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TTIPing Europe into the abyss?

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TTIP-Europe-ColinOpinion by Colin Moors

With the balance of power shifting from the US in the latest round of development talks within the World Trade Organization (WTO) – the so-called Doha Development Round – there has been a significant shift towards bilateral trade agreements being made between countries wishing to have the advantages that WTO membership brings without the need to agree on complex, contentious and often protectionist agricultural and fair trade clauses. As at time of writing these issues are far from resolved and the Doha Round has now been in progress some 14 years.

At the same time this is happening, we have the US concerned by the rapid growth, burgeoning wealth of China and its huge industrial output. US President Barack Obama’s 2012 ‘Pivot to Asia’ programme was meant to be a shift in focus towards better diplomatic, military and trade relationships with Asian countries – and in particular, access to their economies. The US has had more resources available to it to aid these efforts since the scaling back of operations in Afghanistan, Iraq and the wider Middle East. Through these diplomatic efforts, alliances have been formed with Japan, Thailand and South Korea, and US-Filipino relations are at an all-time high point. There’s one big name missing from this list – China.

In political circles there is talk of this glaring omission pointing to what is unofficially known as the China Containment Policy, a policy strenuously denied by the Obama administration. Keen to distance itself from the Cold War strategy of keeping China and other Communist countries contained, Obama went on record as saying that “We want China to succeed and prosper" and that China’s ongoing development was good for the US.

Set against this backdrop three major trade, investment and services agreements have sprung up:

  • The Trans-Pacific Partnership (TPP): Originally a trade agreement between four Pacific Rim countries (Brunei, Chile, New Zealand and Singapore), the TPP grew out of a desire to standardize such trade-related matters as intellectual property rights, environmental law and economic policy. Since 2008 more countries began negotiating within the TTP framework, among them South Korea, Mexico, the US and Australia bringing the total to 12 countries.
  • The Trade In Services Agreement (TISA): Nominally, there are 24 participants in this agreement. As the EU counts as one entity, the expanded list of countries totals 51. The proposed agreement will liberalize the trade of services in fields such as transport, banking and healthcare. It is important to note here that the EU has already stated that market access for publicly funded social, healthcare, TV or education services will not be taken.

  • The Transatlantic Trade and Investment Partnership (TTIP): There are just two players here, the EU and the US. Free trade has been the ideal for both the EU in its various configurations and the US since the days of Glasnost and Perestroika after the end of the Cold War and the fall of the Berlin Wall. Involvement in the WTO and the Doha Round have precluded any concrete plans for a trade bloc but have realistically come no closer than the fairly loose Transatlantic Declaration of 1990, a call for the continued existence of NATO and various other promises including yearly summits and more frequent meetings between heads of state.

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The negotiation of trade agreements seem to come and go on the world stage, so none of these agreements seems out of the ordinary. However ordinary or even mundane they seem, even a cursory inspection will reveal that there are some heavyweight economies and producers missing from every one of these proposed agreements – Brazil, Russia, China, South Africa and India. The so-called BRICS bloc of emerging economies may have had their day in the WTO negotiations but they are being specifically excluded from ‘free’ trade negotiations such as these.

As the common denominator in all three is the US, it appears that not only does the China Containment Policy brought about by Pivot to Asia seem a lot more likely but that any country not playing ball at the Doha negotiations is being specifically excluded in an attempt to limit their ability to play on the world stage.

In June of this year, the EU Parliament’s plenary vote on the TTIP was dramatically cancelled at the eleventh hour, with president Martin Schultz citing the fact that there were too many amendments to consider and vote on in a single plenary session. The real reason has a much shorter name - the Investor State Dispute Settlement (ISDS) clause. The ISDS would provide a mechanism by which corporate lobbyists could "provide input [which] shall be taken into account" by policy makers in both the EU and the US. In plainer English, they could sue governments, city councils or entire countries if a decision taken by any of those bodies can be proven to adversely affect their trade. Needless to say, the tobacco companies are very interested in this particular slice of the pie. The arbitration panel would be made up of three corporate lawyers, so the matter would be decided purely on trade value, not the potential effects on public health.

Despite the best efforts of the EU to reassure a wary public that TTIP is going to improve trade and investor relations between the two blocs and improve the GDP on both sides, many are wary about the secrecy and uncertainty surrounding such a deal. There are without doubt some very positive aspects of a trade deal with the US that even the detractors can't easily deny. Energy commodity trading would be liberalized, and with the spectre of Russia pulling the plug on gas at any time, this could ease the minds of industry and manufacturing. The general removal of restrictions and trade tariffs would almost certainly ease the flow of some goods and services. There's also the benefit from the US point of view of removing the BRICS from the equation, alleged China Containment Policy or not.

The largest hurdle to overcome is the secrecy surrounding these agreements, particularly TTIP. The lengths being gone to in order to protect the text of the agreement from the eyes of the media and the public make some of the Cold War measures look positively open. Currently, if EU officials want to look at this supposedly two-sided agreement, they are only allowed to go to the US embassy on a Monday or a Wednesday (by appointment) for two hours maximum and are not allowed anything but a pen or pencil - and are guarded while reading it. Hardly the openness and transparency promised by Cecilia Malmström when she took over the role of trade Commissioner.

Moreover, the US has requested that no documents prepared by them be released to the public in any form until the negotiations are over, a request with which the EU is complying. This means that nobody will see any of the negotiating procedure until TTIP is a done deal. We're being given assurances in the EU 'myth debunking' factsheet that the health services of EU countries will be unaffected but without anyone being able to see even the drafts, how can we trust either government not to renege on that promise?

Unfortunately, as the situation stands, the public perception of the behaviour of the US and the EU, the shroud of secrecy and the blatant attempts by lobbyists to push their agenda have seriously undermined the public's confidence in any form of trade agreement outside the WTO. Whatever happens, it seems corporate America is likely to emerge the big winner here. Perhaps it's time to call it a day and start discussing terms with the BRICS?

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EU Reporter publishes articles from a variety of outside sources which express a wide range of viewpoints. The positions taken in these articles are not necessarily those of EU Reporter.

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