TTIP: Another Secret Trade Deal Putting Us and the Environment at Risk

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Frank Ackerman, principal economist at Synapse Energy Economics, says we are on the cusp of another trade deal that is fortified to serve the interest of corporations

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SHARMINI PERIES, EXECUTIVE PRODUCER, TRNN: It’s the Real News Network. I’m Sharmini Peries coming to you from Baltimore.

Environmentalists and anti-globalization critics on both sides of the Atlantic are alarmed by a proposed major trade deal that is being discussed behind closed doors. No, not the Trans-Pacific Partnership, but TTIP, the Transatlantic Trade and Investment Partnership, a trade agreement between the European Union and the United States.

Last week, as ongoing TTIP talks resumed in Brussels, Greenpeace activists from seven different countries disrupted the beginning of the negotiations by barricading the entranceway. A Greenpeace press release said that TTIP would give international corporations unprecedented power to expand their interests. Recently, a Guardian newspaper investigation that obtained redacted records of a previous TTIP meeting and an official TTIP briefing paper revealed that Karel De Gucht, the European Union’s trade commissioner, had told representatives of ExxonMobil that [the] pending trade deal would open up access to resources in countries not party to the agreement, such as countries in Africa or Latin America, with a focus on fracking and shale gas.

Well, with us to discuss all of this, and it is underreported, I must say, is Dr. Frank Ackerman, who is a principal economist at Synapse Energy Economics, a public interest-oriented research and consulting firm in Cambridge, Massachusetts. Frank, thank you so much for joining us today.

FRANK ACKERMAN: Thank you.

PERIES: So, Frank, let me begin with asking you whether Greenpeace is correct. Would the TTIP give multinational corporations unprecedented power, and has the public interest in this case been compromised by the, in these draft agreements?

ACKERMAN: It certainly opens up additional power, but this is a big step forward toward enforcing, under cover of freeing up trade, enforcing a new set of rules that will allow corporations to sue governments in a new, private set of courts that have been created just for this purpose.

PERIES: And how would that take place? Give us an example.

ACKERMAN: So, trade treaties adopted in the last 20 or so years have typically included what’s called investor-state dispute settlement mechanisms, abbreviated as ‘ISDS.’ This creates a special trade court. Lawyers who are familiar with trade rules hear the cases and companies then bring suit, so, against foreign governments.

So, for instance, under NAFTA, the North American Free Trade Agreement, which has one of these agreements, a US investor wanted to open a toxic waste dump in a city in Mexico. The federal and state governments in Mexico had approved it, but the city government refused to give them a permit. The investor sued and won a judgment against Mexico for cutting into the profits that he expected he would get by opening this toxic waste dump in the city, and so Mexico had to pay him–Well, originally it was $17 million. Mexico was outraged and spent years trying to appeal it and got it all the way down to $16 million that they had to pay, simply for the principle that a city could control its own zoning when a foreign investor disliked it.

That sort of mechanism allows unprecedented mechanism in other countries’ affairs by businesses and investors.

PERIES: Now, there’s obviously many environmental issues that Greenpeace is concerned about. How might TTIP affect environmental regulations? I know there’s a heightened awareness about TPP, but not so much about this particular one. Are they similar in terms of the regulations?

ACKERMAN: The final language of TTIP hasn’t been settled, and, you know, many things are still being negotiated, so I’m sure the details will be different. The general ideas are very similar ideas. The big idea to understand here is that the claim that we are promoting free trade is a misnomer.

Trade is already extraordinarily free between the US and Europe. Average tariffs are under 3 percent in both directions. So, in the past, in the 1980s or earlier, you could have argued that there were tariffs high enough to interfere with trade. Today that argument is a nonstarter. Those tariffs have already been brought down. It must be about something else.

PERIES: And usually, when it comes to trade agreements and also standards, in terms of environmental standards, Europe has higher standards. Is it possible that the US can benefit from those higher standards in an agreement like this?

ACKERMAN: Europe has higher standards on most issues, although not quite all, but there is nothing in this process that says that these standards will be harmonized upward. There is a debate about how much standards will be harmonized, but there certainly has been a big push toward that, toward making the standards the same. That’s what companies expect to get out of this, since the tariffs are already gone, and there’s been a general assumption that companies will push hard to harmonize downward. So on chemicals regulation where Europe has a much stronger regulation than the US does, both the European and the American chemical industries have been pushing to weaken the European regulations. I think the big push will be to push toward the weaker of the two.

PERIES: All right. And then the particular thing about this agreement is the investor-state dispute settlement. What is it, and how will it affect countries like, say, US, Canada, Europe in this case?

ACKERMAN: This is one of the things that some of the European countries objected to, so the language is perhaps being changed on this, but the general approach to investor-state dispute settlements has been to allow this process where an unelected panel of trade lawyers can make final judgments about what one country owes to a foreign investor.

So within Europe, under existing treaties, there already have been cases like this. A Swedish electric utility that owns power plants in Germany has sued Germany twice. The first case they already got German environmental regulations rolled back on one power plant. The second case, which is still pending, is asking Germany for billions of dollars compensation for Germany’s plan after Fukushima to shut down their nuclear plants. So the idea that a foreign investor could impose enormous costs on a country doing something like making its own decisions about nuclear power would change the rules of the game completely.

PERIES: All right. And then, moving forward in terms of the current negotiations, what should us, who are being shut out of this process altogether, be most concerned about?

ACKERMAN: I think the idea that a corporate system is crating the binding, unappealable authority to overturn democratically adopted rules should concern everyone. There is no good argument for anyone except the affected businesses benefiting by harmonizing regulations on every single issue.

So, take two cases where the US and Europe have differed. The US moved much faster to regulate smoking in public than Europe did. Should the United States have been forced to wait until Europe was ready to regulate smoking? On the other hand, Europe has done much better at regulating gun use than the United States has. Should Europe be forced to wait for the United States to be ready to regulate gun use? Well, harmonizing downward to the weaker standards would be excellent for tobacco manufacturers and gun manufacturers in those cases, not really any good for anyone else.

I think this is the great danger: that the rhetoric of huge economic gains from free trade is going to impose a system that allows unelected, private courts of trade lawyers to rule in favor of corporate claims to roll back democratically adopted regulations.

PERIES: Now, we know from past experience, past agreements that most often people are shut out of these processes, and we don’t actually learn about its damages and consequences, you know, 20, 30 years into such agreements. What can we do now in terms of getting more access to the process and stopping some of these detrimental clauses that might be put into such agreements?

ACKERMAN: I think it’s important to push for publication of the proposals. The European proposals are published in Europe. The American proposals are secret in the United States. So we could certainly push to publicize our proposals as much as Europe publicizes its proposals. The kind of review that there was under TPP, where there is a long period, multiple months, after the text has been revealed before a vote is taken is very important, and reading it, reading all of that legal language very carefully and pushing to have congress resist if it doesn’t actually reflect a good deal for America, if it doesn’t actually respect the regulations or the laws that are adopted by each country, then it should be turned down.

Remember, there is no huge barrier to trade between the US and Europe. Goods flow back and forth all the time between the US and Europe. This is a solution looking for a problem. We don’t need a new treaty to make it possible to trade with Europe. I don’t know if you’ve ever had trouble finding wine from Europe in a liquor store. I find it fairly easy, actually, myself. There just aren’t barriers there that need solving unless you’re a corporation that wants to roll back the rules that the US or Europe has adopted.

PERIES: Frank, there’s such defunding of watchdog roles on behalf of public good in this country. I thank you for doing the work you’re doing, and look forward to more reports and what you’re observing out there.

ACKERMAN: Okay. Thank you.

PERIES: And thank you for joining us on the Real News Network.

End

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