Yes, you’ve probably never heard of it, and that is something of a deliberate strategy as we will see, but as someone with an interest in the law you need to at least know something about what it could mean. Let’s go through some questions and try and answer them.
What is TTIP?
The Transatlantic Trade and Investment Partnership. The title says it all – well more or less, but it also leaves a lot out. It is a partnership between the EU and the USA on breaking down trade barriers and improving investment opportunities. A free-trade deal, if you like. The European Commission sums up the rationale on its website (link below) as follows: ‘Customs duties, red tape and restrictions on investment on each side of the Atlantic can make it difficult to buy and sell goods and services on the other. Getting rid of these barriers to trade between the EU and the US would boost our economy, create jobs and widen choice and lower prices for consumers.’ Supporters claim that it will improve the economies of every European country and of the USA by 0.5% per annum. That may not sound much, but the size of the UK economy is currently around £2 trillion, so 0.5% is roughly £10 billion every year – that is far from insignificant and can build a lot of hospitals, schools, rail track, motorways, roads etc…
Isn’t that a good thing?
Yes, it certainly is, but only if it comes about, and only if the disadvantages don’t outweigh the advantages. Not everything can be measured in monetary terms, and if there is a loss of control, or a significant cultural shift which populations don’t agree with, then TTIP could do more harm than good. We’ll look at the problems a bit later.
I thought it was dead anyway?
Well, yes and no. It’s been in the process of negotiation since 2013 and it is only in the last year or so that some of the problems have started to surface, causing both governments and various pressure groups to bring these issues to attention, and therefore to pause the negotiations somewhat.
What about the new players – Theresa May and Donald Trump?
Interesting question. May is definitely a free-trade advocate, though she would want to see some of the more extreme measures watered down. Trump professes to be more of an isolationist and does not agree that free trade helps every country. His view is that free trade has effectively exported American jobs overseas and caused high unemployment in the US, particularly in more traditional sectors such as automotive, steel, ship-building and mining.
However, we must wait and see which way he turns. America could certainly ‘go it alone’ far more comfortably than any other nation, but the price would be high. Jobs would be created and immigration curbed, but we could then be headed back to the 1930’s with a depression as a result of nationalistic, isolationist policies.
Some commentators have suggested that TTIP, for all its benefits, is too risky to introduce, and a slimmed down version, especially with a compatible country such as the UK (newly released from Europe) would be a much better, far simpler and far less controversial approach.
So what are the problems with TTIP?
Really it is all to do with the extent of the partnership and the potential effects on certain sectors. Unlike a more traditional trade deal, where the parties agree to lower, or eliminate, tariffs and trade barriers, this one goes a lot further. The link to the Europa website above is well worth accessing, but it does give a somewhat one-sided picture. Although it puts some concerns forward and answers them, those answers, according to those who oppose TTIP, really don’t address the fundamental issues.
Let’s have a look at the affected sectors and the differences between TTIP and other trade deals:
1. Public bodies
Concerns have been expressed that large parts of the public sector in Europe will be open to competition from the USA and will, in time, effectively be privatised. Whether that is seen as positive or negative it is certainly a big change. In the UK, lawyers have argued that TTIP will undermine the National Health Service by imposing a new and very different modus operandi.
2. Environmental standards
It is claimed, though not really proven, that Europe has higher environmental and food safety standards than the USA, and that TTIP dumbs those standards down. The main example quoted is the use of GM foods or GM ingredients in foods, though there is no evidence to suggest that America’s food standards are lower than those of Romania or Bulgaria.
3. Finance and Banking
This is a bit of an anomaly, as American regulation is actually tighter than in Europe, and Europe, led by the City of London, is seeking to remove some of the restrictions put into place by the US after the financial crisis. So on the one hand we are arguing that we want tighter environmental standards but on the other looser financial regulation…..
4. Employment opportunities
Here is where President Elect Trump (I still can’t quite believe I actually wrote those three words together…) has voiced a powerful message to Americans during the campaigning prior to November 8th. His argument is that internationalisation and globalisation have shifted jobs away from high wage countries to ones where labour is a lot cheaper. Relatively unskilled Americans lapped up this message in the recent hustings, and see isolationism as essentially the answer, keeping jobs in America. TTIP, according to the European detractors will actually move jobs back to America anyway – so on the one hand Americans are arguing that TTIP is bad (as it opens up trade), but on the other hand, if TTIP gets signed, jobs will flow back to America anyway.
5. Dispute settlement
If you have read this far you might be wondering where the law comes in – well it is interwoven throughout all the foregoing paragraphs but is especially apparent in this one. The Independent (see link below) suggests that ‘TTIP’s biggest threat to society is its inherent assault on democracy. One of the main aims of TTIP is the introduction of Investor-State Dispute Settlements (ISDS), which allow companies to sue governments if those governments’ policies cause a loss of profits. In effect it means unelected transnational corporations can dictate the policies of democratically elected governments.’
Whether this is true or not is debatable, but it could be a very powerful shift in the balance between governments and multinational organisations. If you read the links in this article you will see a common thread running through – that of relative secrecy of the negotiations. My very first sentence ‘You’ve probably never heard of it’ sums up the fears of many detractors. Why is such a major piece of legislation and trade liberalisation so little known? It is because (according to many European sources at least) it changes the power balance and effectively allows huge and anonymous international corporations to dictate terms (and therefore legislation) to governments. The negotiators feel there are checks and balances built in, others do not agree. I leave you to come to your own conclusions on that one.
Will it ever be signed?
My opinion is ‘no’ not in its current format. There are too many opponents on too many different issues. It remains to be seen how keen Donald Trump will be to reach a free-trade agreement with Europe, and of course Brexit brings in a new dimension – where many of the UK’s values are similar to those of the US, but more divergent from those of more protectionist EU countries.
The links below are a bit emotive but worth reading. They will also point you to many other ideas you can explore on this subject.