TTIP: What is the “secret” deal being negotiated between the EU and US and why are people so angry about it?

Have you heard about TTIP? You will soon

If you’re like most people, even if you’ve heard the initials TTIP, you probably don’t know exactly what it is.

And why would you?

The Transatlantic Trade and Investment Partnership has barely been covered by newspapers in the UK, it very rarely gets mentioned in parliament and almost hasn’t been seen on TV.

But it will bring a raft of swingeing changes to the UK if it goes ahead.

The discussions for the deal have largely been going on in secret, but here’s what we know.

What is TTIP?

TTIP is a deal between the US and the EU which would ensure freer trade by reducing barriers.

Since February last year, representatives from the EU and the US have been thrashing out terms of the agreement, which both sides hope will reduce tariffs, regulation and restrictions for businesses wishing to operate on the other side of the Atlantic.

The European Commission, which is leading the talks between the US and EU, said it aims to make it easier to buy and sell goods and services between the two places.

“The EU and US also want to make it easier for their companies to invest in each other’s economy,” it added.

It’s similar to a trade deal the US has had with Canada and Mexico for 20 years called NAFTA (the North America Free Trade Agreement).

It will eventually be voted on in the European Union allowing MEPs to say “yes” or “no” to the deal.

How could it affect the UK?

One of the biggest components of the agreement is likely to be a change to the way we tender contracts. Under current rules all public sector tenders, whether that’s to provide hospital catering or build new social housing, must be opened up to companies in the whole of the EU and be fairly considered.

TTIP aims to open this up to US companies too.

It also seeks to allow companies to sue governments for loss of profits resulting from policy decisions.

Why are people so angry about it?

In the UK, protests started in July and have occurred almost non-stop since then. People are unhappy with TTIP for a number of reasons:

Secretive

The EU initially promised the negotiations would be transparent to prove TTIP posed no threat to regulations on health, safety, environment or financial security.

However, the EU changed its mind, and now all negotiation documents are unavailable to the public for 30 years. It’s also called for “confidentiality” from MEPs who are involved in the discussions, and nobody not directly involved in discussions is allowed to view the documents, including senior politicians from the countries affected by the deal.

Jobs

Many people are concerned TTIP will lead to job losses in the EU, as US firms win bids for work using cheaper employees. Employee benefits, such as holiday pay, are more generous in the EU than the US and mean that providing services is generally more expensive. If TTIP goes ahead, many contracts will be awarded to cheaper US companies where employee rights are poorer, costing jobs in the EU.

Critics are also concerned this could lead to reduced worker rights in the EU, if labour standards are deemed “barriers of trade” by the US. Plus, any future changes to employment rights could allow US firms to sue the UK or any other EU government, if it will cost the company profits.

Food safety and environment

The EU has some of the strictest standards of food safety in the world – for example, regulations that allow potentially dangerous food to be pulled from shelves before it is fully proved it poses a risk to human health.

Bringing EU regulations closer to much looser US regulations would mean a considerable relaxation of rules surrounding hormones and antibiotic use in livestock, GM food, pesticides and food safety rules, such as the above.

Similarly, the EU’s strict rules and targets on environmental damage could also be relaxed.

The NHS

By far the biggest fear for critics in the UK is the privatisation of the NHS.

The European Commission has said public services can be kept out of the system, however many people worry this will not happen in practice.

Looking at the experience of Canada under NAFTA, exemptions don’t always work. Canada negotiated a “reservation” for research, allowing it to be left out of the trade deal. However, it was still successfully sued by ExxonMobil after trying to insist companies drilling for oil invested in local research and development. The court found the “reservation” didn’t cover that sort of research.

In fact, many businesspeople are calling for individual public sector services to be specifically listed as exempt from TTIP, making it difficult to cover every NHS service.

Power to sue

Companies will be able to sue countries for loss of profits, known as Investor-State Dispute Settlements (ISDS) – something that could cost the UK millions and lead to changes in laws.

Canada has already lost a total of $175m to US companies through NAFTA, with firms successfully suing the nation for things such as banning toxic additives in petrol. In this instance it led to the ban being reversed.

So far around 500 cases have been filed across the globe, including:

  • Energy company Vattenfall suing the German government for €3.7bn over the decision to phase out nuclear power in the wake of the Fukushima nuclear disaster.
  • US tobacco giant Philip Morris suing countries over measures to reduce smoking, such as Australia’s plain packaging and Uruguay’s health warnings.
  • Ecuador paid out $1.77bn to Occidental Petroleum for terminating its contract after the company broke the law.

In the words of John Hilary from War on Want: “Ultimately, TTIP is an agreement designed to benefit transnational corporations from the EU and USA seeking to expand their market access and to engineer the removal of regulations that restrict their profits.”

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Readers' comments (1)

  • Secret trade deals being negotiated between big corporations and governments?

    Never!

    Allowing US corporations to sue governments if their democratically supported laws make them worse off?

    Surely not!

    Enshrining the privatisation of the NHS into a law that cannot be changed?

    I don't believe it!

    What are you, some kind of conspiracy theorist?

    This is Britain!


    Unsuitable or offensive? Report this comment

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