02 January 2016


In a previous update a couple of months ago, I discussed a low-key meeting that took place between  the European Commission and some of the biggest companies in the world (mostly from the US), which essentially revealed that the Commission was, after all, intending to bring back some of ACTA's worst ideas.  Things just became rather more worrying on this front as the result of the following announcement in the US:

This morning, President Obama nominated Robert Holleyman as deputy U.S. trade representative. If confirmed by the U.S. Senate, Holleyman will help lead the effort to pass the controversial Trans-Pacific Partnership trade deal.

Notably, Holleyman is a former lobbyist who led efforts to pass the Stop Online Piracy Act legislation, better known as SOPA, when he was leader of the Business Software Alliance. The SOPA debate (along with its sister legislation, PROTECT-IP, in the Senate) brought a spotlight on industry efforts to undermine Internet freedom through what many considered to be draconian intellectual property policy.

As that notes, he was formerly head of BSA; that means that he is no friend of open source.  Coupled with the European Commission's admission that it wants to bring in "Christmas list" of new demands in the area of intellectual monopolies, makes TTIP alll-the-more dangerous for both free software and online freedom.

Alongside that bad news, we've also had some good news in the shape of two significant leaks of relevant documents.  One concerns the Canada-EU trade agreement (CETA), which I discussed recently.  The German Pirate Party has obtained a copy of part of this agreement (.pdf), dating from December last year - quite recent, then.  Interestingly, even here there are sections that have still not been finalised. The leaked section concerns intellectual monopolies; a good early analysis of it has been made by Ante Wessels of FFII.  In particular, he compares its measures to those found in ACTA:

The damages in CETA do not contain the much criticized retail price damages, which were part of ACTA, the Anti-Counterfeiting Trade Agreement, and are part of the EU – Singapore trade agreement proposal.

The injunctions do not contain “inaudita altera parte”, the much dreaded possibility to decide on injunctions without the infringer present.

So far so good. But, I do not see what was footnote 2 in ACTA, and is footnote 33 in the EU – Singapore agreement, the right to exclude patents from the scope of the civil enforcement section.

All the strong enforcement measures (damages, injunctions, provisional measures) will be available for software patent trolls.

The strong enforcement measures further create problems for access to knowledge and taking part in culture, for remix artists, and for inventors involved in sequential invention – like software developers.

Bad news, in other words.  And because agreements tend to build on one another - as I mentioned last year - it's very likely some of this language will re-appear in TTIP. 

The other leak is the European Commission's draft proposal on trade in services, investment and e-commerce for the TTIP negotiations [.pdf], obtained by the German newspaper Die Zeit.  Although it dates from July last year, it still offers some useful insight into the Commission's general thinking as regards TTIP.  That's also true of its latest official document, entitled "EU US Trade Agreement – The Facts" [.pdf]  This is very similar to the text that I discussed in October last year, headed "Incorrect claims about investor-state dispute settlement".  It takes the same form: statements allegedly made about TTIP, and their rebuttal.  For example:

TTIP will enable foreign firms to undermine EU laws. FALSE

An existing law cannot be undermined by a trade agreement. An existing ban on fracking or chlorine - washed chicken cannot be questioned, for example.

Although that's true, the European Commission omits to mention that  foreign firms will be able to undermine *future* laws by threatening to sue the EU or national governments if they are brought it.  This chilling effect is not merely theoretical: it has been happening for years in Canada, where NAFTA's ISDS chapter has allowed US companies to undermine proposed legislation in just this way.  If TTIP includes ISDS, it seems certain US companies will do the same here in Europe.  And remember that the great thing about such threats is that they can work even when it is not at all clear that the company would win in the ISDS tribunals: the mere possibility of such expensive actions is usually enough to "persuade" governments to back down.  That's the real danger here.

Moreover, from a true statement, the European Commission rather naughtily segues into an untrue one:

What the agreement does provide for – and this is in the EU's interest - is a ban on discrimination. That means that what applies to domestic firms must also apply to foreign firms.

What the Commission elides here is the fact that US companies will actually have *more* rights than EU companies in Europe, because EU companies are not able to sue there for any claimed "indirect expropriation of future profits", as US companies can using ISDS.  So introducing ISDS in TTIP will actually put EU companies at a disadvantage in their home markets.

TTIP will lead to privatisation in areas such as health care, water and education. FALSE

The TTIP Agreement has nothing to do with privatisation – only governments can decide that. No free trade agreement obliges the EU's Member States to liberalise or privatise the water industry or other public services, such as public health systems public transport or the education system.

Again, this misses the point - wilfully, perhaps.  The problem with TTIP is not that it will force nations to privatise services, but that once they are privatised, and provided by a US company, it will effectively be impossible to re-nationalise them.  That's because under ISDS that would amount to an "expropriation" of future profits, which would mean that the US companies concerned could sue the governments for those "lost" monies.  That would make re-nationalisation punitively expensive, and ensure that it rarely happened.

TTIP will restrict the rights of internet users. FALSE

Both the EU and the US have efficient regulations for protecting intellectual property rights, even though their respective regulations achieve their goals in different ways. The TTIP aims to simplify trade between the EU and the US without weakening these regulations. The TTIP will not be "ACTA throug h the back door" and it will not call into question the European Parliament's rejection of the trade agreement on combatting piracy of labels and products (ACTA).

As I noted above: the European Commission has already said to corporates that ACTA by the back door is precisely what it hopes to achieve here; the appointment of one of the main SOPA supporters as a key US negotiator guarantees that this will be high on the agenda.

The TTIP is undemocratic and elected politicians have no influence over it. FALSE

Both the EU's national parliaments as well as MEPs in the European P arliament have considerable influence on the TTIP negotiations. The European Commission is negotiating the trade agreement in the name of, and with a mandate from, the EU's Member States. The EU's negotiators meet weekly with representatives of the dem ocratically elected governments of the Member States in order to brief them 'live' before, during and after negotiating rounds and to take into consideration their positions. The European Parliament is also regularly informed of the state of the negotiati ons so that the positions and interests of the democratically elected parliamentarians can also be taken into consideration in the negotiations. Finally, it will be the EU Member States and the European Parliament which will have the last word on the TTIP and so it is obvious their interests will be taken into consideration.

This is nonsense.  Here's the reality:

USTR demands for hyper-secrecy in the Trans Atlantic Trade and Investment Partnership (TTIP) continue to be a major block to continuing negotiations. The current issue under discussion is access to US proposals by EU member states — which are of course themselves sovereign countries. The member states are demanding access to the text of proposals that would constrain their domestic law making, as they ave had in all other EU trade agreements (e.g. the recent EU-Canada FTA). But Inside US Trade (2/28/2014) reports that USTR Froman has offered only that “he might be able to allow the European Commission to share the U.S. negotiating documents it receives if they were accessible only in a secure reading room.”

As that makes clear, even the "representatives of the democratically elected governments of the Member States" don't have access to all the relevant documents: they are currently being offered peeks in a "secure reading room" - how insulting is that? For MEPs, it's even worse:

There is no word yet on whether EU Members of Parliament will obtain access to consolidated TTIP text after each negotiation round, as was provided in at the end of the negotiation of the of the Anti-Counterfeiting Trade Agreement (ACTA). Increased access to ACTA text for EU (but not US) legislative staff followed a March 2010 Resolution of the EU Parliament lambasting the Commission for its intense secrecy, including accusations of violations of the Lisbon Treaty governing EU affairs.

If MEPs can't even see the text, they are certainly not informed.  There's no way that they can exert "considerable influence" as the Commission claims if they don't know what's in the negotiating texts.  And that "last word" is literally that: a single, "yes" or "no" vote, where MEPs will be under tremendous pressure to accept the horrors - things like ISDS - for the sake of some much-needed growth.  Talking of which:

Why bother? The Transatlantic trade and Investment Partnership could have a similar effect to a package of economic stimulus measures. It could boost growth by 0.5% of GDP or some €120 bn, equivalent to €500 for every EU household because savings for companies also mean cheaper products, higher quality and more choice for consumers.

Yet again, the European Commission fails to note that the extra 0.5% GDP growth is compared to what would be obtained without TTIP *in 2027*, after 10 years of the agreement.  That means that even under the most favourable circumstances - something else it also fails to note - TTIP will increase GDP by just 0.05% each year on average.  It makes no sense to talk about the cumulative GDP effect: it might as well say that TTIP will produce 50% GDP growth - but without mentioning that would only be in 2117.  The only meaningful measure is the extra GDP growth that TTIP will produce *each year*, and that figure is 0.05%. 

Claiming that TTIP "could boost growth by 0.5% of GDP" without explaining that this is the  cumulative, not annual, figure is a serious misrepresentation of what its own projections suggest might happen in the best-case scenario - and certainly not a "fact" about the EU-US trade negotiations.

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