The Bureaucrats in Europe and across the pond are currently burning the midnight candle on both ends, they are scrambling to conclude the controversial Transatlantic Trade and Investment Partnership (TTIP) trade deal, which could be worth as much as €100 billion extra to the European Union's (EU's) Gross Domestic Product (GDP) .
With the EU's economy in stagnation and some economists hyperventilating over deflation, why then the controversy? After all, the bilateral trade deal is likely to fortify transatlantic trade. So at a glance, TTIP is likely to mean more sales and profits for businesses, jobs for households and in turn increased consumption. Why then isn't there overwhelming enthusiasm from all quarters, businesses and the public alike, for the trade deal?
The reasons cited by those who are anti TTIP, predictably tending to be drummed up from those on the political left, are as follows;
-Weaken workers’ rights and put millions of jobs at risk. The view is that it is “big business” that will be able to take advantage of economies of scale, undercut their smaller rivals and put them out of business. It is the anti-globalist argument.
-Lead to more privatization of public services like education and our prized National Health Service (NHS), which is perhaps a hot button topic amongst the British electorate. The fear is that the NHS will be sold off and run like a corporation with shareholders. Shareholders' main priority often is higher dividends which may clash with the public needs for a functioning health service. The fear is that this conflict of interests between the two stakeholders would lead to the end of free healthcare in Britain.
-Reduce environmental protection and food safety regulation. This is based on Europe's outright rejection of GM foods and the potential adverse impact that fracking could have on the environment. These are hot topics which cross the political divide.
-Give new powers for corporations to sue European governments, including the UK.
Those against TTIP argue that the world leaders are working alongside major corporations and are rushing to get the deal signed without public transparency. No information is being released to the media about TTIP. However, some information has been leaked, but it is difficult to verify at this stage if it’s accurate or not. There are rumours that what may be on the cards, is a change to the law relating to foreign investors and the state. It is known as the investor to state dispute settlement rules (ISDS), which will enable foreign creditors to sue indebted governments in the event of a sovereign debt default, or debt restructuring, in a court behind closed doors. With little or no transparency, who do you think is going to come out of the disputes better off, the governments or the creditors (commercial banks high up the food chain)? My money would be on the latter, leaving the tax paying public to mop up the mess.
Nevertheless, despite the cons of TTIP it’s hard to argue against the view that free trade ultimately benefits everyone. “It means more jobs, more trade and reduced prices. Reducing regulation will have enormous benefits to both consumers and businesses on both sides of the Atlantic”, said a European Member of Parliament.
As to whether TTIP would lead to the privatization of the NHS, that might be a bit over-done. Apparently there will be no clause in the bilateral trade treaty which dictates how national governments operate their public services.
Both sides of the UK political spectrum, Labour and Conservatives support the principles behind the negotiations and recognise that more and better trade is good for the UK and the rest of the EU.
But the devil may be in the detail.
The goal for EU Bureaucrats will be to try and strike a deal which will enable business on both sides of the Atlantic to compete on a level playing field.
For example, some US states are currently not covered by the agreement and therefore procurement at state level would not be available to the same extent as EU states. This means that the EU would be at a disadvantage to a significant amount of procurement spending in the US at the state level.
Ironically, the US promotes free trade but it is also fiercely protectionist with respect to foreign players in their market. The “Buy American” rules apply to materials used in contracts inside and outside the United States and especially projects funded by the federal government.
Take for example the UK offshore wind power scandal. It was a bonanza for foreign competitors, who snapped up the juicy contracts while UK companies were left picking up the crumbs.
The way it stands, the playing field may be tipped in US favour.
But it is worthwhile keeping the TTIP deal on your radar. Any news of a breakthrough is likely to jolly the markets on both sides of the Atlantic with maybe the US getting a lot of the froth.
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