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Zac Goldsmith & Boris Johnson on a walk about in Richmond, April 10, 2012. Photo: By Andrew Parsons / i-Images via Flickr.com.
Zac Goldsmith & Boris Johnson on a walk about in Richmond, April 10, 2012. Photo: By Andrew Parsons / i-Images via Flickr.com.
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No rubber stamp for the TTIP!

Zac Goldsmith

27th February 2014

The Transatlantic Trade and Investment Programme - TTIP - is a huge 'free trade' agreement under negotiation between the EU and the USA. Zac Goldsmith MP warned Parliament that it threatens to undermine key democratic principles.

A guard needs to be erected against the voracious lobbying by big businesses that have a direct interest in undermining standards.

It is good news that we are discussing the TTIP which, as far as I am aware, is the most ambitious free trade agreement ever attempted.

On these complex agreements, national legislators, in their worthy pursuit of job creation, growth and trade, do not always pay attention to the finer details.

Some years ago I interviewed Ralph Nader, the consumer activist and occasional presidential candidate, about the North American Free Trade Agreement.

He told me that even though Congress was set overwhelmingly to back the treaty, he was convinced from his discussions with members that few of them, if any, had bothered even to read the text.

Your Ignorance is their strength

He eventually offered a substantial prize to any member who was willing publicly to answer twelve simple questions about NAFTA.

Following a long pause, a strongly NAFTA-supporting Republican, Senator Hank Brown of Colorado, accepted the challenge and reserved the Senate Foreign Relations Committee room for the ordeal.

The cameras and journalists were there and, to everyone's amazement, he answered each of the twelve questions correctly.

But when he had finished, he turned away from Ralph Nader to the cameras and said that having read the treaty, which he had not previously done, he realised just how awful it was, so he chose to do a U-turn and to vote against it.

At this stage, we do not have a huge amount to go on regarding the TTIP but, whatever one thinks about it, it clearly has serious implications and it merits close scrutiny.

On the whole, free trade agreements are about lowering barriers to trade - that is their purpose - but, compared with the situation in other countries, there are relatively few barriers to trade between the EU and the US, so the main focus must be standards and regulations, with the goal of trying to harmonise them.

However, it is hard to imagine that the process will involve any key standards going up. On the contrary, I suspect that we will see a spiral downwards.

Standards and regulations will be swept away

We only have to read several of the publications put forward by some of the most substantial big business lobby groups to see that they are openly talking about removing under the TTIP whole rafts of standards and regulations that businesses believe hinder their activities.

One does not have to believe in a conspiracy theory; one just needs to read the communications of some of the companies that are playing an active role in the process.

We are already seeing an emphasis on lobbying with regard to food, about which several hon. Members have spoken, and it is difficult to imagine the harmonisation of food standards working in our interest.

Europe believes that providing clear labelling for genetically modified food is a consumer right, but such practice is absolutely opposed by the vast majority of states in the US.

There are so many differences between the US and the EU, and not only in the quality of standards, but in the approach to developing them. I cannot imagine a situation in which harmonising standards and regulations would work in the interests of the consumer. I have given the example of GM food labelling, but there are many others.

Growth hormones and endocrine disruptors

A number of countries around the world, and indeed the EU as a whole, have chosen not to allow the import from the US of beef from cows fed a diet that includes the hormone ractopamine, because of the fairly grave health concerns.

I suspect that most British consumers would support that position. Would that be challenged? Well, there is already plenty of talk among agribusiness in the United States that it should be.

Most worryingly, US agribusiness is strongly opposed to EU attempts to limit endocrine disruptors. The links between the use of such chemicals and the alarming increase in precocious puberty among young girls are not disputed.

Will those standards that we have set across Europe be adhered to and maintained? That remains to be seen, but we know that plenty of lobby groups in the United States have their sights set on reducing those standards.

Undermining democracy

It is easy to imagine that regulatory convergence will mean chasing the lowest common denominator.

It is worth noting that, according to a whole raft of freedom of information requests conducted by the Corporate Europe Observatory in the context of the TTIP, the Commission has met civil society groups just eight times over the course of those discussions, whereas it has met corporate lobby groups - I do not know how they are defined and am only repeating what has been reported - 119 times.

I suspect that most Members across the House would agree that removing or simplifying unnecessary regulations, removing barriers to entry, particularly for small firms, and encouraging free trade are all laudable aims.

But they need not happen at the expense of democracy. My concern is that the proposed ISDS mechanisms, which we have already heard a great deal about, will undermine democracy.

Investment tribunals

Under those mechanisms, companies wishing to challenge a national regulation could effectively bypass the usual process and go straight to an investment tribunal.

Often hugely important outcomes therefore rest on the shoulders of just three arbitrators - one is chosen by the company, another by the state and the third is a compromise of the two. It is hard to understand how this country would want or need such a system.

At this stage it is very hard to know how things will pan out. Much will depend on the terms of reference, but there are plenty of examples from around the world - as he pointed out, this is not a new concept - of companies using similar provisions in other trade agreements in order to undermine domestic legislation.

NAFTA - only 15% of Americans want to stay in

The North American Free Trade Agreement is a good example. According to a succession of polls in the past year, just 15% of US citizens want to remain in NAFTA. It has become one of the most unpopular free trade agreements of all. It makes the UK's current vogue of Euroscepticism look like a joke.

A striking example in relation to NAFTA concerns Canada being sued via one of these dispute mechanisms by Ethyl Corporation for banning the chemical MMT, which Canada considers to be a highly dangerous toxin.

Canada had to settle. It paid millions of dollars in compensation and eventually had to reverse its ban. Incidentally, the ban still stands in the United States, which makes the decision even more perverse. There are many more examples, and I was going to rattle off hundreds, but time is short and Members will be pleased to know that I will not.

Voracious lobbying must be resisted

As this treaty unfolds, it is essential that we remain mindful of who it is designed to serve. A guard needs to be erected against the voracious lobbying by big businesses that have a direct interest in undermining a number of the standards that I cited and have been cited by other Members.

I personally do not trust the Commission to balance those competing interests, for all kinds of reasons, some of which I have hinted at in my short speech. I strongly believe that it falls to legislators like us to apply scrutiny throughout this process, and I very much hope that we do.

 


 

Zac Goldsmith is MP for Richmond Park, and a former editor of The Ecologist. 

This article is a minimally edited version of a speech given in the House of Commons on 25th February 2014.

 

 

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