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Is Europe hungry enough to accept a deal with the US? A first comment to the EU draft mandate for the TTIP

Following its non-transparent practice in trade and investment policy making, last 13 March the EU Commission adopted a “restricted” mandate proposal1 for the Transatlantic Trade and Investment Partnership (TTIP), between the European Union and the United States of America. The European Council is expected to endorse it in the Foreign Affairs Council dedicated to Trade of 18 June. The adopted mandate will be still a “restricted” document, with limited access from Parliamentarians and no access for NGOs and social movements. The launch of negotiations should follow during a EU-US Summit.

The democratic deficit that affects the EU procedure in trade and investment is notorious (e.g.secret mandates, secret negotiating texts, rare public discussion, a limited role of the European Parliament on trade and investment issues to only approve or disapprove agreements after the negotiations have been closed). In most cases the texts of agreements remain secret long after the conclusion of the negotiations – as was the case with the EU-Colombia/Peru FTA. It is clear that this non-transparent and exclusive approach falls far short of democratic governance, especially in view of the very broad scope, the high “ambition” of the agreement and the many implications it may have for people and nature on both sides of the Atlantic. As many recent “free trade” agreements show, they have not much to do with “freedom” and “trade”: they mainly aim to reduce non-tariffs barriers, that is they reduce the possibility and power of the state and public authorities to regulate in the public interest.

The draft mandate proposal is short, general and vague, and therefore – if approved like this – will give a free-hand to the Commission to negotiate. It confirms the ambition of the High Level Working Group Report. How this will turn into concrete handling of a wide range of hot issues is too early to say. President Obama believes that a deal is now possible . He expects “to see more pressure from more countries on the other side of the Atlantic to get this done than we have seen in the past,” especially because “they are hungrier for a deal than they have been in the past”2. The mandate seems to confirm: the EU elites are hungry for a deal because they want to use the crisis as an opportunity to advance deregulation in the interest of Europe’s big business.

Interestingly, despite the fact that Obama has made it clear that agriculture will have to be part of the negotiations, the draft mandate does not mention agriculture let alone agricultural subsidies, although trade in agricultural products may be implied in the paragraph on market access. So far the EU seems to uphold its position that agricultural subsidies are an issue that can only be dealt with at the WTO, because EU farm support, with the exception of direct export support which has become very small, is not country specific. Given the clearly voiced position of the US on this, it is difficult to see how agriculture would be excluded and subsequently how t the issue of agricultural subsidies could be avoided. The mandate in any case includes sanitary and health questions which are closely related to agricultural products, but it does not offer more clarity on how for instance the beef hormones or chlorine chicken issues will be addressed. When the Commission states that sanitary measures should be “science based” does it intend to allow GMOs, hormone beef and chlorine chicken into the EU market?

The draft mandate is also extremely short and thus open-ended on another sensitive issue since the ACTA-debacle, namely Intellectual Property Rights. Apart from the need to include geographical indications it does not say much more than that “the agreement shall cover issues related to intellectual property rights”.

The mandate also speaks of “addressing long-standing market access barriers in services” but proposes that “the agreement shall not contain provisions that would risk prejudicing the Union’s cultural and linguistic diversity, namely in the audio-visual sector”. However the Commission does not explicitly exclude audio-visual services, nor any other sensitive sectors like education, health, water distribution, maritime transport, cabotage, etc., nor does it mention the need to strongly regulate the financial sector.

Equally sensitive is the approach to government procurement where it is clear that the Commission intends to target the sub-federal level in the US.

The paragraph on investment protection confirms the approach already used in the EU-Canada-CETA negotiation, designing a model which still offers tremendous privileges to investors (the investor-to-state dispute settlement mechanism; ISDS) but adds some specifications that supposedly would mitigate excessive/unjustified use of it. The draft indeed still speaks of the “highest possible level of protection and certainty” and of the promotion of the “European standard of protection”. If “European” means, “as in the EU member states BITs” this would imply “unspecified” protection standards, very broad definitions, no transparency, etc. The insistence on an investor-state dispute mechanism in an EU-US agreement in spite of the robust legal systems in both parties can only be seen as an attempted assault on these systems and on democratic governance.

Finally the mandate includes a number of misleading references to “sustainable development”, social and environmental standards etc. But as evident in the paragraph on Trade and Sustainable Development the Commission does not foresee in the requirement to ratify the ILO conventions that the US has not ratified, or in an effective enforcement mechanism.

In sum the draft confirms the will to impose greater regulatory “convergence” and “harmonization” of future regulations between the EU and the US in the only interest of transnational corporations and the financial industry. The vagueness of the draft would allow the Commission great freedom to achieve this. Social, labour and environmental rights in both sides of the Atlantic are under fire.

Seattle to Brussels Network, 5 April 2013

1The Recommendation for a Council Decision authorising the opening of negotiations on a comprehensive trade and investment agreement, called the Transatlantic Trade and Investment Partnership, between the European Union and the United States of America has been disclosed by the online Magazine Inside US Trade on http://insidetrade.com/.

2Inside US Trade, Obama Expresses Guarded Optimism On U.S.-EU Trade Deal, But Sees No Guarantee, 12 March 2013

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