Friday, 6 December 2013

Transatlantic Trade and Investment Partnership (TTIP)

The Transatlantic Trade and Investment Partnership (TTIP) is a trade agreement that is currently being negotiated between the European Union and the United States. The negotiations aim at removing trade barriers (tariffs, unnecessary regulations, restrictions on investment etc.) in a wide range of economic sectors so as to make it easier to buy and sell goods and services between the EU and the US.

There are many areas of concern regarding this trade agreement, most notably that it may allow companies to sue governments who try to protect areas of social policy from commercialisation (e.g. Heathcare). Some of these issues are described in more detail below.

1) Investor to State Dispute Settlement (ISDS)
2) Lack of Protection of Social Policies such as Healthcare
3) Cautionary tales from other Free Trade Agreements
4) NAFTA - Framing, legalese and adverse effects
5) Petitions etc and feedback from politicians
6) Further Links


1) Investor to State Dispute Settlement (ISDS)
ISDS procedures are a component of many Free-Trade agreements and allow companies to challenge governments if they believe their rights to free investment have been curtailed, even if this has been as a result of government action for environmental, health or other social good reasons.


2) Lack of Protection of Social Policies such as Healthcare
The Health and Social Care Act 2012 mandates that compulsory competitive tendering for NHS services.

This, of itself raises issues relating to the lack of evidence that private operators are more efficient than the NHS, the administrative burden tendering imposes, the risks of disrupted care (imagine your GP "provider" switching your GP around every two years), and poorer working conditions for medical staff - but these are issues for another post.

The mandatory tendering of health services may allow large US healthcare companies, who come from an environment that lacks the public service ethos of the NHS, to grab and hold parts of the NHS - and prevent future UK governments from bringing those parts of he NHS back into public hands. One wonders how bad a service such large companies will be allowed to provide before their contracts are terminated.

Given that they can take the UK Government to court, the answer may well be "very".

More information on this at (yes, they are biased, but it is the only info BFTF has available at this point).

The UK could exempt the NHS from TTIP (as the French have done with their media industry).

In a world class example of doublespeak, David Cameron responded to a direct question on this issue as follows (Hansard for 19th June 2013:
"Debbie Abrahams (Oldham East and Saddleworth) (Lab): Will the Prime Minister confirm that the NHS is exempt from the EU-US trade negotiations?

The Prime Minister: I am not aware of a specific exemption for any particular area, but I think that the health service would be treated in the same way in relation to EU-US negotiations as it is in relation to EU rules. If that is in any way inaccurate, I will write to the hon. Lady and put it right"

George Monbiot has written about ISDSs in the Guardian, commenting that :
"The hearings are held in secret. The judges are corporate lawyers, many of whom work for companies of the kind whose cases they hear. Citizens and communities affected by their decisions have no legal standing. There is no right of appeal on the merits of the case. Yet they can overthrow the sovereignty of parliaments and the rulings of supreme courts."
Adding that one of the judges has commented that:
" never ceases to amaze me that sovereign states have agreed to investment arbitration at all ... Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament."
And there is a chilling effect on new legislation, with threatening letters from corporations ensuring that new public protection laws are watered down or dropped entirely, especially in the case of environmental legislation.


3) Cautionary tales from other Free Trade Agreements
Philip Morris sued Australia for billions of dollars in lost profits when the government there took action to reduce teenage smoking by introducing plain cigarette packaging. Unbelievably, the tobacco company simultaneously claims that there is no evidence the legislation will reduce smoking and is also suing for lost profits. So, Philip Morris, which is it?

Canada is being sued for hundreds of millions of dollars by pharmaceutical giant Eli Lilly for revoking the patent on drugs because (according to the Canadian Government) they were not as effective as claimed in the patent (Straterra) or that they did not meet Eli Lilly's promise of being significantly better than other drugs in the marketplace (Zyprexa). In contrast, Elli Lilly wants the Canadian legislation to change so that even a "scintilla" of evidence, no matter how dubious, is enough to grant and maintain a patent.

Dutch healthcare firm Achmea initiated arbitration proceedings against the Slovak government because of the possibility that the administration would nationalise the existing private healthcare providers to create one single, public health insurance company. Achmea claimed that the proposals would go against the Bilateral Investment Treaty between the two countries. The tribunal ruled against Achmea in this case, although it is a little bit more complicated than that. Full story here.

Read this on how Canadian asbestos mining interests attempted to overturn Frances, health risk related, ban on the import of asbestos.

South African healthcare reforms are under threat from GATS.

Lots more examples at the NAFTA Wiki page


4) NAFTA - Framing, legalese and adverse effects
Dr Elaine Bernard at the Harvard Law School has written about the North American Free Trade Agreement (NAFTA), commenting that :
"The intellectual property provisions are just one example of how there is extensive protectionism in this so-called "free trade" agreement. However, this protection applies only to corporations, not to workers, consumers or small farmers.
The "free trade" aspect of NAFTA can be found in the serious restrictions that the agreement places on a government's ability to regulate. It explicitly requires, for example, that governments treat social institutions -- such as education or health care -- as service commodities open to the competitive pressures and the dictates of the marketplace."

Dr Bernard also gives an example of the impenetrable language used in the agreement :
""Nothing in this Chapter shall be construed to prevent a Party from providing a service or performing a function, such as law enforcement, correctional services, income security or insurance, social security or insurance, social welfare, public education, public training, health and child care, in a manner that is not inconsistent with this Chapter."[Chapter 11. Section 4 of Article 1101 on Scope]

and explains that :
"Double negatives such as "not inconsistent" are common language in many trade agreements. They are a trade lawyer's version of a positive assertion. That is, they allow the drafters to avoid a clear assertion that something is permitted. Instead, activities are crypticly permitted as "not inconsistent."

Dr Bernard also mentions the summary of NAFTA made by Michael Walker, chief economist with the right-wing economic think tank Fraser Institute in Canada who said:
"a trade agreement simply limits the extent to which the U.S. or other signatory governments may respond to pressure from their citizens."

Regarding protection of standards, Dr Bernard comments that :
"If a standard in one country is higher than the standard in another countries, such legislation and regulation could be challenged as "technical" or "non-tariff" barriers to trade. Once challenged, the onus is on the defending country to prove that its regulation is "based on scientific principles" and "risk assessment.".

And the focus on product instead of process undermines environmental and food safety legislation :
"The trend in regulation that NAFTA promotes is to regulate product not process...Regulating product means that if you grow a tomato and use DDT or other chemicals that are banned in this country, we cannot prohibit the import of that tomato. We can simply inspect it at the border to assure that any DDT residue is within legal limits, but we cannot regulate process, that is, how it is grown. Ultimately, this undermines our domestic regulation."

Of particular interest to the UK, is the way in which national healthcare systems can be targeted under free trade agreements :
"U.S. corporations [are ] pointing out that the Canadian government run health care insurance system works as a de facto government subsidy to industry -- and therefore could be viewed as a violation of the trade agreement. Lee Iacocca has stated that he saves $700 per car by producing in Canada because of the free (for him) Canadian health care system. He does not have to bargain with the Canadian auto workers over rising health care for Iacocca it's like getting a $700 government subsidy per car."

Some more information on the danger that TTIP poses for the NHS at this NHA Party article

Dr Bernard points out that, in contrast to NAFTA, the EU has mechanisms in its Single Market that reduce equality - such as allowing free movement of labour, the Social Charter and structural adjustment funds for poor regions.


5) Petitions etc and feedback from politicians
A petition from SumOfUs regarding TTIP

You can read TTIP straight from the horses mouth, as it were, by visiting this European Commission page.

A Q&A section can be found here. Note in particular that it says that the treaty must be approved by the European Council and the European Parliament before it becomes law.

An anti-TTIP group points out that for every one NGO seen by the EU, over 20 trade representatives are seen.

BFTF has asked the local MP and Conservative Party how they are going to ensure that the TTIP agreement will prevent abuses of corporate power as described above.

And also, for example, will food goods coming into the UK from the US have to have the (sensible) EU format for dietary information which states calories per 100g - or will the US format which states calories per arbitrary serving amount be allowed?

Labour Response
Received a response from BFTF's local MP saying that "So far, the Government has demonstrated no intent to bring transparency and accountability to to bear to these talks..." and that no impact assessment has been carried out of the deal on the UK.


6) Further Links
Open Democracy Article