TTIP Update: EU commission consultation and House of Commons debate

15 January 2015

A European Commission consultation has received a record number of responses, and the Investor-State Dispute Settlement (ISDS) is taken off the table – for now.

The consultation on the Transatlantic Trade and Investment Partnership (TTIP) has found “major opposition” to the proposed trade deal. 150,000 responses – more than 100 times that of any previous trade deal consultation – were sent to the commission from 3,000 individual citizens and a variety of organisations including trade unions, law firms, and NGOs – with over a third coming from the UK.

The EU Trade Commissioner Cecilia Malmstrom admitted; “The consultation clearly shows that there is a huge scepticism about the ISDS instrument…We need to have an open and frank discussion about investment protection and ISDS in TTIP with EU governments, the European Parliament and civil society before launching any policy recommendations.”

The consultation was carried out between March and July last year, and consisted of 12 questions covering investor protection and the ISDS clause. The ISDS clause – the part of the deal that has attracted the most outrage – would mean that companies could sue governments if their policies cause a loss of profit. The cases would go through paralegal kangaroo courts rather than a domestic court system.

US-EU talks resume next month, but in response to the public response and extensive campaigning against TTIP, the proposed ISDS clause has now been “suspended”. The European Commission will decide by this summer if it will abandon ISDS altogether.

An indication of what ISDS will look like can be seen in the US tobacco giant Philip Morris International’s ongoing attempt to sue Australia and Uruguay for their attempts to dissuade their citizens from smoking. Elsewhere, Mexico has had to pay over $200 million in damages due to the ISDS clause in the North American Free Trade Agreement (NAFTA) between the US, Canada and Mexico. A significant proportion of these damages came from a case against Mexico placing taxes on soft drinks containing high-fructose corn syrup. Tellingly, the US has not lost a single NAFTA arbitration.

The bilateral trade deal constitutes an alarming transferral of power from sovereign governments to corporations, attained through anti-democratic back door negotiations. It would allow US multinationals to override laws protecting the environment, consumer rights, and food standards. It would also undermine the NHS even further by irreversibly opening contracts up to US health giants. The government is claiming that the NHS will be out of TTIP’s jurisdiction, however the British Medical Association disputes this.

TTIP will undoubtably have a detrimental effect on employment rights. By the EU’s own admission the deal would probably see jobs going to the US where labour regulation and trade union rights are even worse than our own. Although those vested interests championing the deal are using job creation as one of the main selling points, we only have to look to NAFTA as an indicator that this will not be the case. Although hundreds of thousands of new jobs were promised, in reality NAFTA led to a loss of one million US jobs over 12 years.

In today’s (15 January) House of Commons debate on TTIP, Caroline Lucas MP pointed out that while the coalition claims a family of four will be £400 better off, research by Tufts University shows that the average British person will be £3,000 worse off after 10 years under TTIP, due to the depression of wages it will cause.

A wide range of campaigns have come together under Stop TTIP and 2.5m have signed anti-TTIP petitions. Public awareness of, and opposition to TTIP is accelerating at a rapid rate, and governments are being forced to listen. A similar trade deal, the Multilateral Agreement on Investment, was abandoned after public opposition in 1998, showing it is possible to defeat TTIP and secure a democratic victory.