TTIP 2016

Thank you for getting in touch with your concerns about TTIP and CETA - the trade deals currently being negotiated by the European Union with the USA and Canada.

Personally, I first blogged about TTIP in 2014 (http://martinveart.blogspot.co.uk/2014/11/ttip-and-isds-one-good-one-bad.html) and identified the potential difficultly of the negotiations, that is how to overcome ISDS - Investor State Dispute Settlement mechanism.  It is this mechanism that has led to concerns, as voiced by organisations such as 38 Degrees and the potential future of public organisations such as the NHS.  The ISDS mechanism struck me then as a particular threat to national and EU sovereignty and I came out strongly against it.

I returned to the topic for Westminster elections in 2015 where I outlined the then Liberal Democrat position (rather uncritical of TTIP and ISDS) and where it differed from my own position. http://martinveart.blogspot.co.uk/2015/04/campaign-letters-1-ttip.html   In this blog I restated my opposition to ISDS while stating the benefits of TTIP, especially for our small and medium-sized businesses across the UK and EU.  It is recognised that TTIP would be worth the many billions to all trading nations: the equivalent of an extra €500 for every adult and child in the EU on this side of the Atlantic alone; the equivalent an extra £1billion each year for Scotland.   This is not something to be dismissed lightly.

Since last year, I am very pleased to say that the Liberal Democrats position has changed and has come more into line with my own.  As I predicted, this debate has been led by Europe.

Last September France and Germany suggested an alternative to ISDS in the form of a semi-public investment court system (ICS).   Liberal Democrat MEP Catherine Bearder, with other Liberal  members of the European Parliament, has voted strongly in favour making sure there are no special courts for corporations and in ensuring any dispute mechanism is accountable.  Like you, liberals want to see a system of dispute resolution that is accountable to the public, transparent and ensures the State's 'right to regulate' takes priority over an investor's 'right to invest'.

The European Union has recently issued a clear guarantee that Member States' rights to provide the public services they see fit will be enshrined in TTIP and CETA – this is to prevent any challenge by corporate interests.  This is a welcome clarification and will provide the safeguards that we are all looking for.

I have to say that since then there has been further developments of great interest.  On the 19th of April, the UN Human Rights Council's independent expert, Alfred de Zayas, questioned the whole necessity of having either an ISDS or ICS system, claiming that neither system was compatible with national sovereignty or human rights.

Speaking in front of the Council of Europe's legal affairs and human rights committee, de Zayas said  “Existing investor-state dispute settlement (ISDS) mechanisms should be phased out and no new investment treaty should contain any provision for privatised or semi-privatised dispute settlement.”

The reason de Zayas gives is that while ISDS mechanisms are necessary in bi-lateral trade agreements in order to ensure that trading partners with less-than-adequate national legal systems do not arbitrarily change laws to target individual companies, both the US and the EU are governed by the rule of law.  It is therefore unnecessary for any form of ISDS system to be part of TTIP.

I have reflected upon de Zayas' position and found that it is consistent with my own view that any form of ISDS or ICS is unnecessary to make TTIP work as a trading agreement.

It is too early to gauge the effect of de Zayas' intervention into the ongoing process.  Recent rounds of the TTIP trade negotiations are stumbling over European companies ability to win US procurement contracts.  In terms of public tendering and procurement from the private sector, America has a "buy US" policy for federal contracts, while demanding equality for US companies operating in the EU.

It is important to recognise that both TTIP and CETA could bring significant benefits to businesses and families across Scotland by allowing a greater trade of goods and services within a wider marketplace with reduced barriers.  Indeed, these deals are estimated to be worth tens of billions of pounds to our economy and could support hundreds of thousands of new jobs across the country.  That’s potentially great news for the many people in our community who are looking for work and for our local businesses that want to grow and expand and is a prize that is worth fighting for, but only if we can also protect our public services and ensure accountability.

At the moment we should be clear that these are just negotiations and a final agreement has not yet been reached let alone published.  If an agreement is reached it will still have to be approved by the United States Government, the European Commission, the European Parliament and each of the twenty eight European Union Member States’ Parliaments.

I am clear that, when we get the chance to look at and consider the final agreement, the Scottish Liberal Democrats will not support anything that threatens our public services, gives power away to corporations or would jeopardise the free and public nature of the NHS and other public services we all rely on.  As one in the party that has been more critical than most, if elected I will ensure that this remains the case.

Having outlined my position, please would you support me with your vote in the upcoming election?   In doing so you can be sure that you would be electing a person who has an informed, strong and independently-minded view on the entire TTIP process.

Campaign Letters 1. TTIP

As a candidate, one gets a lot of letters, mostly pro forma, on the issues of the day.  I have decided to post copies of my replies on the blog.

The first is on the issue of TTIP -

Thank you for contacting me about the Transatlantic Trade and Investment Partnership (TTIP).

First of all: what is TTIP?  TTIP is more than just a trade agreement.  It is a process of mutual recognition of equivalent rules and regulations.  At this time, products made to similar standards must undergo local retesting and evaluation when imported.  I'll give a couple of real examples.

Cream-making machines in the US and Europe are made to difference standards.  At this time, this means that foods containing cream cannot be traded across the Atlantic.  TTIP will allow for this: after all, it is the cream that is being exported, not the machines.
Sun screen is tested differently in the US and the EU. Imports have to retested.  TTIP will allow for the swapping of test results and the rapid evaluation of equivalent standards without the product having to be retested.

I would like to point out that the TTIP negotiations are still ongoing. What these negotiations are about is allowing for local standards to be upheld.  An inferior product that is clear for usage in the US should still not be allowed for sale in the EU if its performance does not meet EU minimum regulations.

 The main stumbling block however isn't TTIP, but rather the Investor-State Dispute Settlement (ISDS) mechanism.  It is clear to me that these negotiations are being led by German and French concerns.  Last year, Minister of Foreign Trade, Matthais Fekl, told the French Senate that “France did not want the ISDS to be included in the negotiation mandate.  We have to preserve the right of the state to set and apply its own standards, to maintain the impartiality of the justice system and to allow the people of France, and the world, to assert their values,"  according to an article on the EurActiv website.

It is this very section, the ISDS that has also led critics of the project to claim that the NHS would be opened up further to corporation takeover, whether the government of the day welcomed it or not, for the ISDS would allow corporations to challenge legislation that they claim would be putting a brake upon profits.  The US is loath cut this section but it seems that Germany is not going to sign any agreement that contains ISDS in its current form.
The probable endgame for these negotiations is that the EU will get their / our way and a watered-down ISDS mechanism, matching the powers of many already in existence in other trade treaties, will be finally agreed upon.  The benefits of doubling cross-Atlantic trade are just too big for either side to walk away from.  For Britain alone, the extra trade expected from the successful signing of a TTIP treaty is in the order of £10billion a year.

Liberal Democrats support the TTIP negotiations and it is our party’s policy to ensure the success of TTIP in the best interests of the UK.  However, we are clear that we will not sign up to any deal which is not right for Britain.

Vince Cable, Liberal Democrat Business Secretary, has said he wants to see the proposed ISDS clause tightened up.  While ISDS clauses are commonplace in existing trade deals, there is understandable concern that companies could sue us for losses and win if the Government takes a decision in the wider public interest.  To put this into context, there are around 3,400 investment treaties in force worldwide and around 2.5% of these have led to ISDS cases where the investor has won.  There has not been a single successful ISDS case brought against the UK and nothing in TTIP puts the UK at any more risk from being successfully sued by a company.  To be clear, ISDS cannot force the Government to open markets or privatise public services.

The UK has a large number of trade agreements already in place with other countries and over 90 bilateral investment treaties.  Not one of these has been watered down or threatened the high levels of environmental protection, food safety, consumer protection or any other regulatory standards we rightly insist upon.  Neither the EU nor the US is looking to reduce standards but Vince has been clear that if the US cannot match our standards, we will not lower our own.  They will have to raise their game and match ours.

Transparency is an issue that concerns many and this is something Vince Cable has been keen to improve.  Vince has met the EU Trade Commissioner to discuss this and has asked her to give senior UK parliamentarians access to the TTIP treaty text as it is being developed so they can raise questions or concerns on the public’s behalf.  This is on top of the significant moves the European Commission has already made to make previously restricted material available to MEPs. Where our interests are not harmed by disclosure, then disclosure must take place.

The EU Commission is rather irked by the standard of debate in the UK on the topic and have claimed that here it is being suppressed for our own domestic political reasons.  I know there is much worry over the matter: a lot of which is generated by a lack of information.  Therefore, in the hope of addressing this matter, I have included a link to the EU website, which far greater details of the TTIP process than any I know of in the UK media.

http://ec.europa.eu/trade/policy/in-focus/ttip/

In this letter, I hope I have both given you some idea what the TTIP process is about and what the issues are that face it.  Negotiations are very much ongoing, with both the Liberal Democrats and our European partners keen to see delivery of a successful package that does not lower consumer and environmental standards, nor infringe upon the sovereignty of governments to set policy or decide how to best spend public money.

If you have further questions on the issue, or any other, I will be glad to hear from you.

Yours sincerely,

Martin Veart
Scottish Liberal Democrats
Edinburgh North and Leith.

TTIP and ISDS - one good, one bad.

The Transatlantic Trade and Investment Partnership has hit a major stumbling block, with the announcement that France will not sign it in its current form and Germany has grave concerns over a section known as the Investor State Dispute Settlement mechanism (ISDS).  

  

Minister of Foreign Trade, Matthais Fekl, told the French Senate that “France did not want the ISDS to be included in the negotiation mandate.  We have to preserve the right of the state to set and apply its own standards, to maintain the impartiality of the justice system and to allow the people of France, and the world, to assert their values,"  according to an article on the EurActiv website.

It is this very section, the ISDS that has also led critics of the project to claim that the NHS would be opened up further to corporation takeover, whether the government of the day welcomed it or not, for the ISDS would allow corporations to challenge legislation that they claim would be putting a brake upon profits.  The US is loath cut this section but it seems that Germany is not going to sign any agreement that contains ISDS. 

Quite right too in my opinion.  TTIP is more than a look at tariffs between trading nations: it is a massive unification of regulations across vast trading zones.  Although there is a lot of potential upside – for the UK alone this is estimated at £10 billion a year, it is important too that governments are able to keep control over their own legislation – this should not become a battlefield for lawyers.  Surrendering of sovereignty to corporations is unacceptable.

A lot depends on the TTIP negotiations: at this time in the UK economy an estimated 3.5 million jobs are linked to the EU, and that number will only increase if TTIP goes through.  I want to see that happen, but it is also correct for both Germany and France to highlight the threat to both sovereignty and therefore democracy that this contained within ISDS.

The TTIP negotiations also show how wrong-headed and muddled the views of UKIP and the Conservative right are on Europe.  Outside the EU, we would not be part of the negotiations and would have no influence upon their outcome.  Should a Britain outside the EU seek to join the TTIP group, it would be on a take-it-or-leave-it basis.

My view is that the UK can benefit greatly if TTIP is secured, and that we should be backing the views of France and Germany on ISDS.  Trade is good: having corporations being able to dictate legislation, not so much.