnaire in effect invites ISDS-friendly responses by design.

And continues with these excellent points:

Third, the consultation is not in fact a consultation on the TTIP text but on a CETA text that was valid in March but has since progressed further in the CETA negotiations. In addition, the Commission says that it wants to build on CETA but also refer back to existing treaty practice. It is therefore a consultation on a non-existent text; given the significance of the details, this renders the consultation all but useless.

Fourth, the consultation starts from the assumption that ISDS should be in the agreement. This is despite the fact that in the negotiating mandate it states that "the inclusion of investment protection and investor-to-state dispute settlement (ISDS) will depend on whether a satisfactory solution, meeting the EU interests concerning the issues covered by paragraph 23 is achieved".

This gives an indication of the quality and thoughtfulness of the responses that are currently being made to the corporate sovereignty consultation, and of the rich materials that citizens can draw upon in making their own comments. The European Commission certainly won't be able to claim that no one cares whether ISDS is included in TAFTA/TTIP -- the level of public interest in this previously obscure aspect of international trade law is unprecedented. Whether Karel De Gucht, the European Commissioner responsible for the negotiations on the EU side, is willing to take note of all the important points raised above and act on them, is quite another matter, though.

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Filed Under: corporate sovereignty, eu commission, international trade, isds, tafta, trade agreement, ttip

Why TAFTA/TTIP Isn't Worth It Economically, And How We Can Do Much Better

from the doing-it-by-numbers dept

As recent posts on Techdirt have made clear, resistance to TAFTA/TTIP is growing on many fronts. In countering that, supporters of the negotiations unfailingly cite the "unique opportunities" or "huge benefits" of the deal. There's no denying that potentially TAFTA/TTIP will be huge: the European Commission's pages on the negotiations point out that the US and EU trade €2 billion every day (around $2.7 billion). They also note the following important facts about investment between the two regions:

Total US investment in the EU is three times higher than in all of Asia.

EU investment in the US is around eight times the amount of EU investment in India and China together.

Of course, those impressive figures completely undermine the case for including corporate sovereignty provisions in TAFTA/TTIP, since investors are clearly happy to put their money into the US and EU even in the absence of ISDS mechanisms.

But what counts is not just the present size of the trade and investment between the US and EU, but the future gains that TAFTA/TTIP would bring. This is clearly the central question about the negotiations, because if those benefits are small, there is no point making painful concessions of the kind that will be required to conclude the deal. And yet, surprisingly, there is precious little in the way of rigorous research into what the effects of TTIP would be on the US and EU economies. It's true that figures about the benefits are regularly trotted out by those involved, but these come almost exclusively from one source: econometric modelling carried out by the Centre for Economic Policy Research (CEPR) in London (pdf), and paid for by the European Commission. Here are its key claims about the benefits of TAFTA:

An ambitious and comprehensive transatlantic trade and investment agreement could bring significant economic gains as a whole for the EU (€119 billion a year) and US (€95 billion a year). This translates to an extra €545 in disposable income each year for a family of 4 in the EU, on average, and €655 per family in the US.

Those figures of €119 billion a year (about $160 billion) for the EU and €95 billion a year (about $130 billion) for the US are uncritically quoted in most articles about TAFTA. That's a pity, because they are misleading in the extreme. For example, the passage quoted above speaks of "€119 billion a year" as if this would be the gain from TTIP each year. But a footnote on page 3 of the CEPR study, where a table lays out the predicted change in GDP, explains:

Note: estimates to be interpreted as changes to a projected 2027 global economy.

That is, the €119 billion figure is the extra GDP that would be seen in 2027 as the result of TTIP being in place for the previous ten years, compared to the situation in 2027 without the agreement: it is a cumulative GDP gain. That means the other figure often thrown around -- that TAFTA will increase the GDP of the EU and US by around 0.5% is similarly misleading: it refers to the cumulative GDP gain after ten years. In terms of how much TAFTA would add to GDP each year, that would be far less -- roughly 0.05%, a rather different matter. Here's what the economist Dean Baker has to say on this misdirection, in a blog post on the TTIP negotiations with the provocative title: "Why Is It So Acceptable to Lie to Promote Trade Deals?"

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.

He goes on to make a great point about the impact of strengthening intellectual monopolies in these trade agreements:

there are reasons to believe the growth effect could go in the opposite direction. The model used by the London CEPR does not assume any negative growth impact from higher prices for drugs or other goods that might be more costly due to stronger patent and copyright protections coming out of the deal.

These will likely be a drag on growth. Economists tend to like patents and copyrights (probably because their friends and family members benefit from them), but that doesn't change the fact that they lead to market distortions and have major economic costs. If the price of a drug rises by 1000 percent because we imposed stronger or longer patent protection it has the same effect in the market as if we imposed a 1000 percent tariff on the drug.

Nor is this the only negative factor that is ignored in the CEPR projections. A study by a group of economists at the Austrian Foundation for Developoment Research, commissioned by the Confederal Group of the European United Left/Nordic Green Left in the European Parliament, points out that a number of major costs have been omitted when calculating the overall benefit of TTIP (pdf). The most important of these are the costs that arise from TAFTA's stated aim to eliminate "non-tariff barriers", or "non-tariff measures", by harmonizing regulations and standards. As the researchers point out:

All studies, but particularly the Ecorys study, assume that a reduction of NTMs [non-tariff measures] is welfare-enhancing. This ignores that NTM such as laws, regulations and standards pursue public policy goals. They correct for market failures or safeguard collective preferences of a society. As such they are themselves welfare-enhancing. The elimination or alignment of an NTM thus will imply a social cost for society. This applies equally to NTM elimination, harmonization and mutual recognition.

In other words, eliminating or harmonizing regulations may well produce a boost for companies, which no longer need to worry about stringent health and safety standards, say, but represent a loss for society, which suffers through increased health costs. Many of the supposed gains from TAFTA/TTIP are actually counterbalanced by similar losses that society as a whole will be forced to accept.

It's also worth emphasizing that the "€119 billion a year" figure that is used by supporters of TAFTA is what the CEPR research calls an "ambitious, comprehensive agreement" -- in other words, the most optimistic prediction. Strangely, no one ever talks about the other figures in the study -- the less optimistic, more realistic ones. Naturally, those would produce even lower growth than the tiny 0.05% extra GDP per year discussed above.

Because mainstream media unquestioningly accept this "€119 billion a year", and fail to challenge the assumptions that lie behind it, we don't know how the US and EU negotiators would attempt to justify TAFTA given the extremely small economic benefit predicted by the European Commission's research. Presumably, they might say that it's better than nothing at a time when both the US and EU are keen to boost their economies and create jobs.

But that's not really true, because it ignores the fact that there are other ways of achieving this goal that don't involve placing companies above nations through corporate sovereignty provisions, or require massive changes to regulations on both sides of the Atlantic. For example, a report commissioned by the Omidyar Network, entitled "Open for Business: How Open Data Can Help Achieve the G20 Growth Target" (pdf), claims that:

implementation of open data policies including in areas corresponding to G20 agenda items could increase G20 output by around USD 13 trillion over the next five years. This would boost cumulative G20 GDP by around 1.1 percentage points of the 2% growth target over five years.

That would work out as an extra GDP boost per year of around 0.22% -- four times what TAFTA might offer in the most optimistic case. And of course, open data initiatives do not require negotiations or concessions: governments can implement them unilaterally for very little cost. Or how about this new report on "climate-smart development"?

Government policies that improve energy efficiency and public transport could increase global economic output by more than $1.8 trillion per year, and also save lives, reduce crop losses and tackle climate change, according to new analysis released today from the World Bank and the ClimateWorks Foundation.

The increased economic output (pdf) works out at $242 billion for the US, and $271 billion for the EU, both in 2030. In this case, a collateral benefit of taking this route is that it would help to improve the environment and tackle climate change, too -- not something that can be claimed for TTIP. The current negotiations between the US and EU are being presented as a "once-in-a-generation" chance to boost transatlantic economies. They are nothing of the sort. TAFTA/TTIP is merely one of a number of ways of achieving that, and, as the above discussion indicates, not even a very good one.

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Filed Under: economic projections, economics, predictions, tafta, trade agreements, ttip

US Embassy In Berlin Offering Cold, Hard Cash For People To Create Pro-TAFTA/TTIP Propaganda

from the beats-transparency dept

We've been writing about the big US/EU "free trade" agreement negotiations (which aren't really about free trade at all), variously named TAFTA or TTIP (negotiators prefer TTIP, to avoid comparisons to NAFTA) for quite some time now. If it were really about free trade, there might be some interesting elements to it, but it's much more about the standard issues like providing corporate sovereignty over national sovereignty, and other things like ratcheting up copyright and patent laws in secret. All this "democracy" is all done very much behind closed doors that won't be opened until many years after the agreement is already reached.

The key negotiators have long been complaining about "misinformation" being spread about this and other agreements -- but it often appears that the misinformation is actually coming directly from the negotiators themselves. Besides, it's pretty rich to complain about misinformation on a deal that you're negotiating in secret. Want to end much of that supposed "misinformation"? Here's a simple suggestion: open up, show some transparency and release the negotiating positions you're taking, or even draft documents of the agreement to allow the public to comment.

But instead of transparency, it appears that the US State Department has settled on another option: paying for propaganda.

No joke, the US Embassy in Berlin has apparently been tweeting out offers to give out between $5,000 and $20,000 to organizations willing to produce pro-TAFTA/TTIP propaganda. The document doesn't ask for proposals for unbiased analysis on the impact of any potential agreement, instead it starts out by simply declaring:

T-TIP will be a fair deal for Europeans and Americans that will build on an already existing strong friendship.

Now that's an interesting claim, given that there is no agreement yet, and what's been negotiated so far is (and will remain) entirely secret. So, uh, how does anyone know if it will be "a fair deal." Wouldn't it be more reasonable and, dare I say, objective, to ask for an analysis of what kinds of things might be useful in an agreement, and what kinds of things might cause harm? Or, better yet, how about a study on the pros and cons of certain proposals, so as to better weigh the benefits and dangers? Instead, the State Department just insists that this secretive, and nowhere near concluded, agreement will definitely be fair... and is offering cold hard cash to anyone who will cook up some argument for why that must be. Anything will do:

The activities funded with a Federal Assistance Award (Grant) ranging from $5000 to $20,000 might include the following innovative ideas:

• short documentaries on T-TIP
• Expert Speaker Tour with proposed names(s) for travel (including per diem and honoraria)
• creation of a Twitterfall wall during a conference
• digital posters in German with QR codes to inform about T-TIP objectives
• a T-TIP conference with a broad swath of stakeholders that can be live-streamed
• online discussion forums on T-TIP
• website devoted to T-TIP

Hmm. We run a site that has online discussions around the agreement. Perhaps we should apply... Somehow, I don't think we'll pass the "screening" process.

Filed Under: berlin, embassy, grants, propaganda, state department, tafta, ttip, us dos, ustr

USTR's Anti-Transparency Rules For TAFTA/TTIP Documents Published

from the now-let's-have-the-others-anyway dept

Alongside the corporate sovereignty provisions, perhaps the most controversial aspect of the TAFTA/TTIP negotiations is the deep secrecy that surrounds them. This is largely unbroken on the US side, aside from a few token meetings with the public in which questions are deflected with content-free or generic replies. The EU has at least released a few documents outlining its general negotiating positions, although this week we learned that British MPs aren't allowed to see details of the mandate that was given to the EU's negotiators, so the openness is still minimal. Now, in a rather ironic development, through a Freedom Of Information Act request Knowledge Ecology International has managed to obtain a letter sent in July 2013 to the European Commission outlining the measures the USTR will be taking to keep the talks as un-transparent as possible:

As we prepare for the initiation of negotiations on a Transatlantic Trade and Investment Partnership (TTIP) Agreement, I would like to thank you for your letter of July 5, 2013, describing the arrangements that the European Union (EU) has in place for the protections of negotiating documents, given the sensitive nature of their content and that apply in the context of negotiations for a TTIP Agreement. I take this opportunity to inform you of the arrangements that the United States will apply for the protection of TTIP negotiating documents, given the sensitive nature of their content.

There is the obligatory nod to openness:

Transparency is an important principle for the Obama Administration, just as it is for the EU.

Which is swiftly negated by the following:

However, the United States also shares the EU's view that a certain level of special care in handling these documents is necessary to enable mutual trust between negotiators and for each side to preserve positions taken for tactical reasons with regard to third countries with which we are or could be negotiating in the future.

Those are pretty feeble excuses. It's imposing secrecy that makes trust necessary: if everything in the negotiations were out in the open, as is the case for WIPO meetings, trust wouldn't be required. And as for "preserving positions", their final form will be evident for all to see in the agreement, assuming it is concluded, and how those final positions were achieved tactically is largely a product of the particular negotiating dynamics between the US and EU, and hardly relevant to any other talks which might happen. As the letter explains, basically everything is to be kept secret, except for two groups of people:

For the US side, this means that documents containing such information may be provided only to (1) US government officials, and (2) persons outside the US government who participate in its internal consultation process and who have a need to review or be advised of the information in these documents. Anyone provided access to the documents will be informed that they are not permitted to share the documents with persons who are not authorized to see them.

That is, lobbyists can still be provided with access, since it is obviously vital that they "review" whether the terms are acceptable to their industries, but there's nothing for the general public. No surprise there, but the following is news:

The United States will hold the TTIP documents in confidence for five years after entry into force of the TTIP Agreement, or if no agreement enters into force, for five years after the last round of negotiations.

That's even worse than for TPP, where the participants have agreed to keep all the negotiating documents secret for four years after ratification. That's an indication that the USTR is not content with keeping details of the negotiations away from the prying eyes of the public as they happen, but aims to lock them down for even longer than with TPP. You really have to wonder what the US has to hide there.

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Filed Under: eu, secrecy, tafta, transparency, ttip, ustr

Success Of Fringe Parties In European Parliament Raises New Obstacle To TAFTA/TTIP's Progress

from the more-problems dept

As Techdirt has been charting, the TAFTA/TTIP negotiations have already encountered far more resistance than was expected when they began last year. This has mostly centered around the controversial corporate sovereignty provisions, but there are also more general concerns about things like deregulation -- for example, through a new regulatory council. As well as pushback from expected quarters -- civil organizations and NGOs (pdf) -- even some European governments are expressing their doubts. And following last week's elections for the European Parliament, a new obstacle to concluding the agreement has been added: an increased number of European politicians (MEPs) that are skeptical about pan-European projects in general, and TAFTA/TTIP.

Although they hold a relatively small number of seats, they complicate the dynamics of the European Parliament, where neither the center-right group of the European People's Party, nor the center-left group of the Progressive Alliance of Socialists and Democrats, has an absolute majority. That means that complex and probably shifting coalitions will be needed to pass new laws in the European Parliament for the next few years.

For many areas, it's not obvious what those coalitions will be, or what policy compromises they will require in order to coalesce. But for one -- that of TAFTA/TTIP -- it's already clear that things have changed. That's because many of the smaller euroskeptic groups have declared their outright hostility to the negotiations. Here, for example is Marine Le Pen, leader of the successful far-right party, Front National, which came first in France, gaining 24 of the 74 seats allotted to that country in the European Parliament:

"I also demand that [the French President] does three things to take Sunday's vote into account: firstly, France halts the transatlantic treaty..."

In Italy, the Movimento Cinque Stelle came second in the polls, and won 17 out of the country's 73 seats. A recent blog post on the subject of TAFTA/TTIP made the party's views clear (original in Italian):

The Euro-American free exchange zone risks binding definitively the fates of Europe and the Euro with those of the US and the dollar, limiting the residual autonomy of an EU less and less integrated internally, and always more at risk of fragmenting.

...

[Movimento Cinque Stelle] is certain that additional liberalization [from TAFTA/TTIP] would damage [Italy] more than other countries; we therefore expect from the [Italian] government clarity and full involvement of Parliament.

Meanwhile, in Spain, a new party called "Podemos" took 5 of the country's 54 seats. Its political program (original in Spanish, pdf) contains the following demand regarding TAFTA/TTIP:

Cessation of the negotiation process for the Transatlantic Trade and Investment Agreement.

Now, individually these parties don't amount to much, and even collectively they are still a fringe group. But their existence will add a heightened anti-TTIP edge to the new European Parliament. Moreover, political leaders in France, Italy and Spain are likely to take their views into account in an attempt to minimize damage in local elections. Coupled with the existing groups that have declared their opposition to TAFTA/TTIP -- the European Greens and the left-wing groups -- this means the likelihood of TAFTA/TTIP getting an easy ride in the European Union is now greatly reduced.

That more hostile atmosphere will feed through to the European Commission -- the European body responsible for negotiating TAFTA/TTIP. New Commissioners are being appointed later this year, and the incoming Trade Commissioner is likely to be much more robust in his or her defense of European interests, so as to head off criticism from the new Euroskeptic groups and national leaders made nervous by the success of these parties.

The overall affect of this is likely to be more clashes during the negotiations, and slower progress. That's problematic for TAFTA/TTIP; if there is no deal until 2016, when the next Presidential race begins, a controversial and perhaps deeply unpopular trade agreement will be the last thing that US politicians will want to deal with. TTIP will just be put on hold until after the election -- or maybe even dropped completely.

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Filed Under: eu, eu parliament, politics, right wing, tafta, trade agreements, ttip