09 December 2015

UK TTIP Debate Tomorrow: Please Contact MPs Today

It seems that there will be a rare UK debate about TTIP tomorrow.  This is a great opportunity to contact your MPs and let them know what you think.  Here's what I've just sent - you can use WritetoThem to make things easier.

I believe that the House of Commons will be debating TTIP on Thursday. I hope you are planning to be there, and might be able to convey some of my concerns about the proposed agreement.

TTIP is generally presented as being something that will boost the EU and UK economies, and provide benefits for all. In fact, the European Commission's own study shows that even under the most optimistic assumptions, the GDP gain will only be 119 billion euros. That may sound a lot, but in fact is only about 0.5% of EU GDP. Moreover, that would be after ten years of TTIP, so the extra annual GDP in this optimistic scenario is around 0.05%, which is effectively zero given the uncertainties of all econometric modelling.

Even that 0.05% annual GDP boost will probaby be very hard to achieve. According to the European Commission's own study, it is based on the assumption that only 20% of the boost will come from removing tariff barriers, which are already low between the EU and US, while 80% will come from removing non-tariff barriers (NTBs). But NTBs are essentially regulations, and are not "trade irritants" as some like to describe them, but hard-won protections for health, safety, the environment etc. Removing them would cause huge negative effects on society – none of which are included in the econometric model. In fact, *no* costs are included in the CEPR projections, which is extraordinary.

The European Commission says that regulations will be harmonised, not lowered. But that will rarely be possible. For example, for chemicals in cosmetics, the EU bans 1300 of them, while the US only bans 12. If it is infeasible to harmonise regulations, and standards will not be lowered, achieving the 80% of gains will be hard, if not impossible.

Finally, there is the issue of ISDS. No convincing argument has been offered for why this is necessary. Both the EU and US have extremely well-developed legal systems. The European Commission has been unable to cite any example where an EU company has been discriminated against in the US. Moreover, the size of the investments across the Atlantic prove that there is absolutely no problem that needs solving here: the US has invested 1.5 trillion euros in Europe, while the EU has invested 1.6 trillion euros. Businesses would not be making these massive investments if there were a problem. And for those that are chary, there is always investment insurance.

On the other hand, including ISDS in TTIP will give 19,900 US-based corporations that own more than 51,400 subsidiaries in the EU the ability to sue the EU and members states over regulations that they claim will harm their profits. And while it is true that ISDS cases cannot force governments to repeal laws, many do since the cost in terms of ISDS awards are so high: recently, an award of $50 billlion was made against Russia by an ISDS tribunal. It is clear from past experience that ISDS has a chilling effect on bringing in new laws that protect the public.

I hope these quick thoughts make clear why I am concerned about TTIP, and believe that it in its current form it will bring few, if any benefits, to the UK public, while exposing them and the EU to huge risks.  If you have time, which I fear is unlikely, I have written at greater length about TTIP in this extensive feature for Ars Technica UK.

As ever, thank you for your help.

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