Tuesday 27 September 2016

Deal or no deal: Is TTIP good for us?

Published 16/07/2016 | 02:30

Critics say the Trans-Atlantic Trade and Investment Partnership will hurt standards, and weaken democracy, backers say it could leave us all better off.

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NO

Michael Taft, Unite the union

Unite believes that the implications of TTIP are so far-reaching that it must be put to a referendum.  Traditional trade issues are only incidental to this so-called 'trade deal'. TTIP's main thrust is to debase democracy by awarding global corporations legal privilege over citizens and elected governments. As a result, the ability of democratically elected governments to safeguard labour, consumer, environmental and health standards will be severely, if not fatally, undermined.

Our main concern is the Investor State Dispute Settlement (ISDS, now repackaged as the Investment Court System) which enables corporations to sue governments for compensation if they believe public policies interfere with profit maximisation. They can bypass our legal system and take their case to secret, private courts from which there is no appeal. This has been done under the umbrella of other agreements with similar ISDS provisions:

• Philip Morris Company sued Australia over its planned introduction of plain-packaging for cigarettes.

• Veolia is suing Egypt for its decision to raise the minimum wage.

• Canada has been sued by corporations over such decisions as subsidising renewable energy, placing a moratorium on fracking, banning toxic petrol additives and temporarily banning toxic waste exports.

This is not about 'trade'. It is about global corporations coercing governments into subordinating public welfare to shareholder interests. No wonder the negotiations have been conducted in secret and there is reportedly an agreement with the US that negotiation documents won't be made public for 30 years.

Instead of addressing this substantial democratic deficit, the Government has focused on TTIP's alleged economic benefits. However, the Government's own report shows little economic gain but potentially significant losses. For example, although TTIP will boost pharmaceutical exports this will have little impact on employment. Pharmaceutical exports have nearly doubled since 2000 but sectoral employment has fallen. Many of TTIP's purported benefits, like the recent GDP figures, will be only marginally attached to the domestic economy.

But the losses will be felt in the domestic economy. Even the Government admits the beef sector will be badly affected. The Irish Farmers Association has raised additional concerns about the pigmeat and poultry sectors, citing threats to standards governing genetic modified organisms, hormones, pesticides, animal health and product labelling. Thanks to TTIP's 'regulatory convergence', these standards are likely to be driven down to US levels of low regulation. Given the importance of the food sector, our economy could be badly hit. But that's not all.

Leaked TTIP negotiating documents indicate that a range of consumer protections are also in the firing line. The EU's precautionary principle was dropped (whereby products must be proven safe before they can be sold) in favour of the US 'risk-based' approach which puts the burden of proof on states and consumers to show products are unsafe. Everything from US-sanctioned lead in lipstick to chlorinated chickens could hit our shelves after TTIP.

European public service unions have warned that health, education and other public services could be exposed to privatisation, race-to-the-bottom competition and secret-court action. The 'negative list' approach means all public services can be permanently opened up to TTIP unless the current government specifically excludes them. This is a real threat in Ireland where global companies already have a foothold in our hospital and higher education sectors.

Business groups are waking up to these threats. In Germany, 'KMU gegen TTIP' (SMEs against TTIP) is supported by thousands of small companies and entrepreneurs - including many exporters. They point to TTIP's hidden additional costs and the disadvantage they would be placed at vis-à-vis global corporations.

Throughout Europe there is a rising sentiment against TTIP. Over three million signed a petition - a European Citizens' Initiative - opposing the deal. Over 1,800 cities and regions have declared themselves 'TTIP-free zones' including Barcelona, Cologne, Milan, Vienna, Amsterdam, Birmingham and Co Clare. Every month the list grows.

In Ireland there is an emerging, broad-based coalition opposed to TTIP - from farming, consumer and environmental activists to ICTU and the trade union movement. TTIP poses such a fundamental threat to democracy, public welfare and our economy that Unite believes people should have the final say in a referendum.

Michael Taft is Unite's research officer.

YES

Ian Talbot, Chambers Ireland

The Brexit decision of the UK electorate has left its neighbours and allies perplexed if not in shock. In Ireland, the prospect of our closest trading partner exiting the EU has now become one of the more pressing risks to our economic growth.

We can assume that the impact is very likely to be negative and consequently we must devise a range of alternative strategies to counteract this.

Irish companies are going to need new markets for exports. Ireland already has strong links with US and EU markets and so in the months and years to come we must look to these partners when it comes to growing our economy - a simple message of strengthening our strengths. This is why negotiations for a trade agreement between the EU and the United States have suddenly taken on even greater importance for Ireland.

The 14th round of negotiations for an EU-US trade deal took place earlier this week. This trade deal represents an unprecedented opportunity for two of the world's largest economies to remove barriers to trade, increase growth and create jobs.

The United States is the world's largest national economy and the world's second largest according to purchasing power, representing a staggering 22pc of global GDP. A transatlantic trade deal of this size will benefit not just the multi-nationals already operating in Ireland, but also our indigenous industries and SMEs.

According to a study carried out by Copenhagen Economics on behalf of Ireland's Department of Jobs, Enterprise and Innovation, Ireland stands to benefit by more than double the European average, creating between 5,000 and 10,000 jobs in exporting sectors and potentially increasing real wages by an average of 1.5pc, with low skill and agricultural wages increasing the most at almost 2pc.

What would a deal mean in practical terms? Historically trade deals brought about reduced customs tariffs. However the opportunity in TTIP rests much more in devising common regulatory standards so that products and services approved for use in one jurisdiction would need no further approvals to be sold in the other. This would have a disproportionately bigger impact and opportunity for SMEs.

In spite of the rhetoric that this is being driven by "big business", the reality is that big businesses are much more likely to have the resources and time available to seek regulatory approval for a product or services in several jurisdictions; SMEs don't. This agreement will be the first to include a dedicated SME Chapter under which each jurisdiction will commit dedicated resources to support SMEs trading between the respective blocs.

However, TTIP has attracted a lot of controversy, with opposition seeming to focus on two core issues - concerns that regulatory co-operation will result in a dilution of hard-fought safety and employment standards and secondly, anxiety that increased trade liberalisation may benefit some sectors less than others. On these points we would note that the Commission has repeatedly said that our current high standards will not be impacted by a trade agreement and that regulatory co-operation will only take place in areas where standards are already similar.

With regard to the impact of an EU-US trade deal across all our sectors, trade liberalisation is a complex process, but the reality is that trade deals do not have overnight impact, they can typically take up to 15 years to have a full impact and therefore in that time period individual sectors will probably encounter significant change in any event but will also have plenty of time to adapt.

With 90pc of world economic growth predicted to be generated outside Europe in the coming 10-15 years, having an ambitious trade agenda has never been more important. However, opposition to free trade is growing, with increased civil society mistrust of international trade and the rise of populist politics. There are clear signs that this anti-trade sentiment is already translating into more protectionist policies globally.

And 2015 saw the biggest rise in protectionist activity since the onset of the financial crisis - with an estimated 40pc rise in trade barriers introduced compared to 2014. More recently, IMF chief Christine Lagarde warned that anti-trade polices championed by Republican presidential candidate Donald Trump risks sparking a dangerous protectionist movement that could severely damage the global economy, noting that protectionism "hurts growth, hurts inclusion and hurts people".

Over the past two decades trade has been a powerful driver of economic growth and job creation for Ireland. We should be concerned at growing anti-trade sentiment in Europe and further afield. TTIP is probably the largest trade deal to be negotiated in history so it is logical that we should support it to get the best possible outcome for Ireland. Brexit proves we must diversify and not obstruct new trade opportunities.

Ian Talbot is CEO of Chambers Ireland, of the International Chamber of Commerce Ireland and Deputy Chair of Eurochambres

Irish Independent

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