Nothing threatens democracy as much as corporate power. Nowhere do corporations operate with greater freedom than between nations, for here there is no competition. With the exception of the European parliament, there is no transnational democracy, anywhere. All other supranational bodies – the International Monetary Fund, the World Bank, the United Nations, trade organisations and the rest – work on the principle of photocopy democracy (presumed consent is transferred, copy by copy, to ever-greyer and more remote institutions) or no democracy at all.
When everything has been globalised except our consent, corporations fill the void. In a system that governments have shown no interest in reforming, global power is often scarcely distinguishable from corporate power. It is exercised through backroom deals between bureaucrats and lobbyists.
This is how negotiations over the Transatlantic Trade and Investment Partnership (TTIP) began. The TTIP is a proposed single market between the United States and the European Union, described as “the biggest trade deal in the world”. Corporate lobbyists secretly boasted that they would “essentially co-write regulation”. But, after some of their plans were leaked and people responded with outrage, democracy campaigners have begun to extract a few concessions. The talks have just resumed, and there’s a sense that we cannot remain shut out.
This trade deal has little to do with removing trade taxes (tariffs). As the EU’s chief negotiator says, about 80% of it involves “discussions on regulations which protect people from risks to their health, safety, environment, financial and data security”. Discussions on regulations means aligning the rules in the EU with those in the US. But Karel De Gucht, the European trade commissioner, maintains that European standards “are not up for negotiation. There is no ‘give and take’.” An international treaty without give and take? That is a novel concept. A treaty with the US without negotiation? That’s not just novel, that’s nuts.
You cannot align regulations on both sides of the Atlantic without negotiation. The idea that the rules governing the relationship between business, citizens and the natural world will be negotiated upwards, ensuring that the strongest protections anywhere in the trading bloc will be applied universally, is simply not credible when governments on both sides of the Atlantic have promised to shred what they dismissively call red tape. There will be negotiation. There will be give and take. The result is that regulations are likely to be levelled down. To believe otherwise is to live in fairyland.
Last month, the Financial Times reported that the US is using these negotiations “to push for a fundamental change in the way business regulations are drafted in the EU to allow business groups greater input earlier in the process”. At first, De Gucht said that this was “impossible”. Then he said he is “ready to work in that direction”. So much for no give and take.
But this is not all that democracy must give so that corporations can take. The most dangerous aspect of the talks is the insistence on both sides on a mechanism called investor-state dispute settlement (ISDS). ISDS allows corporations to sue governments at offshore arbitration panels of corporate lawyers, bypassing domestic courts. Inserted into other trade treaties, it has been used by big business to strike down laws that impinge on its profits: the plain packaging of cigarettes; tougher financial rules; stronger standards on water pollution and public health; attempts to leave fossil fuels in the ground.
At first, De Gucht told us there was nothing to see here. But in January the man who doesn’t do give and take performed a handbrake turn and promised that there would be a three-month public consultation on ISDS, beginning in “early March”. The transatlantic talks resumed on Monday. So far there’s no sign of the consultation.
And still there remains that howling absence: a credible explanation of why ISDS is necessary. As Kenneth Clarke, the British minister promoting the TTIP, admits: “It was designed to support businesses investing in countries where the rule of law is unpredictable, to say the least.” So what is it doing in a US-EU treaty? A report commissioned by the UK government found that ISDS “is highly unlikely to encourage investment” and is “likely to provide the UK with few or no benefits”. But it could allow corporations on both sides of the ocean to sue the living daylights out of governments that stand in their way.
Unlike Karel De Gucht, I believe in give and take. So instead of rejecting the whole idea, here are some basic tests which would determine whether or not the negotiators give a fig about democracy.
First, all negotiating positions, on both sides, would be released to the public as soon as they are tabled. Then, instead of being treated like patronised morons, we could debate these positions and consider their impacts.
Second, every chapter of the agreement would be subject to a separate vote in the European parliament. At present the parliament will be invited only to adopt or reject the whole package: when faced with such complexity, that’s a meaningless choice.
Third, the TTIP would contain a sunset clause. After five years it would be reconsidered. If it has failed to live up to its promise of enhanced economic performance, or if it reduces public safety or public welfare, it could then be scrapped. I accept that this would be almost unprecedented: most such treaties, unlike elected governments, are “valid indefinitely”. How democratic does that sound?
So here’s my challenge to Mr De Gucht and Mr Clarke and the others who want us to shut up and take our medicine: why not make these changes? If you reject them, how does that square with your claims about safeguarding democracy and the public interest? How about a little give and take?