Progress | Centre-left Labour politics

Should Labour back TTIP?

Emma Reynolds and Cat Smith debate the pending transatlantic trade agreement

Yes

Emma Reynolds

The European Union and United States account for nearly half of global GDP and almost a third of world trade. The Transatlantic Trade and Investment Partnership would be the biggest free trade agreement ever. It is an opportunity to better regulate this trade and push up standards in areas like environmental and food protection.

TTIP would attract foreign investment, create jobs, lower the cost of consumer goods and services, and bring new opportunities for business in the United Kingdom. The Department for Business, Innovation and Skills estimates the deal to be worth £10bn a year to our economy. The average household could benefit by up to £400 a year.

British companies that export to the US pay £660m a year in tariffs. They also have to deal with hidden costs of meeting different regulations. Many are bureaucratic rules that could be standardised. For instance, American and European regulators have different requirements for testing the safety of cars, pharmaceuticals and even furniture. These different standards can be expensive for firms and, in the worst cases, some goods have been banned, such as British lamb.

TTIP would remove tariffs and many of the hidden barriers to trade. It would harmonise regulations and bring in common standards. This would reduce costs for businesses and would benefit consumers too. We pay up to 20 per cent more for products imported from the US as a result of tariffs. Without TTIP, people will continue to pay higher prices for food, clothes and other products.

Opponents of TTIP often make two arguments. First, they claim that the NHS will be opened up to American private healthcare companies. Labour has been clear that NHS services should be excluded from TTIP. The European commission recently reassured the health select committee that ‘all publicly funded public health services, including NHS services, will be protected in TTIP.’ Labour members of the European parliament are closely scrutinising the draft agreement to make sure these promises are honoured.

Second, they claim that TTIP’s inclusion of investor-state dispute settlements is secretive and favours multinational companies. Under the ISDS, if there is a breach of the rules companies have the right to bring legal proceedings against governments involved in TTIP. The UK already has 90 such agreements in place with other countries, but there has never been a successful claim against us. There is nothing unique or inherently sinister about this proposal being included in the TTIP deal.

Finally, some opponents of TTIP are simply protectionist or anti-American. The EU has already negotiated free trade agreements with many countries, such as South Korea, Canada and Vietnam. None of these deals have provoked the same hostility that is directed at TTIP.

We should neither oppose nor fear free trade provided it is underpinned by sensible, proportionate and progressive regulation. We can fight for high standards in the final agreement which will benefit workers in sectors like car manufacturing, textiles, chemicals and construction. Here TTIP has the potential to stop spiralling low standards and cost-cutting at the expense of working people and their wages. Previous trade deals have not weakened standards. The EU and US already trade more than £1bn a day. TTIP is a huge opportunity for progressives to push for better standards in both the world’s largest economy and its largest single market. It is an opportunity that we should seize and shape according to our values.

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Emma Reynolds MP is a member of the health select committee

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No

Cat Smith

The debate surrounding the Transatlantic Trade and Investment Partnership is essentially a debate about democracy. Do we want decisions on policies relating to our public services and regulations taken by elected governments democratically chosen by the people or do we want them taken by investor-state dispute settlements tribunals between overseas investors and those governments?

Much of Labour’s focus on TTIP to date has involved exempting the NHS from it. It is not difficult to see why. Legal advice from Unite the union has suggested that TTIP could lead to the United Kingdom having to compensate private providers for ‘future losses’ should services be brought into the public sector. Labour went into the last election with clear commitments to introduce a levy on tobacco companies to pay for doctors and nurses, to reverse many of the changes introduced in the Health and Social Care Act and place a limit on the profits private healthcare operators could make on patient treatment. Should TTIP go ahead it may be difficult to make similar commitments in future without risking a substantial financial penalty. Many of the Blair governments’ reforms of the NHS centred on putting the patient in control and challenging what were often defined as ‘producer interests’. While we can debate the policy choices that were made few would disagree with the principle. We cannot allow TTIP to bring this approach to an end and put the needs of pharmaceutical companies and private health and social care providers ahead of those of the patient.

It is not only the NHS which is at risk. European Union regulations on a range of issues might be affected. Barack Obama has publicly made reference to EU regulations on food standards which are much more robust than those in place in the United States. Prior to the last election the cross-party environmental audit committee expressed its concerns about the impact which TTIP would have on EU environmental protections. While the government is keen to paint such concerns as scaremongering the evidence suggests otherwise. The number of ISDS cases being taken worldwide has increased significantly in recent years. High-profile cases include Philip Morris taking action against Uruguay and Australia for putting in place regulations on tobacco not dissimilar to those being pursued in the UK.

Labour is currently fighting to protect its landmark Freedom of Information Act from Tory attempts to water down its provisions. This act has ensured that governments have becomes more transparent and allowed the public to know about important issues such as the number of times police officers have used Tasers on children. The secrecy surrounding TTIP negotiations as well as the potential secrecy of ISDS proceedings also represents a serious threat to open democracy.

Recent debates within the Labour party and the wider Labour movement since the general election defeat have demonstrated, to put it mildly, that there are a diverse range of views about the future of progressive politics in the UK. One unifying theme, however, appears to be the need to change our politics so that individuals have greater control over their own lives. This is incompatible with a treaty being negotiated in secret and which, instead of devolving power to individuals and communities, transfers it away from democratically elected governments and to unaccountable tribunals and corporations.

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Cat Smith MP is shadow minister for women and equalities

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Emma Reynolds MP

is a former member of the shadow cabinet

Cat Smith MP

is shadow minister for women and equalities

9 comments

  • It seems to me that any argument against TTIP is ideological rather than practical. Now I’m not any kind of expert on any of these subjects but as layman so to speak this is how it plays out to me. There seems to be three arguments against. 1. The NHS being opened up to private American investors. 2. Unaccountability. And 3. Differing US and European standards.

    If I look at each point the way I see it is as follows. I don’t think anyone is suggesting opening the NHS up to American firms is on the table, only those against. I’ve heard a few times that the NHS would be excluded. But even if this wasn’t the case surely they would have to operate to a certain standard or be prosecuted. We have had private British firms working in the NHS for a while and as far as I can see the NHS hasn’t imploded. I appreciate ANY privatisation of the NHS is viewed as bad in some people’s minds but I’m not sure it’s true. I’m not saying it’s necessarily a good thing but maybe some of these US companies have real expertise that could be of benefit. Or the wider benefits could outweigh the drawbacks. I just don’t know enough about it.

    Unaccountability, undemocratic and a lack of transparency. We have elected representatives. If we don’t like the way they conduct business we vote them out. The EU is run by it’s member states which are all democratic, don’t like the way they run it vote for someone else. I don’t buy the whole EU is undemocratic argument. Also as I see it, negotiations are still continuing. I have never heard of any set of negotiations with detail being offered out on a large scale. It’s how negotiations are done.

    With regards to differing standards in the US and Europe. I doubt many European standards would have to be watered down. And even if they were are American standards really so terrible and dangerous? I appreciate they have less regulation in the US but I suspect that standards are not as bad people like to make out. I’m sure a country like the USA isn’t going to put up with substandard goods and services. It just doesn’t ring true.

    On balance I’m in favour of TTIP but this only goes from what I understand which isn’t much. There is nowhere near enough information out there for people to make an informed debate. I suppose one could look for the information but I imagine it’s not exciting reading and trawling through the politicised opinions would be a bit of a ball-ache. It’s another case of the political establishment failing to set out the facts in a clear and concise way without trying to have an opinion one way or the other. But I guess this is the world we live.

  • You are relying on a lot of ‘might be’s’. Two things are worth bearing in mind. First, there is a difference between Us regulatory standards and Europe’s. This is largely because the US has a legislature which is largely captured by big business who are able to buy support from Congress for light touch regulation. Secondly, the NHS is unique in global terms because it is free at the point of use. Every other country has some form of health insurance which excludes those who cannot afford to pay. In the US, until recently, many millions of people were unable to afford health insurance and the current Obamacare scheme is vulnerable to a Republican president scrapping it. Global healthcare companies want a slice of the easier parts of the NHS and TTIP is one route to getting it. Of course, there is private sector involvement in the NHS but it is limited. Do we really want to see a future Labour government involved in costly litigation with a major multinational company, under the terms of a freetrade agreement, because it wants to maintain those strict limits?

  • Fair points well made. I think Labour needs to come to a position but the government and the EU are going to do what they want. I think it will be settled long before Labour get a sniff at power. If it was me in charge I’d support TTIP providing the government makes sure the NHS is exempt which, although I could be wrong, is what I believe they are doing anyway. Labour should make a big song and and dance about it though.

    The past few years have shown that opposition for oppositions sake has not gone down well with the electorate so Labour has to pick it’s fights carefully.

  • Emma Reynolds is somewhat disingenuous, regarding the implications of TTIP and particularly the Investor-State Dispute Settlement process. It is unlikely to have escaped her attention that Vatterfall are currently suing Germany over its decision to phase out nuclear power generation post-Fukushima and that the figure being demanded has climbed from 700 million euros to 6 billion euros, plus interest!

    Another example was the $50bn claim by Yukos shareholders against Russia, that exploited ambiguities in the Energy Charter Treaty. This was despite the acknowledged illegal activities of the defendants including: illegal conduct in the acquisition of Yukos; the misuse of the tax treaty between Cyprus and Russia; the use of Russia’s low-tax regions to mitigate tax burdens; and actions to obstruct the enforcement of tax claims. Amazingly, these factors were ruled not relevant, regarding pursuance of the claim, for assorted technical and legal reasons but did result in a 25% reduction in the awarded amount. For those interested in this case (still not settled) and the rulings see link below:

    http://tinyurl.com/qbmp5zq

    There are articles online, detailing the lobbying interests of the small number of legal firms involved and how such processes can be relatively easily manipulated, perhaps of no great surprise to an ex-lobbyist (Cogitamus), such as herself?

    http://corporateeurope.org/sites/default/files/efila_report-web.pdf

    Additional problems with TTIP and the different regulatory frameworks, generally weaker or even voluntary/self-reporting in US were identified in a report commissioned by the European Parliament in 2013. All beef from America is currently banned by the EU because of the hormone injections used. The US uses pesticides banned in the EU and there is also the problem of genetically modified products which the US refuses to label as such, when exporting.

    http://www.ecologic.eu/10074

    Emma Reynolds appears to have failed to have done her homework, so I’m with Cat Smith on this one, until evidence emerges that other proponents of TTIP are not as lazy or unquestioning.

  • Agree with Cat the ISDS is scary. Labour MEPs have done well to bring this to our attention. Agree with Emma that this is a great opportunity for socialists to fight for high standards for workers’ (and consumers’) rights in any final EU-US Treaty. Any Treaty is surely way, way down the line. If it was negotiated in public it would take far far more time, which is why all these things are done in private, but with public input (there’s v public debate about ISDS in the European Parliament). We can always oppose the final Treaty.

  • If Labour were in Government and negotiating the TTIP there may be some some safe guards but they aren’t, the Tories are in power and I wouldn’t trust that lot to organise my daughters 11th birthday party. If the TTIP is so benign and spiffing as Emma Reynolds suggests, why are all the negotiations behind close doors? Global capitalism and many global corporations have let citizens, consumers, environment, society and their own workforce down very badly, yet we seem to be happily blundering our way towards another neo-liberal stitch up.

  • It is not only the NHS, which is currently being underfunded and demonised by the despicable Tories and may well not exist in 2020. But what would happen for example if we needed to take the power industry back under some state control? There is a good case for this as the privatised industry has failed to ensure security while bloating all costs. Or the railways? There seems to be little case for TTIP unless it forms part of a new EU Treaty which should require acceptance by all member nations. There may be opportunities in TTIP but I would have thought that tariffs could be negotiated bilaterally without selling what remains of European democracy to the corporate feudalists.

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