Yesterday, the European Parliament passed a draft report containing the EP’s recommendations to the Commission on the negotiations for TTIP. TTIP is the “free trade” treaty that is being negotiated between the US and the EU. It is the latest chapter in a long range of abbreviations across the world, from ACTA, to CETA, to TPP, TISA, etc. The end goal for TTIP is to create a single, massive free trade area/single market between the United States and the European Union member states. In practice, this requires that our standards be lowered to theirs and American businesses given unfettered access to the European markets (and in name vice versa, but it remains to be seen whether that will be the case in reality.)
The negotiations with the United States are being conducted in secret. There are various MEPs who are regularly informed about the progress of the negotiations, but they are prevented from saying anything substantial about the actual contents of the documents currently on the table. The peoples of Europe have no influence and no say in what makes it in the final treaty. Most of the Members of the European Parliament also have no idea about the exact contents of the negotiating document, and what is currently on the table. The European Parliament will vote on TTIP when the treaty is completed, but does not have the power to make amendments to the final text. This is a massive shame, since this treaty will influence us in major ways. In practice, it will open up our markets to American big business, while the effect for European middle and small enterprises are almost non-existent (as the vast majority of SMEs will not make the step to export to the United States).
Negligible Economic Advantages
The long-term economic advantages of TTIP to Europe is in fact completely negligible. Karel De Gucht, the previous EU Commissioner for Trade until 2014, claimed that TTIP will create lots of jobs in Europe, when in fact, we’re looking at an increase of GDP of at most 0.4 to 0.5 percent over a time period of decades. Claiming that this treaty will be about job creation and creating opportunities for workers on both continents is just completely dishonest, as also claimed in a blog on the U.S. Center for Economic and Policy Research (CEPR) website. According to various studies, the economic advantages are quite negligible. Incidentally, when De Gucht was confronted by some questions asked by the journalist regarding the alleged economic advantages of TTIP, he couldn’t provide an answer. And these are the sorts of people in charge of these things?
ISDS With A Different Name
One important aspect that hasn’t been scrapped in the new resolution is the notorious ISDS provision (Investor-State Dispute Settlement). ISDS is a arbitration provision, that basically says that if a corporation thinks that a certain law passed by a nation-state’s parliament is hurting the profits of the corporation, they will have a way to sue the state for damages, in practice amounting to hundreds of millions of euro’s.
The most laughable thing about this arbitration commission is, that in the initial proposals, it consists of 3 lawyers, one of which will be from the company and another one from the nation state; the third one to be decided by the 2 parties. No legitimate judge would be asked to take this decision, and this provision has the potential to hurt democracy in a massive way. That this was even up for serious discussion is simply insane. When we as people can no longer decide for ourselves what we do and do not allow onto the market, because we should always take into account whether or not that will hurt someone’s business model, what independence do we have left? What will be left of the people’s sovereignty, granted to them by international law?
The ironic thing is that in the latest resolution passed by the European Parliament (P8_TA-PROV(2015)0252), the term “ISDS” has been replaced with: ‘a system for resolving disputes between investors and states’. Tell me: how is that different from “Investor-State Dispute Settlement”? This was just a different term used in the new resolution just so some fractions in the European Parliament can say: “Look people, we stopped ISDS!”, while at the same time the Commission and the negotiating team can say to the Americans that it’s still in. In effect, nothing has changed on this point. The entire concept of investors suing states for damages because legislation is a threat to their business model, and doing so in kangaroo courts, is an utter travesty to the legal system.
Another problem is that big corporations have an excessive influence on European policy-making. During the preparatory phase of TTIP, 590 meetings took place between the Commission and corporate lobbyists. 92% of these meetings were with representatives of big business. In fact, quite a few sentences in the proposals are directly written by the lobbyists, and made it in the proposals virtually unchanged. And this is not only a problem for TTIP, this happens all the time.
Consequences of Arbitrary Arbitration
An example of where this could lead to is the case of Achmea vs the Republic of Slovakia. In this case, Achmea (which is a major Dutch insurance conglomerate) sued the Slovak Republic for damages because they wanted to re-nationalise their health care system. Of course, Achmea stood to lose millions of euros in potential profits due to this policy change, so they sued, citing alleged breaches of the Treaty on encouragement and reciprocal protection of investments between the Czech and Slovak Federal Republic and the Kingdom of the Netherlands. Luckily, the arbitration committee in this case dismissed all of Achmea’s claims, and recognised the sovereignty of the Slovak Republic to make these kinds of policy decisions.
Now imagine what happens when TTIP is implemented, on a massive scale and in a vast area across many different industries? What sovereignty do we have left when we have to think about protecting the profits of huge corporations with each and every policy decision?
Investor-State Dispute Settlement is wholly unnecessary
Protecting investments by means of arbitration committees only makes sense if your trading partner is a country without a well-developed and functioning legal system. It does not make sense whatsoever in the context of a free trade deal between the United States and the EU, since European countries do have functioning legal systems. It isn’t a union of banana republics. At least not yet. So any investment arbitration mechanism in the TTIP treaty that circumvents the nation states’ legal system is wholly unnecessary. The only reason it will make it into the treaty is to give big business a lot more power to overrule the decisions made by our elected representatives. One step closer to a United States of Europe, which in the vision of eurocrats the likes of Guy Verhofstadt is only complete when it stretches from California to the Caspian Sea.
Benito Mussolini, the fascist Italian dictator during WWII, once defined fascism as: the merger of the corporate with the state. When TTIP is passed, the corporate is the state! We will open our European markets up to American multinationals who, as we know, have little concern for labour standards, food safety regulations, and more. It will amount to us lowering our standards to theirs in the interest of “free trade”. If we don’t lower our standards, that would imply that the United States would raise theirs, which is extremely unlikely to happen in the current political climate. It will introduce a dispute settlement system that is actively hostile to the very principle of democracy. And our parliaments will have no say in the matter. Despite what the average eurocrat says, these are very real dangers. But there are even more reasons not to want this trade agreement with the United States.
Free Trade? With the people who spy on their allies?
Recently, news came out that the United States NSA spied on the German Chancellor and her most senior officials and also on the last 3 Presidents of the French Republic. These documents on WikiLeaks also reveal that the US has a decade-long policy of economic espionage, and is intercepting all French corporate contracts and deals valued over $200 million.
Two years after Edward Snowden’s revelations were made public, we have seen a move towards more secrecy, more surveillance, and more corporatism, and a lot less transparency and accountability. Transparency and accountability is also a major issue within the EU institutions and in particular the TTIP negotiations, but I’ll get to that it a bit.
Over the last 2 years we have seen moves by various European intelligence agencies to imitate the NSA and GCHQ in their capabilities. Just recently, the Dutch government released for public consulting a proposal aimed to give the AIVD, more power, authorising them to start tapping cable-bound communications.
Also, the FBI by means of James Comey and others in the US and UK (Cameron, May) are desperately trying to ban encryption, against all expert advice. Banning encryption makes us less secure, preventing, for example, banks and corporations from protecting our personal data against interception by criminals. Without encryption we cannot securely shop online, we cannot message online, businesses cannot keep their trade secrets confidential, etc. Encryption is essential to the internet, and essential to innovation.
The important point is this: Do we really want to increase cooperation in the areas of trade and industry, across all sectors, with the country that has been spying on us and disregards its own Constitution and rule of law? Do we really think that is in the interest of European citizens?
I wonder what would happen in the following hypothetical situation. Let’s say for the sake of argument that it is revealed that the Bundesnachrichtendienst (Germany’s foreign intelligence agency) has been spying on the last 3 US Presidents. Would the US then take the initiative and start negotiating a trade deal and much closer cooperation with the Europeans? Or would these actions be strongly condemned and action taken to prevent these actions in the future? I think we know what the response of the US in this hypothetical situation would likely be. However, in the real world, the US has been spying on the Europeans for decades on a massive scale, and we still don’t reconsider who our allies are?
We still mindlessly follow the US lead when it comes to demonising Russia, we don’t consider what actions are in the best interest of European businesses, we continue to give the US great advantages as they continue to stir up trouble, start revolutions and regime changes in Ukraine, hurting stability in the entire region, with MEPs Verhofstadt & Van Baalen joining in, calling for regime change on Maidan square.
The fact that US foreign policy is not a force of good in the world would already be grounds to scrap this entire treaty altogether.
Europe’s democratic deficit
An Ancient Greek ὄστρακον (ostrakon), mentioning Megacles, son of Hippocrates (inscription: ΜΕΓΑΚΛΕΣ ΗΙΠΠΟΚΡΑΤΟΣ), 487 BC. In the ancient Athenian democracy, ὄστρακον were pieces of discarded pottery that people would scratch a name into to cast their vote of who to banish from the city.
Some people may accuse me of being Eurosceptic. That is not the case: I like the concept of European cooperation and integration, I have many clients across Europe, I like the fact that I am able to travel, live, and work anywhere in the European Union. That is not the problem, and in fact, one of the greatest achievements of close European cooperation.
What is the problem, however, is the clear lack of democracy and transparency at the European level at various European institutions. European elections are held to elect Members for a small piece of the pie that is the European Parliament (depending on the country you’re from the piece may be bigger or smaller), but other than that, the European institutions are completely closed from all meaningful interactions with European citizens. The Commission is not elected, and all other European institutions that make or influence European policy also have unelected officials who decide on things. We have 4 different Presidents responsible for God knows what, and all unelected. This is the major problem with the Union, and the thing in my opinion needs to be fixed before we start thinking about further expansion, or the transfer of even more powers to Brussels.
Europe should embrace democracy, not eschew it, like we could see yet again prior to the latest Greek referendum, when various European leaders made threats to the Greek people about the consequences should they not agree to more austerity. Even the President of the European Parliament, Mr. Martin Schultz has made such threats, which is wholly unbecoming of a President of a poor excuse of a Parliament, who should be above all parties, and adhere to independence from such political opinions.
Democracy is a great concept, invented in the 5th century BCE by the ancient Athenians in Greece. We should do more of it!
The Sad Truth
The sad truth regarding TTIP is that — based on the resolution just passed by the EP — I can already make the prediction regarding the final verdict of the European Parliament when the TTIP final document is finally presented to them: they will pass it, and it’ll probably include some sort of ISDS provision. There will probably be time pressure involved, requiring MEPs to read and interpret thousands of pages of legalese in a very short time-frame, which ensures that no MEP will actually read the document they vote on.
And when TTIP is passed, corporate fascism in Europe has won.