TTIP is the Transatlantic Trade and Investment Partnership. It is a comprehensive free trade and investment treaty currently being negotiated – in secret – between the European Union and the USA.
TTIP would cut tariffs and lower regulatory barriers to make trade easier between the two countries. According to The Telegraph, it would be the biggest trade agreement of its kind, affecting one quarter of global trade.
Those in favour of TTIP argue that it will improve GDP. A study by Joseph Francois and his colleagues found that EU GDP will rise by 0.5% by 2027 relative to a scenario without TTIP.
However in practice that only translates to an increase of €545 ($600 USD) in disposable income for a four person household by 2027, which will have negligible effects upon living standards. The London School of Economics has noted that there is “little reason to think that an EU-US investment chapter will provide the UK with significant economic benefits.”
ISDS allows the foreign property owner to skip domestic courts, administrative procedures, city hall hearings and the like (all the processes that home-grown property owners use) and sue the host-country government before a panel of private “arbitrators.”
In other words, ISDS is a secret court that allows a private company to sue a government if it feels its profits have been harmed.
Theoretically, if your government introduces a law calling for better health and safety which could be costly to implement, foreign companies investing in your country could sue your government for loss of profits. If the company wins, your taxes will pay them.
Since the introduction of ISDS to the end of 2012, almost 60 percent of all cases resulted in a government having to make a pay-out.
Given many rules and regulations are significantly more relaxed in the US than the EU, the risk of TTIP is therefore obvious. US companies could use ISDS to challenge EU regulations designed to protect the public and the environment to sue European governments and maximise profits.
According to the campaigning website Patients4NHS, 8% of US-owned firms operating in the EU (mainly in Central and Eastern European countries) are covered by ISDS, and have already claimed more than €30bn against EU member states under ISDS.
If TTIP includes ISDS, the treaty will give US based investors the right to claim massive compensation if EU governments introduce initiatives that benefit the public – such as universal public healthcare – but which reduce profit. Indeed in the UK, there is enormous concern that TTIP would effectively privatise the NHS as the deal would open it up to the private market.
War on Want has listed a host of EU “regulatory barriers” that harm profits but protect people, which could be removed by TTIP. These include labour regulations to protect workers, food standards including animal welfare and GM (which are significantly more relaxed in the US), and key environmental legislation. In fact, the US government has explicitly said it will target food standards if TTIP is enacted. This could lead to a massive upsurge in GM foods being sold in the EU.
What is TTIP? A secret trade deal cooked up by private companies and politicians that will affect everything from the fruit you buy to the doctor who tends to your sickbed.
It’s an act of economic vandalism, and the citizens of the EU must oppose it.