What is TTIP?
By John Hillary*
Business groups on both sides of the Atlantic have long harboured the dream of a pro-corporate trade and investment agreement between the EU and USA. The TransAtlantic Business Dialogue, an invitation-only group of chief executives from the most powerful US and European companies, was set up in 1995 to lobby for the removal of regulations affecting transnational corporations operating in the EU and USA, and has consistently advocated a far-reaching agreement to realise that goal. The creation of the Transatlantic Economic Council in 2007 provided a new opportunity for the TransAtlantic Business Dialogue to press for a free trade area based on the deregulation of markets in both the EU and USA.
Responding to this pressure, European Commission and US officials announced in November 2011 that they would be setting up a high-level working group to “identify and assess options for strengthening the US-EU trade and investment relationship”. Shortly afterwards, the European Commission embarked upon a series of over 100 closed meetings with individual companies and business lobbyists in order to develop their negotiating position – meetings that were kept secret until the Commission was forced to reveal their existence under a freedom of information challenge. The TransAtlantic Business Dialogue joined with the US Business Roundtable and European Round Table of Industrialists to call for an ambitious trade and investment partnership between the EU and USA.
US President Barack Obama duly announced the launch of negotiations towards a comprehensive Transatlantic Trade and Investment Partnership (TTIP) in his State of the Union address of February 2013. The first round of talks was held in July 2013, with the stated hope on both sides that the negotiations might be rushed through within two years (thus avoiding the start of campaigning towards the next US presidential elections, which will begin in earnest during 2015). Given the election of a new European Parliament and the formation of a new European Commission in 2014, the intention to complete such a complex and controversial set of negotiations on ‘one tank of gas’ (as US negotiators have put it) is extremely reckless.
TTIP is not a traditional trade agreement designed primarily to reduce tariffs on imports between trading partners, as tariffs between the EU and USA are already at minimal levels. Officials from both sides acknowledge that the main aim of TTIP is instead to remove regulatory ‘barriers’ which restrict the potential profits to be made by transnational corporations in US and EU markets. This includes the removal or downgrading of key social standards and environmental regulations, such as labour rights, food safety rules (including restrictions on GMOs), regulations on the use of toxic chemicals, data protection laws and new banking safeguards introduced to prevent a repeat of the 2008 financial crisis. The European Commission’s negotiating mandate (classified as confidential under EU rules, and thus only available as a leaked document) identifies the elimination of regulatory obstacles as one of its top priorities for TTIP, thus belying the European Commission’s subsequent claims that deregulation is not on the agenda. The US government has also identified key EU regulations and standards for removal in the negotiations, as detailed in the rest of this briefing.
TTIP also seeks to create new markets by opening up public services and government procurement contracts to competition from transnational corporations, threatening to introduce a further wave of privatisations in key sectors such as health and education. UK government officials have confirmed that one of their top three goals for TTIP is to “complete the single market” within the EU itself, particularly by opening up public service and procurement contracts to private companies in other EU member states. Most worrying of all, TTIP seeks to grant foreign investors a new right to sue sovereign governments before ad hoc arbitration tribunals for loss of profits resulting from public policy decisions. This ‘investor-state dispute settlement’ mechanism (ISDS) effectively elevates transnational capital to a status equivalent to the nation-state itself, and threatens to undermine the most basic principles of democracy in the EU and USA alike.
TTIP is correctly understood not as a negotiation between two competing trading partners, but as an assault on European and US societies by transnational corporations seeking to remove regulatory barriers to their activities on both sides of the Atlantic. In an internal paper leaked and published in December 2013, the European Commission confirmed that the types of regulation at risk from TTIP would include primary EU legislation (both regulations and directives), implementing measures, delegated acts and also regulations introduced by EU member States; and, on the US side, bills passed by Congress, federal rules and also regulations adopted by individual US states. EU Trade Commissioner Karel De Gucht has confirmed that the purpose of TTIP is to remove regulations on both sides of the Atlantic so that business has a free hand to operate: “Regulatory barriers are more complicated to remove than traditional trade barriers… It will not be easy but it will be worth it.”
* The text is a chapter from John Hillary’s booklet The Transatlantic Trade and Investment Partnership: A charter for deregulation, an attack on jobs, an end to democracy, published by Rosa Luxemburg Foundation.
1. Mark A. Pollack, The Political Economy of the Transatlantic Partnership, Fiesole: European University Institute, June 2003.
2. ‘European Commission preparing for EU-US trade talks: 119 meetings with industry lobbyists’, Brussels: Corporate Europe Observatory, 4 September 2013.
3. ‘Forging a Transatlantic Partnership for the 21st Century’, Joint Statement by US Business Roundtable, the TransAtlantic Business Dialogue and the European Round Table of Industrialists, 18 April 2012.
4. ‘Directives for the negotiation on the Transatlantic Trade and Investment Partnership between the European Union and the United States of America’, Brussels: Council of the European Union, 17 June 2013; a call to make the mandate a public document was rejected by the European Council of Ministers at its 18 October 2013 meeting in Luxembourg.
5. For more details of the UK government’s goal to ‘complete’ the single market within the EU, see ‘The economic consequences for the UK and the EU of completing the Single Market’, London: Department for Business, Innovation and Skills, February 2011.
6. ‘TTIP: Cross-cutting disciplines and Institutional provisions; Position paper – Chapter on Regulatory Coherence’, Brussels: European Commission, 2 December 2013.
7. ‘Transatlantic Trade and Investment Partnership (TTIP) – Solving the Regulatory Puzzle’, speech by European Trade Commissioner Karel De Gucht at the Aspen Institute, Prague, 10 October 2013.