On the 11th of October protesters took to the streets all across Europe in order to demonstrate their concerns over – and opposition to – the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada and the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the USA. Several Naturefriends organizations joined the protests, like the Greeks right in front of Syntagma Square, as shown on the picture. This article tries to dig into the topic and analyzes why the free trade agreements raise so many concerns among European citizens.
Reasons for opposing the free trade agreements vary and the protests bring together different interests and political camps, ranging from social, environmental and health activists to anti-globalization, capitalism and neo-liberalism movements, and to conspiracy theorists fearing the beginning of a ‘New World Order’ dominated by financial elites controlling what would become the biggest free trade area in the world. But what exactly is all this fuzz about? What is so problematic about TTIP and CETA that it brings more than 400 activist groups across Europe to the streets?
The concerns are manifold, of different nature, and too varied to be elaborated in their entirety at this point. In general, fears revolve around the potentially adverse consequences of removing ‘trade barriers’. Here, the main focus of the free trade agreements does not lie on financial barriers like taxes and tariffs, of which there are only a few left to remove, but rather on qualitative and regulatory trade barriers. While little details about the scope of deregulation have been made public yet this could encompass EU standards for food quality and labelling (like restrictions on importing the [in]famous chlorine-chicken or GMOs), chemical security, data privacy or energy production (euractiv, 2014 [A])
Another aspect of the agreements that received special attention is the introduction of a system of ‘investor-state dispute settlement’ (ISDS). An ISDS system enables investors, i.e. American and European multinational companies, to start private legal proceedings against governments in case their (potential) profits are obstructed by upcoming legislation, for example on social and environmental regulation. Such lawsuits take place before panels made up of corporate lawyers, hereby bypassing domestic courts and the involvement of parliamentary bodies. The different camps opposing the free trade agreement fear that such a mechanism would scare off governments that want to introduce stricter social and environmental legislation. A related concern involves the costs of such proceedings and consequent fines that might arise, which could easily amount to a respective share of (especially smaller) countries’ GDP. Further, critics question the overall need for such a mechanism, arguing that existing commercial and single market legislation set up under European Treaties and overseen by the EU Court of Justice are sufficient on their own. In fact, ISDS systems were originally designed to protect corporate interests in so-called ‘failed states’, countries in which the rule of law can either not be guaranteed or the future development of the judicial system is unpredictable. Consequentially, the Guardian cannot find a clear answer to the question ‘what is it doing in an EU-US deal?’, and only assumes that “[perhaps] it’s because functioning courts are less useful to corporations than opaque and unjust arbitration by corporate lawyers” (the Guardian, 2013).
The adjustment to (largely lower) US quality and safety standards, as well as the introduction of global norms would in the end mean a lowering of European standards. The ISDS mechanism could further complicate the introduction of new regulation. Therefore, opponents of the free trade agreements, which include some of the major European health, environment and transparency NGOs (like CEE Bankwatch Network, Climate Action Network Europe [CAN], European Public Health Alliance [EPHA], European Environmental Bureau [EEB], Friends of the Earth Europe [FOEE], World Wide Fund for Nature [WWF] and also Nature Friends International [NFI]), fear a race to the bottom of social, environmental, health and consumer protection regulation. As a consequence, TTIP and CETA would end Europe’s role as global forerunner on issues such as food quality, chemicals safety, energy savings and climate change (euractiv, 2014 [B]).
In response to the NGOs’ concerns, the EU Trade Commissioner in charge Karel de Gucht stated that the EU representatives are determined to “secure the right balance between protecting European investment interests and upholding governments’ right to regulate in the public interest” (euractiv, 2014 [C]). Further, EU Trade spokesman John Clancy stated that TTIP should be seen as a tool for incorporating already existing investment treaties (of which there are more than 1,400, including many with the USA) into “a revised, improved and fully transparent investment protection system with the right safeguards in place to prevent abuse by multinationals [and which] fully enshrine[s] democratic principles and guarantee[s] the sovereign right of EU member states to regulate in their national and public interest” (Commission, 2013). According to Clancy, the TTIP agreement will state ‘explicitly’ and ‘crystal clear’ that “legitimate government public policy decisions cannot be over-ridden” and that companies will not be able to simply receive compensation for lost profits due to health or environmental regulation (Commission, 2013). Instead the ISDS mechanism is a necessary part of TTIP because it is the only way for European companies to legally enforce the agreement in case of a dispute, because the US legal system “does not allow companies to use international agreements like TTIP as a legal basis in national courts” (Commission, 2013). He further ensured that in contrast to the current negotiations, these tribunals will not be secretive backroom courts, but open to the public and interested parties.
Yet, concerns remain and are even aggravated by examples of existing ISDS proceedings which illustrate the magnitude of areas covered and the potential consequences of investor-state proceedings.
- In the currently still pending case of Australia versus the tobacco company Philip Morris Asia, the multinational claims financial compensation of billions of dollars for future losses in sales due to the planned requirement of plain packaging for cigarettes.
- In another case, US multinational Lone Pine Resources Inc. sees its business of gas and oil extraction impaired by a ban on fracking recently introduced in Quebec, which is why it demands 250 million Dollars for compensation.
- The German government faces allegations in front of an investor-state lawsuit, in which the Swedish energy giant Vattenfall seeks 3.7 billion euros in compensation for lost profits due to the government’s decision to phase out all nuclear power plants after the tragedy of Fukushima.
Cases similar to these heaped in recent years, amounting to more than 500 against 95 different governments.
In order to address the public’s concerns about the ISDS mechanisms, the EU also held a session of public consultations. The fact that the EU Commission received almost 150,000 contributions to the inquiry (of which 99 % came from individuals, submitted in collective actions by civil society organisations) shows the substantial interest of the public in what is going on behind the closed doors of the negotiation meetings (Commission, 2014). These contributions still need to be analysed, and a detailed report is supposed to follow within the next months. Yet, the impressive number of contributions should already be a wakeup call, urging authorities to push for more transparency in the negotiations. Further, it shows that the European public might not be as fatigued of – or uninterested in – European politics as many observers often claim (and as participation in public elections might indicate).
One central problem that the discussions about TTIP reveal, and that the attempted corrections by Mr Gucht and Mr Clancy even support, is the fact that negotiations about the details of TTIP are happening behind closed doors, between elected representatives and a large number of faceless lobby groups. This lack of transparency also concerns the CETA agreement between the EU and Canada, whose arrangements have still not been made public even though it is already agreed upon by the European Commission, but not (yet) approved by the European Parliament. This secrecy fans fears and fuels distrust, which constitutes a fertile soil for catastrophizing a development that may have started with good intentions, and constructing conspiracy theories about the evil big business that tries to establish a new world order. In turn, civil society groups express their concerns, stating that “what is masquerading as a trade deal may be a far more sinister attempt to roll-back environmental and public health laws built up over decades in the name of corporate efficiency” (euractiv, 2014 [B]).
Seen in this light, the first step for soothing waters and enabling a rational discussion about intentions, content, and possible consequences of TTIP and CETA between all its stakeholders should be to open the doors that are currently covering the negotiation tables. Only this way citizens can be assured that representatives are negotiating with genuine interests in mind and not with Dollar / Euro signs in their eyes. And only this way European and American authorities can find an agreement that will be accepted by the main stakeholders, which should be the public, and not multinationals.
In the end, such an open discussion might reveal that further deregulation of trade and commerce is not the right – or desired – approach to nurse an ailing economy back to life, but instead an end to austerity and a process of re-regulation, especially of financial markets. It remains to be seen whether European (and US) authorities will give in to the demands of the public, or remain in untransparent background negotiations with each other and the lobbyists. We can only keep up our work in raising our voices and hope that they will be heard.
References:
Euractiv, 2014 [A] http://www.euractiv.com/sections/trade-society/anti-ttip-demonstrations-seize-european-capitals-309119
Euractiv, 2014 [B] http://www.euractiv.com/trade/ttip-puts-eus-environmental-soci-analysis-532724
Euractiv, 2014 [C] http://www.euractiv.com/trade/brussels-wants-hear-ttip-investo-news-532919
The Guardian, 2013 http://www.theguardian.com/commentisfree/2013/dec/02/transatlantic-free-trade-deal-regulation-by-lawyers-eu-us
Naturefriends Greece, 2014 http://naturefriends-gr.blogspot.gr/2014/10/naturefriends-greece-stop-ttip-ceta-11.html
Commission, 2013 http://trade.ec.europa.eu/doclib/press/index.cfm?id=1008
Commission, 2014 http://trade.ec.europa.eu/doclib/docs/2014/july/tradoc_152693.pdf