Difference between revisions of "10 reasons to be worried about big international agreements"

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[[Category:Economics]] [[Category:Trade]]
[[Category:Economics]] [[Category:Trade]]
[[Category:TPP]] [[Category:TTIP]]

Latest revision as of 21:18, 11 March 2015

10 reasons to be worried about big international agreements

Is 2014 the year when big business goes supranational? Hazel Healy looks at two very big agreements – “Trojan treaties” - that the US are leading.


Kathryn Corlett

People who don’t agree with them say they help big businesses too much and they give US companies too much power.

They say these new free-trade treaties will start the world economy growing again. But if they are agreed, they will give countries less power and big business more power.

One treaty is the Trans-Pacific Partnership (TPP). This is led by the US. 12 governments in Asia, Oceania and the Americas have been discussing it for four years. The 11 other countries that might sign are Canada, Australia, New Zealand/Aotearoa, Japan, Malaysia, Vietnam, Brunei, Singapore, Chile, Mexico and Peru.

The other one is the Transatlantic Trade and Investment Partnership (TTIP). The US and European Union (EU) have been discussing this since July 2013. They will continue to talk about it for the next two years.

If the countries sign the treaties, they will only be able to change the agreements if all the other countries sign.

1 The Public do not know about it

There is a lot of secrecy around these deals. Many politicians around the world have said it is bad that they do not know about the talks.

The public knows only because people have “leaked” (revealed) information about them eg. German MEPs revealed some information about TTIP.

Many people have asked for the agreements to be made public. Wikileaks has published information about TPP from leaks. And they are offering money for new information.

But the US trade delegations have more than 600 business advisers who can see all the information they want.

It is not chance that the agreements are secret. If the public knew about them, they would probably not survive.

2 Intellectual Property

The chapter about ‘Intellectual Property’ (IP) leaked from TPP said that big digital companies want more controls on the internet, and big copyright fines.

Companies want to work with the more relaxed privacy laws in the US to get personal information of people in the EU. And pharmaceutical companies want to stop people getting generic drugs.

3 More hormones too?

TTIP may make food less safe because the safety regulations are bad for trade because they cost money and take time. Europe has stricter laws on animal welfare and pesticides, but these might be relaxed so we would get hormone-treated US beef and chlorine-dipped chicken in Europe. A lot of genetically modified (GM) foods are grown in the US, and the biotech firms in the US want to stop the laws that say all GM food must have labels in the EU.

4 If you bring in regulations, I’ll sue!

This one could really be a problem. Both treaties probably protect the investors. So businesses would be able to sue governments if they bring in national laws that restrict their profit.

If companies say they will lose money because of things like environmental protection or anti-pollution laws, they could sue.

The business lawyers control the courts and there would be no limit to the money they could demand.

This is not completely new. Companies are already suing countries in ‘Bilateral Investment Treaties’ (BITs) – there are about 500 cases every year. Philip Morris, a big tobacco company is using BITs to get billions of dollars in compensation from Australia and Uruguay because they have brought in anti-smoking laws. There will be more of this in the future.

TPP and TTIP would let a lot more investors sue countries. TTIP by itself would allow 75,000 new companies in the US and the EU to sue governments.

There will be a minimum cost to governments of nearly $8 million in court fees and legal bills, so countries will have no power against the businesses.

5 More work for firms like SERCO

If we have these agreements, governments may have to give public services eg. health and education to international businesses.

People fighting to keep Britain’s National Health Service (NHS) public are worried that TTIP will help big US health businesses buy it.

The tribunals (in Point 4) would make it impossible to change privatization. It will also make it more difficult to keep quality in public services. Canada had problems with this when the previous treaty, the North American Free Trade Agreement (NAFTA), made it possible for businesses to sue governments if the governments made them pay environment taxes or made them follow performance standards.

US companies will be able to compete for public contracts on an equal level with local suppliers, or social enterprises which are already finding it very difficult to compete. It would make it possible for a few really big international companies, like G4S and Serco, to control all the market. These two already control security and some transport services.

6 Losing labour rights

Europe’s labour laws are a problem for US investment, and are difficult for Europe with all the cuts. Unions are afraid that TTIP will force European labour law to change to be more like US labour laws. So European workers would lose the right to organize.

People against TPP are trying to find out if there will be, in TPP, standards based on International Labour Organization agreements. And how this would work.

7 Mines and fracking

Companies are using TTIP to try to get lower standards of environmental protection. EU food exporters are trying to reduce US marine mammal protection legislation. US Airlines for America wants to end the EU emissions trading scheme because they say this brings ‘unfair’ barriers to trade. Standards controlling chemicals and toxins could also be reduced.

Special tribunals (Point 4 again) mean that countries that try to limit environmental damage will probably be sued. So there might be more stories like this one about Costa Rica: because of a BIT, a Canadian mining firm, Infinito Gold, is suing Costa Rica for $1 billion after they were not allowed to start an open goldmine in a rainforest (75 per cent of the public were against it). There is another similar story about the big Swedish energy company, Vattenfall: they are suing Germany (under the Energy Charter Treaty) for €700 million because Germany brought in new laws that would have made a coal-fired power plant they were planning ‘uneconomical’.

And under NAFTA, a company is suing Canada for $250 million after Quebec province banned fracking.

8 (Even) less regulation of finance

The City of London, with all its finance, is one of the strongest groups fighting for TTIP. It wants to stop the changes in laws, like the US Dodd-Frank Act and the EU’s limits on food commodity speculation. They also want to stop the Tobin Tax on financial transactions.

9 False promises

People say that both the treaties are the solution to starting the world economy again. But people do not agree on how much money countries will get (which could be more than $100 billion for the EU and $5.6 billion for New Zealand). Most of the people who say they will get a lot of money are from businesses that want free trade. But an independent study from Manchester University said they will never earn this amount of money. The European Commission has said TTIP will cut jobs and make inequality worse in Europe.

Other agreements like NAFTA lost 870,000 US jobs but people had said it would create 200,000 jobs. (Some people have said the TPP is ‘NAFTA on steroids’.)

They are trying to find a new way to improve markets because they can't agree on this at the World Trade Organisation.

10 Plan for the world

People say these two ‘trojan treaties’ are the new ‘gold standard’ for all future trade agreements; people describe TPP as a connection to other nations in Asia and the Pacific.

If the agreements go ahead, it will be almost impossible for countries in the Global South to say they want a different, more sustainable development model without losing trade from the US, EU and others.

Take action

The treaties are a threat, but we can do something. Everyone is angry: organic farmers in Germany to public-sector unions in Malaysia. Treaties like this can be stopped. A similar treaty called the Multilateral Agreement on Investment (MAI) was stopped by a lot of protest in 1996. The EU is already not so keen on TTIP; Pacific states’ negotiations are taking a long time.

There is still time. Tell your representatives that you do not agree with TPP and TTIP, and tell other people about it. Or join organisations like the World Development Movement: http://wdm.org.uk/

NOW READ THE ORIGINAL: http://newint.org/features/2014/05/01/trojan-treaties/

(This article has been simplified so the words, text structure and quotes may have been changed).