By Manuel Ruiz Rico
A review of the key aspects explaining why left-wing parties in the EU are against the Transatlantic Trade and Investment Partnership (TTIP) with the US.
Since TTIP negotiations between the EU and the US began in February 2013, the treaty has become a subtle ideological indicator of the European Parliament, where criticism towards the ‘great coalition’ on all crucial EU-related issues – formed by the European People’s Party, the social democrats of the S&D and the liberals – has been a constant among left-wing parties, especially the European United Left and the Greens.
This situation has left social democrats between a rock and a hard place: if they align themselves with the European People’s Party they will be reproached for being part of the so-called ‘coalition’; if they decide to approach the leftists, they will be labelled by the right, with whom they often ally, as nothing less than ‘irresponsible’ or ‘populist’. Seemingly, it’s all black and white when it comes to this issue.
Investor-state dispute settlement (ISDS). This is something you will hear about from now on. It is an instrument that grants multinationals the right to settle disputes with Member States (for example, if states change their jurisdiction) by bringing matters before an arbitral tribunal.
ISDS is not new. European states have already signed 1,400 trade agreements (many of them bilateral) that include an ISDS clause. This makes sense when the other party of the trade agreement is a non-democratic country, or one with a deficient or unreliable legal system. But is there any point of an ISDS clause in an agreement between the US and the EU?
In 1994, the US included such a clause in its trade agreement with Mexico and Canada, the NAFTA. Consequences immediately followed. Among others, Ethyl Corporation filed a lawsuit against the Canadian government, claiming that the Canadian ban on a gasoline additive had caused them to lose money. Canada had to overturn the ban, given that Ethyl had asked for a $251 million compensation.
The results of a public survey conducted by the European Commission last year, and published in mid-January, provide conclusive evidence: 95% of a total of 150,000 participants are against an ISDS clause in the TTIP.
“This clause implies handing over to multinationals the power to contest decisions taken by a State, that is, to challenge democratic decisions,” said Yannick Jadot, MEP for the Greens.
Downward law harmonisation. This is one of the biggest concerns of the European left, civil society and European NGOs, especially for those working on food, environment and consumer protection.
The main goal of the TTIP is to remove trade barriers between the US and Europe in order to promote the transit of goods, and the exchange of goods and products between both sides of the Atlantic. The procedure to follow, when legislation on said goods or services is different, is a pending issue.
The NGO, Food & Water Europe, claims that “European legislation on food production is much stricter than American legislation. In the EU all stages of the production chain are subject to legislation, while in the US only the last one is. This means that the preceding stages may include certain products later removed before controls at the last stage. In Europe, this is not allowed. Should we believe that US standards will be upgraded?”
“This possibility is remote. If Obama aims at selling American products in Europe it is to be expected that he will call for a downgrade of European legislation, not for an upgrade of his own legislation.”
An open door for fracking? The conflict between Russia and Ukraine has made hackles rise in Europe. Rather than the political or territorial aspects of the dispute, it is its consequences on European energy that have caused the most friction, given that Europe ─ especially its main economic engine, Germany ─ depends largely on Russian gas.
This situation in Europe has caused oil prices to plummet around the world. The cause lies within the US: energy self-sufficiency is now possible for Obama thanks to fracking (the procedure of creating fractures in subterranean rocks in order to obtain hydrocarbons).
American self-sufficiency stands against European dependency on Russian gas, which makes the stability of the European economy largely dependent on Putin’s willingness. With the TTIP, this is now a cause for concern in a European Union that is closer than ever to the US, and to fracking.
If the US shares its energy pie with Europe, this could open the door to fracking in Europe for the American energy industry. So far, EU states have held exclusive competence over fracking. Could the TTIP change this situation?
In Europe, left-wing parties, especially the Greens, have opposed fracking. Firstly, because it would increase carbon dioxide emissions into the atmosphere. Secondly, because it would cause further damage to terrestrial ecosystems, including water and land contamination, and minor earthquakes.
Privatisation of public services, public tenders. The European left warns that the TTIP could bring a new wave of privatisation of the public sector, namely in two fields: water management and European healthcare systems.
The first is a losing battle, given that water resources are managed by French companies in many European states. However, if US companies were to manage water resources, European standards regarding water quality and water management procedures would have to be lowered to match US standards.
With regard to European healthcare systems, there is much more to worry about. The British government has already asked the EU if its national healthcare system would be at risk of privatisation. Ignacio García Bercero, EU Chief Negotiator, replied with a reassuring letter: “European governments will be free to keep and adopt measures regulating access of foreign companies to the healthcare services market”. However, according to the European left, it will be very difficult for Europe to preserve these conditions when negotiating with the US.
Labour rights and consumer protection. This is another of the key issues regarding TTIP: if the treaty aims at reducing the cost of trade between European and American companies, how can we be sure that the US will not demand lower consumer protection, and particularly, fewer labour rights in Europe?
If they did not, American companies in Europe would end up having more expenses in this regard than they would in the US, leaving no incentives for them to operate on European soil. More so if, as representatives of the business lobby group BusinessEurope claim, the TTIP “would be more profitable for small and medium sized enterprises than for big corporations, given that the latter can afford said cost differences, while the former can’t”.
According to the European left there is significant risk that the TTIP will reduce consumer protection, for example, by reducing labelling requirements or the penalties applicable to companies. In the field of labour rights, they fear the implementation of free dismissal and the disappearance of collective agreements. Isn’t this where labour reforms, pushed forward by European right-wing governments upon the troika’s request, have been heading since the crisis began?
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