TTIP Of The Iceberg




Members of Uplift outside Leinster House, Dublin last month (top) and Dr Julien Mercille (above)

If passed The Transatlantic Trade and Investment Partnership will introduce a new wave of regulation-free trade between America and Europe.

But is it good news for Ireland?

If only we had a smouldering French-Canadian egghead to explain it all….

Dr Julien Mercille writes:

TTIP (pronounced “Tee-tip”) is the Transatlantic Trade and Investment Partnership, a US-EU trade deal that political leaders have been attempting to implement for the last two years. It hasn’t been discussed a lot in the media. One reason is surely that if more people knew about it, popular opposition would rise, although there have already been protests against it.

President Obama is currently attempting to obtain from the US Congress the authority to deliver trade deals faster, including TTIP, but negotiations have been animated as a number of Democrats are opposed. Some in Congress have said an arrangement could be passed this week.

At the same time, the European Parliament will soon vote on TTIP, on June 9th. It will then debate many issues, principles and red lines related to the proposed pact. So the next few days will be interesting.

One of the most important points about TTIP is that although it is often referred to as a ‘trade deal’, in fact, it’s much better to think of it as a deal that seeks to alter regulations to benefit corporations.

Secondly, there has been a big push from politicians to present TTIP as key to revive Europe’s stagnating economies, implying that if we can only pass it, an economic bonanza awaits us and jobs will be created. However, as economist Dean Baker said, this is ‘complete nonsense, unless we define down bonanza to mean finding a quarter on the street’. Therefore, ‘as growth policy, this trade deal doesn’t pass the laugh test’.

An analysis by the UK-based Centre for Economic Policy Research is regularly quoted in support of the deal. What it says is that TTIP would increase the EU’s GDP by €119 billion and US GDP by €95 billion. This represents a 0.5% increase in EU GDP and a 0.4% increase in US GDP.

But this is not at all as fantastic as it might sound, for the following reasons. To start with, it’s based on economic modeling, forecasting and estimating, what some would call guessing. Also, the think tank that produced the study is overall very favourable to the deal.

But let’s say we put all that aside and look at their numbers. The study says that the above GDP increases will be achieved only in 12 years, when TTIP is fully in place. This means that by 2027, EU GDP will have grown by 0.5% due to TTIP. This translates into a very small boost to EU GDP of less than 0.05% annually until 2027. Imagine if a leftist politician presented a growth plan that would boost GDP by 0.5% in 10 years—that would be laughed at in the mass media.

And this is under what the study calls their ‘ambitious’ scenario, in which TTIP could be implemented as fully as possible. Under their ‘less ambitious’ scenario, which presumably means ‘more realistic’, growth would be even smaller.

Finally, the study does not say anything about job creation due to the pact.

Therefore, if the deal is not really about growth, what is it about? Conventional trade barriers between the EU and the US are already very low, and thus there is not much room for improvement here. So, what’s at stake is really non-conventional barriers, i.e., regulations. All the big players in various industrial sectors face some regulations that they wish could be removed, amended or made more flexible so they can maximize profits. And that’s what TTIP is about.

The problem is that in many cases, regulations are good and important to protect customers, the environment, health, and a range of other areas to maintain our quality of life.

The difference between Europe and US regulations is well illustrated in the case of chemicals. In general, Europe uses a precautionary principle that requires companies to demonstrate that new chemicals are safe before they can be sold on the market. But the US approach puts the burden of proof on regulators to establish that there is evidence of danger before action is taken against the chemicals.

Therefore, many chemicals are tightly restricted or simply banned in the EU, but are allowed in the US. A recent analysis found 82 pesticides allowed in the US but restricted or barred in Europe.

From a consumer perspective, those regulations are essential protections. But from the industry’s viewpoint, they’re barriers to trade that if removed could open up markets for more profits.

In this respect, investor-state dispute settlement (ISDS) mechanism that is part of TTIP has attracted much criticism from progressives. ISDS essentially creates special panels that decide on issues that arise in disputes between transatlantic investors and governments. They’re outside the control of governments.

For instance, if a US company claims that a regulation imposed by a European country deprives it of profits by imposing costs on its business, the firm could decide to take its complaint to the special panel, rather than to the government’s legal system. The worry, of course, is that those panels will be pro-business, otherwise, why would corporations want to bypass the regular court system?

One relevant example that illustrates the potentially negative consequences of ISDS is the ongoing action by Big Tobacco firm Philip Morris, which is suing the Australian government. The reason is that in 2011, the government implemented a range of public health measures such as plain packaging for cigarettes. Philip Morris is unhappy because such measures reduce smoking and thus cut into its profits. So it’s using an ISDS mechanism to try to force the government to overturn the public health legislation.

Other similar cases have occurred with other countries and in different industries. It is the kind of legal actions that would now be supported in Europe if TTIP comes to pass. Clearly, ISDS puts profits and the interests of corporations before that of ordinary people.

Do you still want this TTIP?

@JulienMercille is lecturer at UCD and the author of The Political Economy and Media Coverage of the European Economic Crisis: The Case of Ireland (2015, Routledge). His new book, Europe’s Treasure Ireland (Palgrave), will be out in July 2015.

35 thoughts on “TTIP Of The Iceberg

  1. Clampers Outside!

    Surely our govt does not have the auhority to sign us up to be potentially sued by some corporation in court rooms developed in secret and removed from democracy. It’d be like sigining another bailout, in advance.

    This must be stopped.

    1. Odis

      Well yes it does. These laws are being developed in secrecy in the US.
      Congressmen are allowed to study the documents, in a sealed room, but they can’t take in any electronic equipment and have to leave their cell phones at the door. Equally, that old fashioned favourite, the pen and notebook, is likewise banned.
      I understand from reading english websites, that Slimey Dave, has similar precautions in place, to discourage his elected minions, from vigilance.
      Worringly, there’s the EU, where being unelected, has the advantages of “keeping you impartial”. And the brown envelopes have been replaced by Jiffy bags.
      Cynics would say that politicians, nowadays, are the second tier of society, with big business/corporations sat in the first tier, with a lot of justification. The TTIP deal merely recognises this process.

      1. Clampers Outside!

        But back to my question… our govt does not have the right to sign us up to some new hidden corporate law courts… how can that be binding to the public if not in the public domain…. I’ve no idea, doesn’t sound right to me.

        Screw the IW nonsense, this stuff is a millions times bigger sort of crazy!

        1. Odis

          “our govt does not have the right to sign us up to some new hidden corporate law courts” – I’m not to sure if it does or it doesn’t in fairness, Clampers.

          I think the general idea is that the EU signs us up for this.

          1. Clampers Outside!

            Can’t use our Constitution to wriggle free no?

            This remember has nothing to do with any of the previous EU referendums. This is the US! …must be something… I dunno

          2. Lorcan Nagle

            Legally it’s a trade agreement, which doesn’t need as much oversight as a new law. But international trade agreements supersede local law for some reason.

            This is the third or fourth attempt to push this agreement through in recent years, your best bet is probably to email MEPs and try and apply pressure that way. It’s what I do

          3. Clampers Outside!

            Cheers Lorcan, I’m just admittedly ignorant of, and think it mad, that a corporation could sue a govt in private courts… makes no sense at all from a democratic view.

            Scary sh*t

  2. Owen C

    There’s an awful lot of words up there for what seems to amount to a couple of vague complaints.

    1. Odis

      P:roTip: It’s only vague because we are not supposed to know about it, until its a fait accompli.

  3. Just sayin'

    Suddenly Mercile is an expert in internal trade policy too, along with banking and the property market. Are there no limits to his talents?

    1. Bob

      In fairness, he’s only repeating information that’s been out there for a while but that nobody has been reporting on.

  4. Mr. T.

    TTIP is entirely undemocratic and favours only the very wealthiest who can live and travel wherever they want. They never have to suffer the negative consequences of their actions.

    Anyone who champions TTIP is a liar.

    1. Just sayin'

      “Anyone who champions TTIP is a liar.”

      With a healthy tolerance like that you must also be an active Yes campaigner.

      1. Odis

        Why should proposed laws need security guards to protect them from inspection?

        Seriously, this is a fairly easy question to answer.

        1. Just sayin'

          Under US law all trade negotiation documents are classified secret – hence the security. More generally, trade agreements involve a lot of horse trading so its easier to do it in secret so the public doesn’t get upset about their politicians making compromises. All trade agreements are done behind closed doors TTIP is no different but, as usual, there have been plenty of leaks.

          1. antigonite

            These threads are a magnet for conspiracy theorists. “It hasn’t been discussed a lot in the media. One reason is surely that if more people knew about it, popular opposition would rise..”

            Not really, it is discussed in the media but because it’s a complex and undeveloped negotiation that requires qualified and lengthy analysis maybe its not interesting interesting enough. However, the very general concerns raised are well known and well heeded all over the EU as against the general and undetermined potential benefits. More trade is generally good, but at what cost? Lets negotiate and see what we might achieve.

            What is discussed in the media are Julien’s comments and quotes because he has an unusual name, a nice face and is a “doctor” even if it is in a School of Geography, Planning & Environmental Policy.

      2. Paolo

        TTIP gives corporations far greater access to law makers and decision makers than the European electorate ever had. For this reason alone, it should not be passed.

  5. Jonotti

    All the anti fluoride crew are starting to jump on TTIP now. Experts in health and international trade agreements.

  6. Ros

    If you dissagree act! Write to your elected! MEP who will be voting on this..

    Information on EU TTIP negotions is here

    List of negotiatiors are here and their email address

    Quick search also brings up tons of stuff about TTIP here

    Also the secret hidden text…

    That said I dissagree with the ISDS provision.

  7. TK

    The EP vote in June is a non-binding resolution, although it will get to vote on the draft text (if both sides ever agree to one).

    Any speculation about the nature and effects of ISDS is at this point uninformed, as the EU is currently re-drafting their proposals for it.

    For those of you who are interested in learning or doing more, the GUE/NGL group in the European Parliament is active on TTIP (including Luke Ming).

  8. wonder boy in monster land

    February, 2014:
    This is a laughable reason: to save a crumbling transatlantic relationship.

    … So TTIP, at least temporarily – for 5, 6, 7 years – can create transatlantic unity of sorts. It will not magically make things perfect for us but it will create a temporary sense of vitality which is totally under-appreciated in Europe. We are arguing about genetically modified foods and we have completely lost sight of the bigger picture. In my view, that is the greatest thing which is lacking.

    Okay, whatever.

    March, 2015:

  9. Kolmo

    Yes, more deregulation by non-national corporations is exactly what we need, the deregulation of Wall street worked out well..
    anti-social politicians supporting the deal have probably been promised a place on the board of these corporations when they get out of the politics racket, so that’s nice for them.
    Corporations are not your friend. A lot of them are more powerful than most Governments, driving policy in the ‘West’ into an increasing amount of asset-grabbing wars and destabilising any government who isn’t playing ball..nothing new.

  10. Paolo

    Hmm, I’m torn.

    On one hand, I have always been strongly opposed to TTIP because it clearly is a bill of rights for corporations over the general public and a deliberate attempt to further subvert the democratic process.

    On the other hand, Julian Mercille is also against it and he has a very weak grasp on reality.

  11. bakuninslittlehelper

    I’ve understood TTIP as fundamentally including a mechanism for arbitration if a dispute arises between a multi-national and a particular state.
    In other words if a TNC (or multi-national) has difficulty with legislation in a particular country then TTIP provides a method of resolving this – hence smoothing the difficulties that can arise in international trade.
    This seemingly innocuous idea is in actual fact an appalling example of a government surrendering its sovereignty and increasing the already egregious powers of the multi-nationals.
    One case would be Ireland’s attempt to legislate for blank cigarette packs – this external body would now have the authority to forbid this.
    I have to ask with “Clampers Outside” – does a government have the authority to sign away our autonomy? Is this unconstitutional?

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