TTIP Undermines Democratic Norms
Ska Keller, Member of the European Parliament, is the top Green candidate for the upcoming European elections. Here she answers questions from Atlantic Community on the Transatlantic Trade and Investment Partnership (TTIP). Ska Keller argues that TTIP is likely to circumvent democratic accountability and to benefit primarily big companies rather than smaller companies and ordinary citizens on both sides of the Atlantic.
Editorial Team: What is the most concerning aspect of TTIP in your opinion?
Ska Keller: The resistance against TTIP is slowly growing all over Europe – and that is not because people do not like to cooperate with the US. It is because they fear TTIP will impact seriously on their lives. The proposed trade deal with the US and the EU will be the biggest ever – in scope and depth. It will not only cover the reductions of tariffs but also harmonize regulations and standards, which are in the eyes of the negotiations the real barriers to more free trade. That would entail serious threats to consumer and environmental standards on both sides of the Atlantic. Products or processes that are currently forbidden in the EU will probably be allowed under TTIP. The most cited example is beef that was treated with hormones, which is a common practice in the US. Regulatory cooperation means that each trading partner will have a huge say in the internal policy making of the other, which I find undemocratic.
Editorial Team: Contrary to the argument that TTIP will only benefit large corporations, is it not true that the removal of trade tariffs and regulatory barriers to transatlantic trade will significantly improve the prospects of small and medium enterprises?
Ska Keller: The problem of the economic impact assessment done by the Commission is that it is based on the assumption that non-tariff barriers to trade will be completely dismantled. So, first we only get the promised GDP growth if we lower our standards. Second, the economic impact assessment says nothing about the distribution of that prospective growth. This is why, for example, trades unions are quite skeptical. Who makes sure that the wealth gained trickles down to the workers and the average citizens? Third, there is no common ground on what we mean by small and medium enterprises. There are SMEs that are quite large and export their products to the US. But there are a lot of small enterprises that will probably struggle in competition with US products and do not benefit. Experience from past huge trade deals like NAFTA shows that it is mostly bigger companies that profit from trade liberalization. With TTIP you will find plenty of evidence of that if you look at who is pushing for it the most. It is not so much the small companies but the chemical industry or the highly concentrated US agricultural industry.
Editorial Team: With regard to food safety and the threat of GMOs entering European markets; the European Commission has said on numerous occasions that it will simply not negotiate on any sort of watering down of restrictions on GMOs entering Europe. Why then, do many critics continue to argue that TTIP will undermine these restrictions? Is the Commission's reassurance not enough?
Ska Keller: The Commission says that it will not negotiate on watering down standards. At the same time they want to intensify regulatory cooperation. Regulatory "barriers" are not simply purely technical issues – often they have been put in place after long political fights and concern legitimate public policy concerns. If we harmonize our regulations with those across the Atlantic it means we accept their regulations even if we do not directly change our legislation. On the very concrete question of GMOs that can concern authorization procedures for example.
Editorial Team: Finally, with regard to the investor-to-state dispute settlement (ISDS) mechanism; TTIP's proponents argue that it is a necessary component of a successful trade deal. If it is included to avoid state discrimination against foreign companies, then would it not appear two-faced if it is included in the trade deals with developing nations and not in a transatlantic deal?
Ska Keller: ISDS is so dangerous because the rights of international investors are mostly only vaguely defined. That means that investors can bring states to court over basically any legitimate public policy measure. The Swedish energy company Vattenfall is currently suing the German government because of its decision to phase out nuclear power. That decision was carried by an overwhelming majority in the German parliament. Vattenfall wants over €3.6 billion of compensation because Germany diminished the company's profits with its decision.
ISDS was originally invented to protect Western companies' investment in developing countries, weak and fragile states where the national legal system was not supposed to be strong enough. Over time, more and more ISDS provisions were included in agreements between OECD states. Now the European Commission wants ISDS in the agreement with the US, although the US legal system is very well developed and EU companies could easily use the national courts if they feel hindered in their rights.
I am strongly against introducing ISDS into TTIP, but I also fight for a general revision of the system and to get rid of ISDS everywhere – including for developing countries. A lot of developing countries suffer hugely from ISDS arbitration. For example the case where Chevron successfully sued Ecuador even though Chevron had contaminated a large part of the Amazon (in Ecuador). The UNCTAD and others have made very good proposals on how to replace ISDS and at the same time secure the legitimate rights of investors in developing countries.