The Transatlantic Trade and Investment Partnership (TTIP) is a proposed trade deal between the EU and the US.
PCS believes that TTIP poses a profound threat to public services in general, leaving them wide open not only to greater privatisation, but making it harder for any future government to regulate foreign private sector companies operating in our public services.
This briefing outlines why PCS opposes TTIP, why we are calling for all public services to be protected within any trade treaty and what members can do to support the growing campaign against TTIP.
- What is the transatlantic trade and investment partnership?
- Why should we be concerned about TTIP?
- Public services and public procurement
- Employment and trade union rights
- Endangering the environment and action on climate change
- What is the PCS position?
- How can members get involved?
What is the transatlantic trade and investment partnership?
The Transatlantic Trade and Investment Partnership is a bi-lateral free trade agreement which is being negotiated by the US and the European Union. The talks aim to eliminate barriers to trade in goods and services, to guarantee investor rights and to promote regulatory cooperation. These agreements are essentially about creating a positive, secure investment environment for big transnational businesses.
TTIP is designed to:
- Harmonise rules on trade, business and environmental standards.
- Open markets in the service sector – including public services – to delivery from outside.
- Open up access to government procurement markets and eliminate preferential treatment to local suppliers.
- Introduce investment protection provisions that include Investor-State Dispute Settlement (ISDS) mechanisms which allow investors to challenge state actions which they perceive as threatening to their investment.
Why should we be concerned about TTIP?
TTIP will create an economic environment that will favour multinational companies and deregulation.
- TTIP is not a traditional trade agreement designed primarily to reduce tariffs on imports between trading partners, as tariffs between the EU and USA are already at minimal levels. Its main aim is to remove regulatory "barriers" which restrict the potential profits to be made by transnational corporations in US and EU markets.
- This includes the removal or downgrading of key social standards and environmental regulations, such as labour rights, food safety rules (including restrictions on GMOs), regulations on the use of toxic chemicals, data protection laws and new banking safeguards introduced to prevent a repeat of the 2008 financial crisis.
- One of the most controversial aspects of the negotiations is the inclusion of an Investor-State Dispute Settlement (ISDS) mechanism which if agreed, would give transnational corporations the ability to sue national governments directly for losses suffered in their jurisdictions as a result of public policy decisions. For example if steps were taken to return utilities to public ownership, investors would be able to sue for both current and future loss of profits often amounting to billions.
- The entire TTIP negotiations are shrouded in secrecy. Elected EU parliamentarians from EU member states will not be allowed any sight of the demands being made on their countries by the USA. The European Commission has event tagged official TTIP documents with secret markings in order to be able to trace any leaks back to their source.
Public services and public procurement
TTIP could be disastrous for public services by forcing further deregulation and liberalisation.
- TTIP aims to secure the liberalisation of services markets, including the opening of public services such as health, education and water to private firms.
- The Commission has moved to abandon a "public utilities" exemption on the ground that it actively wishes to see public services included within EU trade agreements, excluding only security-related services such as the judiciary, border policing or air traffic control. The European Commission and US government are also both intent on using TTIP to open up public procurement contracts to the private sector.
- In addition to the prospect of handing over public services to profit making companies, one of the most insidious effects of free trade agreements is that it becomes effectively impossible for countries to restore public services if they have already been privatised.
- This "lock-in" effect will apply even more widely if TTIP adopts the "negative list" approach seen in the EU's new free trade agreement with Canada, whereby all service sectors are surrendered to liberalisation unless they are specifically marked out as exemptions (the "list it or lose it" model).
- TTIP threatens to restrict the ability of local authorities and other public bodies to source and employ locally. This undermines their ability to use public money to achieve social and environmental outcomes through their supply chain and employment practices.
Employment and trade union rights
Free trade agreements rarely, if ever, benefit working people and are pushed by corporations who use them as a means to maximise profits and further their own interests.
- There are concerns that TTIP could lead to a downgrading of any labour standards identified as "barriers" to trade, such as collective labour agreements which could be challenged as representing restriction on the business model of competitors.
- The EU has historically included employment and trade union rights in trade agreements. However, the USA has not ratified a number of the most important International Labour Organization Conventions, including the rights to freedom of association and collective bargaining.
- Around half of all US states have now adopted anti-trade union legislation under the so-called "Right to Work" framework; an anti-trade union legislation framework that undermines trade union finances and allows businesses to undercut workers pay, health insurance and pensions.
- There is a concern that European companies may take advantage of the ease of market access created by TTIP to relocate to the USA, and take advantage of the weak labour regulations described above. Similarly, there is also a danger that American companies may be encouraged by the TTIP to relocate to EU states such as Bulgaria, Romania and Slovakia where incomes are low and trade unions are weaker than in other parts of the EU.
Endangering the environment and action on climate change
TTIP will weaken environmental regulation, dictate energy policy and severely limit our ability to tackle climate change.
- TTIP would abolish trade restrictions on energy between the US and EU leading to increased fossil fuel exports. This is despite grave warnings from the UN Intergovernmental Panel on Climate Change (IPCC) that if we do not end our dependency on fossil fuels we are heading for climate catastrophe.
- Fossil fuels emit harmful greenhouse gases into the atmosphere leading to climate change processes, and if we are to seriously take action to combat climate change, it means leaving around two thirds of existing fossil fuel reserves in the ground and scaling up renewable energy development.
- Any relaxation of trade restrictions would encourage further oil and gas development such as fracking. Gas has to be transported in liquefied form and is a carbon-intensive fuel.
- A further concern is the harmonisation of environmental standards, downgrading current protections. TTIP would undermine the important EU precautionary principle which provides that where actions or policies might be a danger to the environment or health of citizens, then there is a duty of care to prevent that.
- With the threat of legal challenges through the ISDS mechanism, TTIP would derail a transition to renewable – wind, solar and tidal – energy sources and undermine the ability of states to address national public concerns.
What is the PCS position?
PCS believes that the threats outlined mean that we should oppose TTIP. This view is shared by a coalition of other organisations both in the UK and in the EU.
Of great concern are:
- The liberalisation of public services. Public services should be explicitly excluded from the scope of TTIP. If the ‘positive list’ approach towards liberalisation commitments is taken, only services specified in the agreement can be liberalised, rather than the ‘negative list’ approach, which means that only services that have been specifically excluded are safe.
- The Investor State Dispute Settlement (ISDS) mechanism. ISDS has no place in a trade deal between two trading blocs with well-established legal systems and effective existing protections for investors.
- The mutual recognition of regulatory standards that will inevitably lead to a lowering of established European regulations and which exist to protect workers, consumers and the environment.
- Moreover, the European Parliament and national governments should not ratify any agreement unless it includes a commitment by the US to respect and implement the ILO core conventions.
How can members get involved?
To stop TTIP, we have to act now. Negotiations are scheduled to be completed during 2015 with the bulk of the negotiations taking place in 2014. The UK government is a major supporter of the deal, however, given the secrecy surrounding the negotiations many MPs and MEPs are not aware of the dangers of TTIP.
It is essential that trade unions and other civil society organisations ensure that critical voices are heard in Westminster, the European and Scottish Parliaments, the Welsh and Northern Ireland assemblies.
- Contact your MP, MEP, MSP or assembly member and raise your concerns about TTIP. Ask them to oppose the deal.
- Encourage your branch to link up with other organisations locally campaigning against TTIP such as War on Want.
- Spread the word about the dangers of TTIP using social media such as Twitter #stopTTIP and Facebook - Stop TTIP UK