The latest on trade and development policy: February 2016
12th round of talks on the transatlantic free trade agreement with the USA, TTIP
The 12th round of talks on the Transatlantic Trade and Investment Partnership, TTIP, took place from 22 to 26 February. Two further rounds of talks will take place before the summer. In the meantime individual points will be dealt with in intersessional discussions. For example, negotiations on procurement will continue in the coming week. This round concentrated on the controversial topics of investment protection and regulatory cooperation.
The European Commission presented a proposal for reform of the private investor arbitration courts; this proposal has been widely criticised, also by us. The US responded by presenting its own proposal in this round. To date the texts have not yet been merged, but it appears clear that there are differences with regard to content. The US Chamber of Commerce heavily criticised the EU’s proposal because it responded too much to the demands of civil society. Further criticism was voiced by civil society itself, with several studies being published prior to the round of negotiations (see below). In a statement, the German Association of Judges issued a crushing verdict on ISDS reform. The proposed arbitration tribunals are superfluous, it read, since the legal systems in the USA and the EU would suffice. Furthermore, the proposal of the European Commission is lacking a legal basis.
The European Commission introduced a new draft to the negotiations on regulatory cooperation. This draft does not contain any more references to a regulatory body; however, full mutual participation is intended on planned legislation. Hence the USA would be able to influence EU legislation even earlier than the European Parliament, for example.
Negotiations on the Transatlantic Trade and Investment Partnership have not progressed substantially; therefore it is unlikely that negotiations will be concluded this year. In view of the political statements announcing the conclusion of negotiations this year, this means only a lightweight version is conceivable, a “TTIP light”. However, it is more probable that negotiations will continue next year.
You can find more information on TTIP here on the web page of the Green Party in the European Parliament.
The Comprehensive Economic and Trade Agreement with Canada, CETA, could be concluded this year
Negotiators could soon come to an agreement on CETA. The new progressive government in Canada have agreed to the amendments to investor protection demanded by the European Union. Significant elements of the proposed EU reforms are incorporated (e.g. provisions on the selection of arbitrators or the appeal level in investor courts). However, by no means all concerns have been addressed. A possible timetable would see CETA adopted by the European Council in June. The European Parliament would then have to vote on the free trade agreement; this could still happen in December 2016. Read my press release on CETA here.
New studies on TTIP and CETA
The NGO Corporate Europe Observatory, together with many other NGOs, has published a study on the proposed European Commission reform on investor protection. It states clearly that the proposed reform differs only marginally from the old “ISDS system”. In particular it is still possible to take legal action against legitimate, democratic measures to protect the environment and health. The rights of investors have actually been extended, since interpretations that were disputed previously have now been defined as clauses. Instead of burying one-sided private investment protection, this misconceived system is to be firmly established in the European Union.
In its paper, the organisation “Small and Medium Sized Companies against TTIP” looks at the different safety certification processes in the electrical industry. It is not expected that harmonisation will soon be achieved in this sector since US standards are not determined at a national level, with a large number of different private certification bodies. Harmonisation is expected to lower European standards - that will affect small and medium sized enterprises especially. The Deutsches Institut für Normung (DIN - German Standards Organisation) published a paper in 2014 expressing similar concerns.
A further study on regulatory cooperation published by LobbyControl and Corporate Europe Observatory, shows that European and US lobbyists have long exerted considerable influence on legislation in the EU. Regulatory cooperation would turn these informal structures into an institutionalised process.
CETA does not comply with the criteria established by the European Parliament in its report on the free trade agreement with the USA. That is the result of an analysis of CETA compiled for the Belgian MEP Maria Arena. In particular the Parliament’s demand that governments should still be able to regulate services and investments has not been satisfied. Nor are there any enforceable rules for sustainable development or standards for safety at work and the environment.
Creating a just global policy
On the World Day of Social Justice I described in the Frankfurter Rundschau how we can actually make globalisation more just. You can read my guest article here. It is in German.