What is TTIP and CETA and Why Should You Care?

 

TTIP and CETA are international trade and investment treaties. TTIP is the Transatlantic Trade and Investment Partnership, a treaty between the EU and the USA, and CETA is the Comprehensive Economic Trade Agreement between the EU and Canada. These international agreements aim to harmonise trade laws and reduce barriers to trade. While this may seem harmless, the implications are quite substantial. These are far reaching agreements that will affect the ability of governments and citizens to defend their rights and protect the environment from multinational corporations or very wealthy individuals. These agreements are anti-democratic and hold the rights of large corporations above those of citizens, workers and the environment. Ireland has never been party to any international trade agreement like these before and it certainly hasn’t hurt our ability to attract investment, it would at least lead to the question does Ireland need one now?

You probably haven’t heard anything about TTIP and CETA. This is because the negotiations of these deals has been carried out in secret and it has been illegal to discuss the contents of the documents! These agreements have been negotiated, in secret, and almost exclusively between the EU commission and the representatives of big corporations. The CETA has just been finalised and the entire 1598 pages are available to read here. It might seem more appealing to stab yourself in the eye than read through a bulky incomprehensible document like that, so below is a summary of some of the dangers of CETA and TTIP that you need to know. In fact, the EU negotiators involved in drafting the agreements don’t even know what the consequences of the agreements really mean.

So, what makes these agreements so bad? They contain provisions for what has been referred to as Investor State Dispute Settlements (ISDS), Investor Court Systems (ICS) and the International Centre for Settlement of Investment Disputes Convention (ICSID). Investor State Dispute Settlements have a history in international agreements and it isn’t pretty when it comes to respecting workers’ rights, the environment, control of public services, the ability of the government to pass laws and thus democratic freedom, in fact there is evidence to support the claim that it prevents governments even considering the laws in the first place!

Below are examples of how ISDS can affect a number of different areas.

ISDS and Workers Rights:

The ability of governments to protect worker’s rights could be severely restricted. If a foreign company or investor argues that a law has a discriminatory effect on their interests and they consider any change of policy that improves workers’ rights and conditions and impinges on their “legitimate expectations”, – (their expected profits), then they could use the ISDS mechanism to challenge, or prevent laws enacted on, for example, collective agreements, equal pay, living wage or health and safety.

A recent example of this is, the ISDS system has been used by Véolia to bring a case against Egypt demanding $110million following Egypt’s decision to raise the minimum wage. Another example is Piero Foresti & others vs. South Africa in 2007. They brought a case for $350million in damages as a result of the country’s Black Economic Empowerment Act, which aims to redress some of the injustices of the apartheid regime which required companies to transfer a portion of their shares into the hands of black investors. The case was only dropped after the government changed the legislation watering down the requirements for the mining companies.

The Trade Union congress in the UK explained that:

‘TTIP may lead to a lowering of labour standards as the US refuses to ratify core ILO conventions, including those on freedom of association and collective bargaining and operates anti-union “right to work” policies in half of its states. We are concerned that labour chapters in EU trade agreements to date (such as in the EU-Korea FTA and CETA) have not contained enforceable language such as sanctions for violations of labour standards and that workers would therefore not have a route through TTIP to enforce their rights’

 

ISDS and the Environment:

Just as with the protection of employment rights, protection of the environment will be equally hampered. Examples of how the ISDS system has been used in environmental disputes includes the case of Chevron, an international oil company that is using ISDS to try to get out of paying fines imposed for polluting large areas of the Amazon and ‘poisoning the communities of some 30,000 Amazon residents, including the entire populations of six indigenous groups (one of which is now extinct)’

Another example of the danger of ISDS threatening the protection of the environment is the case of Renco who are suing Peru for $800million for failing to renew a third extension on its requirements to prevent pollution from its metal smelting plant that have already been extended twice since 1997 The pollution has been linked to the toxic poisoning of children, in particular with lead poisoning.

A recent study published by Canadian Centre for Policy Alternatives, Corporate Europe Observatory,

Friends of the Earth Europe, Forum Umwelt und Entwicklung (German Forum on Environment & Development) and the Transnational Institute has examined numerous other ways that the ISDS/ICS mechanism could affect Europe. Of the five cases they look at, two are quite pertinent as they include Canada who are the most sued country in the world under the ISDS system. The report says that like Canada, EU countries could be sued for trying to prevent fracking or acting on the outcomes of environmental impact assessments. Cases that could cost Canada a combined total of at least $310million.

 

ISDS and Public Services:

The ability of governments to protect essential public services from being exploited for corporate profit will be eroded. The Case of Azurix suing Argentina for $165million:

‘During a 1999 water privatization deal, the company won a 30-year concession to provide water and sewage treatment to 2.5 million people. Within a few months, residents complained of foul odors coming from the water. Local governments advised against drinking or paying for tap water and street protests against the water service were held. After the problem was identified as algae contamination of a reservoir, Azurix alleged the algae was the government’s responsibility and demanded compensation for associated costs. The government argued that Azurix had a contractual responsibility to ensure clean drinking water. In the following year, residents experienced a series of water outages and were repeatedly over-billed by Azurix for water, resulting in government fines. Azurix withdrew from its contract in 2001.

Azurix then launched its claim under the BIT, claiming that the government had expropriated its investment and denied the firm “fair and equitable treatment” by not allowing rate increases and not investing sufficient public funds in the water infrastructure. In its deliberations, the tribunal weighed whether legitimate public interest policies could constitute BIT violations. The three tribunalists decided, “the issue is not so much whether the measure concerned is legitimate and serves a public purpose, but whether it is a measure that, being legitimate and serving a public purpose, should give rise to a compensation claim” (emphasis added). The Tribunal ruled that Argentina violated Azurix’s right to “fair and equitable treatment,” among other breaches, and ordered the government to pay the Enron subsidiary $165 million plus interest, in addition to covering almost all of the tribunal’s costs.’

In Ireland, the Irish Cancer Society produced a report. It concluded ‘that the predicted economic gains are too small to justify the social risks and particularly, the risks to our public health which would result from ISDS in TTIP’.  “Ireland receives seven times the EU average Foreign Direct Investment from the United States and this shows quite clearly that the country doesn’t need this type of trade agreement,” … “Ireland has never had a claim against it under investor protection, so if this is provided for in TTIP, there will be a massive exposure to Irish laws and in particular in the area of public health.”

ISDS and Democracy:

Apart from the obvious significance of the effect of the increased power of corporations under these trade deals, the harmonising of laws between the EU and the US will have a serious effect on the ability to maintain food quality standards that are currently protected under EU law. It is an almost certainty of GM food being sold widely across the EU without being able to legislate against it, or even have anything indicating GM contents on the packet as a result of these deals. The effect on agriculture, which comes under the ‘phytosanitary’ aspect of the deals, could have dramatic effects. In addition, Regulatory Convergence is as big a threat to democracy and our well-being as ISDS. The three step process of mutual recognition, harmonisation and convergence envisages an on-going revision of standards in areas as diverse as food safety and worker’s rights; if they are deemed barriers to trade. This will happen behind closed doors, in the EU proposed secret Regulatory Cooperation Board, where corporations must be notified in advance of and can object to, new government regulations or legislation and can advance their own regulations or even propose revision of old ones. This on-going process would allow corporations to co-write legislation with only profit in view and would eliminate accountability, while introducing a quasi-feudal system ruled by corporations and the Commission.

 

So, what can be done? Well, YCW is a member of the Stop TTIP Information Network.

We are organising a protest and march on April 23rd 2016 from 2pm outside the Central Bank in Dublin.

Keep an eye on the news section of the website and facebook pages for upcoming actions or contact us to get involved.