Transatlantic Trade and Investment Partnership (TTIP): Background & commentaries on social & environmental impacts

Background

The European Union (EU) and the United States of America (USA) are currently negotiating a trade agreement referred to as the Transatlantic Trade and Investment Partnership (TTIP).  It aims to reduce trade barriers on goods and services in a wide range of sectors.  Most of the negotiations are centred on reducing regulatory barriers to trade, including making EU and US laws relating to health, safety, environment and financial security more compatible, and on measures protecting the rights of the investors.

Advocates for the TTIP argue that it will increase GDP growth in both regions, create hundreds of thousands of jobs, and make cheaper products and services available to consumers.  

The first round of negotiations took place in June 2013.  Once finalised, the agreement will need to be approved by the European Parliament, EU Member States and the US Congress.  Documents and information are available on the European Commission’s website and the website of the Office of the US Trade Representative.   

Key business & human rights concerns

Civil society in both in the EU and US have raised various concerns about the TTIP, and opposition has been widespread.  There have been large protests across Europe and in 2014, an online consultation conducted by the European Commission received 150,000 responses, 97% of which were negative.  

Social cost of weakened regulations

One of the biggest concerns is the regulatory convergence of standards. This is largely related to arguments that there will be heavy social costs related to the regulatory convergence surrounding health, workers’ rights, consumer safety and the environment, and the strengthening of the rights of foreign investors.  In Europe, in order to reduce barriers on the trade of food, EU standards on food safety and the environment will be brought closer to those of the US, which are much less strict.  70% of all processed foods in the US contain genetically modified ingredients, while the EU allows virtually no GM foods.  On the other hand, US financial regulation is currently stricter than in the EU and it too could be weakened to match with EU standards.

Investor state dispute settlement

Investor state dispute settlement (ISDS) allows foreign investors to bring proceedings against the country hosting their investment, if they have been disadvantaged by an act of the government.  This act could be legislation aimed at improving social or environmental protections, or a local council denying a permit for environmental reasons, or measures aimed at regaining government control in public services.  Arbitral tribunals are outside the domestic legal system, do not have an appeals mechanism and are often private.  Foreign investors can thus bypass national courts, and challenge what may otherwise be a legitimate policy.

In response to these concerns, the EU commission proposed an Investment Court System, which will be comprised of judges and have an appeals mechanism.  However, a study carried out by ClientEarth finds that any international agreement containing ISDS or an investment court would not be legal under EU law as it would undermine the powers of the European Court of Justice and the European internal market.

Lack of environmental protections

Following a leaked document, environmental campaigners have also cautioned about the impacts on climate change of the proposed energy provisions, as there are no strong commitments to environmental protection or sustainable development. 

Lack of transparency & business lobbying

Further concerns include excessive business influence over the negotiations as well as the lack of transparency surrounding the talks.  Most of the preparatory meetings of the negotiations were with industry lobby groups, where the information of these meetings was not publicly disclosed, and very few of these meetings were attended by civil society.

 

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