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Think Ireland getting sued by a tobacco company is odd? Then worry about this EU-US trade deal…
It may not have a catchy name but we need to pay attention the Transatlantic Trade and Investment Partnership – it poses huge ramifications for Ireland.
TOBACCO GIANT Philip Morris is suing Ireland for attempting to introduce plain-packaging for cigarettes. The move has caused outrage in Ireland, and rightfully so. We’re not the first country that Philip Morris’ army of lawyers has targeted in this way. It is a tactic we see repeated around the world by big business interests, who want to block or frustrate “burdensome” progressive law-making by any means available to them.
The tools available for Philip Morris in Ireland’s case are the national courts, where at least public scrutiny, judicial independence and fair and equitable access to justice are guaranteed. But this may soon change with the proposed EU-US trade deal, the Transatlantic Trade and Investment Partnership (TTIP).
Under the proposed deal, an obscure mechanism could make the threat of lawsuits, and potentially huge payouts to companies, a regular feature in Ireland’s law-making processes. Known as ‘Investor-State Dispute Settlement’ or ISDS, the mechanism allows foreign companies to bypass national courts and take claims against countries for their perceived loss of current or future earnings, as a result of new laws.
Countries being sued by companies
In Australia, Philip Morris lost its court battle on new cigarette laws, but then used ISDS to sue Australia once again via a Hong Kong subsidiary. The case is ongoing, and despite little information it is thought they’re looking for billions in compensation. We know that Germany is facing a €4.7 billion euro ISDS claim brought by a Swedish energy company, for deciding to phase out nuclear energy after the Fukushima disaster. The French Veolia group used ISDS to sue Egypt for raising the minimum wage in 2012.
The largest known settlement paid out by an EU country was Poland, which was forced to pay €2 billion to Eureko, an insurance giant, after it decided not to privatise public insurance in August 2005. TTIP expands foreign investors access to ISDS tenfold, with an estimated 75,000 EU and US subsidiaries gaining the right to sue governments under TTIP.
Strengthening the hands of already powerful corporations
Our government’s right to regulate is under threat if the EU-US deal is passed, and it could have real monetary costs for cash-strapped Ireland. Even the threat of being sued can cause a “chilling effect” on governments’ willingness to make new laws. Would Ireland really be inclined to bring in new financial or social regulations if there is a risk of being sued for billions by the many US multinationals based in Ireland?
Currently we are unique in being the only EU country that has not signed an investment treaty that includes an ISDS mechanism. However, Minister for Trade Richard Bruton was one of 14 EU trade ministers who penned a letter to the EU Trade Commissioner last October, requesting that ISDS be included in TTIP, despite opposition from countries like France, Germany and Austria.
We know the US has told EU negotiators that the exclusion of ISDS would be a deal-breaker. Our strong ties with the US, and our government’s continuous ringing endorsements of TTIP to date, may account for Bruton’s willingness to provide his signature.
Criticism is pouring in from concerned citizens
Recent polls suggest that Ireland has one of the highest support levels for the agreement. Yet the more people understand what it contains, the less they like what they hear. The Irish Farmers Association warns that the beef industry is set to suffer substantially from cheap and substandard imports of US meat.
Our universities have warned it will undermine our public education services. The Irish Medical Organisation has also said that mechanisms like ISDS would “weaken existing or future regulations and policies that protect public health”, just as in the case of plain packaging for cigarette packs now.
A recent John Oliver ‘Last Week Tonight’ episode exposed for many the shadowy abuses of trade pacts by companies like Philip Morris. While ordinary Irish citizens might be surprised by their actions, we can’t allow it to become the new normal. Already the TTIP agenda has been rigged in favour of the most powerful corporations at the expense of the public good.
The battle is raging in Brussels, over ISDS in particular, and MEPs are due to vote on TTIP on June 9. It would do our representatives well to hear the anger directed at the actions of Philip Morris in Ireland, and to think how much worse it would be under the EU-US trade deal.
Recipe for Ruin: TTIP the Transatlantic Trade and Investment Partnership
Nessa Childers Independent MEP's Speech: The EU US trade deal talks: should we be concerned?
Officially this EU US trade deal is about market access for businesses, enhancing regulatory cooperation and setting international rules. And we are assured that existing EU regulations will not be affected. Supporters of the trade talks, and these include Ireland, say that a transatlantic agreement will create a single market of 800 million people creating millions of jobs, although trade union analysts dispute the job creation figures.
But the overriding objective of the TTIP agreement, as it is called, is to facilitate trade to the greatest extent possible. Therefore my concern and the concerns of many others are centred on the question – how can we trade with the US when that country has vastly different standards – for example around food safety and employment law?
Because of these concerns more than 1 million citizens around Europe have signed a petition opposing the trade deal, and demanding the end to the negotiations. I have also registered this event as part of tomorrow’s Global Day of Action organised to send a clear signal against trade and investment deals that threaten our democratic rights, food sovereignty, jobs and the environment.
Neither TTIP nor CETA (the EU trade deal with Canada) are traditional trade agreements to reduce tariffs on imports between trading partners. These types of agreements are already in place, instead the main goal of TTIP and CETA is to remove regulatory ‘barriers’ which restrict the potential profits to be made by transnational corporations on both sides of the Atlantic.
But these ‘barriers’ are in reality some of our most prized social standards and environmental regulations, such as labour rights, food safety rules, regulations on the use of toxic chemicals, costs of medicines, digital privacy laws and even new banking safeguards introduced by the EU to prevent a repeat of the 2008 financial crisis.
To be passed the final deal must have the support of a full majority of MEPs. However – although there is this democratic component, there are serious concerns surrounding the trade talks.
Early this year the European Ombudsman criticised the EU Commission’s inadequate transparency and public access to documents in relation to TTIP. By deciding to launch her own investigation into the European Commission’s lack of disclosure of materials in their negotiations, Emily O’Reilly, brought much needed attention to this problem. The Commission subsequently made substantial disclosure of negotiation documents.
The Ombudsman rightly understood that the secrecy in these talks, which the Commission repeatedly blames on US government demands, is not only often unjustified, but strips the talks of legitimacy in the eyes of the public, irrespective of their outcome. The Commission has taken a welcome step in the right direction but this is not enough. The Ombudsman’s opinion combined with growing concern at member state level has brought the deal into the daylight, but only just.
A major concern for people is that the deal could involve ISDS, the investor-state dispute settlement mechanism. This would allow big corporations to sue governments through closed arbitration panels composed of corporate lawyers, which would by-pass domestic courts and parliaments. In early March, my political grouping, the Socialist and Democrats Group in the European Parliament adopted a very strong position paper on Investor-State Dispute Settlements opposing the inclusion of the controversial mechanism in trade deals with both the US and Canada.
This is a personal red line for me when the deal in its entirety comes before the European Parliament. And the court action against Ireland, over the plain tobacco packaging bill, from the owners of Benson and Hedges and Silk Cut cigarette brands shows how dangerous it is to give multinational corporations legal fora to challenge governments over public policy decisions.
What is happening in Ireland goes to show the obvious. Multinational corporations will hold any available legal gun to the taxpayer’s head to stop public policy-making in its tracks, whenever this policy risks harming their profits. But at least the Irish state will be fighting big tobacco on behalf of the Irish citizens in a proper court of law. ISDS would remove this transparency.
If the trade agreement is passed with such a clause, the legal battleground can well move to a private arbitration forum, an opaque netherworld where the best paid legal suits stand an even better chance of ripping off the taxpayer as punishment for public interest policy that costs big business money.
So what are the next steps in these talks?
As I said, the European Parliament will have the final say on TTIP, in a single, ‘yay or nay’-type vote. Thanks to a prerogative in place since the Lisbon Treaty entered into force, Parliament has to consent to every international treaty the European Union enters into so that it can be ratified by the Union.
This is why I could not have been absent from last autumn’s cross-party protest held outside Parliament’s reading room, given the truly Kafkian conditions under which only members of the International Trade Committee of the European Parliament had access to the documentation pertaining to the state of play of the negotiation rounds.
Although we have achieved access for all members of parliament into that room, the same conditions under which you can consult thousands of pages, further to signing a confidentiality agreement, without even the possibility to bring pen and paper in with you, still apply.
You will certainly agree with me that these are far from ideal conditions to conduct proper parliamentary scrutiny to trade negotiations that go way beyond the traditional confines of breaking down trade and customs barriers.
They extend into the alignment of standards, regulatory cooperation and the establishment of means of redress that should not be discussed under a veil of secrecy invoked to safeguard secrets on which our business and trade interests depend.
Despite these limitations, we have not simply been waiting on the side-lines until our time comes to have a formal, binding say, not least because we must try to have a positive impact on an outcome that we may not be strong or numerous enough to halt altogether.
Both the main Committee I sit in in Parliament, the Environment and Public Health Committee, and one of the Committees I am a substitute member of, the Economic and Monetary Affairs Committee, have issued formal Opinions on this matter.
They are addressed to the International Trade Committee, the lead body in charge of following this file, which will vote on a preliminary position on the TTIP negotiations in late May, before it is brought to the full house for a vote that could well take place in June or at a plenary session soon after that.
I have tabled amendments to those opinions, some individually and some others in collaboration with like-minded colleagues who share many of the concerns I have been raising since I was re-elected last year.
With regard to the Environment and Public Health committee opinion, my main focus was on opposition to an Investor-State Dispute Settlement mechanism, health standards and the protection of our Member States’ public health provision models, where European and US traditions are starkly at odds and many dangers lie in terms of our citizens’ access to affordable healthcare.
We want to ensure that no standards are watered down in the process or in its wake, even if by omission.
For example, I want to see legislation in place to address the dangers of endocrine disrupters before the end of this parliamentary term.
This would be way overdue if it were to be approved today, but it has proved extremely difficult, and many in Brussels suspect that this and other files have been stalled pending the conclusion of the TTIP negotiations, in the hope that common ground will be reached with the US.
The fact is, there are areas where our approaches and takes on risk management are so widely divergent that, if we were to come to introduce trade provisions, our standards would necessarily be compromised, breaching our leaders’ pledges.
We don’t treat our poultry with chlorine, and we have banned animals testing for cosmetics, and we don’t want this changed or liable to challenges in what can justly be called very fancy kangaroo courts.
Thankfully, the final compromise text adopted this Tuesday brought all of these concerns on board, yielding a predictably strong opinion from the Environment and Public Health Committee, seeing as so much is at stake for our citizens in these policy areas.
As concerns the Economic and Monetary affairs committee opinion, my focus, with the support of the European Consumer Organisation, BEUC, was on the prevention of a chilling effect on the work of our legislators by provisions that would leave us open to costly legal challenges by well-heeled multinational organisations.
Also, I opposed the introduction of provisions restricting justified state aids, public service provision and public ownership in critical areas, or the leeway of our financial regulators.
In fairness, these often show far more teeth across the Atlantic, even if that is not a tall order if we compare them with our sorry track record in Ireland.
I was happy to see that both the letter and the spirit of these survived the vote at the committee and made it to the final text of the opinion.
Just two days ago, the Agriculture committee approved its own opinion, and it was also strongly opposed to any undermining of food safety, animal and plant health standards, or our geographical indications.
Throughout this period, I have been constantly querying the Commission on its intentions and activities surrounding the negotiations through parliamentary questions they may fudge but not avoid.
I have been pursuing, in particular, matters that relate to the conflict between overriding public policy goals, such as public health, versus certain claims to legal rights made by private parties against those goals, in international fora.
This is the case with big tobacco, as we know. Their strategies are so aggressive that you would almost pity what their PR departments are suffering at the hands of their legal teams, were they not peddling known carcinogens for human consumption.
In conclusion, we need to ask who will benefit from this deal, and at what cost?
And I now look forward to hearing our speakers today who will cover in greater details all the issues I have touched on in my speech. I want to take this opportunity to thank them for contributing to the debate, thank you to Glenna Lynch for chairing the event.
UK: Bring on the defeat of the EU-US free trade deal
By Nick Dearden
‘Lord Livingston has admitted that Cameron won’t exclude the NHS because the TTIP is too good an opportunity to sell our ‘world class health services’ to the US market.’
EU-US free trade deal will, after all, include the NHS, trade minister Lord Livingston admitted on Monday. The deal, known as the Transatlantic Trade and Investment Partnership or TTIP, is a priority of David Cameron’s government – a “once in a generation” opportunity. But officials have been taken aback by the extent of public hostility.
At the heart of this opposition is the fear that the TTIP will give big business vast new powers over public services like the NHS, and undermine rights at work, environmental protection and food safety standards. According to a poll commissioned by Unite, 68% of people in marginal constituencies oppose the inclusion of the NHS as part of the deal. Even among Tory voters, just 23% supported its inclusion.
After weeks of the government telling the public that “the NHS won’t be affected”, Lord Livingston has admitted that Cameron won’t exclude the NHS, because the TTIP is too good an opportunity to sell our “world class health services” to the US market. This also means US health corporations would gain new “rights” to sell their health services here. And should they be impaired from doing so by, let’s imagine, a future government abolishing the Health and Social Care Act, those corporations will have the right to sue the British government through a parallel legal structure created by the TTIP. They won’t even have to go through our domestic court system.
The same fate awaits other public services and potential public services, from education to transport and energy provision. Protecting or renationalising services will mean the government is forced to “compensate” foreign businesses that want to invest.
It’s no wonder that an opinion poll commissioned by 38 Degrees at the weekend found that 39% of those surveyed thought the TTIP would be bad for Britain – three times as many as thought it would be beneficial.
The government’s strategy is becoming increasingly defensive. Yesterday, Livingston again repeated that the UK would benefit to the tune of £10bn. This is a fantasy figure, as former trade minister Ken Clarke has admitted. Even more ludicrous is the idea that the average UK household will “benefit by as much as £400 a year” – as if any advantages that do accrue would equally benefit every household in the country.
Perhaps the minister should be more worried that the same studies he is quoting from also predict that more than a million jobs would be lost in the EU.
So the government is now down to its last defence: suggesting that those opposed to the treaty are motivated by “anti-American” sentiment. But it is precisely in the US where opposition to the TTIP, and its sister treaty the Trans-Pacific Partnership, has been most vociferous. Democrat opposition in Congress has even prevented President Obama from getting special “fast track” negotiating authority.
Without this authority, the TTIP’s chances are radically reduced. That’s a good thing, because TTIP isn’t simply a threat to the NHS, or even public services in general. It’s an aggressive expression of the “free market” ideology that should have been binned with the financial crash. The defeat of the TTIP will be one more nail in its coffin.