08 May 2015

TTIP explained: The secretive US-EU treaty that undermines democracy

The Transatlantic Trade and Investment Partnership (TTIP), sometimes known as the Transatlantic Free Trade Agreement (TAFTA), is currently being negotiated behind closed doors by the European Union and the US. If it is successfully completed, it will be the biggest trade agreement in history. But TTIP is not just something of interest to export businesses: it will affect most areas of everyday life, including the online world.

Opponents fear it could undermine many of Europe's hard-won laws protecting online privacy, health, safety and the environment, even democracy itself. For example, it could effectively place US investors in the EU above the law by allowing companies to claim compensation from an EU country when it brings in a regulation that allegedly harms their investments—and for EU companies to attack US laws in the same way.

Those far-reaching effects flow from the fact that TTIP is not a traditional trade agreement, which generally seeks to lower tariffs between nations so as to increase trade between them. The tariffs between the US and EU are already very low—under 3%—so there is little scope to boost transatlantic trade significantly by removing the remaining tariffs completely.

Instead, TTIP aims to go beyond tariffs, and to remove what it calls "non-tariff barriers." These refer to the different ways of doing things which make it hard for a company to sell exactly the same product on both sides of the Atlantic. Typically, different national regulations require different kinds of tests and product information, which leads to a duplication of effort that adds costs and delays to making products available in the other market.

TTIP's stated aim to smooth away those NTBs is good news for the companies, but not so much for pesky humans. What are classed as "barriers" include things like regulations that protect the environment or the online privacy of Europeans. The threat to diminish or remove them in the name of transatlantic "harmonisation", has turned the traditionally rather dull area of trade agreements into the most important focus for civil action in years, galvanizing a broad spectrum of groups on both sides of the Atlantic that see TTIP not as a potential boon, but a bane.

Read the rest of this 6,376-word article on Ars Technica UK.