Negotiations on an EU/US free trade deal are grinding slowly through the bureaucratic mechanisms on both side of the Atlantic. The deal is called TTIP – the Transatlantic Trade & Investment Partnership – and it involves something called ISDS – the Investor/State Dispute Settlement mechanism. It is important to stress that no final text is on the table, and may not be for some years. When it exists, it will be published, and we will be able to see in detail what is proposed. But various resolutions on TTIP working their way through the European parliament are propositions about how the negotiations should proceed, not a Yes/No vote on whether we accept the deal.
For context, it’s worth noting that the USA is also working on a Pacific trade deal which is likely to give Australia (for example) free access to the US market long before any EU/US deal is resolved.
Despite the early state of TTIP, we MEPs are getting hundreds of e-mails from citizens who have already made up their minds, and are stridently opposed to TTIP – though I’m not at all sure that many of these people really have a clear grasp of the issue. For example they call on us to reject TTIP, despite the absence of a finished proposal – and the consequent fact that at this stage we have no opportunity to reject it.
A couple of caveats. There are genuine concerns that TTIP provisions could affect Britain’s NHS, and just about everyone involved – our party, the British government, the European Commission – have given firm assurances that they will not accept any provisions that would interfere with state provision of healthcare. Secondly, we in UKIP would far prefer to see an independent UK negotiate a bilateral deal with the USA (indeed but for the EU we would probably have had such a deal decades ago). Bizarrely, some people say that the UK – a top ten trading nation – is “too small” to do a bilateral deal with the USA. These people need to explain the fact that the USA has dozens of free trade deals with countries much smaller than the UK. But given that we are currently in the EU, an EU/US free trade deal (provided the conditions are right) is a great deal better than no deal at all.
The real frenzy of TTIP opponents, however, is focussed on ISDS. The way they tell it, ISDS will enable rapacious multinational corporations to ride rough-shod over the legitimate interests and decisions of democratic governments, and to sue them for vast amounts of money. This proposition is a travesty.
A free trade deal is a Treaty under which the parties agree to behave in a certain way. Virtually all treaties and contracts include terms that govern non-compliance, and provide redress for any party injured by such non-compliance.
The objectors write as if ISDS were some devilish plot dreamed up by Google and Amazon to dismantle democracy in Europe. But in fact ISDS provisions are a commonplace in existing international treaties, and don’t seem to have given rise to serious problems. Indeed a treaty that failed to provide mechanisms for dealing with non-compliance would hardly be worth the paper it was written on. And if democratic governments don’t wish to comply (as is their right), the solution is simple – don’t accede to the treaty.
Dutch Liberal MEP Merietje Schaake http://www.europarl.europa.eu has made a detailed study of ISDS. She writes: “…Although TTIP has brought ISDS to the current public debate, it is not new. There are over 3000 agreements containing ISDS clauses in the world, and many of the 1400 bilateral agreements EU member states have also contain ISDS. It has become a complex patchwork, and European member states even have ISDS in agreements with each other….”
It seems to me that if a government makes commitments under a free trade agreement, and then fails to implement them, causing an investor to suffer losses, it is entirely right and proper that the injured party should seek redress. That’s not anti-democratic. Indeed the enforceability of contracts is an essential element of free societies and free markets. Moreover these provisions promote investment. They enable a company to invest in a foreign country with confidence in the protection of the treaties. And because ISDS increases investor confidence, it encourages such investment, promoting new businesses, jobs and trade – which is what TTIP is designed for in the first place.
The mass of standard letters against TTIP which MEPs are now receiving show no grasp of these basic elements of international trade agreements. Rather, they seem to be motivated by knee-jerk anti-Americanism and protectionism.
My job as an MEP (besides the basic task of seeking to restore the independence of our country) is to promote the security and prosperity of my constituents. I believe that TTIP has the potential to do that, and while there are legitimate concerns that need to be taken into account in the negotiation process, I am satisfied that all parties will benefit from Transatlantic free trade.