European Commissioner Claims 'Nothing Secret' About TAFTA/TTIP, Tries To Defend Corporate Sovereignty

from the getting-desperate dept

After lurking in the shadows for a few months, the mega transatlantic trade deal TAFTA/TTIP is starting to hit the mainstream media. Here, for example, is an excellent article by George Monbiot in the Guardian, which rightly singles out corporate sovereignty as a key threat: Panic spreads through the European commission like ferrets in a rabbit warren. Its plans to create a single market incorporating Europe and the United States, progressing so nicely when hardly anyone knew, have been blown wide open. All over Europe people are asking why this is happening; why we were not consulted; for whom it is being done.



They have good reason to ask. The commission insists that its Transatlantic Trade and Investment Partnership should include a toxic mechanism called investor-state dispute settlement. Where this has been forced into other trade agreements, it has allowed big corporations to sue governments before secretive arbitration panels composed of corporate lawyers, which bypass domestic courts and override the will of parliaments. In a clear sign that the European Commission is starting to worry that people are waking up to the dangers present in TAFTA/TTIP, Karel De Gucht, the commissioner for trade, has written a response to Monbiot's article. Techdirt readers will recall that it was largely because of De Gucht's handling of ACTA that it suffered an ignominious defeat in the European Parliament last year. Sadly, it looks like he has learned nothing from the experience: George Monbiot, in his article on the negotiations for a Transatlantic Trade and Investment Partnership, claims the European commission has tried to "keep this process quiet" (Chickens in chlorine? It's what free trade's about, 3 December). This is laughable. Every step of these negotiations has been publicly announced and widely reported in the press. The commission has regularly consulted a broad range of civil society organisations in writing and in person, and our most recent meeting had 350 participants from trade unions, NGOs and business. It's true, every step of the negotiations has indeed been announced, but only in terms of what was happening when -- hardly very informative. What people want to know is what is being said during those negotiations, and very little of that has been released. They would also like the opportunity to provide their views on the subject, and to be listened to. It's not clear who those "350 participants" mentioned above might include, or what the exact breakdown of numbers is. What we do know is that of 130 "meetings with stakeholders" that took place earlier this year, 119 of them were with large corporates and their lobbyists.

Here's an interesting point raised by De Gucht: no agreement will become law before it is thoroughly examined and signed off by the European parliament and 29 democratically elected national governments -- the US government and 28 in the EU's council. I've not seen this misdirection before, but I'm sure we will in future. It seeks to convey the idea that nothing is final, and that the European Parliament will be able to examine and approve the agreement before it is ratified. Strictly speaking, that's true -- with two important caveats. First, that the European Parliament cannot change a single comma of the agreement that is presented to it, whatever horrors it finds there. And secondly, the "signing off" is all or nothing: either it accepts everything, or rejects it. Given the exaggerated claims about the agreement's benefits, the European Parliament will be under huge pressure not to reject it, even if it contains a truly awful chapter on corporate sovereignty, for example.

On the subject of supposed benefits, De Gucht of course trots out the big numbers: we do not take Monbiot's extreme view that investment protection agreements (IPAs) are "toxic" attempts to put monster corporations in charge of our destinies. His exaggerated fears are no reason to abandon a deal with the US that could create £100bn in new growth for Europe. No justification for refusing to recognize that ISDS places corporations above nations is offered, just a dogmatic statement. But it's worth remembering that the £100 billion -- which comes from the €119 billion figure in the European Commission's report -- is for 2027, is the best-case figure, and is anyway unlikely to be achieved. That's because it assumes massive deregulation of health and safety standards that will to be too much even for a European Parliament under pressure to accept the deal.

There then follows this comment from De Gucht: (Contrary to Monbiot's claims, the economic impact of free trade agreements has been positive. For example, Europe's agreement with South Korea has seen our exports rise by 24% in its first two years.) Monbiot was quoting figures Techdirt used earlier this year in the context of NAFTA and KORUS. I find it interesting that De Gucht underlines the success of the agreement with South Korea. That also applies to investments: according to the European Commission's own site on the agreement with South Korea, "European companies are the largest investors in South Korea." And yet it turns out that there are no corporate sovereignty provisions in the agreement: it would seem that even without them, European companies are perfectly happy to make significant investments in South Korea, so why does the European Commission insist ISDS must be a part of TAFTA/TTIP?

Here's De Gucht's only attempt at a justification: In reality, these IPAs [investment protection agreements] protect job- creating investment from discrimination and unfair treatment. The UK has benefited, with 15 British companies launching cases under investment agreements in the last five years. Well, let's look at the most recent of those cases, as listed in the annual report on ISDS published by the United Nations Conference on Trade and Development. In 2012, UK companies concluded corporate sovereignty cases against the following nations: Argentina, Tanzania and Hungary. New ones were begun against Hungary, Indonesia, Pakistan and Uganda. That's pretty much as you'd expect: most cases were brought against governments in emerging economies where UK companies might be concerned about the judicial systems (whether or not that concern was justified is another matter.)

But those cases have no bearing on TAFTA/TTIP, which is purely between the US and EU, and therefore involves only the judicial systems of those two areas. Nobody could seriously claim that investors will fail to receive fair hearings in either, so De Gucht's invocation of other corporate sovereignty cases elsewhere is simply irrelevant.

He concludes by making some striking assertions: EU investment agreements will explicitly state that legitimate government public policy decisions -- on issues such as the balance between public and private provision of healthcare or "the European ban on chicken carcasses washed with chlorine" -- cannot be over-ridden. We will crack down on companies using legal technicalities to build frivolous cases against governments. We will open up investment tribunals to public scrutiny -- documents will be public and interested parties, including NGOs, will be able to make submissions. Finally, we will eliminate any conflicts of interest -- the arbitrators who decide on EU cases must be above suspicion. Of course, what he omits to mention here is that the EU is in no position unilaterally to insist: these things will only happen if the US agrees to them, and that seems highly unlikely, especially on transparency matters, where the US has shown itself completely unwilling to open up. Indeed, implicitly claiming that he will force the US to accept these conditions as part of the deal will make it more unlikely that it agrees to them.

De Gucht ends his assault on Monbiot with this stern admonition: We should focus on the facts. We should indeed, because they show quite clearly that the economic benefits of TAFTA/TTIP are likely to be extremely modest. They're certainly not worth the price to be paid in terms of loss of national sovereignty as a result of ISDS, or the enhanced corporate control of regulation on both sides of the Atlantic, recently revealed in the latest leak about the negotiations, which remain as secret and undemocratic as ever, despite claims by De Gucht to the contrary.

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Filed Under: corporate sovereignty, eu, investor state dispute settlement, isds, karel de gucht, tafta, ttip