CP briefing 10: TTIP Trans Atlantic Trade and Investment Partnership

Communist party briefing ten Trans-Atlantic Trade and Investment Partnership (TTIP)

go to communistparty.org.uk July 2014

TTIP Trans-Atlantic Trade and Investment Partnership

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Discussions to negotiate a Trans-Atlantic Trade and Investment Partnership were launched by President Obama in February 2013. Preliminary work was undertaken by the Trans-Atlantic Economic Council which had been formed in 2007 by multinational companies based in both the EU and the US. The Partnership agreement is being negotiated between the EU Commission and the US government in a series of closed-door meetings which began in spring 2013 and are likely to continue into 2015.

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The TTIP is a sequel to, and partly based upon, the Trans-Pacific Partnership still under negotiation and initiated in 2009 as part of Obama’s ‘pivot to Asia’. The TTIP brings together countries around the Pacific rim that together control 40 per cent of world. It does not include China and is widely seen as an attempt to contain Chinese influence – and to set legal protocols for trade that China would ultimately be compelled to accept.

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In June 2013 an editorial in the Financial Times put such containment as also the long-term strategic objective of TransAtlantic Partnership: ‘The shift to Asia of the centre of gravity cannot be stopped but a Grand Deal would be likely to delay the impact on the Atlantic’s region’s influence. By integrating markets now, the US and the EU, through their combined magnetic power, would secure their ability to set market standards through the rest of the world’ (FT, 18 June 2013).

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A key part of this ‘setting of market standards’ would be to make illegal the forms of state and quasi-state ownership, subsidy and strategic direction that has been a key element in Chinese growth – as well as some other members of the BRICS alliance. Between them the EU and the US control 46 per cent of world trade.

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Negotiations have been • behind closed doors • involved direct consultation with major corporations for those sectors of trade and finance in which they have interests • produced major clashes between the main EU partners and the US.

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Like the TPP, negotiations have repeatedly broken down and then been resumed. conclusion by the end of 2014. This has now been postponed into 2015.

They were originally scheduled for

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The main clashes have been over • The demand from the EU (principally France and Germany) that the Treaty includes financial services – the US opposes • The demand from the US that the Treaty includes a Investor State Dispute Clause – allowing companies to sue governments in a closed supranational court for denying them equal access to markets, including markets for public sector services such as health and education. France and Germany currently oppose this.

• The demand from the EU that the TTIP include agricultural products – which US negotiators have asked to be postponed till after US Congressional elections in November 2014. The EU wants an end to US government subsidies to producers; the US wants access to the EU for GM foods.

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The most contentious issue has been the Investor State Dispute Clause. In February 2014 French trade minister Nicole Bricq and the German economy minister Sigmar Gabriel both stated that they found the clause unacceptable. The main business newspaper in Germany, Die Zeit, leaked the key section of the draft treaty containing the clause the same month: http://www.zeit.de/wirtschaft/2014-02/freihandelsabkommen-eusonderrechte-konzerne. In March 2014 the EU announced a 90 day period of ‘public consultation’ which postponed further negotiation till June 2014 and after the EU elections.

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Context The negotiation of the TPP and TTIP take place in the context of the breakdown of Doha round of negotiations on the global liberalisation of trade and also of the growing influence of China and the BRICS states within the World Trade Organisation. In these circumstances both the EU and the US have both negotiated regional and bilateral trade treaties within their own spheres of influence: the EU principally in the Mediterranean and Africa; the US the North American Free Trade Area with Mexico and Canada. All have generally involved clauses that required partner countries to privatise services, end the protection of manufacturing and provide investing corporations with resort to special courts to protect their rights to trade and their intellectual property (i.e. to prevent technology transfer).

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The US and the EU see the BRICS alliance as having the future potential to change the legal framework for world trade relations in ways that benefit developing and emerging economies and limit the freedom of US and EU companies.

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The current TTIP negotiations also take place in the context of a major influx of US corporate and financial capital into Europe – particularly into banks in EU periphery countries where there are high ‘risk-engineered’ interest rates. $66 billion of US loans were made to EU banks in 2013 and $70 billion in the first half of 2014 (Financial Times 4 June 2014). The June 2014 report of the Bank of International Settlements warned of dangerous levels of financial speculation. The Bank of America Merill Lynch issued a survey in June 2014 indicating that major US corporations had $1,300 billion available to fund corporate merger raids into the EU.

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These economic compulsions to export capital for higher rates of profit, inherent in finance capital, are the basis of inter-imperialist rivalry and aggression.

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Assessment The TTIP poses major threats to the public sector in EU countries. It also threatens further downward pressure on wages and conditions, would make attempts to assert democratic control over national economies even more difficult and, internationally, represents a strategic move by the main imperialist blocs to contain the rise of China and the BRICS countries.

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At the same time it is important for the trade union movement to avoid being drawn into positions where they are supporting ‘their imperialism’ against rival imperialisms: supporting French and German big business against the Investor State Dispute clause or supporting the City of London (and the US) in demanding the exclusion of financial services. Campaigns currently emerging tend to focus exclusively on possible future threat of the ISD to the public sector – but make no mention of the far more immediate threat posed by EU Austerity rules that, if not reversed, will destroy (ie privatise) much of the public sector long before the ISD comes into force.

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The TU movement and the Left needs to ensure that any campaigns that emerge equally feature the immediate threats posed by the EU Fiscal Compact, the EU 2020 programme and ECJ legal judgements.

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Current campaigns against TTIP include: https://you.38degrees.org.uk/.../stop-the-british-government-joining-the-...

World Development Movement www.wdm.org.uk/...campaign/transatlantic-trade-and-investment-partner... occupylondon.org.uk/stop-ttip/ Unison has an anti-TTIP campaign and other unions are developing policy – often as an alternative to developing policy against the EU.