For Labour, TTIP should be a red flag: it’s the one element of the EU over which the Tories aren’t tearing themselves apart.
For Labour, TTIP should be a red flag: it’s the one element of the EU over which the Tories aren’t tearing themselves apart
Lord Livingston, trade minister, has attempted to diffuse criticism of the transatlantic trade and investment partnership (TTIP), the planned deal between the EU and USA. The former BT chief executive belittled opposition, labelling the protest movement misguided and driven by ‘anti-American sentiment’.
If this was a cost-free boon nobody would be complaining. Plenty of people are complaining that TTIP threatens education, the NHS, environment and labour rights.
There are three dangers, firstly that TTIP is harmonising regulations to one ‘very high standard’ (Livingston) without democratic input or means for reform. Open competition on an uneven playing field is the second, and third is the investor-state dispute settlement mechanism (ISDS) which lets foreign investors sue governments that pass laws which threaten profits in secret courts.
Being sued itself isn’t the worry – the fear is that US multinationals will use the threat of ISDS to dissuade parliament from passing publicly-supported laws, e.g. on fracking. Livingston didn’t mention Philip Morris, the American ‘Big Tobacco’ company that’s already menacing Britain with an £11bn lawsuit over plain cigarette packaging plans. Philip Morris earlier used ISDS against Australia in similar circumstances. Australia won but, along with South Africa, no longer agrees to trade agreements with ISDS clauses.
Britain has nearly 90 ISDS treaties and we’ve never lost a case, Livingston argued. What he omitted is that none of those treaties are with economies approaching America’s size, and that Britain has only fought two cases. America has form – look at lawsuits between Canada and America after NAFTA. Currently there are 19 cases pending under NAFTA seeking a total of $38bn, most about health, finance, and the environment. Globally there were 50 ISDS cases in 2000, but 550 this year (UN).
The government won’t listen to popular concerns and resist the ISDS provision, as Germany is considering. Ken Clarke, TTIP’s champion, admitted ISDS mechanisms were created to protect investors from states with unstable legal systems – not from Britain or France. The TTIP investment chapter won’t provide Britain with any real boost. America already invests huge amounts here; companies trust the British environment. Extra protection is unnecessary.
Even if Britain gets its £400/year and is never sued, this is no economic silver bullet. The whole free trade mentality accepts that simplifying tariffs and regulations increases competition. America subsidises its car and agricultural industries, plus energy, while having much lower labour protection than Britain. It follows that some UK firms would be outcompeted and sink, some workers would lose their jobs.
This is why campaigners fear TTIP will erode European working standards, not because of an actual treaty provision abolishing the minimum wage but because of direct competition with a less regulated system.
Of course, deregulated employment is precisely what the Conservatives want, as we the Beecroft report and working time laws criticism demonstrate. Livingston insisted TTIP wouldn’t impact labour, an assurance difficult to trust while his party is pushing for a 50 per cent turnout threshold for union action. The British left hasn’t awoken to this, while French and Belgians have been protesting regularly.
The Government claims small businesses, not multinationals, will be the real winners. But inflexible top-down rule changes are exactly what the Federation of Small Businesses already complains about. Multinationals have lawyers, compliances teams and finances to changes practices. It’s SMEs that fall foul of new rules, unable to afford them or simply unaware of changes.
As Tony Benn often argued, when the EU produces rules Britons dislike, parliament can’t block or improve them. A new regulation regime negotiated by that same EU and America, in secret, is not a promising replacement. If the regime threatens Britain’s health service, labour laws and its very sovereignty, that’s even worse.Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.