• The TTIP and the Struggle for Sovereignty and Dignity

  • By Amelia Martínez Lobo | 21 Jun 15
  • The TTIP (Transatlantic Trade and Investment Partnership) is being negotiated with the usual secrecy as the other trade agreements between the US and the European Union (through the European Commission, the executive and legislative organ) and it represents a frontal attack against democracy, sovereignty, social and labour rights, unions, the environment and many other issues.

    There are numerous examples and former experiences. Several independent impact studies agree that the NAFTA Agreement (FTA between the US, Canada and Mexico), which has existed for 20 years, has had disastrous consequences for the Mexican population: lowering the minimum wage (-17.9%), rising inequality and poverty (environmental degradation or exodus of farmers to the cities (2.7 million Mexican farmers have abandoned their land), among other things. Across the border, the consequences can also be quantified: falling wages as a result of the relocation of businesses in Mexico, where labor is cheaper and therefore the closure of more than 60,000 US manufacturing companies. Another example is the trade agreement between Colombia and the European Union which has spurred the practice of land grabbing. The transnational corporations appropriate land from the farmers, violating human rights and sabotaging the difficult processes of dignity for the indigenous people.

    The TTIP is not a common free trade agreement, which has already been proven not to be beneficial to people. The TTIP is a geostrategic agreement that aims to create a macroeconomic block. On the one hand, it would slow down the expansion, growth and hegemonic control of the BRICS-countries (Brazil, India, Russia, China and South Africa), and on the other hand, it imposes the commercial regulations for third countries, which is especially damaging to developing countries.

    Both sides of the Atlantic represent 12% of the world population and 50% of world trade. Why then sign a trade agreement between the two largest trading blocs? Both sides of the Atlantic represent 60% of the global GDP, distributed quite unevenly: 70% of the population has 2.7% of the wealth, compared to 8.7% of the population holds 87% of the wealth. The TTIP would open a path of no return that would further deepen the gap of inequality poorness.

    Consequences of the TTIP

    There are numerous studies of the TTIPs impact of our societies in the coming years. The most optimistic studies commissioned by the European Commission predict a rise in per capita income of 50 per year. And these are the most optimistic!

    Jeronim Capaldo, an economist at Tuffs University and currently a research member of the ILO, conducted a pioneer independent impact study, (the only one that is based on the model of the United Nations) which takes into account variables such as inequality, wages, macroeconomic adjustments and political trends. According to Capaldos study, the TTIP would cause revenue losses between 5,500 and 3,400 yearly per worker, losses in net exports or on the GDP (-0.50% in northern Europe and -0.29% in Germany). Because of the relocation of companies, it is estimated that 600,000 jobs would be lost across Europe. In addition to a significant reduction in public revenues of the states that would lead to an increase of the public deficits

    Furthermore, the implementation of the ISDS clause would be unable to re-municipalize utilities that have been previously privatized. The social struggles, such as those carried out in Ireland against water tariffs would fall on deaf ears, since undemocratic supranational bodies could act as co-legislators against the legitimate and democratic governments. The TTIP and the implementation of the ISDS would create a wave of privatization, since the door would be open for companies to do business with public services.

    The public procurement which represents 15% of European GDP would also be affected, making state, regional or local governments a powerful consumer and employer. The responsible public procurement, which rewards companies that respect the environment and decent working conditions to their employees, would be negatively affected. The conditions are not mandatory, but the inclusion of such criteria, favors the local industry, particularly local SMEs, and they are promoting another type of economy and social solidarity. For example, a small local furniture business could not compete with the pricing of a large multinational company, where in many cases it would be allowed to have temporary losses, in order to "win market".

    The controversial ISDS clause - system of resolving disputes between investors and states

    The ISDS (Investor-State Dispute Settlement) is a private arbitration system that would resolve disputes between investors and states, in the case that the former considers that the law of the State is against their expected or real benefits. This in itself represents an aberration, since it puts a company on the same level as a state. Companies and states do not have the same objectives, interests or the same legitimacy at all.

    This clause is not new. It is included in several trade agreements. The CETA (FTA between EU and Canada), considered as the little brother, and TTIP pilot project, which still has to be endorsed in the Parliament, includes this abusive and undemocratic clause.

    There are numerous instances of how the ISDS works. Egypt is particularly illustrative. A French company, Veolia, threatened to sue the Egyptian state, since the government proposed to increase the minimum wage by 50 per year. The multinational that was operating in the country, considered that this legislation would lower the expected profits. There were three options: a) that the State compensated the company by paying the benefit difference; b) to go to one of the private arbitration courts to resolve the conflict, and taking public money to pay the cost of these private arbitrators, which are very expensive; c) that the State would recant and not approve the bill. Egypt chose the third option. In any of the three, who pay are always the same: the citizens because they either see reduced their rights or have to take public money to pay the compensation to the companies or they have to pay the high costs for the private arbitration court, which are large multinational companies dedicated to consulting.

    The option that Egypt choose is what is called the "regulatory chill", which implies that the states cease to legislate or regulate in certain labor, environmental or social issues in fear of being sued by companies who believe their profits will decrease. It is a sign of perversion and inhuman greed of the large corporations, which know no boundaries, no country, no dignity.

    The TTIP in the European Parliament

    Recently, in the European Parliament, we have seen a shameful and pitiable spectacle of usurpation of democracy and instrumentalization of the institutions in the interests of a few. At the plenary session in June, a debate and vote on the TTIP report that the ITC itself responsible for monitoring the negotiations, had prepared should have taken place. This report represents only recommendations or a reflection of the opinion of the European Parliament, with the aim that the European Commission, responsible for negotiations, continues its work. The already depleted powers of Parliament were rushed when the ratings and the debate itself at the last minute were canceled. The justification, merely technical and procedural appealed to the high number of amendments, was not credible. In fact, the ISDS was the real reason. The Great Coalition, formed by popular, liberals and social democrats did not reach an agreement on the controversial clause. The pressure from civil society and the wide mobilization throughout all Europe caused that several European socialists were aligned with the proposals of the United Left and the Greens: unambiguous rejection of the ISDS. Thus, the majority of MEPs would vote against the private arbitration system. It opened a crack in the Great Coalition that the defenders of the TTIP could not consent. So they suspended the vote and debate until further notice, because it seems that they only accept democracy when they win, and when they lose they turn to policy and agreements on the back to the citizens.

    It is therefore clear that the ISDS is not a prop, not a part of the TTIP, but a fundamental pillar of this treaty. The TTIP without the perverse clause is meaningless.

    The Citizens vs the Oligarchy: The Struggle Continues

    The TTIP is not a fight between the United States and the European Union. The TTIP is a struggle between citizens and the economic powers. The US social platforms are also mobilized to express their rejection of this trade agreement. In addition, more than 30 congressmen have sent a letter to Obama asking for the suspension of the TPP negotiations, the twin brother of TTIP but with Pacific countries. All this happens on the other side of the Atlantic, and it shows that the common struggle is against the powers and oligarchies.

    Negotiations are still under way and it is likely that they continue until the end of 2016. So we have still time to continue fighting on the streets and to ask our representatives at all levels of governments to demand a binding referendum, in order that the citizens can decide. It is a question of democracy and political responsibility, as this agreement would completely change our lives, our state of law and our democracies (already weak, with an increasingly frayed representative system).

    European Campaign to collect signatures: https://stop-ttip.org

    Translater: José Luis Martínez Redondo