Transatlantic Trade and Investment Partnership: Five Major Concerns

On the 31st May 2016 GreenBuzz Berlin organised and hosted a Sustainability Panel Discussion on the subject of the Transatlantic Trade and Investment Partnership (TTIP) and its impact on the Sustainable Development Goals (SDGs). This agreement is currently being negotiated between the European Union (EU) and the United States of America (USA). Commenting on why the topic was chosen Carolin Kruse, a board member of GreenBuzz Berlin notes that “there is so little information about the agreement and in particular on its impact on sustainability, that our aim with the event, was to put it more into focus and to enable discussion”. Facilitated by Gerd Hofielen of UnternehmensGrün, the panel also involved Jürgen Maier of Bündnis TTIPunfairHandelbar, Guido Körber of  KMU gegen TTIP and Julia Thrul, an independent ethical business consultant. Representing private business, non-governmental organisations, civil society groups and themselves as concerned citizens it was evident that all panelists were against TTIP although for different reasons. In this article Ken Fullerton explores what was discussed, some of the arguments point forward and how or why they don’t support the successful implementation of the SDGs.  

  1. TTIP negotiated in secrecy.

One of the most controversial elements of any potential TTIP agreement is the fact that it has been negotiated in great secrecy. General citizens, civil society groups, political parties and other interest groups have had very limited access to the actual text of the agreement (and its previous versions) and this should be of great concern. A fear is that the agreement is skewed heavily in favour of the large multi-national corporations (MNCs) who not only want access to bigger and new markets but want more favourable trading conditions as well as wanting to pay as little tax as possible. Such an agreement is likely to greatly affect the ability of small businesses and entrepreneurs to operate effectively and to be innovative and is likely to increase, not reduce, inequality (SDG 10). 

  1. Regulatory standards difficult to be enforced in the USA.

In the EU if a new trade or political agreement comes into force that has been agreed to by all members then the various regulatory standards of that agreement are relevant for each member. If a member does not comply with the agreed upon standards, then that member must take efforts to uphold those standards and ensure that they do comply. However, in the USA, different states, cities have their own regulatory standards and if a new trade agreement, such as TTIP, comes in at the national level it does not force these states and cities to comply with the regulatory standards set out in that agreement. If TTIP were to come into force, with specific set out regulatory standards, this could greatly skew trade in favour of the USA. Essentially, EU countries and their businesses would be forced to make different variations or models of their products for different parts of the USA in order to meet their local regulatory conditions. On the other hand, businesses in the USA could make products adhering to one set of regulations and could then market and trade their products with all EU members who are forced to adhere to the standards. This goes against the values of ‘inclusivity’, ‘equality’ and ‘fair partnerships’ that are evident in multiple SDGs.

  1. Free trade does not equal fair trade.

While reducing barriers, such as protectionist measures like quotas and subsidies, will generally lead to increased trade between nations or trading blocs, this does not always mean that it results in fairer trade. Each country – even the 29 members that currently make up the EU – is very different which means there is no ‘one size fits all’ model that can work. Countries are at different stages of their development, some are net importers (Poland for example) while others are net exporters (Germany) and each country has different socio-economic factors that can impact upon their economy. A bilateral agreement, such as TTIP, can therefore be better for some countries within the EU that it is for others. SDG 8 promotes decent work and economic growth and SDG 11 promotes sustainable cities and communities, so should such an agreement be considered as fair? 

  1. No free movement of people.

While TTIP seeks to reduce the barriers to trade on many different aspects ranging from services to finances it does not seek to allow the free movement of people between the EU and the USA. If TTIP is ratified stringent regulations will remain in place and citizens of EU countries (where they are already free to move around in as they please) will still have to obtain visas in order to visit, live and/or work in the USA. Citizens trapped in poverty will find it difficult to relocate to the USA in search of a fresh start and access to educational and/or employment opportunities (SDG 1 and others). This concern is not just limited to TTIP as many other recent bilateral and regional trade agreements have struggled to solve the ‘free movement of people’ issue.

  1. Bilateralism vs Multilateralism.

TTIP is an example of a bilateral ‘free’ trade agreement negotiated between two trading blocs. While it might bring some benefits to these two blocs other countries it will not be of great benefit to developing and least developing countries who are the countries that stand to benefit the most from global (and multilateral) fair trade agreements that enable them greater access to global markets with reduced subsidies, tariffs and other trade restrictions. A key argument made by the panellists was that the rich, developed nations have had a long time to develop and get their economies into the position they are now in today while the developing and least developing countries have not had the same fortune. Surely the world (not only the EU and the USA) should acknowledge this, and negotiate trade agreements under the World Trade Organization (WTO) regime that gives poorer nations favourable access thereby enabling them to develop and provide sustainable development opportunities to their citizens, many of whom, live in poverty?

Due to immense pressure coming from citizens, civil society groups, businesses and others it is still not clear yet whether or not TTIP will actually be concluded, agreed upon and then ratified on both sides of the Atlantic. What is likely is that continued pressure from such sources will continue to keep TTIP in the international media’s spotlight and attempts will be made to keep unravelling the ‘secret’ elements so that citizens of the EU, USA and the rest of the world know how they will be impacted by it if it ever comes into force. In summing up the Sustainability Panel and the controversy of TTIP Kruse says “the treaty is unnecessary as it is not going to simplify trading in many industries, standards will worsen and innovation will be reduced. Above all it does not facilitate sustainable development as it suggests as some elements of development might be covered individually, but not in a continuous and holistic manner.”