For the past three years, the European Union and the USA have been negotiating on the so-called Transatlantic Trade and Investment Partnership (TTIP), the largest scale free trade agreement between the two biggest economies in the world. It has the ambition of reducing and even removing customs, tax and regulatory obstacles, and leading to a unification of production standards on both sides of the Atlantic. This would lead to greater consumer spending ability for people in the EU and the USA, and increased grown. Both of these are clear and political consequences for the global economy. These aims make TTIP perhaps the most significant political decision in recent years, and its ratification or rejection has the potential to affect us in one way or another for decades to come.
From the very outset, TTIP negotiations have caused the most contradictory reactions. “We’re burying democracy”, “An end to national sovereignty” and “We’re being poisoned with GMO and mutant hormones”, is the chorus of battle cries of the extreme left, nationalists and environmentalists. Moscow echoes them with accusations of an “Economic NATO”.
What is the truth and what is a lie? Can we make a sober assessment of the contents of an agreement which we don’t actually know (in its entirety at least)? Is there a global conspiracy against high European standards and should we be afraid of most free trade and competition?
In the next few lines, I shall share my view and comment on the most frequently asked questions and try to respond to them.
What is this agreement all about?
The starting point for an answer to this question is: the mandate given to the EU negotiation team by the Council of Ministers of the European Union. The main conditions are connected with the facilitation of the movement of services and capital, and the reduction/removal of duties, quota and other obstacles and restrictions to trade between the EU and the USA.
More precisely, the agreement consists of the following three elements:
a) Easier access to markets,
b) regulatory matters and non-tariff barriers (NTB) and
Negotiations on all three elements have to be undertaken simultaneously and form part of one and the same policy, in order to guarantee a balance between the removal of duties, the removal of unnecessary regulatory obstacles to trade and improving the rules. The objective is to lead to significant progress in all three elements and the effective opening-up of the EU and US markets to each other.
When we talk about more specific policies such as health care, food, the environment, the labour market, cultural heritage and so on, the mandate allows for negotiations only within the framework of what has been ratified on accession to the EU and the World Trade Organisation. Member countries, including Bulgaria, expressly retain their right to impose additional restrictions on a national level.
Who takes the final decision? What is the role of national parliaments?
Trade agreements to which the EU is a party have to be voted on and accepted both by the European Council (TTIP requires complete consensus due to its scale and importance), and also ratified by the European Parliament (with a majority). One matter of dispute which has been sent to the EU Court for resolution, is the matter of whether and to what extent the national parliaments of the individual members states will have any say in the ratification of the trade agreements.
Why did the negotiations begin in so much secrecy and a lack of transparency?
The logical explanation here is that this is a traditional and accepted practice in international public law. The countries negotiate, arrive at some form of agreement and only then present it to the general public. Is this acceptable in a time of global connectivity and opportunity, and the desire to access information? No, of course it isn’t, and this has led to harsh reactions. Cecilia Malmström, member of the European Commission and responsible for negotiations on the part of the EU, has taken these into account. So, since the end of 2014, we have had a site maintained by the Commission which regularly published information about each negotiation meeting and the European position. Unlike their EU colleagues, the US negotiating team prefers not to act with the same transparency and we, thus, don’t have any (easy) access to their documents.
Will TTIP lead to lower environmental protection and consumer protection standards?
Both the European Commission and the American negotiators dispute this claim. It may sound paradoxical for readers convinced of the superiority of European standards, but a number of American politicians and leaders are of the opinion that the Americans will have to bring their “stricter” standards into line with the lower standards of the EU. For instance, in the case of approving and allowing the sale of pharmaceutical projects and electrical items. This is particularly interesting, since it shows the controversy of whose standards are in fact “higher”, since it is more frequently a matter of view point and interpretation. The idea of both parties is more a case of achieving mutual recognition of the standards and certification procedures, with a guarantee of a “single level of protection”. Thus, for example, in the USA, motor vehicle indicator lights have to be red, while in the EU – orange. There is no evidence that one is better than the other, but that is the “standard” and the European manufacturer of motor vehicles and spare parts have to bear this in mind and produce red indicator lights, if they want to export to the US market. This leads to an increase in consumer prices and makes them less competitive. In actual fact, there is no real problem in mutual recognition and treating red and orange indicators in the same way. In this way with standardisation, the motor vehicle industry would save 26% on costs. In other sectors, the optimisation of costs would more even more tangible. For example, cosmetics manufacturers: they would save up to 35%, and in the food production industry – up to 57%.
Do only corporations profit from TTIP?
Of course not. This is because corporations do not exist in isolation. They have a leading role in economic turnover. When employers hire a large group of people directly, there is also a larger group of subcontractors (who are also employers) and free-lancers and self-employed persons. The removal of the regulator fetters from the legs of business help all of the above-mentioned, and in particular those who will benefit from the newly created work places.
All right then, but what about the chicken showered in chlorine, meat full of hormones and GMO food?
One of the most widespread myths in German and Austria is that the agreement will lead to the European market being filled with chlorine disinfected broiler chickens and hormone-treated beef from the US. All this has to be seen in the context of the non-existent evidence of the harmfulness of broilers and beef treated in this way, as well as foodstuffs containing GMO permitted for sale in the EU (as long as GMO is visible on the labels). Of course, people are quite justified in being wary of what they should (not) eat. In the same way, the Americans don’t want to touch mouldy French cheese. Which is why the European negotiating team has been extremely careful when negotiating this part of the agreement. For the moment, the US negotiators are offering large concessions for the import of motor vehicles and parts manufactured in the EU, if we display a willingness to compromise on hormone treated meat. I should note that the USA has a WTO guaranteed quota for facilitating meat without hormones into the EU, but has not used it. Why? That’s very simple. Local consumers are buying more and more hormone-free meat, as a result of which it is barely able to keep up with the profitable domestic demand. Most of what is left is hormone-treated, which is why they want to place it somewhere. It is understandable that they support their own vested interest. Malstrom and her team are completely aware of that and they can always refer to the matter of the unused quota. My own forecast, therefore, is that just like the trade agreement between the EU and Canada 9CETA), hormone-treated meat will not be part of the TTIP.
A particularly controversial matter is commercial arbitration – “where corporations can sue countries, like Bulgaria”. What is it?
Investment protection is a traditional part of any trade agreement and its aim is to guarantee that the foreign investor will not be discriminated against, and its property will not be confiscated or even nationalised. If anything like that does happen, the investor can turn to a specially envisaged arbitration court to resolve the dispute. If the politicians in a given country have done something stupid or for some populist reason have ratified an idiotic law which injures the investor, then the investor will be able to “sue the state” and demand compensation. The opponents of TTIP frequently underscore certain gloomy prospects, but the facts suggest otherwise: Up to the present moment Bulgaria has signed 64 bi-lateral trade agreements which envisage an investment protection mechanism, similar to TTIP, but as of yet Bulgaria has not lost a single dispute with a foreign investor. We shall see whether the case brought by Russian Atomstroiexport in 2013 against the state-rune National Electricity Company will do anything to change that statistic.
Notwithstanding this, the position of the European negotiating team with regard to an investment protection mechanism is that it should be achieved by means of an international public law tribunal, where the decisions are open to appeal, and which in the long term will replace arbitration as a method for resolving disputes between states and investors. This position was reached as a result of a large scale inquiry amongst all the interested parties – the business sector, administration and civil organisations.
That’s all very well, but haven’t Greenpeace published something about “leaks”?
Anyone can check that on https://ttip-leaks.org/. The view presented by a variety of “green” politicians is that the leaks show “all the dangers we have warned about for the whole time”. Yes, but to a certain extent it sounds and looks sexy, but it is not accurate and even deceptive. The leaks are actually quite small, if measured in that way. They show the requests and demands of the US team which are not secret to those who follow the process. In contrast to the claims by Greenpeace and which the mainstream media have uncritically repeated, the TTIPLeaks do not contain any evidence that the European negotiating team (and Cecilia Malstrom in particular) have never been prepared to give in to American demands. The leaks have even had their positive side, since they will probable persuade the American negotiators to be more transparent.
What does Moscow think about TTIP?
In the context of the economic sanctions and American foreign policy success in Trans-Pacific Partnership (TPP) negotiations, the Russian government appears worried about a new possibility for the expansion and strengthening of economic relations on both sides of the Atlantic. The Moscow-managed media frequently refer to TTIP as the “economic NATO”. This is understandable, since both the TPP and TTIP are outside the purview of the WTO and Russia cannot participate or influence the negotiating process. If it does decide to sign up to any of them at a later stage (and why not both of them), the Russian Federation will have to do it on a “take it or leave it” basis.
That’s about all.
If you’ve read this far, then in fact you know more than 99% of all the critics and opponents of TTIP. Unfortunately, the political clouds instead of dispersing have begun to gather over the agreement. Only one month ago, the French President Hollande, under the pressure of his record low ratings and the hysteria in France against any meaningful reform, stated that he would probably block the signature of TTIP. The German Vice Chancellor, Sigmar Gabriel, also said something similar. What is also surprising is that Donald Trump, Bernie Saunders and even Hilary Clinton have expressed their opposition to TTIP. If Jean Claude Junker has appealed to the European leaders to reconfirm their support for the agreement, then its future will without doubt depend on the US election result. Until then we can all obtain and analyse the information and decide whether we are prepared to swap hormones for more common sense.
 Where the public disapproval for TTIP is 73, and correspondingly 78%.