TTIP: Just Another Trade Agreement, or an Assault on Democracy?

Many may not have heard of the Transatlantic Trade and Investment Pact (TTIP), yet it has managed to unite both ends of the British political spectrum. Earning the label of a “shady” backroom deal from the UKIP MEP, Paul Nuttal, and the voice of the people that is the Morning Star. The deal has also stirred up the passions of almost 3 million internet activists throughout Europe. So, what is it that’s got so many Europeans angry?

TTIP is the largest bi-lateral trade agreement in history and, if passed, will cover over 40% of global GDP. Negotiated between the US and the EU, the deal is designed to remove tariffs and barriers which restrict trade therefore increase profitability and employment levels on both side of the Atlantic. At least that’s how it is sold by its supporters. Doesn’t sound too bad, right? When we look closer at the “barriers” which TTIP aims to remove however, the reasons for the anger become clear.

The agreement aims to achieve “regulatory coherence”, or “harmonisation” in lay-mans terms. Leading economists, such as Joseph Stiglitz, argue this will lead to a race to the bottom in terms of standards, maximising profit-margins for business whilst ultimately punishing the consumer. The regulatory barriers TTIP is attempting to undermine are some of the most valued and hard-fought social standards in Europe, including workers rights won through the labour movement, food regulation standards (including restrictions on GMO and chemical content), privacy laws, banking regulations, and regulations on the use of toxic chemicals.

According to the main proponents of the deal these claims amount to no more than left-wing scaremongering, with many arguing that TTIP could raise standards as manufacturers seek to harmonise their products in order to remain competitive in both markets. For example, as US regulatory standards for car safety are lower than their European equivalent, those espousing this theory believe that US manufacturers would be forced to meet EU standards to compete in the European market, and create a race to the top. As profit is the driving-force behind corporatism however, is it not more likely that European manufacturers would forgo the expenses of meeting high regulatory standards, opting to lower standards to US levels and initiating a race to the bottom?

The US has a history of enforcing their economic agenda on non-compliant markets. Luckily, however, as a long-term strategic ally the EU will likely escape the tactics used to enforce such conditions on Chile, for example. Though, as was the case in Chile, we are likely to suffer an assault on our democratic processes and, by extension, our sovereignty. TTIP’s major threat to national sovereignty and democratic process comes in the form of the “Investor state dispute settlement” clause. ISDS has encouraged widespread protest against the proposed deal as many believe it puts corporate profits above the rights of workers and consumers.

The ISDS clause ensures the rights of corporations to sue national governments in the event that governments pass law/policy which is detrimental to corporate profits. ISDS will give corporations the right to sue governments, at both national and local level, through arbitration tribunals, for the loss of current profit, or “expropriation” of future profit. In basic terms, social interests and the welfare of the public would become subject to corporate whims.

Such clauses have become increasingly popular in recent years. In 2012, 58 cases were filed against national governments around the world as corporate lawyers become more and more creative in how they claim profits are affected. Swedish energy giant Vattenfall, for example, are in the process of suing the German government for potential losses of $6 billion due to the democratic decision to phase out nuclear energy after the disaster in Fukoshima.

Even if the case were to be thrown out by the German Constitutional court, the Energy Charter Treaty, which Germany and Vattenfall are both a party to, includes the formation of arbitrary courts to settle such disputes. Such arbitrary courts are formed under the guidelines included in ISDS clauses and essentially create a new realm of international law in which investor-state disputes can be settled. Vattenfall would still have the right to take the case to the arbitrators, who would then have an economic incentive to rule in favour of the corporation in order to encourage further cases. If TTIP were to be implemented, what’s to stop Monsanto suing the French government for its recent decision to ban genetically-modified food?

This process is clearly unaccountable, biased and an affront on democracy.  The threat of being sued alone is enough to worry lawmakers and policy advocates, especially in times of economic uncertainty as most of Europe is today. This can only have a negative effect on policy and stifle the democratic process as governments must concern themselves as much, if not more, with corporate interests than that of the public. Furthermore, if governments are sued, it will be the public who will pay the bill, meaning less money for education, health and infrastructure.

In addition to the undemocratic nature of the agreement itself, the way in which it has been negotiated until this point has shown little-to-no-regard for the democratic process of the EU. Negotiated between US representatives and an un-elected EU commission, elected representatives in the EU parliament are given extremely restricted access to Commission members or documentation related to TTIP,  whilst privileged access is granted to business leaders. During the EU Commissions preparations for the negotiations, 90% of the meeting they held were with corporate lobby groups. The Commission did not seek, or agree to, meetings with any environmental groups, trade unions or representatives of consumer rights initiatives before negotiations began in 2013. This move sends a clear message as to whose interests truly concern them.

TTIP was given the green light in the US when the Senate voted 60 to 38 in favour of the trade agreement but was stifled when it came to a vote in the EU parliament. Originally scheduled for June 2015, the vote in the EU was delayed until July at the last minute due to such a high number of amendments to be made, according to President Schulz. This provided the corporate lobby machine enough time to counter fears over the ISDS clause and make the illusive claim that an alternate system could be agreed upon. With the promise of an alternative in place, the EU parliament voted in favour of adopting a “common position” on TTIP by 436 to 241.

As the largest single market in the world, if the EU were to merge with the transatlantic market, the move could also be seen as a major geopolitical strategy to ensure the western economic structure of the next generation and combat the rise of alternate and competing markets; namely Russian and Chinese initiatives in BRICS. However, with many citing the failures of past trade agreements to fulfil similar promises, huge levels of public opposition and many raising questions surrounding the relationship between democracy and corporate power, it is time to seriously question the neoliberal economic status quo. 

Author Bio

Ben Hogg is a graduate in International Relations and Politics and is currently in application for a Masters Research programme. Aspiring researcher and author who’s academic and research interests include: global finance, EU-US relations, Middle Eastern relations, corporatism and democracy, global resistance movements, open-source information/education.

Cover image ‘TTIP und CETA: Der Widerstand wächst!‘ by Mehr Demokratie