Why we’re fighting to make TTIP a force for good

By Geraint Davies MP, Helen Goodman MP, Chris Matheson MP, Kate Osamor MP and Daniel Zeichner MP 

Trade is a good thing. Not many people would disagree with that. It can create wealth, jobs and innovation; pull people out of poverty; and cement relationships between countries. So let’s start by being clear: we are in favour of trade, of growing trade, and of the EU.

Last Thursday, Labour led the way in calling for greater scrutiny of TTIP. Geraint Davies secured a Back Bench Business Debate in the main chamber of the House of Commons under the motion:

That this House believes that the Transatlantic Trade and Investment Partnership, the Comprehensive European Trade Agreement, the Trade in Services Agreement and any associated investor-state dispute settlement provisions should be subject to full parliamentary scrutiny in the UK and European parliaments.

We didn’t do this because we are against trade.

So why did we do it?

TTIP is a trade deal between the United States and the European Union. It is currently being negotiated and is intended to break down barriers and increase trade between the EU and US. But we run the risk that it will be adopted without proper consultation with national parliaments and will contain provisions that will harm our environment, small businesses, public services and rights at work.

The question we wanted to ask is: is it worth it?

The Department for Business, Innovation and Skills has analysed the benefits of TTIP. They estimate that by 2027, Britain will raise an additional £7 billion in GDP as a result of TTIP. While that’s a big number in itself, it’s very little when you consider that the Office for Budget Responsibility has a margin of uncertainty of 6% – £160 billion – in our GDP forecast for 2020.

£7 billion is the equivalent of £110 a year per person, or £2 a week – the price of a not-very-fancy coffee. If you like coffee, perhaps it’s worth having.

But when we look at what we’re potentially trading off, it quickly becomes clear that, coffee-lover or not, we run some serious risks.

Firstly, at the moment TTIP is set to include something called the investor-state dispute settlement (ISDS).

The ISDS would allow companies to sue governments if they act against their commercial interests. Rather than being tried under existing British laws that already offer investor protection through breach of contract laws and judicial reviews, these big companies would benefit from a special tribunal meeting behind closed doors.

The ISDS is already in use in other trade agreements and has been used by companies to bring cases against governments on the basis of damaging commercial interests. For example, the Lone Pine fracking company is suing the Canadian government for hundreds of millions of dollars because Quebec brought out a moratorium on fracking. Philip Morris is suing Uruguay and Australia over plain packaging for tobacco.

Veolia has sued the Egyptian Government for alleged breach of a contract for waste disposal in the city of Alexandria on the basis of a bilateral agreement between France and Egypt. At a time when Egypt is in a vulnerable and uncertain position politically, we should be helping it to develop democratic structures. When the Egyptian Government introduce a minimum wage that will probably benefit most ordinary Egyptians, we should support their action, but apparently Veolia has sued the Egyptian Government for taking that action.

Public policy could end up at the mercy of big investors because the difference between the law already available in public courts and that offered by ISDS tribunals is that public courts weigh the public interest against the commercial interest. They have a duty to take public interest into account. Tribunals are concerned solely with the commercial interest.

Ministers have been at pains to tell us that the NHS won’t be subject to TTIP. However, as much of health is already delivered privately it is likely that US private medical companies will try to gain a foothold.

ISDS will have a chilling effect on legislation as ministers and governments will factor in the risk of being sued by powerful international corporations, thereby having an intimidating effect on their ability to make policy decisions for the public good. It infringes our sovereignty to act in the interests of our people.

TTIP also threatens our sovereignty through the ‘harmonisation’ of standards. At the moment, the US and EU have different regulatory standards to protect consumers and employees. Labour is concerned that rather than harmonising these standards in a way that will make US companies perform better and bring them up to the high standards we have in the EU, our standards will be lowered to meet theirs. This could have a disastrous impact on everything from the quality of food we eat, to the environmental standards companies must comply with. It is planned that particular harmonised standards will be decided by civil servants in consultation with industry thereby undermining democratic scrutiny and putting standards at risk.

Employees, too, could suffer. Our comparatively high workplace standards would be threatened if companies decide that, for example, increasing the minimum wage breached their commercial interest.

In effect, if TTIP is adopted with the ISDS included, it will entrench the dominance of global corporations, which have driven down wages, moved jobs into areas where they think they can pay people less, increased personal and family insecurity and increased tax evasion.

Meanwhile, TTIP negotiations have been cloaked in secrecy. Rather than being given the chance to put the plans under real scrutiny, until recently MEPs were only allowed to go to see the trade document in a closed room without making copies. We are calling for more openness and transparency in order to ensure TTIP delivers for the public good.

The final deal must pull the ISDS teeth from the TTIP wolf and genetically edit it to include the environmental imperatives of Paris COP21, rights at work and human rights so that it is a blueprint for fair and sustainable world trade. Let’s make TTIP a force for good and not a Trojan horse to allow democracies to be intimidated by big business.

Geraint Davies, MP for Swansea West

Helen Goodman, MP for Bishop Auckland

Chris Matheson, MP for City of Chester

Kate Osamor, MP for Edmonton

Daniel Zeichner, MP for Cambridge