The transatlantic trade deal must work for the people, or it won’t work at all

Unions TTIPOn June 16 we published an article by EU Trade Commissioner Karel De Gucht on the Transatlantic Trade and Investment Protocol (TTIP). Today, Bernadette Ségol, General Secretary, European Trade Union Confederation (ETUC) and Richard Trumka, President, AFL-CIO and of the OECD’s Trade Union Advisory Committee (TUAC) reply.

In 2013, the United States and the European Union began talks on the Trans-Atlantic Trade and Investment Partnership (TTIP). The AFL-CIO and the European Trade Union Confederation (ETUC) believe that increasing trade ties could be beneficial for both American and European workers, but only if TTIP promotes a people-centered approach which considers the interests of the public and not just those of corporations. As with all other economic relationships, the rules of the TTIP will matter because TTIP is about much more than just trade. Its rules will make the difference between a Trans-Atlantic New Deal, which envisions an important role for democratic decision making, and a Trans-Atlantic corporate hegemony that privatizes the gains of trade while socializing the losses. Increasing trade between the U.S. and the E.U. can only help create quality job growth with shared prosperity on both sides of the Atlantic if the project is approached and concluded in an open, democratic, and participatory fashion and with these goals in mind.

Unions believe that TTIP could represent a “gold standard” agreement that improves living and working conditions on both sides of the Atlantic and ensures that standards are not lowered. However, the risk of the current model of trade and economic integration agreements to democratic decision making cannot be overstated. The U.S. has already lost state-to-state challenges to its anti-smoking, meat labelling, and tuna labelling policies, and even now, European multinationals are using the investor-to-state system to challenge decisions to phase out nuclear energy and raise minimum wages. Simply put, these policies are part of a government’s most basic responsibility to promote the general welfare of its people.

Trade and investment rules that not only allow but promote such challenges undermine support for trade even as they reduce the ability of governments to be more responsive to their publics than they are to well-heeled global corporations. This is no accident. Global corporations have long wanted to “overcome regulatory sovereignty,” See, for example Trade on the Forefront: US Chamber President Chats with USTR, and NAFTA Origins: The Architects Of Free Trade Really Did Want A Corporate World Government.

We envision a set of rules that respect democracy, ensure state sovereignty, protect fundamental labour, economic, social and cultural rights and address climate change and other environmental challenges. In a people and planet-centred agreement, the negotiators should consider: how will this decision create jobs, promote decent work, enhance social protection, protect public health, raise wages, improve living standards, ensure good environmental stewardship and enshrine sustainable, inclusive growth? If negotiators are not pursuing these goals, the negotiations should be suspended.

Rules on the protection of workers should not in any way be regarded as trade barriers. The TTIP should not undermine provisions for the protection of workers set down in laws, regulations or collective agreements, nor collective trade union rights such as freedom of association, the right to collective bargaining and the right to take industrial action. The TTIP must ensure that all parties adopt, maintain, and enforce the eight core conventions of the International Labour Organisation for all workers, as well as the Decent Work Agenda, and that those minimum standards set a starting point for regular improvements that are built into the architecture of the agreement. The U.S. and EU should also explore adopting transatlantic mechanisms in line with EU instruments to provide for information, consultation and participation of workers in trans-national corporations; stronger protections for workplace safety and health; and requirements to ensure “temporary” workers receive equal treatment with regard to pay, overtime, breaks, rest periods, night work, holidays and the like. In other words, the TTIP should not just raise standards for those whose standards currently do not measure up, it should create a system for continuous improvement.

This must include advancing democracy in the workplace. Only when workers are free to organize, associate, peacefully assemble, collectively bargain with their employers and strike when necessary can they provide a vital balance to the economic and political influence held by global corporations.

The TTIP must be aligned with—and never work at cross purposes to—international agreements to protect the environment, including commitments to slow catastrophic climate change. As part of its rules, the TTIP must advance a sustainable balance between human activity and the planet. Rules must not encroach or dilute national and subnational efforts to define and enforce environmental rules, measures and policies deemed necessary to fulfil obligations to citizens, the international community and future generations. Rules must respect the right of parties to prohibit corporations from capturing gains through predatory extraction, unsustainable resource utilization, and “dumping” of pollutants and refuse.

The TTIP must have at its core state-to-state commitments and modes of conflict resolution; it must reject all provisions that allow corporations, banks, hedge funds and other private investors to circumvent normal legislative, regulatory and judicial processes, including investor-to-state dispute settlement (ISDS). State-to-state commitments and enforcement mechanisms reinforce the notion that the agreement is between sovereign nations, for the benefit of their citizens. It also recognises the right of different states to make different choices about how to best promote the general welfare. A hold-over from the discredited era of market fundamentalism, ISDS is used by private actors to constrain the choices democratic societies can make about how best to protect the public interest. It gives the government’s duty to secure the general welfare the same status as private interest in profit—undermining public trust and placing governments in the position of having to pay a ransom to protect the public interest. At the same time, investors must assume their responsibilities, and it is imperative that respect for instruments such as the OECD Guidelines for Multinational Enterprises be fully be integrated in TTIP. We also ask that Contact Points meet the highest standards and those in EU countries be better coordinated.

Only when American and European workers can meaningfully participate in the development and design of the TTIP will they be confident that it is being created for their benefit, rather than as a secret deal that will amplify the influence of global corporate actors and diminish the voice of the people. Secret trade deals may have been appropriate when they were limited to tariffs and quotas, but given the broad array of issues covered under “trade” agreements – including healthcare, intellectual property, labour, environment, information technology, financial services, public services, agriculture, food safety, anti-trust, privacy, procurement, and supply chains – secrecy can no longer be defended. The proper place to debate and reach agreement on these domestic policy issues is in the public forum—if an idea cannot stand the light of day, it must not be pursued.

The AFL-CIO and the ETUC are united in a commitment to ensure that the TTIP represents a global new deal that would create high quality jobs, protect worker rights and the environment and benefit workers on both sides of the Atlantic. A new trade model that puts people first can create a high standard for not only the US and the EU, but for global trade. Workers deserve a deal that delivers improved living and working conditions on both sides of the Atlantic.

Useful links

OECD work on the benefits of trade liberalisation

Bernadette Ségol and Richard Trumka talk about the TTIP

Aiming high: the values-driven economic potential of a successful TTIP deal

About TTIP
Click to find out more about TTIP from the EU

Today’s post is from EU Trade Commissioner Karel De Gucht

A year ago, Presidents Barroso and Obama launched negotiations for a Transatlantic Trade and Investment Partnership, or TTIP. A deep and comprehensive free trade deal in generic terms, but much more than that from political, commercial and civil perspectives. We have now held five formal negotiating rounds, and it’s time to re-state the importance of this deal not only to us in Europe and the US, but for people around the world.

The overall figures are impressive. The EU and the US trade goods and services worth around EUR 2bn every day, and together we make up one third of global trade. Independent assessment indicates that both sides could gain significantly in terms of GDP growth over ten years (EUR 120bn in the EU, EUR 90bn in the US) – and equally so does the rest of the world (EUR 100bn). Such opportunity for growth is not something to leave by the wayside in a time of hesitant economic recovery.

But these macro figures don’t tell the whole story. The EU and the US have much more in common than our trade relationship. We share values: on democracy, on human rights and freedoms, and on a global rules-based trading system. Each of us enjoys a vibrant civil society and business sector, and broad political debate over things that matter. TTIP’s potential to deliver results depends very much on our ability as negotiators to meet the interests of all our stakeholders.

That’s why we are looking at three distinct areas: market access, regulatory cooperation and trade rules. Market access is a traditional element of trade negotiations. Tariffs between the European Union and the United States tend to be low in general but are still very high on certain important products, such as dairy and textiles. Even for products that have lower tariffs, such as chemicals, the volume of trade is so large that the tariffs add up to a significant extra tax on business.

Getting results on market access for our services industries is also important. Both the EU and the US have very strong services sectors, ranging from finance and commercial services, via the professions such as doctors and architects, to transport and environmental services. TTIP would help our world-class industries to be able to establish themselves and work in the US without many of the restrictions that they face today. Furthermore, EU firms are highly competitive in many of the things that governments need to buy: for example energy services, rail transport equipment, aircraft, pharmaceuticals and textiles. TTIP could open up more public tendering by the US federal government and US states to EU bids, generating new contracts and jobs for European firms.

Market access isn’t everything, however. From a global perspective, the regulatory and rules parts of TTIP are key. In the regulatory part of the negotiations, we are looking at how the EU and the US could cooperate better together in the future on new regulations, for example in breakthrough industries such as medical devices. We are also finding ways to align existing regulations, for example to stop unnecessary, unjustified duplication of tests, or to remove barriers to trade caused by two different ways of achieving the same result. These may seem unimportant by themselves, but taken together, reducing these trade obstacles would give a significant boost to transatlantic trade. If the authorities of both sides work together from the early stages, we could avoid problems for businesses, share our limited resources and probably produce better outcomes.

As I have underlined many times, this is not about lowering regulatory standards. Where we agree with each other we will see what we can achieve together; where we don’t, we will continue with our own approach.

Given the economic heft of the US and EU, any shared standards, policies or practices that we can agree in TTIP would almost certainly have spill-over effects on the rest of world trade. Producers in developing countries would not have to choose between US and EU market requirements – they would be able to start selling to the other side without incurring extra regulatory costs. The influence of strong US and EU standards would make it more worthwhile for other countries to develop their own policies based on the transatlantic model. In areas such as trade in raw materials, high environmental and labour standards, the role of state-owned enterprises and the importance of intellectual property rights, a strong transatlantic statement of intent would help steer the multilateral debate in a positive direction for traders, workers and consumers worldwide.

This, then, is our ambition. A trade partnership that opens our markets wide for goods, services and public procurement, that provides a framework for us to cooperate in the long term on regulatory issues affecting trade, and that sets high standards across a range of globally significant economic issues.

After five rounds, we are making good progress – but it won’t be easy. Many of these things are deeply intertwined and we need to work hard to get the right results for our citizens. This is a complicated choreography to work with: with Member States and US states, EU and US regulators, EU and US legislatures, transatlantic business and civil society. That’s a lot of voices to bring together. So a key element to success is making sure that we listen to the important concerns and interests of our stakeholders. This is what I have in mind when talking about the current EU consultation on investment protection, about the importance of safeguarding the EU’s high standards of consumer and environmental protection, and about what TTIP could deliver for the global economy.

In this electoral year for the EU and the US, I want to highlight that it is Congress and the European Parliament – as well as the heads of 28 EU Member States that form the European Council – that will eventually need to examine, debate and approve the deal. The public debate about TTIP is very welcome in this context, and I look forward to continuing to take full part in it.

Useful links

OECD work on the benefits of trade liberalisation

Karel De Gucht on how the European Union sees the TTIP negotiations