What Is the Transatlantic Free Trade Agreement?

Raoul-Marc Jennar, Renaud Lambert

10/06/2014

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What exactly are we talking about: TTIP, TAFTA, GMT, PTCI or APT?

These are all abbreviations for what is officially known in English as the Transatlantic Trade and Investment Partnership (TTIP) and in French as the Partenariat Transatlantique sur le Commerce et l’Investissement (PTCI). The profusion of names is partly a result of the secrecy surrounding the negotiations, which has hindered the standardisation of the terminology. The work of activist networks encouraged by leaked documents has led to the appearance of acronyms such as TAFTA (Transatlantic Free Trade Agreement), which is also used by some French organisations including Stop TAFTA, and the Great Transatlantic Market (Grand Marché Transatlantique; GMT).

What is it officially?

TTIP is a free trade agreement between the United States and the European Union that has been under negotiation since July 2013. It aims to create the world’s biggest market, with more than 800 million consumers.

A study by the Centre for Economic Policy Research — an organisation which the European Commission presents as “independent” although it is funded by the big banks — has calculated that the agreement might boost wealth creation by $164bn per year in Europe and $130bn in the United States: $750 extra per European household, according to the optimistic conclusion the Commission has drawn from this study.

Free trade agreements, such as those backed by the World Trade Organisation, aim to reduce not only customs barriers, but also “non-tariff” barriers: quotas, red tape and health, technical and social regulations. The negotiators claim the process will lead to a general improvement in social and legal standards, since the treaty aims to impose them on the rest of the world.

How likely is that?

The WTO has worked energetically for the liberalisation of world trade since its creation in 1995. However, negotiations have been stalled since the failure of the “Doha round”; agricultural issues are a particular stumbling block. So continuing to promote free trade has meant pursuing a circumvention strategy: Hundreds of bilateral agreements have been concluded or are being adopted between countries or regions. TTIP represents the final stage of this strategy: If signed by the two biggest commercial powers in the world (which represent almost half of global GDP), its provisions will end up being imposed on the whole planet.

The scope of the EU mandate for negotiation and the expectations expressed by the United States suggest that TTIP will go far beyond the framework of straightforward free trade accords. In concrete terms, the project has three main objectives: to eliminate the last customs barriers; reduce non-tariff barriers through a harmonisation of regulations (which, to judge by previous treaties, will mean a levelling down rather than up); and to give investors legal mechanisms to break down all regulatory and legal obstacles to free trade. This means it will impose some of the provisions already set out in the Multilateral Agreement on Investment in 1998 and the Anti-Counterfeiting Trade Agreement in 2011, both of which were rejected as a result of popular pressure.

What is the timescale?

Officially, negotiations are supposed to be concluded in 2015. There would then be a long ratification process in the European Council and European Parliament, followed by national parliaments in countries where that is a constitutional requirement, such as France.

Who is negotiating it?

Civil servants from the European Commission and their counterparts at the US Department of Commerce. They are all under significant pressure from lobbyists, mostly representing the private sector. The European Commission has admitted that participation in 119 meetings out of 130 held to prepare its negotiating mandate between January 2012 and April 2013 was limited exclusively to representatives of the world of business and finance.

What will be the consequences of TTIP for states?

TTIP envisages submitting current legislation on both sides of the Atlantic to the demands of free trade, which generally fits the interests of American and European big business. Under TTIP, states would agree to a considerable reduction in their sovereignty and those that did not adhere to the free trade principle would risk incurring financial sanctions that could run to tens of millions of dollars.

According to the EU mandate, the agreement must “provide for the highest possible level of legal protection and certainty for European investors in the US” (and vice versa). More simply: It will allow private firms to attack legislation and regulations when those firms consider that they impede competition, access to public markets and investment.

Article 4 of the mandate stipulates: “The obligations of the Agreement shall be binding on all levels of government,” so it will apply not only to states, but also at all other administrative levels: regions, counties, municipalities, Länder and so on. A municipal regulation could be challenged not just in a national administrative court, for example, but before a private international arbitration court. It would be enough for a regulation to be seen by an investor as a limitation on his “right to invest what he wants, when he wants, how he wants and to derive the profit from it that he wants,” according to a definition common among US pressure groups.

As the treaty cannot be amended without the unanimous agreement of its signatories, it will apply irrespective of changes of national government.

Is this something that the United States is forcing on the European Union?

No. The European Commission, with the agreement of the governments of the 28 member states, is actively promoting TTIP, which fits its free trade credo. The project is also backed by major employers’ organisations, such as the Trans-Atlantic Business Council. This was created in 1995 at the instigation of the European Commission and the US Department of Commerce, and promotes a “dialogue” between the two continents’ economic elites in Washington and Brussels.

- Raoul Marc Jennar is the author of Le grand marché transatlantique: La menace sur les peuples d’Europe (The Great Transatlantic Market: The threat to the peoples of Europe), Cap Bear Editions, Perpignan, 2014; Renaud Lambert is deputy editor of Le Monde diplomatique. Translated by George Miller.

https://www.alainet.org/pt/node/86302