At S&D TTIP panel, interest groups warn of trade deal risks

By Jared Angle

BRUSSELS — American and European trade officials met with interest group representatives to discuss potential outcomes of the Transatlantic Trade and Investment Partnership (TTIP) in a panel discussion at the European Parliament on Nov. 18.

Hosted by the EP’s centre-left Socialists and Democrats bloc and the International Trade committee, the panel brought Deputy US Trade Representative Michael Punke and EU Trade Commissioner Cecilia Malmström together with experts from European and American consumer protection and labor rights groups.

Journalists and panelists at the Nov. 18 discussion on TTIP.
Journalists and panelists at the Nov. 18 discussion on TTIP.

Projected tariff reductions under TTIP will allow companies to pass savings onto consumers and will allow new companies to begin exporting to international markets, according to Malmström.

“We will deliver a TTIP that is good for consumers; not bad, not ugly,” Malmström said.

The US and EU must not miss the opportunity to implement TTIP, because other countries will keep moving and setting new, inferior standards in the absence of TTIP, according to Punke.

“As the conversation about TTIP intensifies, it is now more important than ever to articulate why we’re negotiating this agreement and to make clear what we’re negotiating,” Punke said.

TTIP will increase economic and job growth for European and American consumers while preserving or enhancing environmental, intellectual property and labor standards, according to Punke.

The agreement will also facilitate imports and exports for small and medium-sized businesses on both sides of the Atlantic; these businesses have the most to gain from the agreement, as large corporations are already performing well in transatlantic markets, according to Punke.

Interest group reps say TTIP, ISDS could damage labor rights, regulatory standards and democratic values

Each group offered varying perspectives of potential outcomes of the agreement, which is in the midst of negotiation.

Representatives of labor and consumer protection groups debated the virtues of TTIP, saying that the agreement contains pitfalls that could lower wages, damage labor rights, and reduce health and safety standards.

Some panelists, including Damon Silvers, a policy director with the AFL-CIO labor organization, expressed their concerns about the role of investor-state dispute settlement (ISDS) in the event that TTIP is implemented.

Another audience member asked if ISDS cases such as the ongoing case between Australia and the Philip Morris tobacco company over plain cigarette packaging regulations could pose a threat to EU member states.

ISDS rules were revised in the recently concluded Comprehensive Economic and Trade Agreement (CETA), with the intent to limit abuse and increase transparency, according to Malmström.

Therefore, so-called “abusive” ISDS cases such as the Australian tobacco lawsuit are “not possible” in the EU, Malmström said.

Saying that ISDS tends to be oversimplified, Punke argued that modern implementations of the legal mechanism under new agreements like TTIP and CETA would be different than existing ISDS systems that have drawn criticism.

“The purpose of ISDS provisions is to create a neutral legal mechanism for the resolution of investment disputes by means of arbitration,” Punke said.

Citing concerns of a “race to the bottom,” Silvers said that regulatory harmonization under TTIP will damage European food and pharmaceutical standards, as well as privacy and anti-trust protections.

ISDS lawsuits cannot compel the US to reduce regulatory standards or change legislation as some people have argued, according to Punke.

“On the contrary, the United States has taken great care to craft an approach to investment rules in ISDS that safeguard the government’s ability to protect public health and safety, the financial sector, the environment, and any other area where they seek to regulate,” Punke said.

ISDS is not one agreement, but rather a collection of thousands of agreements worldwide of varying quality; many abusive, well-publicized ISDS cases frequently occur with lower-quality ISDS agreements, according to Punke.

American improvements to ISDS will “deter frivolous challenges to legitimate public interest measures, and ensure transparency and public participation in ISDS proceedings,” Punke said.

Despite assurances that ISDS will not have a de-regulatory role under TTIP or similar trade agreements, Silvers remained critical of the legal mechanism.

“[ISDS] is a provision that can be deployed against any consumer protection that a particular firm doesn’t like and is willing to pay lawyers to bring a case on,” Silvers said. “The procedural agenda [for business] is to remove regulatory decision-making from democratic processes; ISDS is the tip of that spear.”

Malmström and Punke rejected the idea that the United States or EU member states could be constrained by corporate interests and prevented from maintaining strong regulations under TTIP.

According to Punke, President Obama will reject a TTIP agreement that weakens American environmental and consumer protections.

“[Obama] won’t sign it, we won’t negotiate it, and legislatures on neither side of the Atlantic would approve it if that’s what we were to seek,” Punke said.

Both sides shouldn’t feel obligated to sign the agreement, and must be willing to back away from the deal if any portion is unsatisfactory, according to Silvers.

ISDS revised for future trade agreements

A September 2014 report released by the European Parliament’s Directorate-General for External Policies highlights new ISDS regulations proposed in the EU investment policy.

ISDS provisions will not apply to “legitimate public purposes, such as health or environment protection,” according to Rupert Schlegelmilch, a high-ranking Commission trade official and one of the report’s authors.

Additionally, investors would not be exempt from legitimate legislation, including “a change in the minimum wage or a ban on fracking,” and courts will dismiss illegitimate or trivial challenges to national or EU regulations. Finally, future agreements will mandate the public release of legal proceedings from all parties in ISDS cases, according to the report.

“There is an imperative drive to [protect EU investments] without undermining the capacity of states to regulate,” writes Schlegelmilch.

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