By Melanie Strickland
As a network committed to participatory democracy, environmental and social justice, Reclaim the Power is naturally opposed to the Transatlantic Trade and Investment Partnership, or TTIP. TTIP is a free trade agreement between the US and the EU, currently being negotiated on our behalf by the European Commission. It is the biggest bilateral trade deal ever to be negotiated.
TTIP will affect virtually all aspects of our lives, including public services (like the NHS), finance, food, chemicals, the environment/ climate change/ fracking, data protection and privacy, to name a few. TTIP is an audacious neoliberal project, the purpose of which is to set down new global norms on trade in favour of capital. To quote European Commission President Barroso earlier this year:
“TTIP should become the economic pillar of the EU and US alliance. It should be our joint attempt to shape a fast changing world and to set the standards of the future. It should act as a platform to project shared EU-U.S. values worldwide with regard to open markets and rule of law.”(1)
This vision of open markets reduces the citizen to the consumer and limits the space for democratic participation to merely trivial things. Their version of rule of law is the legal system legitimising the status quo – which is moving closer and closer towards a corporate State.
The main aims of TTIP, as described by those promoting it, are to increase trade and investment by reducing tariffs, ‘aligning’ regulations and standards, increasing ‘protection’ for overseas investors, and improving access to government procurement markets by overseas providers. (2) Tariffs are already very low between the EU and US. Regulation, increased protection for corporates and access by transnational corporations to government contracts are therefore the key elements of this deal.
Regulatory alignment would mean regulations being reduced across the board – regulation is a ‘barrier’ and ‘trade irritant’ for big business, and by lowering standards they can make more money.
Those trying to force TTIP on us insist that the purpose of regulatory alignment is to have a single set of the highest standards. Lord Livingston, current UK minister for trade, was quoted in the Guardian recently stating: “This is not about reducing standards. This is about creating a single very high standard.”(3) High standards don’t generate corporate profits, and neither the US government nor the companies and industry associations involved in promoting TTIP are known for advocating higher and better standards of regulation. For example, the Confederation of British Industry (CBI) (which was one of the ‘civil society’ organisations at the EU’s ‘Civil Society Dialogue’ on TTIP earlier this year – no joke) supports zero hours contracts, fracking, and keeping corporate taxes at the lowest rate in the G20. What we will get with regulatory alignment is the lowest possible standard in all areas.
Europeans have more to lose than US citizens – the EU with its ‘precautionary principle’ generally has higher standards than the US, especially for food safety and animal welfare, GMOs, chemicals, environmental and data protection. On finance it is generally held that the US currently has a more strongly regulated sector, but TTIP puts this at risk too and the City of London is a powerful advocate for rolling back some of the limited steps which have been taken to ensure more financial stability. (4)
Corporate lobbyists inside and outside Government pressing for TTIP
UK trade minister Lord Livingston himself is strongly conflicted and biased. He was until 2013 CEO of BT, which is very actively involved with pro-TTIP lobbying group British American Business. (5) BT will be one of the winners if TTIP passes; it already employs over 2600 people in the US. In particular, BT expects to benefit from the opening up of public procurement markets in the US and EU. (6) This means BT will have more opportunities to win government contracts, which are likely to be major contracts. Lord Livingston still has shares in BT (7), which earlier this year were reported to be worth £20m. (8)
British American Business
British American Business describes itself as a membership organisation for transnational companies, and provides the Secretariat for the All Party Parliamentary Group on EU/Trade and Investment, chaired by John Healey MP (Labour). British American Business has been running a broad programme of events for businesses to build support for TTIP, has direct access to Parliamentarians and sends out regular briefings.
Companies can make vast amounts of money from government contracts, which are guaranteed by taxpayers. The government spends about £100bn annually on the NHS – transnational companies are eager for greater access to such a prize. But all public services will be up for grabs with TTIP – this means more closures, more mergers, and more privatisations would be on the cards.
Investor State Dispute Settlement (ISDS)
As explained in my previous blog, there are many examples of the ISDS provision in other free trade agreements, being used to threaten and extort money from governments, both in rich and poorer countries. We have seen this when governments passed public interest regulation on issues such as plain packaging of cigarettes, imposing a moratorium on fracking and phasing out nuclear power. What may be more pernicious though is the ‘chilling’ effect such a provision has on policy and law making – it puts governments off acting in the first place, to avoid being sued.
In recent weeks Commission officials have indicated that they may be willing to drop the ISDS provision from TTIP. (9) This may be a tactical compromise to quell public opposition and make it look like the Commission has heard their concerns, when in reality they are still pressing ahead with this corporate-benefit deal.
For the reasons stated above, TTIP is profoundly undemocratic and hugely harmful to our collective interests, even without ISDS. We must keep up the pressure and campaigning. With decades of neoliberal trade deals we’re worse off as citizens and workers, TTIP would continue and accelerate this trend. An academic study (working paper) by Tufts University in the US published last month predicts that with TTIP:
“labor income will continue its steady decrease as a share of total income, weakening consumption and residential investment while likely exacerbating social tensions. The flipside of this decrease is an increase in the share of profits and rents in total income, indicating that proportionally there would be a transfer of income from labor to capital.” (10)
However, this is not inevitable. Governments wanted this to pass quietly, but they are being forced to defend their indefensible position. Vince Cable wrote to all MPs in September to convince them of the benefits of TTIP – a sign that many MPs are under pressure from concerned constituents. (11) Reclaim the Power will keep supporting organisations like War on Want and World Development Movement in opposing TTIP, with action.
2 See:Parliament briefing note: http://www.parliament.uk/business/publications/research/briefing-papers/SN06688/the-transatlantic-trade-and-investment-partnership-ttip
4 For more on financial risks, see: http://corporateeurope.org/pressreleases/2014/10/ttip-misguided-proposals-finance
5 BT’s Larry Stone President of Group Public and Government Affairs is on the board of directors for British American Business:http://www.babinc.org/aboutus/boardofdirectorsBT Group Chairman Sir Michael Rake is also on the International Advisory Board: http://www.babinc.org/aboutus/internationaladvisoryboard
6 See: http://www.btplc.com/Thegroup/UKPublicAffairs/EuropeanAffairs/CommunicateEU/COMMUNICATE_EU_MARCH2014.pdf
7 See: http://www.parliament.uk/mps-lords-and-offices/standards-and-interests/register-of-lords-interests/?letter=L
8 See: http://www.independent.co.uk/news/uk/politics/exclusive-minister-in-row-over-bts-link-to-us-drones-war-9215364.html
10 See: TTIP: European Disintegration, Unemployment and Instability http://www.ase.tufts.edu/gdae/policy_research/TTIP_simulations.html The same study notes that:
“The largest reductions will take place in UK (with 7% of GDP transferred from labor to profit income), France (8%), Germany and Northern Europe (4%), reinforcing a negative trend that has continued at least since the early 2000s”.
11 See the letter here, and War on Want’s clear and brilliant point by point refutation: http://www.waronwant.org/news/latest-news/18214-vince-cable-letter-to-mps-a