02 January 2016

TTIP Update VI

In my previous TTIP update, I reported on an extremely important leak about the Trans-Pacific Partnership agreement (TPP), which is the other half of the US attempt to stitch up world trade through supranational agreements.

It's still too early to hope for something similar on the TAFTA/TTIP front – but rest assured, it's only a matter of time (another reason why the insistence on secrecy is not just anti-democratic and insulting, but stupid, too.)  However, Corporate Europe Observatory (CEO), one of the key sites dealing with transparency (and lack of it) in Europe has come into the possession of a TTIP document that is very interesting:

CEO has today published a leaked version of the European Commission's communication strategy for overcoming public skepticism about the controversial EU-US trade negotiations, the so-called Transatlantic Trade and Investment Partnership (TTIP). The document was discussed at a meeting with EU member states on Friday 22 November. In order to "reduce fears and avoid a mushrooming of doubts", the Commission proposes to "further localise our communication effort at Member State level in a radically different way to what has been done for past trade initiatives".

It's not very long, so I recommend reading the whole thing on CEO's site; here I'd like to pick out a key passage.  The leaked document spells out what it sees as the three main communication challenges, the first of which is the following:

Making sure that the broad public in each of the EU Member States has a general understanding of what TTIP is (i.e. an initiative that aims at delivering growth and jobs) and what it is not (i.e. an effort to undermine regulation and existing levels of protection in areas like health, safety and the environment).

TAFTA/TTIP may "aim" at delivering growth and jobs, but what exactly does that mean?  The European Commission's own research predicts a range of possible outcomes:

Under a comprehensive agreement, GDP is estimated to increase by between 68.2 and 119.2 billion euros for the EU and between 49.5 and 94.9 billion euros for the US (under the less ambitious and more ambitious scenarios). However, if the FTA would be limited to tariff liberalisation only, or services or procurement liberalisation only, the estimated gains would be significantly lower. For example, an FTA limited to tariff liberalisation would lead to a lower (23.7 billion euro) increase in GDP for the EU and a 9.4 billion euros increase for the US.

There's a big difference between the 119 billion euros – the figure routinely quoted by the European Commission, even though it is only one extreme case – and the 23.7 billion at the other end, for estimates of the boost to the EU's GDP.  From the research document again:

The comprehensive option includes two scenarios: a less ambitious agreement that includes a 10 per cent reduction in trade costs from NTBs and nearly full tariff removal (98 per cent of tariffs) and an ambitious scenario that includes the elimination of 25 per cent of NTB related costs and 100 per cent of tariffs.

NTB refers to "non-tariff-barriers, and basically means things like health and safety regulations, environmental protection, employment rules and financial rules.  In other words, most of the things that make Europe what it is today: an extremely safe and pleasant place to live.  The 119 billion euro figure always quoted by the European Commission refers to "the elimination of 25 per cent of NTB related costs".  If we don't get rid of those, the predicted GDP boost is a much more modest 24 billion euros – hardly worth bothering about, given that the EU's GDP in 2012 was 12,900 billion euros (indeed, even the massively-improbable 119 billion euro figure is still less than 1% of GDP.)

In some cases, it may be possible to remove those non-tariff barriers that without compromising on health and safety standards, but in others, it is clearly impossible.  A symptomatic case in point is the famous chlorine-washed chicken.  In the US, it is permitted to wash chicken carcases in chlorine water, whereas this is not regarded as safe in the EU.  These positions are not compatible.  So how will this "non-tariff barrier" be dealt with?

The European Commission has said that health standards will not be compromised, which suggests that the EU will not accept chlorine-soaked chickens; but the senior vice president of America's National Chicken Council has a different view of what will happen in TAFTA/TTIP [pdf]:

We have been assured on a number of occasions by our trade negotiators that our industry's issues will not be traded-off for some other issue on the EU side.  We trust our negotiators will secure the most favorable outcome possible, but at the risk of being redundant, we will want to be doubly-assured that the end product is worthy of our support.

That certainly sounds like they think that chickens washed with chlorine water will soon be winging their way to European plates, whether Europeans want them or not.  The same confidence that the EU public's wishes will be swept away during the TAFTA/TTIP negotiations can be found in other food safety areas, such as bringing US beef produced with growth hormones to Europe, and the contentious area of GMOs, as well as the EU's rigorous chemical safety framework REACH - another target of US industry.

This exposes the central dilemma at the heart of TTIP: either the European Commission abandons the precautionary principle – something that is actually enshrined in the Lisbon Treaty – in a desperate attempt to realise some of the over-promised financial gains, or it gives up the big numbers and settles for a mere 0.2% GDP growth in order to preserve European health and safety regulations: it can't in general have both.

In fact, even if the European Union *did* deregulate massively – something that industry on both sides of the Atlantic is pushing hard for [.pdf] - with who knows what consequences for public health and safety, it might all be in vain anyway.  It's obviously hard making prediction (especially about the future, as they say), but luckily we do have the past as a guide. 

TTIP (and TPP) are actually part of a series of major trade agreements that the US has been signing  in order to impose its laws and economic philosophy around the world.  The two most important ones prior to TPP and TTIP are the North American Free Trade Agreement (NAFTA) and the South Korea-US Free Trade Agreement (KORUS).  Here's what happened with NAFTA:

The United States ran a $1.6 billion trade surplus ($2.6 billion in today's dollars) with Mexico in 1993, the year before NAFTA. Last year [2011], the United States ran a $64.5 billion deficit.

And here's KORUS:

In the year after the agreement took effect (April 2012 to March 2013), U.S. domestic exports to South Korea (of goods made in the United States) fell $3.5 billion, compared with the same period in the previous year, a decline of 8.3 percent. In the same 12-month period, imports from South Korea (which the administration consistently declines to discuss) increased $2.3 billion, an increase of 4.0 percent, and the bilateral U.S. trade deficit with South Korea increased $5.8 billion, a whopping 39.8 percent.

But maybe the trade agreements are generating jobs at least – that's one of the things that the European Commission says TAFTA/TTIP will do. Here's what happened with NAFTA:

Bill Clinton (1993) and his supporters claimed in the early 1990s that the North American Free Trade Agreement would create 200,000 new jobs through increased exports to Mexico. In fact, by 2010, growing trade deficits with Mexico had eliminated 682,900 U.S. jobs

Well, what about KORUS?

When the U.S.-Korea Free Trade Agreement was completed in 2010, President Obama said that it would increase U.S. goods exports by "$10 billion to $11 billion," supporting "70,000 American jobs from increased goods exports alone"

Here's what actually happened:

Using the president's own formula relating changes in trade to jobs, the growth in the trade deficit with South Korea in the first year since KORUS took effect likely cost more than 40,000 U.S. jobs

So if you were willing to water down health and safety in the hope that you will be recompensed with that 119 billion euros GDP gain, every indication from the past suggests that you are a mug, because the claimed benefits would not flow. 

Actually, that's not entirely true: some companies would indeed save money by being able to dump today's EU environmental, labour, health and safety regulations.  But those savings certainly wouldn't "trickle down" to the public, not even as more (lower-paid) jobs – because, don't forget: one consequence of trade agreements is that companies tend to move their production to the country with the lowest costs.  One way of reducing costs is to reduce wages, and so TAFTA/TTIP may well actually see working people in the EU worse off than the current situation.  And if you think that's just my ill-informed opinion, you might like to read what the Economic Policy Institute has to say on TAFTA/TTIP:

A much more likely outcome [than the European Commission's rosy projections], based on North American experience under NAFTA, is that production workers in all the member countries will suffer falling wages and job losses (Scott et al. 2006), while U.S. and EU investors will profit handsomely, reinforcing the rapidly rising share of profits in corporate and national income that has taken place over the last decade in the United States (Mishel 2013).

Given these incontrovertible facts about past trade agreements, and the fundamental contradiction in the European Commission's stated aim of achieving large GDP gains by abolishing non-tariff barriers while preserving the precautionary principle and maintaining the European Union's uniquely high health and safety standards, you can see why its communication department has a big job on its hands.

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TTIP Update V

Today's update is a little odd, since it's not actually about TAFTA/TTIP.  Although the second round is taking place this week, it's almost certain we'll be told nothing about the real substance of the discussions.  That's because even thought these massive trade agreements affect hundreds of millions of people, the latter are not given any opportunity to see the draft texts as they are discussed, or to have any meaningful dialogue with the negotiators.  That may have been acceptable 30 years ago, but in the age of the Internet, when it is trivial to make documents available, and easy to enter into online discussions, it's outrageous.

The same has been true for the parallel Trans-Pacific Partnership agreement (TPP) negotiations, which is doing for the Pacific what TAFTA/TTIP aims to do for the Atlantic: define the terms of not just trade, but also the health, safety and environmental regulations that govern our lives.  The almost-total secrecy of the TPP talks, which are much further along than those of TAFTA/TTIP, was shattered yesterday, when Wikileaks released a text [.pdf] of the most contentious chapter: that covering intellectual monopolies.

What makes this particularly interesting is that it shows the negotiating positions of all the nations taking part – these are the US, Canada, Australia, New Zealand, Japan, Malaysia, Vietnam, Brunei, Singapore, Chile and Peru.  That means we can see quite clearly what the US is pushing for in TPP – and what it is liking to be looking for in TAFTA/TTIP.  Of course, the dynamics in the two agreements are very different: the EU is able to stand up to the US – at least theoretically – in a way that the much smaller nations that make up most of TPP can't (even Japan is dwarfed by both US and EU).

The leaked TPP draft is from 30 August, and so represents an earlier stage of the talks.  It is so full of bracketed alternatives where the negotiators have been unable to agree on a text that it is clear a huge amount remains to be done.  The brackets also make reading the text hard: if you'd like a summary of what's in the chapter, there are good ones from KEI and the EFF.  Here I will just pull out some elements that are relevant to TAFTA/TTIP and the digital world.

As far as patents are concerned, the US wants everything to be patentable:

each Party shall make patents available for any invention, whether a product or process, in all fields of technology, provided that the invention is new, involves an inventive step, and is capable of industrial application.

That includes software patents, but also "plants and animals" and "surgical methods".  In addition, here's what the US wants:

a Party may not deny a patent solely on the basis that the product did not result in enhanced efficacy of the known product when the applicant has set forth distinguishing features establishing that the invention is new, involves an inventive step, and is capable of industrial application.

That is, it wants patents for things that don't actually doing anything more than a current invention, but are simply "new" – that is, different in some unimportant way.  This would allow so-called "ever-greening" of patents, which would dilute the value of patents even more, moving them even further from their original purpose of promoting innovation.

The copyright section is one of the most interesting in the leak, since it touches on so many areas I've discussed here in Open Enterprise in the context of ACTA.  Surprisingly, it manages to go beyond ACTA in its awfulness.  This, for example, is what the US wants:

Each Party shall provide that authors, and producers of phonograms have the right to authorize or prohibit all reproductions of their works, and phonograms, in any manner or form, permanent or temporary (including temporary storage in electronic form).

TPP would make even the transient copies of works made as they pass over the Internet, or stored in a computer's RAM, all subject to copyright.  That would mean that everyone would need to get permission from copyright holders to download or even view any copyright work.  I'm not sure how that would work in practice, but even the idea of it is chilling.  It is essentially trying to make the entire Internet a permission-based system.

As far as enforcement is concerned, there's the following (agreed) section for civil damages:

In determining the amount of damages under paragraph 2, its judicial authorities shall have the authority to consider, inter alia, any legitimate measure of value the right holder submits, which may include lost profits, the value of the infringed goods or services measured by the market price, or the suggested retail price.

Which is essentially identical with ACTA , Article 2.2:

In determining the amount of damages for infringement of intellectual property rights, its judicial authorities shall have the authority to consider, inter alia, any legitimate measure of value submitted by the right holder, which may include the lost profits, the value of the infringed good or service, measured by the market price, the suggested retail price.

This goes to show how ACTA is by no means dead, and lingers on in this residual way.  Criminal infringement is even worse:

Each Party shall provide for criminal procedures and penalties to be applied at least in cases of willful trademark counterfeiting or copyright or related rights piracy on a commercial scale.

But what is commercial scale?  Here's what the US wants:

significant willful copyright or related rights infringements that have no direct or indirect motivation of financial gain

That says people can be sent to prison for copyright infringement, even if there is no direct or indirect motivation of financial gain.  The question then becomes: what is "significant"?  Probably a smartphone with a few thousands MP3s that you've ripped from CDs...

Like ACTA, there is also criminal liability for aiding and abetting infringement, again, even if there is no financial gain:

With respect to the offenses for which this Article requires the Parties to provide for criminal procedures and penalties, Parties shall ensure that criminal liability for aiding and abetting is available under its law.

That might catch open source developers if their code is used for making unauthorised copies, for example, even if they were not for financial gain.

Moreover, the criminal penalties must be harsh:

penalties that include sentences of imprisonment as well as monetary fines sufficiently high to provide a deterrent to future acts of infringement

Another very troubling aspect is what's happening with following clause on ISP intermediary liability:

Each Party shall limit the liability of, or the availability of remedies against, internet service providers when acting as intermediaries, for infringement of copyright or related rights that take place on or through communication networks, in relation to the provision or use of their services.

Both the US and Australia oppose that protection, without which ISPs would become liable for everything that their customers do.  If that is enacted, it would mean that ISPs would have to spy on everything, otherwise they would run the risk of being held liable for infringement.  That, in its turn, would inevitably lead to massive censorship, since ISPs would naturally err on the side of caution rather than risk huge fines under TPP.

It's worth emphasising that the leak concerns an older version of the draft, and that things could have changed by now.  But that older version does show us what alternatives are being proposed, and very often the differences are minor.  What's clear, is that the US has been pushing for maximalist intellectual monopolies at every turn.  There's no reason to think that its approach during the current TAFTA/TTIP will be any different.

And there's another issue here.  We've long suspected that the intellectual monopolies chapter of TPP would be bad, and the Wikileaks document confirms this.  You can also understand why the US has been adamant that the negotiations should  be secret: now that we can see what's in at least part of it, we can work to improve its worst features.  Without the text, that's impossible.

This latest leak confirms once again why we must push to have drafts released immediately.  There is no justification for not doing so – they are not "secret", since all parties can see it.  The only ones who can't are the public, in whose name and for whose benefit they are supposedly being negotiated.  That's truly a disgrace.

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TTIP Update IV

One of the key issues during the ACTA negotiations was transparency – or rather the lack of it.  Despite a few token gestures from the European Commission initially, TAFTA/TTIP looks like it will be just as bad. Here's a rather nice trick the negotiators have just played:

Surprise!  The second round of negotiations for the massive Trans-Atlantic Free Trade Agreement (TAFTA) won’t be happening in Washington, DC in December as planned.  It will be happening in six days.  In Belgium.



USTR’s email yesterday invited “stakeholders” to a “briefing session” next Friday where “non-governmental organizations, consumer groups, trade unions, professional organizations, business and other civil society organizations will have the opportunity to exchange views with U.S. and EU chief negotiators.” It just happens to be taking place on the other side of the Atlantic Ocean.

This may well be the most expensive “stakeholder engagement” opportunity presented by the Obama administration for one of its sweeping “trade” deals. At current prices, the cheapest last-minute flight to “exchange views” with TAFTA negotiators in Brussels would set you back $1977. That may not be a problem for the approximately 600 corporate trade “advisors” who are already deeply involved in helping USTR craft TAFTA negotiating positions. For the rest of us, it’s a bit like getting an email invitation to your friend’s destination wedding in Cancun a week before the ceremony (psst...I don’t really want you to come).


That act of petty spitefulness is indicative of a deep and crucial asymmetry in the TAFTA/TTIP negotiations.  Whereas some of the world's largest companies are given privileged information about what is happening – not least *where* things are happening – the public, which is poorly represented anyway, finds itself cut out from that insider knowledge, and therefore lacks the ability to follow the negotiations properly, let alone give any input to them.

That's obviously disgraceful for something that is supposedly being negotiated in their name – and which is certainly being negotiated using their taxes, which pay the European Commission negotiators their not inconsiderable salaries, and the cost of their plane tickets as they jet to and fro across the Atlantic – first class, no doubt.

But there is an even deeper, more troubling asymmetry at the heart of these talks that concerns the investor-state dispute settlement (ISDS) element I've written about in my last two TTIP Updates.  That's probably the most problematic and worrying area of the whole agreement, because the core idea of ISDS is that any laws or court decisions that cause even the "expectation" of future profits of companies to be diminished in some way can potentially be litigated before a secret, supranational tribunal able to impose unlimited fines on entire nations.

The subtle implication of this is that legislative changes must tend to increase corporate profits.  So, for example, improved health and safety laws would be stymied by this, as would enhanced environmental protection where it causes a company's profits to be reduced (as is likely, since better protection usually means more costs for the polluters.)

In other words, ISDS introduces exactly the same kind of upward ratchet that copyright laws have produced for the last three hundred years.  Just as copyright laws only ever make copyright longer, broader and deeper – to the benefit of companies and disbenefit of the public -  so ISDS will put huge pressure on the EU and member states only to pass legislation that improves the outlook for corporate profitability.  The fact that these kind of moves may well cause huge social damage – greater health or environmental problems – is completely overlooked, because the framing does not allow the social costs to be taken into account, only private profits.

That makes this proposal in South Korea particularly interesting:

Evaluation of trade agreements have been made in economic terms. But the impact of trade agreements is not limited to economic life. They have human rights dimensions in many aspects. For instance, trade agreements containing the TRIPS-plus provisions may affect the right to access to essential medicine, the right to food and more broadly the right to science and culture, which is protected by the Article 27(1) of the Universal Declaration of Human Rights. So the UN human rights bodies have tried to develop and propose human rights impact assessments (HRIA) of trade agreements (See The Future of Human RightsImpact Assessments of Trade Agreements).

The recent move of the National Assembly of South Korea to mandate the HRIA was influenced by the efforts of the UN human rights bodies. The lawmaker, Mr. Buh, proposed a bill to amend the Law on the Treaty-Making Process and Implementation of Trade Agreements (Trade Process Act), which includes an amendment making compulsory the HRIA on every trade pacts that are likely to be agreed upon with trade partners.


This is an important move, because it begins the long journey of re-balancing trade agreements around the world so that they take in account human rights and therefore, by implication, the public interest as well as corporate profit.  Although it's not clear whether the Korean initiative will succeed, it does at least raise the issue in a political context.  We now need to start similar conversations here in the EU and in the US regarding TAFTA/TTIP if that agreement is to have any claim to fairness and legitimacy.

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TTIP Update III

It's been fairly quiet on the TAFTA/TTIP front recently.  That's largely because Europe shuts down for its summer hols during August, and has only just got going again.  Unfortunately (for TAFTA/TTIP), the next round of negotiations has just been cancelled because the US administrations was busy being, er, not busy.  But as a consolation prize, we have a couple of documents from the European Commission on the subject of Investor-State Dispute Settlement (ISDS), which by a happy coincidence was the subject of my previous TTIP Update.

In fact, those two documents turns out to be pretty much the same, just re-worded slightly.  Both seek to defend the indefensible – that is, to convince people that ISDS is totally harmless, and nothing to worry our pretty heads about.  Above all, they want to reassure us that ISDS is definitely not this years' ACTA....

This comes through most clearly in the document entitled "Incorrect claims about investor-state dispute settlement" [pdf].  So let's have a look at some of the claims about the claims:

Claim: Investor-state dispute settlement subverts democracy by allowing companies to go outside national legal systems.

Response: Untrue! To get a sense of perspective on this question it is important to remember that the EU itself, as well as all but one of our Member States, Switzerland, the United States, Canada, Japan, South Korea and India - to name just a few - are all party to many agreements which provide for investor-state dispute settlement. These countries, and many more that also allow investor state dispute settlement, have healthy, vibrant democracies.

More specifically, relying on the national courts of the host country to enforce obligations in an investment agreement is not always easy.

Firstly, the investor may not want to bring an action against the host country in that country's courts because they might be biased or lack independence.

Secondly, investors might not be able to access the local courts in the host country. There are examples of cases where countries have expropriated foreign investors, not paid compensation and denied them access to local courts. In such situations, investors have nowhere to bring a claim, unless there is an investor-state dispute settlement provision in the investment agreement.

Thirdly, countries do not always incorporate the rules they sign up to in an investment agreement into their national laws. When this happens, even if investors have access to local courts, they may not be able to rely on the obligations the government has committed itself to in the agreement.


All that sounds plausible, until you remember that TTIP is an agreement between the EU and US, nobody else.  So let's look at the above "explanation" in that light:

"Firstly, the investor may not want to bring an action against the host country in that country's courts because they might be biased or lack independence. "

So the European Commission is saying that the US courts are biased or lack independence?  I do hope Karel de Gucht explains why when negotiating with his US counterparts.

"Secondly, investors might not be able to access the local courts in the host country. "

So here the European Commission is saying that investor might not be able to access local courts in the US? Sure, that happens all the time....

"Thirdly, countries do not always incorporate the rules they sign up to in an investment agreement into their national laws."

So now the Commission thinks that the US will go to the trouble of negotiating this huge treaty – and then just ignore its provisions?  Again, how plausible is that as an answer? 

And notice that none of the three points actually addresses the key issue, which is that ISDS does indeed allow companies to go outside national legal systems, and thus subvert established democratic institutions like the local courts. Basically, ISDS is inappropriate for developed nations like the EU and US.  Introducing it does one thing, and one thing only: provides foreign investors with extra rights over and above what ordinary citizens and domestic companies enjoy.

So let's look at another:

Claim: Investor-state allows companies to sue just because they might lose profits.

Response: Wrong! Companies cannot sue successfully just because their profits might be affected. They need to have a case. That means they need to prove that one or more of the investment protection standards, such as non-discrimination or protection against unlawful expropriation have not been respected. The fact that a government changes a law, which increases the costs for a given company, is not on its own, sufficient to bring a successful case in investor-state dispute settlement.


Although it's strictly speaking true that companies cannot sue *just* because they might lose profits, in practice that's pretty much what happens, because the so-called "investment protection standards" are so vague and easy to invoke.  Here's a good explanation from Public Citizen:

Investors and corporations can demand taxpayer compensation for policies that they allege as violating special “rights” granted to foreign investors by NAFTA-style FTAs. These “rights” are phrased in vague, broad language. Tribunals have increasingly interpreted these foreign investor “rights” to be far more expansive than those afforded to domestic firms, such as the “right” to a regulatory framework that conforms to a corporation’s “expectations.” This “right” has been interpreted to mean that governments should make no changes to regulatory policies once a foreign investment has been established.

Claim: Investor-state dispute settlement cases take place behind closed doors

Response: Many existing agreements do indeed provide, by default, that investment disputes are heard behind closed doors. The EU does not believe that is appropriate. We have championed transparency in international dispute settlement in general and in investor-state dispute settlement in particular. In future EU agreements, all submissions will be public, all hearings will be open, all decisions of the tribunal shall be public and interested parties will be able to make their views known.


So the response here is more along the lines of "well, yes, that's true, but we'd really like to change it."  Unfortunately, that overlooks the fact that it can't do that unilaterally: it needs to get the US to agree, and the current administration has shown itself a bigger enemy of transparency than any predecessor.  Bottom line: it's not going to happen.

Claim: Investor-state dispute settlement undermines public choices (e.g. Vattenfall challenging the German moratorium on nuclear power, Philip Morris challenging Australia’s plain packaging regime for cigarettes)

Response: It is important to note that only well-founded cases have a chance of being successful. The fact that a policy has been challenged does not mean that the challenge will be successful. The EU will negotiate in such a way so as to ensure that legislation reflecting legitimate public choices e.g. on the environment, cannot be undermined through investor-state dispute settlement.


Well, see comment above: the EU can negotiate until it's blue in the face, but if the US refuses to go along with the plan, then the situation remains the same.  And here's what currently happening: a wide range of health, safety and environmental regulations are being challenged through the ISDS mechanism:

foreign corporations have launched investor-state challenges against a wide array of consumer health and safety policies, environmental and land-use laws, government procurement decisions, regulatory permits, financial regulations and other public interest polices that they allege as undermining “expected future profits.”

Claim: Investor-state dispute settlement is biased in favour of investors – they can threaten to bring expensive cases against governments and so scare them away from policies that the investors do not like.

Response: There is little real world evidence that this is the case. UN statistics on investor state dispute settlement cases show that a majority of cases are decided in favour of the government (Of all the cases concluded by 2012, 42% found in favour of the State, 31% in favour of the investor and 27% were settled).


This is an absolutely key issue.  ISDS actions threaten to become the global version of patent trolls: by merely threatening to sue they can cause cautious governments to change their plans.  Notice how the European Commission quotes the figures for "all the cases concluded by 2012".  That conveniently bundles together all the early cases where tribunals did, indeed, tend to find for the State more often.  But unfortunately for the European Commission's argument, that's no longer the case.  Here's what the UN statistics have to say about 2012:

In 70% of the public decisions addressing the merits of the dispute, investors’ claims were accepted, at least in part.

Next:

Claim: Investor-state dispute settlement cases are decided by a small clique of lawyers, with considerable conflicts of interest, who seek to cream off public money.

Response: Like in any area of national or international law the number of true specialist lawyers in the field is not large. Some of these lawyers do combine roles as arbitrators in some disputes and advocates in others. This crossing over may create the risk of conflicts of interest.


In other words, this is also true, but we would like to change it (see above).

Finally, we have:

Claim: Investors should not be allowed to challenge governments directly in international law. Only governments should be able to act against each other, via state-to-state dispute settlement.

Response: It is investors who actually suffer the financial losses. Governments (including the EU) need to pursue the general interest, and that means that they have neither the time nor the resources to follow-up each individual alleged breach of the agreement.


The fact that governments (including the EU) have neither the time nor resources to deal with each alleged breach is precisely why ISDS is so pernicious: it forces governments (or the EU) to spend huge amounts of time and money dealing with claims made under it.  The fact that tribunals are finding increasingly often in favour of companies means that more cases will be brought, because the odds of succeeding are going up, especially if speculative funding is available.

And here's another reason why that growth in ISDS trolling is likely to happen: last year saw the largest award made by an ISDS tribunal – a cool $1.77 billion in damages.  And remember, that's money that the government concerned has to pay.  If ISDS is included in TAFTA/TTIP, the people who will end up footing the not inconsiderable bills will be you and me.

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TTIP Update II

As I noted in my first TTIP Update about the current negotiations between the EU and US over a massive trade agreement that is far from being only about trade, it is probably true that it will not include many of the more outrageous ideas found in ACTA last  year.  But that is not to say that TTIP does not threaten many key aspects of the Internet – just that the attack is much more subtle.

The problem is the inclusion of "investor-state dispute settlement" (ISDS).  This began as a perfectly reasonable attempt to ensure that investments in developing countries were not unlawfully expropriated by rogue governments.  The idea was that if such an event occurred, and the local government refused to compensate the investor, the latter had recourse to independent international courts that considered the case and awarded damages that could be levied against the government in question in other ways – for example, seizing their assets abroad.

Sadly, a sensible idea in one context has been seized upon by opportunists and applied in a context where it's quite inappropriate.  In particular, companies are using ISDS against governments in Western countries.  That's not necessary, because those countries already have extremely well-developed legal systems that allow the courts to consider allegations of expropriation by governments there.  But companies have realised that ISDS tribunals give them an amazingly powerful way to overrule a country's laws.  The following case illustrates how this works in practice.

It involves the US drug company Eli Lilly and Company, which has invoked the ISDS clause in the North American Free Trade Agreement signed between Canada and the US (and Mexico).  Here's the background:

Eli Lilly launched its NAFTA attack after Canadian courts invalidated Eli Lilly’s monopoly patent rights for an attention deficit hyperactivity disorder (ADHD) drug called Strattera. The Canadian courts did so after determining that Eli Lilly had presented insufficient evidence (a single study involving 22 patients) when filing for the patent to show that Strattera would deliver the long-term benefits promised by the company. While the $100 million NAFTA investor-state compensation demand relates to revocation of the Strattera patent, Eli Lilly makes clear in its formal “Notice of Intent” to Canada that it is not only challenging the invalidation of its particular patent, but Canada’s entire legal doctrine for determining an invention’s “utility” and, thus, a patent’s validity. While pushing for an entirely different patent standard, Eli Lilly, the fifth-largest U.S. pharmaceutical corporation, is demanding $100 million from Canadian taxpayers as compensation for Canada’s enforcement of its existing patent standards.

In fact, Eli Lilly has now upped the stakes and demanded $500 million "compensation".

It's worth exploring what is going on here.  Canadian courts have determined that Eli Lilly did not meet the required standard in order to be granted a patent.  This is not a question of an arbitrary, or capricious act by some third-world dictator, but the final decision of a sovereign nation's highest court.  However, Eli Lilly is unwilling to accept that decision, and has invoked the ISDS clause in NAFTA in an attempt to overturn the ruling and demand money.  In other words, ISDS allows companies both to sue entire nations, and to ignore their laws.

Incredible though that may seem, here's why that is possible, as explained in the long and extremely detailed post from Public Citizen on the topic, quoted above:

The system elevates foreign corporations to the level of sovereign governments, uniquely empowering them to skirt domestic laws and courts and privately enforce the terms of a public treaty by directly challenging governments’ public interest policies before foreign tribunals.

The tribunals deciding these cases are comprised of three private sector attorneys, unaccountable to any electorate. Many of the tribunalists rotate between serving as “judges” and bringing cases for corporations against governments. Such dual roles would be deemed unethical in most legal systems. In this “club” of international investment arbitrators, there are fifteen lawyers who have been involved in 55 percent of the total international investment cases known today. The tribunals operate behind closed doors, and there are no meaningful conflict of interest rules with respect to arbitrators’ relationships with, or investments in, the corporations whose cases they are deciding.

Tribunalists are paid by the hour, creating an incentive for cases to drag out endlessly. Governments are often ordered to pay for a share of tribunal costs even when cases are dismissed. Given that the average costs for such procedures total $8 million, the mere filing of a case can create a chilling effect on government policy, even if the government expects to win. (In one challenge against the Philippines, the government’s tribunal and legal costs alone topped $50 million.) If a tribunal rules against a challenged policy, there is no limit to the amount of money the tribunal can order the government to pay the foreign corporation. The cases cannot be appealed on the merits. Countries may file for an “annulment” for certain specific categories of tribunal “error.” Annulment claims are not heard by domestic courts, but are decided by another tribunal comprised of private sector attorneys.

Investors and corporations can demand taxpayer compensation for policies that they allege as violating special “rights” granted to foreign investors by NAFTA-style FTAs. These “rights” are phrased in vague, broad language. Tribunals have increasingly interpreted these foreign investor “rights” to be far more expansive than those afforded to domestic firms, such as the “right” to a regulatory framework that conforms to a corporation’s “expectations.” This “right” has been interpreted to mean that governments should make no changes to regulatory policies once a foreign investment has been established.


Claiming such expansive protections, foreign corporations have launched investor-state challenges against a wide array of consumer health and safety policies, environmental and land-use laws, government procurement decisions, regulatory permits, financial regulations and other public interest polices that they allege as undermining “expected future profits.”


It's important to note that last point: ISDS allows companies to claim for not just alleged past losses, but also supposed loss of "expected future profits".  These, moreover can be "caused" simply by a government passing legislation that happens to reduce a sector's future profits.  They can include something as laudable as strengthening environmental protection, since the extra expense of meeting those more stringent standards would naturaly reduce profits.  Even though this was carried out legally by the government concerned, and in order to protect public health, ISDS clauses would allow a company to sue for the "expropriation" of future profits caused by this move.

Now let's look at this from the point of view of open souce and the Internet.  As the case involving Eli Lilly shows, patents are already being contested using ISDS tribunals.  One obvious situation where this might affect open source is in the area of software patents.  As I have pointed out many times, the situation in Europe is rather anomalous here.  Although the European Patent Convention explicitly rejects software patents ("as such"), the EPO continues to issue them using various formal tricks.  That's why there is continuing pressure to confirm the invalid nature of software patents nationally and at a European level.

But let's suppose that under the current TTIP treaty, ISDS is brought in between the US and EU.  US software companies could then point out that affirming the invalidity of software patents granted by the EPO would obviously reduce the value of those patents.  They would therefore doubtless claim that the European Union or member nations had "expropriated" that value, and demand compensation, just as Eli Lilly has for a patent that Canada decided should not be granted.

With the threat of dozens of huge companies threatening to sue Europe over tens of thousands of software patents, the European Union might decide that the cost of "compensating" them for their "loss" would be simply too great, and thus ultimately acquiesce in the grant of software patents, even though this was being imposed upon them.

But it's not just in the area of patents that the EU could find its hands tied.  The same applies to copyright.  For example, there are various areas where more flexibilities might be introduced into copyright law.  US publishers might claim that these would cause their future profits to be diminished, and sue the EU or nation states for daring to make this move.  Again, the scope for making changes to copyright law in the EU and in invidivudal nations would be greatly reduced for fear that deep-pocketed companies would start suing over things they didn't like – whether or not it was good for Europe and its public.

Similarly, I could imagine inventive lawyers trying to argue that the lack of harsh penalties for unauthorised sharing of copyright material in Europe causes US companies to "lose" profits as a result.  This threat might be used to "encourage" EU lawmakers to pass precisely the kind of laws that were envisaged in ACTA: for example, criminalising even small-scale copyright infringement, and encouraging ISPs to pass on personal information.

Another approach might be to claim that any moves to adopting open standards, which would provide a level playing field for open source, would cause profits for existing incumbents to drop.  They could then invoke ISDS and demand "compensation" for any such move.  The same would be true for any preference given to open source in government procurement.

In this way, the actual or threatened complaints under ISDS clauses would push the EU to bring in precisely the worst ideas of ACTA, but without needing to specify them.  So negotiators can claim quite truthfully that there will be no attempt to bring in ACTA by the backdoor; instead, they will just leave that to ISDS, which gives US corporations a weapon far more powerful than anything envisaged in ACTA.

And if you think I am exaggerating the scale of the threat here, take a look at this official report on ISDS by UNCTAD, the United Nations Conference on Trade And Development:

The Issues Note reveals that 62 new cases were initiated in 2012, which constitutes the highest number of known ISDS claims ever filed in one year and confirms that foreign investors are increasingly resorting to investor-State arbitration.

Foreign investors challenged a broad range of government measures, including changes to domestic regulatory frameworks (with respect to gas, nuclear energy, the marketing of gold, and currency regulations), as well as measures relating to revocations of licences (in the mining, telecommunications and tourism sectors). Investors also took action on the grounds of alleged breaches of investment contracts, alleged irregularities in public tenders, withdrawals of previously granted subsidies (in the solar energy sector), and direct expropriations of investments.

By the end of 2012, the total number of known cases reached 518, and the total number of countries that have responded to one or more ISDS claims increased to 95. The overall number of concluded cases reached 244. Out of these, approximately 42 per cent were decided in favour of the State and 31 per cent in favour of the investor. Approximately 27 per cent of the cases were settled.



Two of the most chilling facts are the following:

2012 saw some notable developments, including:

The highest monetary award in the history of ISDS (US$1.77 billion) in Occidental v. Ecuador, a case that arose out of unilateral termination by the State of an oil contract; and

The first treaty-based ISDS proceeding where an arbitral tribunal affirmed its jurisdiction over a counterclaim that had been lodged by a respondent State against the investor.


Remember, those awards would have to be paid by the state – that is, the people – and the same is true if ISDS cases come to Europe: it will be you and me who must pay because somebody claims that their future profits have been harmed in some way. 

Despite the very high stakes – we are talking many billions of Euros here – few seem to be aware of the serious threat that ISDS represents to national and European sovereignty.  We urgently need to make people and politicians aware of what is going on here before the ISDS mechanism is enshrined in TTIP for companies to use to attack both open source and the Internet in new and frighteningly effective ways.

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TTIP Update I

Right at the start of this year I flagged up the likelihood that hugely important trade negotations between the EU and US were likely to start later this year.  A few months later, I gave some more background to that move, as well as the text of a document calling for the participants to avoid repeating the grave mistakes of ACTA, which ultimately led to that treaty being rejected in the European Parliament on July 4 last year.

Well, things have moved on since then, and the first round of negotations for what is now being called the Transatlantic Trade and Investment Partnership has taken place.  Here's part of the press release:

“It’s been a very productive week”, said EU Chief Negotiator Ignacio Garcia-Bercero coming out of the talks. “We have been striving already for many months to prepare the ground for an ambitious trade and investment deal that will boost the transatlantic economy, delivering jobs and growth for both European and Americans. This week we have been able to take this negotiation to the next step. The main objective has been met: we had a substantive round of talks on the full range of topics that we intend to cover in this agreement. This paves the way to for a good second round of negotiations in Brussels in October.”

Working throughout the week, the negotiating groups have set out respective approaches and ambitions in as much as twenty various areas that the TTIP - the biggest bilateral trade and investment negotiation ever undertaken - is set to cover. They included: market access for agricultural and industrial goods, government procurement, investment, energy and raw materials, regulatory issues, sanitary and phytosanitary measures, services, intellectual property rights, sustainable development, small- and medium-sized enterprises, dispute settlement, competition, customs/trade facilitation, and state-owned enterprises.

Negotiators identified certain areas of convergence across various components of the negotiation and - in areas of divergence – begun to explore possibilities to bridge the gaps.

The talks have been based on a thorough review of the stakeholders views expressed to date. The negotiators met also in the middle of the week with approximately 350 stakeholders from academia, trade unions, the private sector, and non-governmental organisations to listen to formal presentations and answer questions related to the proposed agreement.

The next round of TTIP negotiations will take place during the week of 7 October in Brussels.


Rather more interesting than this press release, the European Commission has issued a document entitled "How much does the TTIP have in common with ACTA?" [.pdf].   That picks up on a question posed in the TTIP FAQ:

Will the TTIP be ACTA through the back door?

To which the answer was:

No. – the 'Anti-Counterfeiting Trade Agreement' – was intended to end the trade in counterfeited goods. It goes without saying that the position of the European Parliament – which voted against – will be fully respected. There will be no 'through the backdoor'.

That by itself was interesting, because it showed that the European Commission was at least aware that ACTA had been a disaster.  However, the latest document goes even further in trying to assuage concerns that TTIP is "ACTA by the backdoor":

In the debate around the Transatlantic Trade and Investment Partnership (TTIP), some commentators have tried to suggest that there is a conspiracy to use the negotiations to bring back parts of the Anti-Counterfeiting Trade Agreement (ACTA). Some have even claimed that TTIP will be a "super- ACTA", aimed at attacking your online freedoms. These claims are – very simply – false. Let's look at them in two parts.

The first point addresses the following question: "Will TTIP be used to bring back controversial parts of the ACTA agreement?" To which the response is:

No. ACTA was negotiated between 37 countries with the aim of reducing international violations of intellectual property rights (IPR). The EU and 22 of its Member States signed the agreement, but it was eventually rejected by the European Parliament in June 2012.

The European Commission has no intention of doing anything that runs counter to the position of the European Parliament on this issue, so there is no question of reviving ACTA through the back door.

The TTIP will be a much broader agreement covering many economic sectors. Intellectual property rights issues – such as rules on copyrights and trademarks – will only be a relatively small element of it. In fact, given that both the EU and the US already have efficient rules for protecting IPR systems, they have limited interest in strengthening their enforcement provisions.

Since the beginning of the TTIP negotiating process, it is very clear that the eventual agreement on intellectual property rights will not include elements that were controversial in the context of ACTA. For example, the ACTA provisions on IPR enforcement in the digital environment (ACTA articles 27.2 to 27.4) will not be part of the negotiations. Neither will ACTA's provisions on criminal sanctions.


The other question is "Will TTIP bring in new provisions that would restrict internet freedom?", where we find the following subsidiary issues and answers:

The discussions on electronic commerce will undermine consumer protection, including on data privacy.

This is also untrue. The EU made it very clear that its standards of data privacy protection are not up for discussion in this agreement. They will not be weakened.

Various other aspects of the digital economy will however be covered by the negotiations to make sure that the rules we have on either side of the Atlantic do not unnecessarily act as barriers to trade. That is not the same thing as undermining the online protection of internet users.


Alas, this is not really the case.  As I've discussed in previous columns, there is a very serious assault on the privacy of Europeans online, with an attempt to water down the proposed Data Protection Regulation.  Privacy is perceived by the US companies like Google, Facebook et al. as a "barriers to trade", since it stops them having their way with our data.  In this respect, TTIP could seriously undermine our privacy if it enshrines the US approach - as in "zero privacy protection" - as applying to the EU.

The other subsidiary question and answer is as follows:

The talks will weaken cybersecurity

The European Union has expressed clearly its concerns on alleged US intelligence activities and their implication for privacy and data protection at European level. We are committed to the Transatlantic Trade and Investment Partnership, but we insist – and the US has agreed – that in parallel there be work in two new EU-US working groups to analyse the oversight of intelligence activities, intelligence collection and also the question of privacy and data protection. These groups have already met and the EU expects that they will now make rapid progress. For the TTIP to be a success, we need confidence between the partners. And confidence can be only be fostered if there is a clarification of these issues of very serious concern. However, the TTIP negotiations themselves will not focus on these issues.


That inevitably implies that Europeans will be thrown to the wolves.  The separation of the discussions about spying and TTIP means the US can simply tell the EU to get knotted when it comes to complaints about the comprehensive surveillance being carried out on Europeans.  This was a major tactical error on the part of the European Commission, since its only leverage over the massive spying was TTIP, and to use the latter to pressure the US to respect local laws.  Now the EU cannot do that, so the working groups will come out with some pious platitudes that mean absolutely nothing in terms of safeguarding our online activity.

The new document concludes with another revealing section:

One last point: a more open process

The EU is committed to providing as much information as possible to the public, the media, and the many stakeholders as we proceed with the negotiations. There is more interest in this potential deal than any we have worked on before. We realise that this requires new initiatives to shed more light on what is going on throughout the negotiations. Several tools have been put in place:


Well, it would be hard to be more closed than ACTA, but nonetheless the following initiatives are all very welcome:

We have created a dedicated webpage to the TTIP negotiations. On this webpage, you can find a timeline, which details the events taking place, as well as providing overviews of the negotiating rounds.

We have also published a detailed Frequently Asked Questions page on the EU-US negotiations. This FAQ is available in all official EU languages and
gives an answer to many of the questions you may have.


Basic, but certainly useful.

The EU Commission's Trade Department now also has two dedicated Twitter accounts. One general account and one account specifically for the TTIP negotiations. The latter – @eu_ttip_team – is managed directly by negotiators and gives you a behind the scenes look at how the negotiations are progressing. We tweet in real time and give you updates on the negotiations as well as details on where to find more relevant info online. The team will also reply to your questions and comments.

That, I think, is much more important.  First, because it shows that the European Commission recognises that Twitter is one of the most important ways of communicating these days.  And secondly, it accepts that it is a medium for receiving questions and comments - that is, a two-way channel.

All-in-all, the appearance of this document from the European Commission is extremely welcome.  It signals a new awareness of how much the public cares about key areas affecting the Internet, and for the need to explain policies, rather than simply to impose them. 

Of course, these are still baby steps.  What we really need are for all tabled documents - which, by definition, are no longer secret - to be made available to the public immediately.  Although that might seem unlikely, the victory over ACTA, and the fact that the European Commission felt obliged to release the current explanation that TTIP is not an attempt to bring ACTA in by the back door, shows that public pressure does work.  In future updates, I will be explaining where in particular we need to apply that pressure - and how we might do it most effectively.

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The Rise and Fall of TTIP, As Told in 51 Updates

This year will be make or break for the Transatlantic Trade and Investment Partnership (TTIP).  It is already years behind its original, hopelessly-optimistic schedule, and is now running into immovable political events in the form of the US Presidential elections, and the general elections in Germany.  If TTIP isn't wrapped up this year, it is probably dead until whenever the next attempt to push through such a global takeover of democracy begins, as it surely will.

From July 2013 until April 2015 I wrote a series of irregular TTIP Updates, which charted the latest developments of the negotiations.  They form the most detailed description of how TTIP emerged and developed during the first two years of the negotiations.  Although superseded by more recent events, they nonetheless offer a historical record of what happened during that time, and may help people understand the strange beast that is TTIP somewhat better.

These Updates were published on Computerworld UK, which has a Web page with consolidated links to the updates.  Unfortunately, re-designs and other changes at the site have led to link-rot setting in.  Although the Computerworld UK page remains the main site for these Updates, I thought it would be useful - and prudent - to offer a mirror here on Open....

Below I have linked to the mirrored Updates, which appear as separate posts on the present blog.  Since I can't extract the final versions of the columns from the Computerworld UK site, I've used my local files.  These may differ slightly from the final, published versions - if there's anything major, I'll try to edit them at some stage.  Similarly, there may be odd typos that I have missed; please feel free to point them out in the comments so that I can fix them.

I should also warn readers that there are many broken links, especially to other Computerworld UK columns, whose URLs have all changed.  If I have time, I will try to fix the more important ones of these, but given that I probably won't have time, please don't hold your breath...

Although I am unlikely to write any more updates, I am most certainly going to keep covering TTIP during this crucial year - indeed, I intend to up my coverage considerably to reflect the crucial stage of the negotiations we have now reached.  I've already written a couple of big features on the topic for Ars Technica UK, which serve as introductions to this whole area for those coming to it for the first time, and as summaries of what has happened for those who are already familiar with the main issues.

The first, entitled "TTIP explained: The secretive US-EU treaty that undermines democracy", is a 6000-word backgrounder to the whole area.  The more recent "How EU nations are being sued for billions by foreign companies in secret tribunals" concentrates on perhaps the most controversial - and dangerous - aspect of TTIP, the so-called "investor-state dispute settlement" (ISDS) mechanism that essentially places companies above national laws by giving them special tribunals in which they can sue governments for alleged "indirect expropriation" of future profits.

If you don't know about this aspect - or about TTIP in general - this is a good place to start.  Once you find out what is proposed for TTIP, I am sure that you will be outraged, and hope that you will join me in trying to do something about it.

TTIP Update l

A review of the few details that emerged from the first round of negotiations, including an attempt by the European Commission to convince us that TAFTA/TTIP is not another ACTA.

TTIP Update ll

An introduction to investor-state dispute resolution (ISDS), and why its presence in TAFTA/TTIP is a grave threat to European sovereignty, open source and the Internet.

TTIP Update III

A point-by-point rebuttal of a document in which the European Commission tries to prove that the presence of investor-state dispute settlement (ISDS) in TTIP is not a problem.

TTIP Update IV

An exploration of how the public is kept in the dark over TAFTA/TTIP, and the dangerous asymmetries it contains.

TTIP Update V

A discussion of a major Wikileaks document discussing intellectual monopolies in TAFTA/TTIP’s sister agreement, TPP, and what it means for TTIP.

TTIP Update VI

An analysis of a leaked document outlining the European Commission’s communication strategy for TAFTA/TTIP, and a look at how disastrous other trade agreements like NAFTA and KORUS have been.

TTIP Update VII

Yet another, increasingly desperate attempt to justify the unjustifiable inclusion of ISDS in TAFTA/TTIP, and why the arguments simply don’t stand up to scrutiny.

TTIP Update VIII

Lifting the lid on how a new transatlantic “TTIP Regulatory Council” would bring in massive deregulation, with a consequent lowering of food, health and environmental standards in Europe.

TTIP Update IX

How an astonishing attack on Corporate Europe Observatory reveals a floundering European Commission increasingly concerned that it is losing control of the TAFTA/TTIP debate.

TTIP Update X

Another (failed) attack, this time by Karel De Gucht, the EU's trade commissioner, who laughably tries to claim that there is no lack of transparency in the TAFTA negotiations, and that it’s worth accepting the threats posed by ISDS.

TTIP Update XI

So it looks like TAFTA/TTIP is, in fact, ACTA by the backdoor – despite what Mr De Gucht has said...

TTIP Update XII

Why the US Fast Track bill guarantees that TAFTA's ISDS chapter will be one-sided and unfair for EU companies.

TTIP Update XIII

Big news: EU pulls ISDS to allow unprecedented public consultation; UK report says ISDS in TTIP would bring little or no benefit.

TTIP Update XIV

What new CETA leaks tell us about EU's plans to re-vamp ISDS - and why they aren’t enough to protect European sovereignty or democracy.

TTIP Update XV

There are growing calls to keep data protection out of TAFTA/TTIP – and to reject the agreement if the privacy of European citizens is not adequately protected.

TTIP Update XVI

More details emerge on ISDS provisions, and a rather ironic call for transparency from the paranoically opaque USTR.

TTIP Update XVII

Bad news, lots of leaks, plus debunking another misleading European Commission document.

TTIP Update XVIII

New leaks, new Web sites, a hidden threat from the “most-favoured nation” approach, and an astonishing claim that Germany wants ISDS out of TTIP.

TTIP Update XIX

A newly-discovered CETA bug shows why the European Commission needs transparency; also, why regulatory data must be opendata

TTIP Update XX

All about transparency in TTIP - or, rather, the almost complete lack of it; includes details of three phantom EU consultations I never heard about, and few took part in.

TTIP Update XXI

Why that best-case “ €119 bn” GDP boost to EU economy equates to just an extra cup of coffee every week.

TTIP Update XXII

ISDS attacks on EU nations have begun – and that’s before TTIP would make it even more likely and costly.

TTIP Update XXIII

Why the European Commission’s consultation on ISDS is a sham, and fails to provide the promised "draft".

TTIP Update XXIV

Looking at important research that finds even more holes in the European Commission’s TTIP justifications.

TTIP Update XXV

A report on a desperate high-level attempt by the US and EU to counter German scepticism, plus the video & slides of my re:publica 14 talk about why TTIP's numbers just don’t add up.

 TTIP Update XXVI

An action-packed update that includes fracking, water cannons and cosmetics – but still very little transparency.

TTIP Update XXVII

In which the European Commission’s misleading use of figures from its economic study is criticised, as is the study itself.

TTIP Update XXVIII

A major leak of EU services offer; an introduction to the top-secret TISA; and how the US it trying to buy love for TAFTA/TTIP.

TTIP Update XXIX

More on the secretive TISA negotiations; insight into the US's anti-transparency plans; and how the public is too stupid to understand TTIP.

TTIP Update XXX

More on the huge dangers of ISDS - and lots of help for responding to the European Commission’s travesty of a consultation on the same topic.

TTIP Update XXXI

Designed to be the final information on responding to the European Commission’s ISDS consultation, but we now learn the deadline has been extended because of huge numbers replying.

TTIP Update XXXII

A couple of interesting leaks, and a round-up of how TTIP is starting to enter the mainstream.

TTIP Update XXXIII

In the wake of the incredible 150,000 responses to the ISDS consultation, the revolt against this idea spreads to the highest reaches of the EU.

TTIP Update XXXIV

ISDS drama from Germany again, and how mutual recognition will undermine EU food and animal protection standards.

TTIP Update XXXV

The shape of multi-billion-pound ISDS lawsuits to come; a leak of the complete CETA agreement; and the threats lurking in US "certification".

TTIP Update XXXVI

Lots of news about CETA and ISDS, plus another slap in the face of the EU public.

TTIP Update XXXVII

Lots about CETA, and exciting plans for a European Citizens’ Initiative to let people make their views on TTIP known
TTIP Update XXXVIII

Slaps in the face of the EU public: a refusal to allow the ECI, and a "celebration" of CETA. Plus bad signs from the grilling of the new EU trade commissioner.

TTIP Update XXXIX

Nearly 50% of the claimed trade boost consists of swapping cars across the Atlantic.

TTIP Update XL

Rumours swirl that ISDS will come out of TTIP; even if it does, it's still in CETA and the new EU-Singapore free trade agreements.

TTIP Update XLI

Yet more sound and fury on the topic of ISDS in TTIP, but things remain as clear as mud.

TTIP Update XLII

Devasting new independent economic analysis of TTIP's likely effects on EU shows net losses in terms of GDP and 600,000 job losses.

TTIP Update XLIII

The problem of data flows, and why CETA's ISDS is a disaster.

TTIP Update XLIV

ISDS dangers in CETA and TTIP - and in the EU Singapore FTA.

TTIP Update XLV

They want "facts" and "hard evidence" about TTIP? Here they are...

TTIP Update XLVI

There are *already* more than €30 billion worth of ISDS claims against EU nations.

TTIP Update XLVII

The belated provision of improved transparency shows that public advocacy works.

TTIP Update XLVIII

The people have spoken: ISDS must go - no ifs, buts or maybes.

TTIP Update XLIX

New leaks show how transatlantic regulatory bodies will undermine EU and national sovereignty.

TTIP Update L
Should the views of a three-person tribunal take precedence over society's wishes?

TTIP Update LI

As resistance grows, TTIP is increasingly in trouble.

19 December 2015

UK Consultation on Draft Investigatory Bill Closes Monday: Please Write

The Joint Committee on the Draft Investigatory Powers Bill invites any "interested individuals and organisations" to submit evidence to this inquiry.  Written evidence should arrive no later than 21 December 2015.   Here are the four main questions:

Are the powers sought necessary?

Has the case been made, both for the new powers and for the restated and clarified existing powers?

Are the powers sought legal?

Are the powers compatible with the Human Rights Act and the ECHR? Is the requirement that they be exercised only when necessary and proportionate fully addressed? Are they sufficiently clear and accessible on the face of the draft Bill? Is the legal framework such that CSPs (especially those based abroad) will be persuaded to comply? Are concerns around accessing journalists’, legally privileged and MPs' communications sufficiently addressed?

Are the powers sought workable and carefully defined?

Are the technological definitions accurate and meaningful (e.g. content vs communications data, internet connection records etc.)? Does the draft Bill adequately explain the types of activity that could be undertaken under these powers? Is the wording of the powers sustainable in the light of rapidly evolving technologies and user behaviours? Overall is the Bill future-proofed as it stands?

Are the powers sought sufficiently supervised?

Is the authorisation process appropriate? Will the oversight bodies be able adequately to scrutinise their operation? What ability will Parliament and the public have to check and raise concerns about the use of these powers?
Weirdly, you are not allowed to publish your submission until you are given permission:

Evidence which is accepted by the Committee may be published online at any stage; when it is so published it becomes subject to parliamentary copyright and is protected by parliamentary privilege. Submissions which have been previously published will not be accepted as evidence. Once you have received acknowledgement that the evidence has been accepted you will receive a further email, and at this point you may publicise or publish your evidence yourself. In doing so you must indicate that it was prepared for the Committee, and you should be aware that your publication or re-publication of your evidence may not be protected by parliamentary privilege.
So, let me give a summary of my answers to the questions:

No, the powers are not necessary, because they are based on the idea that mass surveillance works.  It doesn't.

No, the powers are not legal: both the Court of Justice of the European Union and the European Court of Human Rights have said mass surveillance is illegal. 

No, they are not workable, because the idea of an Internet Connection Record makes no sense. UK's biggest telecoms confirmed the plan is unworkable.

No, the powers are not supervised because the "double-lock" authorisation is a sham: the judge does not check whether the authorisation was justified, only whether the procedure was correctly followed.

Also worth noting that the distinction between "content" and "communications data" is meaningless: metadata is actually more revealing than content, because it is already parsed in a computer-readable form that allows it to be combined with billions of other pieces of metadata.

Creating huge databases of metadata will create huge honeypots that will be irresistible to criminals and foreign governments.  Stealing the metadata will give them valuable information that can be used for identity theft or blackmail.

Finally, it is worth pointing out that the whole idea of "equipment interference" is really stupid.  If agencies are given permission to break into people's systems, they can plant anything there, and make changes to things like browser histories.  As a result, any computer evidence in a trial is suspect, since it could easily have been planted using "equipment interference" without anyone noticing.  As computer-based evidence becomes more important, "equipment interference" would seriously undermine the UK's legal system.  It should be the very rare exception, not part of a standard toolset.

This is a really important consultation: please respond by Monday.

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.

22 November 2015

"Open " Consultation: Setting the mandate to NHS England for 2016 to 2017


Although you wouldn't know it, the UK's Department of Health has been running a consultation on NHS England.  It has kept this quiet in the hope that no one would reply, and it could just do what it wanted.  

You can read its consultation document pretty quickly, but it probably won't do much good: it's written in the finest officialese that manages to sound impressive, but say very little.  You can respond online, and here's what I've sent them:

Do you agree with our aims for the mandate to NHS England?

Although the mandate is largely fine, it suffers from an excess of generalities. What it lacks is any concrete statement of about how things should be done. I think it is vital that the NHS should be committed to providing a world-class health service using public resources, not private ones. The reasons are simple.

First, the US health system shows us that private healthcare is incredibly expensive, incredibly inefficient, and fails to deliver good healthcare. Moving in that direction would be foolish at best, and downright negligent at worst, since people will die as a direct consequence of doing so.

Moreover, privatising healthcare is foolish for economic reasons: private providers by definition must make a profit, and so by definition are more expensive than publicly-provided resources. Invoking "competition" as a reason why private health provision is better makes no sense, since that competition leads to cost-cutting, which again leads to patients suffering, as recent experiences have shown here in the UK.

Finally, privatisation makes no sense because there is no ownership of skills and knowledge. This would make the NHS a hollow, precarious structure.

Is there anything else we should be considering in producing the mandate to NHE England?

Yes: it should specify as a matter of principle that services will provided publicly, not through private provision. The use of private contractors by public bodies is fine, but the control of every key aspect must remain in public, not private hands, otherwise the profit principle takes over, and people will suffer.

What views do you have on our overarching objective of improving outcomes and reducing health inequalities, including by using new measures of comparative quality for local CCG populations to complement the national outcomes fin the NHS Outcomes Framework?

Fine words again, but without adequate resources, essentially worthless. Unless the NHS is funded adequately, as a matter of priority, it will be impossible to achieve those fine objectives. This will lead to the NHS being dubbed a "failure", which a cynic might suspect is the intention so that privatisation can be offered as the "solution." It is not.

What views do you have on our priorities for the health and care system?

The key priority should be providing world-class healthcare to everyone in the UK free of charge. That is the sign of a civilised country, and failing to do so is to fail that test too. Of course, that requires more resources, in which case it becomes a matter of priorities. But far more lives will be lost as a result of underfunding the NHS than will be lost through terrorism, however much the government likes to exaggerate the threat of the latter. Indeed, the greatest threat to this country is not ISIS/Daesh but things like the end of antibiotics, which could see all major surgery becoming impossible in just a few years. The government should be spending its billions on researching new ways of killing bacteria, not beefing up its surveillance apparatus.

What views do you have on how we set objectives for NHS England to reflect their contribution to achieving our priorities?

Despite all the claims of openness, this consultation has been conducted in near-secrecy. If the government really cared about what the public thinks on this matter (and I do realise that it does not), it would have made far greater efforts to publicise the existence of this consultation. Given the government is now trying to emasculate FOI requests, this is hardly a surprise, but I find the emphasis on openness here a little galling, to say the least.

Do you have any other comments?

I think I have probably said enough...

25 October 2015

Urgent: Net Neutrality in EU under Threat; Please Write to your MEPs Now


The long saga of net neutrality in the EU is approaching its end, and things aren't looking good.  The compromise text contains some huge loopholes, which I've written about elsewhere. The key vote is on Tuesday, so there's still time for EU citizens to write to their MEPs. 

You can find contact details for all MEPs on the SaveTheInternet.eu site; those in the UK can also use WriteToThem.com.  Here's what I've just sent - please feel free to use its idea, but don't just copy and paste: MEPs will rightly disregard it.

The Internet has risen more rapidly and had more influence on society than any preceding technology. At the heart of its success lies an obscure technical feature: net neutrality. Simply put, it means that all traffic is treated equally. That level playing field has allowed innovation to flourish, and startups to create new industries in a way never seen before.

As you know, on Tuesday the European Parliament votes on new rules that supposedly enshrine net neutrality in Europe. In fact, those proposals contain such serious shortcomings that they are likely to have the opposite effect, and will undermine net neutrality.

I would therefore like to urge you to vote in favour of amendments that would return the text to a form nearer the earlier one approved by the European Parliament, which was far superior. In particular I would like to ask you to support the amendments specified here:


In a surprising turn of events, the US has passed strong net neutrality laws (https://www.whitehouse.gov/net-neutrality). If the EU does not follow suit, it will threaten digital innovation in Europe, and hamstring its entrepreneurs, thus ensuring that the digital gulf between the EU and US widens, rather than narrows. For this and other reasons, it is vital that the amendments indicated above are included in the final text.

Thank you for your help.

05 July 2015

Urgent TTIP Vote: Please Write (Again) to Your MEPs before Wednesday


There is (another) very important plenary vote in the European Parliament on TTIP this Wednesday, when the European Parliament will vote on a resolution concerning TTIP. The first time around, the vote was pulled for tactical reasons by the pro-ISDS camp, rightly afraid that the European Parliament would reject the inclusion of this anti-democratic idea in TTIP. Now they have cobbled together a "compromise" on ISDS which simply calls it something else, without solving the fundamental problem, which is that it gives corporations unique rights to sue entire nations, with us, the public, footing the bill.  Here's the proposed amendment:
to ensure that foreign investors are treated in a non-discriminatory fashion while benefitting from no greater rights than domestic investors, and to replace the ISDS-system with a new system for resolving disputes between investors and states which is subject to democratic principles and scrutiny where potential cases are treated in a transparent manner by publicly appointed, independent professional judges in public hearings and which includes an appellate mechanism, where consistency of judicial decisions is ensured, the jurisdiction of courts of the EU and of the Member States is respected and where private interests cannot undermine public policy objectives;

The good news is that MEPs are often responsive to their constituents contacting them, especially if large numbers do so on a particular theme. So I would like to urge you to write to your MEPs, using WriteToThem, or directly, to ask them to reject ISDS in all its forms.

If you want to find out more about TTIP in general, I have written a 6000-word explanation; you can also browse through the 51 columns I have written on the topic over the last two years. Finally, there is a documentary about TTIP, which provides a superb introduction to the issues – I'm in it, but please don't let that put you off.

I've included below the letter that I have sent to my MEPs: please feel free to draw on its arguments, but I urge you to put them in your words: MEPs hate and will dismiss letters that are carbon copies of others. Individually-written communications, by contrast, are very powerful.

I hope you will excuse me writing to you again on the topic of TTIP ahead of Wednesday's plenary vote. I would like to urge you to vote against the proposed "compromise amendment" on the topic of ISDS, which supposedly addresses the problems of this system. It does nothing of the sort: it still provides corporations with unique rights against entire nations; it creates a similarly unfair system where companies can win huge awards, to be paid by the public, but the best the public can achieve is not to lose. This is the very definition of a tilted playing-field.

The avowed intent of this "compromise", and of ISDS itself, is to ensure that foreign investors are treated fairly. That is only right, but ISDS and the compromise are exactly the wrong way to go about this. If either is in place, there is no pressure to address the real problem, which is that local laws may not treat foreign investors in the same way as domestic ones. Far better to change laws to make them truly fair, than to introduce another unfair system that undermines the rule of law by creating special structures outside it.

I would therefore ask you to reject ISDS completely, as well as any attempts to introduce it in other ways, for example through the "compromise amendment".