Recipe for Ruin: TTIP the Transatlantic Trade and Investment Partnership

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John Hilary, Executive Director of War on Want, introduces TTIP, the free trade and investment agreement being negotiated between the EU and USA; talk given to Friends of Le Monde Diplomatique at Café Diplo, London, 4 November 2013

StopTTIP is the UK part of an international campaign to oppose the TTIP.  The following information kit, about the US/EU Transatlantic Trade and Investment Partnership (TTIP), was compiled on behalf of StopTTIP campaign by Linda Kaucher.         

Their e-list can be joined via:

StopTTIP-request@lists.riseup.net

 

 a)  The US/EU Trade and Investment partnership (TTIP), called Transatlantic Free Trade Agreement (TAFTA) in the US, is a bilateral ‘trade’ agreement between the US and the EU.  (The EU shifted from a primarily multilateral WTO focus to a bilateral agreement focus in 2005).  The TTIP goes much further than any previous EU ‘trade’ agreement in deregulating, in establishing the rights of transnational corporations and in undermining the ability of governments to control corporations.  It is set to completely change our society, and is already in process, as with the NHS.

 This agreement was formally launched at the G8 meeting in July 2013, but has been in process for much longer.  The decision to launch the agreement supposedly involved waiting for a final report from a ‘High Level Working Group on Jobs and Growth’, though it was obvious that the recommendation would be for a free trade agreement.  Although information about the ‘HLWGJG’ was not easily obtained, there was actually no membership list for this group and the ‘decisive’ report was just produced by the usual EU and US trade bureaucrats.

The WTO Doha Round ground to a halt because in the context of the World Trade Organisation, developing countries were able to join together to resist the demands of western governments and the transnational corporate agenda.

So in 2005 big business pushed the EU to change direction with its trade policy.  Peter Mandelson was Trade Commissioner and the EU Trade Commission produced the Global Europe document, mostly a copy of a business lobby document, and the EU shifted to pursuing bilateral and regional trade agreements.

The EU is now either considering, negotiating, or has completed free trade agreements with most countries of the world.

b)  In parallel to the transatlantic TTIP, there is a Trans Pacific Partnership agreement (TPP), with similar aims and inclusions to the TTIP.  The US is party to both. 

 The twelve countries in the TPP are Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico New Zealand, Singapore, Peru, Philippines, US, Vietnam.  As at December 2013, the TPP could be finalised very soon, unless any of the 12 included countries reject it.

c)  ‘Trade’ and ‘international trade agreements’ are different.  While most people would consider trade to be good thing, international trade agreements give rights to transnational corporations while reducing states’ rights to regulate them, thus reducing democracy.

Tariffs on goods between the US and the EU are already minimal, so the TTIP won’t make much difference in that regard, though this the aspect ‘trade’ deal that is often emphasised.

Trade-in-services liberalisations, talked about much less in relation to trade agreements, give corporations rights.  The services categories, as defined by the WTO, are Business, Communication, Construction and Engineering, Distribution (includes food), Education, Environment (includes water, waste, nuclear waste), Financial, Health, Tourism and Travel, Recreation, Cultural, and Sporting, Transport and ‘Other’ – so it is a comprehensive list.

The usual way of including services in trade agreements, including in WTO agreements, was by countries listing the services that wanted to include.  This is ‘positive’ listing.  However, the EU is now using ‘negative’ listing, including in the TTIP, whereby countries list the services they want excluded from the deal.  This is much more encompassing and coercive.

International trade agreements are for the benefit of transnational corporations.  For the most part, domestic firms cannot use the provisions and do not benefit from them.   In fact trade deals set the stage for domestic firms to be squeezed out by transnational firms, for instance on public procurement contracting.

d)  All free trade agreements include goods and services and intellectual property rights but the additional elements of the TTIP that are the main part of the agreement are much more far-reaching.  These are regulatory harmonisationinvestor state dispute settlement and the intention to establish global rules via these trade agreements.

e)  ‘Regulatory harmonisation’ means ‘harmonising’ regulation between the EU and US downwards to the most lax form, across all areas, to suit transnational corporations.  This will mean the degrading of regulation on health and safety, food, environment, labour standards, privacy and much more, including financial services regulation.   The NHS is now already ‘harmonised’ with the US corporate-access public health model.

As this ‘trade ‘deal is a corporate agenda, regulatory harmonisation will clearly be in a downward direction, getting rid of what are called ‘trade irritants’ such as the EU’s bans on GM food, chlorinated chicken and hormone loaded beef’ and other higher EU health and safety standards.  In another example, ‘harmonising’ our public service broadcasting model with that of the US will mean big changes to the BBC.

State-owned enterprises are a particular, named target in this agreement.

f)  TTIP and TPP will also include Investor State Dispute Settlement (ISDS), allowing transnational corporations to sue governments directly for the loss of any future profits resulting from any government action, at any level, such as new legislation.  Where ISDS is already included in ‘trade’ deals, it is shown to lead either to big pay-outs from governments to transnational corporations or to deter governments from legislating – the ‘chill’ effect.

 There are many examples around the world of where ISDS has had or is having these effects, for instance where environmental legislation has not gone through because of the threat of legal action.  Canada failed to legislate for cleaner petrol, Germany is being sued for ending its nuclear power program, as is Australia for its cigarette plain packaging legislation.

 g)  TTIP and the TPP are intended to set global ‘trade’ rules which will eventually become the norms for the multilateral WTO, but formulated outside of a structure that allows other countries to jointly resist the corporate-dominated agenda.

The WTO Doha Round collapsed because within the WTO structure developing countries are able to join up to resist the western corporate-driven agenda.  This TTIP/TPP mechanism for achieving globalised trade rules bypasses that possibility.

h)   As with all bilateral ‘trade’ agreements, TTIP and TPP negotiations and agreement texts are secret until the negotiations are completed.

 The European Parliament, the European Council, member state parliaments and the public cannot see the content of TTIP negotiations and texts so as EU citizens we are not able to know the commitments being made on our behalf, and on behalf of future generations until negotiating is finished.  Yet business has privileged access to this information and to influencing negotiators to obtain what it wants from these deals.

There is no justifiable reason for the secrecy because negotiators on both sides, as well as business, know what is on the negotiating table.  The information is kept secret from the public, which might protest commitments being made on its behalf.

i)  International trade agreements are effectively permanent.

International ‘trade’ agreements are intended to tie future governments into neoliberal deregulation whatever their political persuasion.

What makes them effectively irreversible are Dispute Settlement Mechanisms, as in the WTO, whereby states can be challenged in relation to not keeping to their commitments, but much more so by Investor Protection Dispute Settlement whereby corporations can sue states directly for financial compensation.

For ISDS, arbitration takes place in courts of the corporation’s choosing, outside of the legal framework of the host state, with arbitration panels that make decisions on the basis of ‘free trade’ rather than any other values.

 j)  Although international ‘trade’ agreements are negotiated government-to-government (by the Trade Commission for EU member states), they are promoted and driven by transnational corporations, which benefit from states being bound by international trade law.

 The Commission’s ‘competency’ to negotiate international ‘trade’ deals on behalf of Member States was strengthened in the Lisbon Treaty, though this change was not part of the public debate on the Lisbon Treaty before it was passed and came into force.

Transnational firms and industry organisations have a great deal of access to the Commission to dictate what they want from the Trade Commission’s negotiating.  These include American lobbying organisations, such as the American Chamber of Commerce and US legal firms which, because of legal confidentiality, do not have to disclose on whose behalf they are lobbying.

k)  The main corporations are the same transnational financial service corporations that caused the global financial crisis.  The City of London is the world’s main international financial services centre, with transnational banks and insurance corporations, the Big 4 accountancy firms and other financial service firms based there.  The City of London has a major influence on the EU’s international ‘trade’ agreements.

 The power of the City of London Corporation and its front group, TheCityUK, in UK policy input into both EU internal and EU external trade policy, and in the formulation of UK domestic policy to fit with those broader ambitions, is only just now starting to emerge.

The City of London Corporation has a dual role, as a Local Authority for the City square mile and also as the organisation promoting the interests of the financial services industry and channeling its demands to policymakers e.g. in  both Houses of Parliament, in Brussels and at the World Trade Organisation (WTO).

In 2010, the City of London Corporation joined with International Financial Services London (IFSL), which had been the financial services lobby organisation for a decade, to initiate ‘TheCityUK’ as the financial services lobby organisation.

At that time, according to the website, there was a third partner, UK Trade and Industry (UKTI), a government department that straddles the Departments of Business, Innovation and Skills (BIS) and International Development (DfID).  This showed government and business joined at the hip.  However the overt involvement of UKTI was quickly removed from the website.  Now, senior civil servants from the main departments of Treasury, BIS and others attend meetings as ‘observers’.

Members of the committees of TheCityUK are from the biggest financial institutions and include individuals who have been main movers in deregulation and the liberalised international ‘trade’ agenda over the last 3 decades.

Considering the power of the City, its role in dictating policy, and its £90m budget to influence policy and public perceptions, it attracts relatively little attention in the public sphere and this is even more the case for its lobby organisation, TheCityUK.

One of TheCityUK’s committees is the Liberalisation of Trade in Services (LOTIS) committee, previously a committee of IFSL.   In this committee, the existence of which was secret until uncovered by Non-Government Organisation World Development Movement, senior staff from major financial service organisations dictate UK input into EU trade policy to the UKTI bureaucrats who attend for this purpose.  These bureaucrats then take that message directly to the fortnightly EU Trade Committee meetings of trade bureaucrats from all member states and the Trade Commission.

In this process, transnational financial service firms direct UK input into EU international trade policy, bypassing the parliament, the public and potentially even the UK government.

In Brussels, the European Services Forum (ESF), representing transnational corporations including US companies and working closely with TheCityUK, has privileged access to influence and direct EU trade negotiators, and to influence the European Parliament (EP) in respect of its role in ‘trade’, especially at the important committee stage via the EP’s International Trade committee (INTA).

l)  As part of the TTIP, a framework for the ongoing ‘harmonisation’ of all future regulation is being put in place with the setting up of a Regulatory Co-operation Council.  This non-elected Council will be able to override national and EU legislating.

This will make this a ’living agreement’ as the Trade Commission calls it, continuing to dominate government regulating into the future.

It will allow for the fast completion of the TTIP because this committee will be in place to continue the regulatory harmonization process, for all existing and new regulation.     

The plan is also for business ‘stakeholders’, including from the partner country, to have a role in the preparation of all future regulation.  So e.g. US corporations will have a say in all EU regulation and UK government regulation at the draft stage.   

m)  ‘Public procurement’, that is all government spending, is a major target in the international trade agenda.

Government spending is a big part of the global economy.

‘Public Procurement’, in trade terms, means transnational corporations gaining rights to access all government spending, including public services like the NHS.

This part of the trade agenda is largely hidden.

n)  The TTIP is being rushed through, with the aim of completion by the end of 2014.

There are specified ‘rounds’ of face-to-face negotiations, with the third round in mid Dec 2013.  These are a focus for media, although the content is secret.  However negotiations are actually continuous, some involving sections of  negotiating teams and some by digital conferencing.

o)  TTIP will include provision for the movement of temporary workers across borders.  This will inevitably mean cheap labour, and the undermining of working conditions and labour rights, especially in a context of overall degraded regulation. 

Companies moving workers temporarily across borders for services work, primarily as cheap labour, is a big part of the neoliberal international trade agenda.  It is called ‘Mode 4’ in ‘tradespeak’.   The EU includes Mode 4 provision in all of its ‘trade’ agreements, and stipulates skilled workers, that is with a degree or equivalent

Most EU trade negotiations are with developing countries and its Mode 4 offers can be an important factor in getting countries to sign up to trade deals and to help them ‘sell’ the trade deals domestically.

For instance, in the EU/India free trade agreement, negotiated for 5 years but now in an apparent lull, the single demand that the Indian government is making is for any Indian firm to be able to supply workers into the EU.  Leaked documentation affirms that the UK is the main and willing target for this cheap labour supply, and WTO frameworks, which are used generally, do not allow any numerical limits or quotas on Mode 4.  David Cameron has confirmed these conditions on his several visas to India as UK Prime Minister.

Officials at the very top of the Trade Commission repeatedly lie about the EU’s Mode 4 offers, for instance pretending that the India deal is about the Intracorporate Transferee (ICT) Mode 4 category, that is workers moved across borders by transnational companies to work within the same company when the Indian government’s demand in this deal is for any Indian firm to supply skilled workers, a different Mode 4 category.  The UK and the EU already have ICT commitments from 1995 under the GATS (General Agreement on Trade in Services) on ICTs – and this system is already abused in the UK.

This secretive EU/India free trade agreement, involving almost a third of the world’s population (India + EU) still being negotiated and could be signed any time.

Mode 4 will be a part of the TTIP. The US has withheld Mode 4 offers in its trade negotiating Instead it has a visa quota system for temporary skilled worker (H1B visas), a system that India has long tried to break through.

Mode 4 offers in the TTIP will not just apply to EU and US forms supplying labour across borders, but also subsidiaries from third country firms established in either of those partner states, supplying workers into the other partner state.  So, for instance, the many Indian corporations established in the UK would be able to utilise TTIP provision to supply workers into the US, or, if established in the US, to similarly supply workers here.

Yet a main claim of the TTIP ‘spin’ is that it will create jobs on both sides of the Atlantic, as in  the overused phrase ‘jobs and growth’.

p)  The Trade Commission has set up a special unit to attempt to control public perceptions of the TTIP.

 The Commission’s strategy document on this, produced for a meeting of member states representatives, has been leaked.  Secrecy, spin and technical language are usually very effective in keeping the trade agenda out of the media and out of the public sphere.  However this document acknowledges that there is unprecedented public interest in this agreement, requiring a spin strategy that is ‘radically different’ and tailored to individual Member States.  The strategy is about trying to put across a proactive message of claimed benefits and to avoid being forced into a defensive position for instance on regulatory degradation and ISDS, and also to ‘reassure’ third countries, particularly China (indicating there must be unease about the TTIP agreement in third countries).

The point is made that the co-operation of member state government propaganda machines is essential to this.

This means we are paying even more to be targeted by ‘trade’ propaganda.

There are observable signs of this radical strategy being enacted, including in the UK. One aspect appears to be a seeming climb down from an absolute hard line ‘free trade’ agenda, with some minor concessions (e.g. the reconsideration of UK plain packaging legislation) in order to manipulate public opinion for the big prize of the agreement.

UK Trade and Industry, the government department that liaises between the Corporation of London and the EU Trade Commission to ensure that the financial services industry gets the trade agenda it demands, is also now placing large ads in newspaper, paid for from the public purse, to obliquely promote the benefits international trade.

q)  Once TTIP negotiations are completed, the European Parliament will only have the right to say yes or no to the agreement, with no amending. It will then, as with all EU ‘trade’ agreements, be provisionally implemented before it comes to member state parliaments for ratification.

 The European Parliament can hardly be an effective democratic mechanism when so few people know who their MEPs are and know even less how they vote.

Aside from that systemic failing, the European Parliament has limited powers.  And in regard to trade agreements, its power of assent on trade deals means that the Parliament can only vote for or against the deal, at that late stage.

r)  In the US, the government is seeking ‘Fast Track’ provision or Trade Promotion Authority (TPA) from the Congress.  If granted, US representatives will similarly only be allowed to pass the agreement or not, without amendment.

 The vote on this is likely to be in January 2014 and opposition to it is growing.  US trade deals have only ever gone through under Fast Track.

s)   The WTO is being used in an ongoing way to further the deregulation agenda.

It is important to recognise that the WTO is subject to the same power plays of transnational corporate forces that dominate EU external trade policy, internal EU policy and UK national policy-making.

Apart from the minimal part of the Doha Round agenda that was signed up in Bali in early December 2013, other important agreements are quietly proceeding within the WTO, without publicity.

There is a grouping of some WTO members within the multilateral WTO who are signatories to a plurilateral Trade-in-Services agreement (the TiSA) for which the intention is to gradually coerce other countries to join, towards a global services agreement, a similar strategy as that intended for the TTIP and the TPP.  There is a similar mechanism and intention for the plurilateral Global Procurement Agreement within the WTO structure.

Resources

EU Commission’s (leaked) mandate from EU Council to negotiate TTIP

http://www.s2bnetwork.org/fileadmin/dateien/downloads/EU-TTIP-Mandate-from-bfmtv-June17-2013.pdf

EU Commission’s (leaked) PR strategy “Communicating on TTIP” http://corporateeurope.org/trade/2013/11/leaked-european-commission-pr-strategy-communicating-ttip

EU Commission’s (leaked) concept paper on regulatory coherence

http://corporateeurope.org/sites/default/files/ttip-regulatory-coherence-2-12-2013.pdf

Corporate Europe Observatory’s analysis of the regulatory coherence document  http://corporateeurope.org/publications/regulation-none-our-business

George Monbiot articles on TTIP:

http://www.theguardian.com/commentisfree/2013/nov/04/us-trade-deal-full-frontal-assault-on-democracy

http://www.theguardian.com/commentisfree/2013/dec/02/transatlantic-free-trade-deal-regulation-by-lawyers-eu-us

Big business control of UK policy-making,including the UK government White Paper on Trade :  http://www.theguardian.com/business/2012/jul/10/brittan-cameron-increase-skilled-foreigner

Scapegoats as Tories crackdown on migrants

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Tories crackdown on migrants

From Liam R Carr

The Tories have  announced new plans to crack down on migrants who use the NHS. On the face of it, you can see why this policy would appeal. Everyone has had to wait to see their GP, we all know some one who is on a waiting list for an operation or an appointment with a consultant. It would be easy to assume that the waiting times are due to the countless migrants in front of us in the queue, but this is not the case.

Migrants make use less use of NHS services than the general population because they tend to be of working age and in good health. The reason for increased waiting times is that the NHS is going through a top down reorganisation, and GPs are now commissioning services as well as treating patients. There are 6000 fewer nurses working in the NHS than there were when the Coalition took power.

Refusing to treat migrants in the NHS does not make medical sense, because refusing GP treatment to migrants will lead to routine cases becoming emergency cases. If migrants are denied early treatment for infectious diseases it could lead to increased cases in people with compromised immune systems.

The most ironic thing about the proposal is that our NHS simply could not function without workers who have come from outside the UK. Without these there would be around 45,000 fewer doctors, nurses, pharmacists, biomedical scientists and operational staff serving the public in our NHS today.

Again, the Tories are putting ideology before evidence. This is not a policy that will help hardworking people, it is a policy designed to appease a group of voters in Tory-held seats in the south who may be thinking about voting UKIP at the next election.

There is a need for sensible immigration policy. There is a need to address the skills shortage in the fields of medicine and science. There is no need for the scapegoating of migrants.

The Systematic Dismantling of the NHS

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The Systematic Dismantling of the NHS

By Prue Plumridge

This is the letter I wrote which was printed in the Maldon and Burnham last week. This is the letter in full as the M&B did not print it all.

‘Dear Sirs

On the 5th July it was 65 years since the birth of the National Health Service, without question one of Britain’s greatest achievements, and the envy of many countries around the world. However, as a result of the Health and Social Care Act which came into force on 1st April 2013 we are now seeing the gradual and systematic dismantling of the NHS which has been, until now, a part of a holistic system that plans and delivers care within the state system.

The government deny that it is privatisation by the back door but the evidence is becoming clearer that this is the ultimate intention. Already the planned £20 billion of cuts (or efficiency savings as they are referred to) are beginning to affect the levels of patient care throughout the NHS including in geriatrics, midwifery and mental health. Furthermore the government clawed back £500 million of a budget underspend for 2012/13 which could have been rolled over. To make matters even more concerning some government ministers are even discussing the possibility that ring fencing which currently protects the NHS budget from further cuts should be abandoned.

This is all having an increasingly severe effect on the service. Seven thousand nurses have already been laid off and this figure is expected to rise. Such reductions are already increasing the pressure on those that remain and can only lead, ultimately, to a reduction in the levels of care. There are closure plans for hospitals, A&E’s, maternity units and mental healthcare centres across England and Wales and already there are 18,000 fewer hospital beds. Readers will, I am sure, also be aware from media coverage that A&E’s country-wide are in crisis, waiting times have increased and doctors are warning that they will no longer be able to care for patients adequately. At the beginning of June figures showed that more planned operations were cancelled in the first few months of this year than for any similar period in almost a decade and senior surgeons are warning that the crisis in accident and emergency is cascading through the NHS. Recent figures show too that the number of ambulances who were turned away from A&E has increased by 24% whilst the roll out of the NHS 111 service, which replaces NHS Direct, has been chaotic and fragmented leaving it currently unfit for purpose.

Section 75 of the Health and Social Care Act requires contracts to be put out to tender to the private sector. Already multi-million pound contracts have been awarded to companies like Virgin and Serco which to date equal around £7 billion. It is important to be aware that if public providers go out of business, as they are passed over for contracts or are shut down because a private provider has undercut them, the patient may be stuck with a worse service as the public providers will no longer exist and the private provider will be free to raise its prices later. Hinchingbrooke hospital has already been privatised and it is very likely that we will see many more such privatisations in years to come. I am sure, too, that it will not have escaped readers’ notice that there has been increased advertising for private health insurance on TV, Radio and via unsolicited emails and post. This must tell us something.

What is equally shameful is the attempt by government to blame all the problems of the NHS on everyone but themselves. Older people or nurses and doctors, who we are told lack compassion, have all come into the firing line in a government attempt to deflect attention from the consequences of its reforms. It is not the fault of the elderly or indeed the dedicated, compassionate and hard working health professionals who are under increasing pressure as these cuts start to bite.

We should not forget either that the Act came into law when many MPs, Lords and Baronesses who have, or have had financial interests in private health care voted for it and a further incentive may have been the donations the Conservative party received from companies hoping to cash in on the carve up of the NHS. Surely a conflict of interest?

Dr Clare Gerada, Chair of the Council of the Royal College of General Practitioners said in a recent televised discussion that she believed that we are seeing privatisation by the back door. She said “If you take privatisation as moving resources – state resources (i.e. tax payers’ money) into the profit or not for profit sector that is privatisation. It’s moving resources that currently belong to the state sector into the ‘for profit’ sector and [that] profit will not go back into the state it will go to shareholders.”

I would like to leave readers with a final thought by the Fleet Street Fox who wrote: ‘Despite talk of efficiency and value for money and market forces – all of which are a great idea – there’s never been, in the history of man, a privatisation which helped the end user at all. If you take a thing provided by the state, and give it to a private firm which needs to turn a profit, either the service has to be cut or the prices have to rise. It’s maths so simple even Jeremy Hunt could do it.’

The EU-US Free Trade Agreement must be opposed – for the sake of the NHS and more.

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The EU-US Free Trade Agreement must be opposed – for the sake of the NHS and more. 

‘This week marks the first round of negotiations for a far-reaching transatlantic trade deal. In the face of growing opposition to plans for expanded corporate powers in the proposed pact, the European Commission is trying to dispel concerns with propaganda. See through the rosy PR with Corporate Europe Observatory’s guide to investor-state dispute settlement - Unravelling the spin: a guide to corporate rights in the EU-US trade deal published by The Corporate European Observatory (re-posted in full below) 

If realisation that the National Health Service is to be privatised by the Coalition government did not dawn on many until it was too late, then the implication of the EU-US trade deal on privatised public services still is not fully appreciated. There is no doubt that privatisation of the NHS is a most unpopular policy, even among Conservative voters and so the cloak of deception woven by the Coalition was the only way this was going to be achieved.

Open Democracy explains how the real reason for the Health Care Act was the EU/US Trade Agreement. The Act is all part of a corporate-interest Trade Agreement. It has nothing to do with the health and well being of UK citizens, nothing to do with the will of the people, and absolutely nothing to do with democracy.

Summary and suggested action (Open Democracy) - It is in health that the effects of ‘harmonising’, towards this Free Trade Agreement, are already manifest. The fact that the NHS has been prepared for transnational investors as part of a planned US/EU free trade agreement should be made public

-  The similar threat to other areas should also be public.

-  The activities of the EU Trade Commission on our behalf should be an important part of the debate about EU membership

-  There is a job to be done on disseminating information and demanding reporting and analysis of the implications of the US/EU Free Trade Agreement, so that it is not just the perspective of transnational capital that is being presented. (The BBC has a Business Unit presenting this perspective but has no such unit for workers or public service users). The nationwide concern about the NHS and established networks of concern could be the means for a strong, clear and concerted public voice on this.

- The juggernaut of the trade deal backed by business voice propaganda is unlikely to be questioned otherwise.

- The lack of public information on this broader context of the NHS changes isgrounds for the Health and Social Care Bill to be repealed. The Opposition Labour Party needs to call for this.

- Raising the issue in relation to health would support information-seeking etc. for other areas which will be affected.

Syzygysue  extrapolated to the EU-US FTA, from what is known about the secret negotiations from the Trans Pacific Pact TPP, or Free Trade Agreement, when she posed the question ‘Are we already in the post democratic era?’ (Think Left)

.. Overarching all this is the transfer of sovereignty from nations to private corporate tribunals who will be empowered to compel governments to change their laws or pay unlimited fines.  Foreign companies will essentially not be bound by domestic laws.

This begs the question as to how much of the Tory/LD programme and the changes being forced on EZ countries, under the guise of ‘austerity’ were/are, in fact, in preparation for compliance with the proposed EU-US FTA

Human rights, environmental protection and employment rights could all be contested and overturned by private corporate tribunals.  The post-democratic age will have been enshrined in binding legislation… and all of it will be done in secret! .. 

( “Are we Already in the Post Democratic Era, Think Left”)

Following the increased support for UKIP,  the Conservative Party has been supporting a Referendum on Europe. Meanwhile, President Obama in May warned that if the UK did withdraw from the EU, the trade agreement would be put at risk (Guardian). This reinforces the argument that democracy may be at risk .. if it is not too late already. Indeed Red Labour must address the Elephant in the Room.

The following article from the Corporate European Observatory is reproduced below in full, and examines how propaganda is being woven by the European commission, and provides a guide interpreting what is really behind their spin.

Unravelling the spin: a guide to corporate rights in the EU-US trade deal

published by The Corporate European Observatory

“This week marks the first round of negotiations for a far-reaching transatlantic trade deal. In the face of growing opposition to plans for expanded corporate powers in the proposed pact, the European Commission is trying to dispel concerns with propaganda. See through the rosy PR with Corporate Europe Observatory’s guide to investor-state dispute settlement.

Consumer groups are opposed to the proposed sweeping corporate rights. Trade unions, environmentalists and digital rights activists, too. All (centre-)left groups in the European Parliament have voted against it. Some EU member states have raised concerns. Media reports have started sounding the alarm. But according to its leaked negotiating mandate, the European Commission still wants to enshrine extreme powers for corporations in the controversial EU-US trade deal.

So-called investor-state dispute settlement provisions would enable US companies investing in Europe to challenge EU governments directly at international tribunals, whenever they find that laws in the area of public health, consumer, environmental or social protection interfere with their profits. EU companies investing abroad would have the same privilege in the US. (See our briefing A transatlantic corporate bill of rights.)

This is an attack on democracy and legislation in the public interest. The companies can claim compensation if governments create regulations that go against the corporate interest. One only has to look at corporate claims against governments based on similar prior agreements to get a taste of what’s to come: tobacco giant Philip Morris has sued Uruguay and Australia over health warnings on cigarette packets; multinational polluter Vattenfall is seeking $3.7 billion from Germany following a democratic decision to phase out nuclear energy; and US-company Lone Pine is suing Canada for US$250 million after the country imposed a moratorium on shale gas extraction (fracking) in Quebec over environmental concerns. According to the UN, last year, investor-state tribunals decided 70% of such disputes in favour of the investor, ordering taxpayers to pay billions of dollars in compensation.

Why would you grant business such a powerful tool to rein in democracy and curb sound policies made in the interest of the public? Why would you give foreign investors more rights in your legal system than your domestic investors, let alone communities and citizens?

To head off concerns amongst an increasingly concerned European public, the Commission has begun a misleading propaganda drive. Let us guide you through some of its key claims:

Spin #1: EU member states have not been sued in previous investor disputes

On its Q&A website on the transatlantic trade deal, the Commission claims that “the EU’s Member States have been regulating for years and have not been challenged” in investor-state disputes under similar treaties.

This is selective blindness. What about the afore-mentioned lawsuit by energy giant Vattenfall against Germany, challenging the country’s phase-out of nuclear energy? And the ongoing claim by Chinese financial company Ping An against Belgium over the bailout of the Fortis Bank? What about the recent award of €22 million that a Dutch insurer won against the Slovak Republic because the country had reversed health privatisation policies? At least 15 different EU member states have faced investor-state challenges. With 20 known claims, the Czech Republic is the fifth most sued country in the world.

Is the Commission ignorant of this evidence? Or is it just telling blatant lies to dispel pesky concerns?

Spin #2: Legislation is not at risk

The Commission also claims that “including measures to protect investors does not prevent governments from passing laws, nor does it lead to laws being repealed. At most it can lead to compensation being paid”.

In fact, this mild-sounding “at most” scenario where a government has to compensate the company can mean quite a raid on public budgets. Last year, the highest known damages to date, US$1.77 billion, were awarded to US oil company Occidental against Ecuador – for the termination of an oil production site in the Amazon. In 2003, the Czech Republic had to compensate a media corporation with US$ 354 million – the equivalent of the country’s entire health budget.

Just the threat of a multi-million-dollar lawsuit can be enough for legislation to be abandoned or watered down. In the Philip Morris claim against health warning labels on cigarette packs in Uruguay, the country gave into pressure before the arbitration even began, and reduced the size of the labels. Canada also withdrew proposals for mandatory plain-packaging for cigarettes after Big Tobacco threatened investor claims.

On top of that, investment arbitration tribunals do absolutely have the power to order the repeal of a government measure. According to leaked texts from the EU’s ongoing trade negotiations with Canada the Commission itself has proposed that the “repeal of the measure concerned” – meaning: the cancellation of a law or government act – should be an option if a tribunal finds that it violates the agreement. Canada will be the first country which far-reaching EU-wide investor rights will be agreed with, likely to serve as a template for the pact with the US.

If that does not put legislation at risk, what does?

Spin #3: Investor-state dispute settlement promotes growth

In a factsheet on investor-state dispute settlement, the Commission states that “investment protection plays a fundamental role in promoting and securing economic growth in the EU” – because it reduces the risk of investing.

In the real word, this is not always the case. Qualitative research suggests that investment treaties are not a decisive factor in whether investors go abroad. And while some econometric studies find that the treaties do attract investment, others find no effect at all. People who think otherwise might want to read Lauge Poulsson’s review of the existing research.

Some governments are also realising that the promise of foreign investment is not being fulfilled. In the words of a South African government official: “We do not receive significant inflows of FDI [foreign direct investment] from many partners with whom we have BITs [bilateral investment treaties], and at the same time, we continue to receive investment from jurisdictions with which we have no BITs. In short, BITs are not decisive in attracting investment.” Due to the lack of economic benefits alongside enormous political and budgetary risks, South Africa has recently stopped renewing certain investment treaties.

So, what evidence exactly is the Commission referring to when it claims that investor-state dispute settlement promotes growth?

Spin #4: The EU is formulating investor rights that safeguard public policy

In public debates and on its website the Commission also claims that it is clarifying and thereby limiting some of the excessive investor rights “to ensure that genuine regulatory action cannot be successfully challenged”. In a media comment, European Commission Spokesman for Trade, John Clancy stated: “The EU is at the vanguard of international efforts to make sure that companies cannot abuse ISDS [investor state dispute settlement], and we will be pushing for safeguard clauses against frivolous claims.”

Oh really? According to the Commission’s negotiating mandate for the transatlantic trade deal investment protection “should be without prejudice to the right [...] to adopt and enforce […] measures necessary to pursue legitimate public policy objectives” (emphasis added). This creates a necessity test that places a big burden of proof on governments to justify their actions. Is Australia’s plain packaging law for cigarette packs necessary to protect public health? Was Germany’s exit from nuclear energy necessary? Might there not have been other, more effective measures? It would be up to an offshore tribunal of unaccountable private lawyers to decide.

Second, a safeguard clause against frivolous claims as proposed by the Commission would not have led to the dismissal of any of the controversial attacks on sound public policies that Vattenfall, Philip Morris and the like have launched – because they are based on allegations of real violations of investment treaties whose terms tend to be very broad. Claims are only considered frivolous when there is a complete lack of legal merit. Under existing rules, states can already ask arbitrators to dispose swiftly of frivolous claims, but not a single such case is known.

Finally, this detailed analysis of a leaked text from the EU’s trade negotiations with Canada (dated May 31, 2013) concludes that the EU has failed to “introduce any major novel changes meant to address the problems that have come to light in investor-state dispute settlement.” The text is likely to be a template for the EU-US pact.

Investor rights – European Commission style – as a way to safeguard public policy? Wishful thinking – at best!

Spin #5: Cultural diversity will not be compromised

On its Q&A website on the transatlantic trade deal, the Commission promises to “not compromise” Europe’s “cultural diversity, for example in film production and television programming” – adding that the audiovisual sector “is not part of the negotiations dealing with services and the right to establishment.”

This careful wording follows France’s adamant insistence to exclude audiovisuals from the EU’s negotiating mandate, to protect its film industry from Hollywood. But what it means in reality is that the cultural sector would still be governed by the investment protection rules of a potential deal, including investor-state dispute settlement. According to German public television providers, “the potential for challenges by multinational firms in the entertainment business would be great.”

Spin #6: European investors face problems in courts elsewhere

In a recent media comment, Commission spokesman John Clancy stated: “The fact that a country has a strong legal system does not always guarantee that foreign investors will be adequately protected.” In its factsheet, the Commission argues that investors need to be able to bypass judicial systems in other countries through a parallel system of investment arbitration because domestic courts suffer from “bias or lack of independence”. It also claims that there are “examples of cases where states have expropriated foreign investors […] and deprived them of any access to local courts”.

Which examples exactly? MEPs have repeatedly asked the Commission to provide evidence of access to local courts being denied in Canada. The Commission gave two weak examples where companies did not even try to go to local courts. Asked specifically about problems faced by European investors, it admitted: “There is little publicly available information available in this context”. Neither has the Commission given any proof of discrimination against foreign firms in US courts.

On the other hand, the Commission remains completely silent on the rampant corporate bias and vested interests at play in private investment arbitration tribunals. Last year, our Profiting from Injustice report uncovered how a small club of lawyers riddled with conflicts of interest is securing investor-friendly interpretations of the law and sustains a continuous flow of multi-million dollar lawsuits.

So, while the Commission has yet to prove that there is anti-foreign-investor behaviour in US courts, there is an enormous weight of evidence of the corporate bias in the parallel legal system it is proposing instead.

Spin #7: The EU will guarantee the independence of the arbitrators

Responding to widespread concerns about conflicts of interest among the private lawyer panels which ultimately decide investor-state disputes, the Commission is proposing a code of conduct – “to make sure that those who are called in to rule on our cases are also the right people”.

leaked version of this code of conduct indeed contains bans that, if implemented strictly, could tackle some of the conflicts of interest at the heart of the arbitration system. For example, arbitrators “shall not be influenced by self-interest, outside pressure, political considerations, public clamour” etc. Also, an arbitrator “may not use his or her position on the arbitral tribunal to advance any personal or private interests” and “must avoid […] acquiring any financial interest that is likely to affect him or her impartiality or that might reasonably create an appearance of impropriety or bias.”

Taking these words seriously would require banning the global elite club of arbitrators – many of them European – who have decided the majority of all investor-state claims thus far. Unlike judges, arbitrators have no flat salary but earn more the more cases they rule on. Any arbitrator earning significant income from these disputes faces an incentive to pave the way for more business in the future with their rulings. This observation was also made by the Singaporean attorney general who noted that it is “in the interest of the entrepreneurial arbitrator to rule expansively on his own jurisdiction and then in favour of the investor on the merits because this increases the prospect of future claims and is thereby business-generating.”

Whether the EU will really kick out these ‘entrepreneurial arbitrators’ remains to be seen, considering the absence of monitoring and enforcement mechanisms from the proposed code of conduct. Just claiming arbitrator independence and putting in place a ‘tick box’ exercise clearly won’t be enough.

Spin #8: Some of the investor privileges cannot be enforced in domestic courts

In its factsheet, the Commission explains that the investor rights which it wants to incorporate in the EU’s future international investment agreements “are not necessarily incorporated into the domestic system” of the signatory states. The investor needs a parallel legal system – investment arbitration – to enforce these rights. Thus the need for investor state dispute settlement.

Finally some honesty! This is exactly what the Commission’s corporate agenda is about: granting multinationals far greater property rights than any domestic firm, any community, any individual is granted by any constitution in the world. And creating an overreaching legal system by which these superior rights can be enforced.

Beyond the rosy PR: a corporate power grab

So, here’s what investor-state dispute settlement in the proposed EU-US trade deal is really about: exacerbating the imbalance between corporations and the 99% by granting a powerful weapon to fight regulation of some of the world’s most powerful multinationals. They will use that weapon to enshrine existing inequalities and launch a toxic attack on democracy, both in the EU and the US.

Don’t be fooled by the European Commission’s spin. Don’t let its rosy stories distort public debate about this looming transatlantic corporate bill of rights.”

References and Further Reading

From Think Left: