UK industry is in intensive care. Should we throw open the door and allow America’s big business battalions to muscle in under cover of a trade treaty?
Critics claim that the Transatlantic Trade and Investment Partnership (TTIP) currently being cooked up between the EU and the United States could:
- Weaken workers’ rights and put millions of jobs at risk;
- Reduce environmental protection and food safety regulation;
- Lead to more privatisation of public services like education and our prized National Health Service (NHS);
- Give new powers for corporations to sue European governments, including the UK, in secret courts.
They complain that world leaders are working alongside major corporations at breakneck speed to get this deal sewn up, and refuse to give details.
An especially prickly issue is the imposition of investor-to-state dispute settlement rules (ISDS) enabling foreign investors to sue the host government.
I put it to the two Westminster parliamentary candidates so far standing in my constituency in the coming general election. The Conservative candidate said he’s comfortable with the fact that the European Commission are negotiating our side of the agreement and have pledged to be as open as possible in this process. And he welcomed the opportunity that freeing up trade with the United States would bring. “It means more jobs, more trade and reduced prices. Reducing regulation will have enormous benefits to both consumers and businesses on both sides of the Atlantic.”
As for fears that TTIP would open the door to further privatisation of our public services, “it is for national governments to decide how their public services operate. Nothing in this agreement will change UK laws or lower consumer, labour or environmental standards. Including measures to protect investors does not prevent governments from passing laws, nor does it lead to laws being repealed.”
He pointed to investor protection agreements that already exist in over 90 bilateral investment treaties. “I am confident that TTIP represents a great opportunity for the UK.”
The Labour candidate said that while he supports the principles behind the negotiations and recognises that more and better trade is good for the UK, he has concerns. TTIP could encourage commercialisation particularly in the NHS, which he thinks should be exempt. “Other countries have sought to exempt areas from the agreement but this Government [i.e. our Conservative-led coalition] has not.” His own party would urge the Government to call for far greater transparency and for legislation in the public interest, like the NHS, to be excluded.
He also noted that the US states are not covered by the agreement and therefore procurement at state level would not be opened up to the same extent as EU states. “This means that we could be at a disadvantage… significant procurement spend in the US is at the state level.”
The Scottish National Party (SNP), which rules Scotland, hasn’t yet declared its parliamentary candidate for this constituency so his/her stance on TTIP is not known. But the Green-Independent group in the Scottish Parliament calls it “a power grab by private corporations which threatens the NHS”.
Tilted playing field
America has always been fiercely protectionist regarding trade and there’s no reason to suppose they’ve changed. Freeing up trade at state level would require state authorization, and states would need to be convinced of the benefits before signing up to TTIP. Then there are the ‘Buy American’ rules that apply to materials used in contracts inside and outside the United States and especially projects funded by the federal government. So it’s looking rather one-sided.
The worry is not just about our NHS but TTIP’s wider threat to all public service and infrastructure projects as well as the industrial base we in the UK should be nourishing and defending as a priority. We surely don’t want a repeat of the offshore wind power scandal where foreign corporates are enjoying a feeding frenzy around Britain’s coast while UK firms scramble for a few tit-bits, thanks to our own government’s failure to formulate a proper strategy for protecting home-grown industry in key sectors.
No ISDS challenge has ever succeeded against the UK, says the Government. “Despite the large number of treaties in force with ISDS clauses, there have been only two ISDS challenges brought against us.” But Canada’s experience is quite different. Ottawa has been sued for billions of dollars after ISDS gave multinational corporations too much power while restricting the fundamental role of democratic governments to regulate on behalf of public safety, the environment, health and other priorities. Having already lost or settled six claims and paid out damages totalling more than $170 million, Canada still faces nine ISDS actions that allege government measures interfere with the expected profitability of foreign investments. These include a ban on fracking in Quebec; a moratorium on offshore wind projects in Lake Ontario and the decision to block a controversial mega-quarry in Nova Scotia.
US wants “expanded opportunities” to bid on UK government contracts
So there are good reasons to feel uneasy about TTIP in the UK. EU procurement rules already make it difficult for the UK to rebuild its industrial base. In their slavish adherence to those rules, successive UK governments have allowed foreign firms to acquire Britain’s entire automotive industry and large parts of our water distribution and energy, sectors that are fiercely protected in Germany and France, for example.
The Office of the United States Trade Representative says it seeks to ensure that US suppliers of goods and services receive treatment as favourable as that accorded to domestic suppliers. “Achieving our T-TIP objectives will ensure US companies get a fair shot at eligible government procurement opportunities, as well as open new opportunities for US companies in the 28 EU Member States. This would mean expanded opportunities to bid on government contracts.”
The added threat of endless disputes at taxpayer expense with rich, powerful and cunning corporations could easily frighten governments into abandoning domestic regulations designed to protect their citizens and the environment. And what would happen if, for example, a UK public authority observing BDS (Boycott, Divestment and Sanctions) principles declined to do business or terminated a contract because the foreign corporate was discovered profiteering from the illegal and brutal Israeli occupation of Palestine?
The idea that foreign investors should have special rights and be able to use ISDS panels in their pursuit of profit rather than take their claims to the courts like everyone else is preposterous. What is more, ISDS cases are heard behind closed doors.
President Obama has let it be known that TTIP is a priority for him, and he’s been pushing Congress to grant him “trade promotion authority” (also known as “fast-track”) which would allow him to negotiate final TTIP terms without Congress debating it and adding amendments,. He argues that this is essential to winning concessions from the EU side and closing the deal. However, the Senate’s top Democrat, Harry Reid, has said he won’t consider giving Obama expanded trade powers. “I’ve always been [suspicious] my entire career in Congress of these trade agreements. I don’t support fast-track because I have not been shown that trade agreements have helped the middle class.” Reid’s words will have resonance here too.
Trade between the US and EU has been brisk enough without TTIP and ISDS, amounting to around 1 trillion dollars worth of goods every year. They invest even more than that in each other’s economies, so why is Obama so keen to go further if not to make it easier for US big business to plunder our resources, gain industrial footholds they wouldn’t ordinarily be entitled to, and weaken our own industrial base?
As if to pave the way for this ‘soft power’ invasion many UK politicians have begun rehearsing the mantra that “national governments decide how their public services operate and nothing in the TTIP agreement will change UK laws or lower consumer, labour or environmental standards”.
But that’s hardly the point if the foreign invader is allowed to bypass our laws and courts.
Half the people in Britain are fed up with the EU and wish to leave. UK Business Secretary Vince Cable (pictured) has said concerns over investment protection measures in the treaty are “misplaced”. But how confident are the rest of us that faceless grey suits in Brussels will come up with a deal that protects what we hold dear?
by Stuart Littlewood / January 26th, 2015