TTIP Update XI

Because of the absurdly and unjustifiably secret nature of the TAFTA/TTIP negotiations, piecing together what is going on is a matter of looking for scraps of information wherever they can be found, and then trying to piece together the bigger picture.  In my last two updates, I analysed some interesting attacks that the European Commission made on articles that dared to be sceptical about TTIP.  In this one, I'll examine another important source: meetings with those that are privy to the negotiations.

It was held just before Christmas, and is reported here by Ulf Pettersson, policy advisor to the Pirate Party MEP, Amelia Andersdotter:

Taking place at the American Chamber of Commerce offices in Brussels, the purpose of the two hour exchange was to strategize between businesses and the Commission in order to make sure that the maximum level of new IP restrictions will be written into the treaty. Present at the meeting were representatives from a range of the very largest multinational corporations. Among these were TimeWarner, Microsoft, Ford, Eli Lilly, AbbVie (pharmaceutical, formerly Abbott) and the luxury conglomerate LMVH. The participant list also included representatives from Nike, Dow, Pfizer, GE, BSA and Disney - among others. Also present was Patrice Pellegrino from OHIM [Office for Harmonization in the Internal Market], the EU/Commission agency responsible for trade marks in the EU.

Controversially, the supposedly neutral Commission negotiator [for Intellectual Property in TTIP, Pedro Velasco Martins] and the OHIM representative not only defined themselves as allies with the businesses lobbyists. They went far beyond this and started to instruct the representatives in detail on how they should campaign to "educate" the public in order to maximise their outcome in terms of industry monopoly rights. In particular, concerns from elected representatives, such as the European Parliament -- as well as civil society criticisms about ever increasing intellectual property rights -- were to be kept out of the public debate.

It turns out that this alliance between the European Commission and major companies like Microsoft is not simply at the general level: the meeting revealed the existence of an explicit "Christmas list" of new demands in the area of intellectual monopolies – principally patents and copyright.  As Petterson points out, that's hugely significant:

Previously - towards the public and the Parliament - the Commission has created the impression that intellectual property rights will be downplayed. The only IP right mentioned has been geographical indications, a minor issue which few are concerned about. In reality, the Commission now revealed that they have received "quite a Christmas list of items" on IP from corporate lobbyists and that they are working to implement this list. The list has already been discussed with the US in several meetings, in person as well as online.

The Christmas list covers almost every major intellectual property right. On patents, industry had shown "quite an interest" especially on the procedures around the granting of new patents. On copyrights the industry wants to have the "same level of protection" in the US and EU; in reality this always means harmonization up which results in more restrictions for the general public.

This is really quite shocking, because the Commissioner with overall responsbility for TAFTA/TTIP, Karel De Gucht has explicitly stated that TTIP will not be ACTA by the backdoor:

ACTA, one of the nails in my coffin. I'm not going to reopen that discussion. Really, I mean, I am not a masochist. I'm not planning to do that.

If the Commission advances new basic legislation, which I think she should, we will revisit the question, but I'm not going to do this by the back door.

And yet ACTA by the backdoor is precisely what one of the EU's senior negotiators seems to be suggesting is coming:

According to the negotiator, the most repeated request on the Christmas list was in "enforcement". Concerning this, companies had made requests to "improve and formalize" as well as for the authorities to "make statements". The Commission negotiator said that although joint 'enforcement statements' do not constitute "classical trade agreement language" -- a euphemism for things that do not belong in trade agreements -- the Commission still looks forward to "working in this area".

Enforcement was one of the most contentious issues in ACTA, and was one of the reasons that the European Parliament killed it off last year.  So the big question is: what is going on here?  Was De Gucht simply trying to mislead us?  Or is one of his staff taking the initiative on his own, and undermining De Gucht's statement that TTIP will not be ACTA by the back door?  Presumably we will find out as more information leaks out.  But Pettersson's report on this meeting highlights a number of disturbing issues.

First, that the EU's chief negotiator on intellectual monopolies sees US companies as his natural allies, and the European public as the enemy:

The Commission and OHIM officials both made clear they were on the same side as the largely American companies present. At the same time, European consumers and civil society were described as either uneducated or as an enemy that needs to be fought.

If that is really what he really thinks, Martins should have the decency to resign.  After all, it is largely the European public that pays his salary, and so this kind of behaviour, if confirmed, is both insulting and ungrateful.  In fact, if this is indeed what he said, De Gucht should simply fire him, both for putting the interests of US companies above those of the EU public, and for contradicting what De Gucht has publicly stated.

But the other deeply troubling point is that we don't actually know what the real position of De Gucht or the European Commission is on this, or on anything else.  Instead, we are forced to shadow box with what we glean from meetings like the one last December, with all the risks of misunderstandings that this naturally entails.  If the European Commission wishes to avoid this, and wants to counteract the impression that it has nothing but contempt for the people that also pay its wages, it should routinely released all tabled EU documents.

After all, once they have been revealed to the US negotiators, tabled documents are no longer secret.  That's not least because the US negotiators are believed to share everything with hundreds of companies and lobbyists, which means that the well-connected (and those with good spies) can easily find out what's going on.  The only people that are kept in the dark by this process are the ordinary people in whose name the negotiations are theoretically being conducted.  That's just unacceptable in an age where transparency and openness are rightly taken for granted.

Full list of previous TTIP Updates.

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TTIP Update X

Last week I wrote about an attack on Corporate Europe Observatory (CEO) by the European Commission over a leak concerning TAFTA/TTIP, which the former had obtained and published.  As my lengthy analysis indicated, what was most remarkable about that response is that it failed to answer the points made by CEO.  That naturally begs the question: so why did the European Commssion bother?

I think the answer is clear.  It was rattled that CEO had revealed its emerging plans to use a new supranational regulatory body to gradually replace the European precautionary system with one that is optimised for profits.  That meant it needed to try to "prove" it wasn't really happening – something it signally failed to do.  More generally, its extremely rapid response shows that the European Commission fears that it is losing control of the TAFTA/TTIP narrative, which is supposed to be all about growth, jobs, profits and happiness sempiternal.

That view is bolstered by the fact that no less a personnage than Karel De Gucht, the European Commissioner for trade, and the person with overall responsibility for the TTIP negotiations, entered into battle himself to rebut an article by George Monbiot in the Guardian.  Monbiot's piece was entitled "The lies behind this transatlantic trade deal", and it rightly concentrates on the threat posed to national and European sovereignty by investor-state dispute resolution (ISDS), and on the extraordinary and unnecessary secrecy:

Panic spreads through the European commission like ferrets in a rabbit warren. Its plans to create a single market incorporating Europe and the United States, progressing so nicely when hardly anyone knew, have been blown wide open. All over Europe people are asking why this is happening; why we were not consulted; for whom it is being done.

De Gucht did not like this:

George Monbiot, in his article on the negotiations for a Transatlantic Trade and Investment Partnership, claims the European commission has tried to "keep this process quiet" (Chickens in chlorine? It's what free trade's about, 3 December). This is laughable. Every step of these negotiations has been publicly announced and widely reported in the press. The commission has regularly consulted a broad range of civil society organisations in writing and in person, and our most recent meeting had 350 participants from trade unions, NGOs and business.

Well, I suppose you have to admire the bare-faced cheek of denying reality.  As far as I can tell – and I do follow this area pretty closely - there have been no "regular" consultations with civil society organisations; in fact there have been vanishingly small meetings with them on any basis.  As CEO found out (but only by demanding the information under a FOI request), of 130 "meetings with stakeholders" that took place earlier this year, 119 of them were with large corporates and their lobbyists.

And note the clever phrasing: "Every step of these negotiations has been publicly announced and widely reported in the press."  That's true – the *steps* have been announced, but we have been told nothing about what was discussed.  That's like claiming that people have been able to read books even if all they were told were the titles.

Interestingly, the evidence that ISDS is a real danger to democracy is now so strong, that even De Gucht is forced to admit it:

We do understand some of the concerns Monbiot and others have about investor-state dispute settlement. We are well aware of the cases he cites, including the "nuclear company contesting Germany's decision to switch off atomic power" and the fact that "the tobacco company Philip Morris is currently suing Australia [which introduced plain packaging for cigarettes] through the same mechanism in another treaty". That is why we want the EU-US trade deal to fully enshrine democratic prerogatives.

That's a pretty big admission, and shows the power of facts to combat empty rhetoric.  Alas, the "solution" offered is the usual one:

EU investment agreements will explicitly state that legitimate government public policy decisions – on issues such as the balance between public and private provision of healthcare or "the European ban on chicken carcasses washed with chlorine" – cannot be over-ridden. We will crack down on companies using legal technicalities to build frivolous cases against governments. We will open up investment tribunals to public scrutiny – documents will be public and interested parties, including NGOs, will be able to make submissions. Finally, we will eliminate any conflicts of interest – the arbitrators who decide on EU cases must be above suspicion.

Notice the verb here: "will" – designed to convey absolute certainty.  Except that TAFTA/TTIP is a two-sided agreement, and the EU is in no position to demand anything.  I don't doubt that it will indeed ask for all the things listed above in an attempt to address the criticisms of ISDS (not that it will, but at least it is trying); however, I also don't doubt that the US negotiators will simply refuse, since overcoming "the European ban on chicken carcasses washed with chlorine" is one of their stated aims in TAFTA/TTIP.  That's precisely why they want ISDS in the agreement, and precisely why the European Commission would be insane to agree to its presence.

Despite admitting that ISDS is inherently problematic, De Gucht goes on to say:

But we do not take Monbiot's extreme view that investment protection agreements (IPAs) are "toxic" attempts to put monster corporations in charge of our destinies. His exaggerated fears are no reason to abandon a deal with the US that could create £100bn in new growth for Europe. (Contrary to Monbiot's claims, the economic impact of free trade agreements has been positive. For example, Europe's agreement with South Korea has seen our exports rise by 24% in its first two years.)

Readers of this blog will recall my earlier analysis of that £100bn, which is the 119 billion euros that appears in the research carried out for the European Commission.  In any case, it represents the best-case  outcome of TAFTA/TTIP, and this will only be achieved through massive deregulation, with a concomitant lowering of health, food and environmental standards, despite what the Commission claims.  So even if TAFTA/TTIP "could" create £100bn in new growth for Europe, that would only be in 2027, and at huge social cost – something that De Gucht naturally omits to mention.

He also fails to note another salient fact when he writes that Europe's free trade agreement with South Korea saw a 24% rise in exports in its first two years.  According to the European Commission's own Web pages on the agreement:

European companies are the largest investors in South Korea.

That's relevant to TAFTA/TTIP, because the key argument for including ISDS in the transatlantic deal is that such investor protection is vital if companies are going to invest in Europe and thus create jobs.  The interesting thing is that the trade agreement between Europeand South Korea does not have an ISDS chapter, and yet Europeans are happy to invest massively in the latter country.  Why on earth would they risk doing that? Simple: because they trust the legal and political systems to act fairly in the case of any disputes over investments.

It is the height of ridiculousness to assert that ISDS is needed in TAFTA/TTIP in order to provide the same guarantees: the legal and political systems in both the EU and US are certainly as well developed as those in South Korea, and so ISDS is completely unnecessary.  As George Monbiot in his Guardian article quotes me as saying on the subject: "The benefits are slight and illusory, while the risks are very real."  Accepting large risks for small benefits shows appalling business judgement: if De Gucht can't see that, and won't drop ISDS in order to protect Europe from those dangers, perhaps he should hand the job on to someone who does and will.

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TTIP Update IX

As the calendar year draws to a close, you might expect the world of trade agreements like TAFTA/TTIP to be shutting down too.  Surprisingly, though, that's not the case.  The last few weeks have seen more activity and revelations than any so far.   In fact, so much has been revealed in the last few days that it will take several updates over the next week or two to explore the implications.

First of all, let's look at an astonishing attack on Corporate Europe Observatory, the group that obtained the important leak about the proposed TAFTA/TTIP Regulatory Council, which I discussed in my previous  TTIP Update.  The post comes from the EU Trade Spokesman John Clancy, and the fact that the European Commission felt moved to publish it speaks volumes about its increasing nervousness: you don't resort to such tactics if you're feeling confident of your position.  Here's how it begins:

Anti-trade and anti-business lobby group Corporate Europe Observatory (CEO) have scored an own goal with their latest claims against the Transatlantic Trade and Investment Partnership (TTIP). The only thing the latest so-called 'leaked document' published by CEO reveals is confirmation of what the EU has been saying all along; namely that any future deal between the EU and the US will 'reaffirm their [EU Member State governments' and the US government's] sovereign right to adopt new regulatory initiatives, to regulate in pursuit of legitimate public, policy objectives and to ensure that their laws and policies provide for and encourage high levels of environmental, health, safety, consumer and labour protection.'

"Reaffirming" those things doesn't really do much.  If a US company uses the investor-state dispute settlement (ISDS) provisions that are currently in TAFTA/TTIP, to sue the European Union, and the ISDS tribunal upholds the claim, the EU and national governments can "re-affirm" their rights as much as they like, but they will still be expected to pay up, and the US government will doubtless support that decision.  The point is, the tribunal may not agree, and can't be forced to follow any supposed EU line, because it is inherently above national or even European laws - that's the problem.

Here's the next section from Clancy:

Furthermore, the so-called 'leaked document' reflects almost in its entirety the EU's initial position paper already made public in July 2013 and available on-line. This sets out how the EU and US could work more closely together, and more openly, when drawing up future regulations. The changes are designed simply to make future regulations more effective and efficient for both business and consumers – nothing more, nothing less.

So here's what that position paper has to say on the subject:

A body with regulatory competences (a regulatory cooperation council or committee), assisted by sectoral working groups, as appro priate, which could be charged with overseeing the implementation of the regulatory provi sions of the TTIP and make recommendations to the body with decision-making power under TTIP. This regulatory cooperation body would for example examine concrete proposals on how to enhance greater compatibility/conver gence, including through recognition of equiva lence of regulations, mutual recognition, etc. It would also consider amendments to sectoral annexes and the addition of new ones and encourage new regulatory cooperation initia tives. Sectoral regulatory cooperation working groups chaired by the competent regulatory authorities would be established to report to report to the regulatory cooperation council or committee. The competences of the regulatory cooperation council or committee will be without prejudice to the role of committees with specific responsibility on issue areas such as SPS.

In other words, it's largely about overseeing the implementation of TTIP, not going beyond it.  Clancy also writes the following:

details of this [Regulatory Council] along with a broad explanation of the regulatory ambitions of the future TTIP agreement were announced by EU Trade Commissioner Karel De Gucht on 10th October in a speech to the Aspen Institute in Prague

Here's what De Gucht said then (.pdf):

I therefore propose that th e TTIP establishes a new Regulatory Cooperation Council that brings together the heads of the most important EU and US regulatory agencies.

The council would monitor the implementation of commitments made and consider new priorities for regulatory coopera tion - also in response to proposals from stakeholders. In some cases it could also ask regulators or standards bodies to develop regulations jointly that could then have a good chance of becoming international standards.

Notice again how passive the Regulatory Cooperation Council (RCC) is there: it would "monitor" implementations, "consider" new priorities, and "in some cases" ask regulators to come up with something new.  Contrast that with what we read in the CEO leaked document (.pdf):

The functions of the RCC will include inter alia:

Considering and analysing, with the help of the relevant working groups substantive joint submissions from EU and US stakeholders or submissions from either Party on how to deepen regulatory cooperation towards increased compatibility for both future and existing regulatory measures;

The RCC may be assisted by sectoral ad hoc working groups. In the domain of financial services the functions of the RCC to monitor, guide the cooperation and to prepare the yearly Regulatory Programme will be assumed by a competent sectorial body established by the TTIP.

Specific modalities will be established for interaction of the RCC with legislators (US Congress and the European Parliament). The RCC should interact with stakeholders, including business, consumers and trade unions. For this purpose a EU-US multi-stakeholder advisory committee or similar body should be established that would regularly meet with and work with EU competent authorities and US regulators in crafting regulatory measures or taking decisions how to further compatibility of existing one (e.g. through mutual reliance, recognition, etc.).

Suddenly the RCC has become an active participant in the formulation of new regulations, interacting directly with legislators on both sides of the Atlantic, and even "crafting regulatory measures".  That's the key change the Clancy chooses to ignore, because it reveals the first outlines of the European Commission's emerging plan to give big business the deregulation it is demanding, but without making it too obvious by enshrining it in TTIP itself for all to see.  Instead, health and safety regulations on both sides of the Atlantic will be swept away – sorry, made "compatible" – through a very gradual process brought about by the dull-sounding  Regulatory Cooperation Council that will in fact effectively veto regulatory changes in favour of the public, which diminish corporate profits.  This will introduced a regulatory ratchet that ensures new laws and rules are always in favour of companies, just as the copyright ratchet ensures that changes to law are always in favour of copyright companies, never the public.

Clancy's last paragraph is as follows:

The EU welcomes an open public discussion on TTIP including the important input from civil society including all stakeholders whether NGOs or business. Unfortunately, CEO only does a disservice to this important discussion with misleading and exaggerated claims once again. Since the launch of EU-US discussions, the EU Commission has welcomed an open public debate but such a debate should be based upon the facts and not the spin.

The European Commission has not invited "open public discussion" -- I challenge it to point out any occasion when the public was invited and able to discuss TTIP with the Commission in any meaningful way – occasional sessions held after negotiating rounds do not count.  The only serious discussions that have been taking place are with big business.  We know this for a fact thanks to a Freedom of Information request from CEO, which found that of the European Commission's 130 "meetings with stakeholders" that took place earlier this year, 119 of them were with large corporates and their lobbyists. 

And for the European Commission to accuse CEO of "spin" is astonishingly hypocritical.  Here, for example, the headline that Clancy used for his post:

Anti-Trade lobby group CEO scores own goal on latest TTIP 'revelation'

But as CEO points out in its own rebuttal, it is not "anti-trade", as its actions prove:

Corporate Europe Observatory has been a part of an effort for years to develop an alternative trade policy. We’ve done that in collaboration with a broad variety of social movements and NGOs, and only a few weeks ago, we were part of launching the Alternative Trade Mandate, whose proposal is to make EU trade and investment policy work for people and the planet, not just the profit interests of a few

But there's a more important misdirection in Clancy's headline.  He is trying to frame the European Commission as pro-trade, and CEO as "anti-trade".  But what is under discussion here is not trade, it is the regulations that protect our health and safety, and help preserve the environment, for example.  

If the European Commission truly wanted a debate "based upon the facts and not the spin", it would acknowledge that TAFTA/TTIP is only tangentially about trade barriers, and mostly about national and European regulations.  And it would stop trying to re-define long-standing measures that protect the public, and which were drawn up in an open and democratic way, as "non-trade barriers", that need to be reduced or removed.

By adopting this language, it reveals it is engaged in an attempt at massive deregulation in favour of the transnational corporations it meets with so much, to the disfavour of the European public whose only role here seems to be to pay the not-inconsiderable wages of the European Commission and its staff.

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