What does the biggest free trade deal in history mean for the environment?
By Karl Mathiesen. theguardian.com, Friday 14 March 2014 12.32 GMT
What free trade advocates say: The US says the deal would “significantly reduce the cost of differences in regulations and standards by promoting greater compatibility, transparency, and cooperation, while maintaining our high levels of health, safety, and environmental protection”.
In the UK, all three major parties are backing the proposal. John Healey, Labour MP on cross-party committee for trade told parliament last month: “The size of our combined economies and the scale of the potential deal mean that [TTIP] could set standards for future agreements with other countries on consumer safeguards, workers’ rights, environmental protection, trade rules and legal process.”
Coalition government minister Ken Clarke said today:
“We are negotiating on the basis that the deal should simplify regulatory procedures to avoid duplication but be neutral on overall standards of protection for the environment. It should leave untouched the ability of governments to set their own standards whilst addressing protectionist measures and at the same time ensuring investors can seek compensation where they face unfair expropriation.”
EU commissioner De Grucht said last month:
Standards are already being set by our different regulatory agencies on both sides of the Atlantic, not by TTIP negotiators.
What we aim to achieve in TTIP is that these regulatory agencies coordinate more closely with each other:
…so that where safety levels are similar, double testing and double inspections can be avoided in future to save companies money.
….and, so that future differences in regulation can be avoided before they become a trade hurdle for companies, especially for SMEs.
That also means: yes, there will be areas where we will not be able to agree. That’s ok.
What are the environmental concerns?
TTIP’s environmental credentials have been challenged by a broad coalition of green groups. Investor-state dispute resolution is the major bogeyman for these groups.
TTIP includes a proposed mechanism for corporations to take countries to an international tribunal to seek compensation if their economic interests have been compromised by state regulations. Corporate Europe Observatory raised a number of concerns about how these supra-national courts might affect decision-making and reduce environmental standards.
The first is that Member States will be afraid to introduce new and effective legislation that may have positive social and environmental impacts but which risks upsetting our trade partners. Companies will be quick to seek arbitration if they believe their commercial interests are compromised. As a consequence of this ‘chilling’ effect, Member States will only introduce legislation if they are sure that they will not be sued.
The second concern is the cost for Member States. The arbitration panels over these disputes may have the ability to levy crippling fines in line with “potential” profit loss. One can easily see how smaller Member States would effectively handover sovereignty to multinationals as fines could be equal to a significant proportion of GDP.
The third concern is why the independent dispute mechanisms are needed in the first place. Existing EU commercial and single market laws are overseen by myriad court jurisdictions, including the European Court of Justice set up under the European Treaties. Why the need for something operating outside these conventional arrangements?
A European Commission report found that:
If TTIP contains broadly worded investment protection clauses, ISDR could hamper the EU and Member States in efforts to establish regulations seeking to protect their citizens or the environment.