The Transatlantic Trade and Investment Partnership (TTIP), also referred to as a TransAtlantic Free Trade Agreement (TAFTA), is a free trade agreement being negotiated since July 2013 between Europe and the USA. It would be the largest free trade agreement yet and cover more than 40 percent of world trade.
The agreement will cover 'non-tariff barriers' (NTBs) to trade, including government regulations, government procurement and spending, and movement of temporary workers across borders. The TTIP is also likely to result in:
TTIP also seeks to create new markets by opening up public services and government procurement contracts to competition from transnational corporations, threatening to introduce a further wave of privatizations in key sectors, such as health and education. [see Trade in Services]
Another aim of the agreement is to advance multlateral trade talks by setting "globally-relevant rules and standards".
Advocates claim the agreement would result in up to 1% increase in economic growth and lower prices for consumer goods. However, "the European Commission's own impact assessment of TTIP concluded that a growth rate in the region of 0.1% would constitute a more realistic expectation" over ten years which would be "trivial".
Jobs are likely to be affected, not only by the use of temporary workers across borders, but also by "a downgrading of any labour standards identified as 'barriers' to trade, such as collective labour agreements which could be challenged as representing restrictions on the business model of competitors". Moreover, the increased import of "goods and services from US states where labour standards are lower and trade union rights are non-existent" will impact on European jobs.
Foreign investors would be able to sue governments if government regulations or policies interfered with company expectations of profits using the Investor-State Dispute Settlement (ISDS) in the agreement.
The TTIP is primarily aimed at eliminating regulations that hinder trade. This is variously termed 'regulatory harmonization', 'regulatory coherence' or 'regulatory cooperation'. The traditional aim of reducing tariffs is hardly necessary given that those existing between participating countries only average 3%.
Proponents argue that differing regulations impede trade, adding costs to trading activity. However critics are concerned that harmonising regulations on both sides of the Atlantic would ensure that the weakest regulations would prevail. This would mean abandoning the precautionary principle in Europe and adopting US environmental, food and labour standards, that is "getting rid of what are called 'trade irritants' such as the EU's bans on GM food, chlorinated chicken and hormone loaded beef' and other higher EU health and safety standards". Other regulations that have been targeted include pesticide restrictions and endocrine disrupters.
EU Commission president, José Manuel Barroso, argued that differing regulations required "raising safety standards and limiting the environmental impact of cars, or increasing health and hygiene standards for food" entailing "unnecessary costs" and " delays for businesses".
Documents obtained by the Corporate Europe Observatory show
that EU Commissioner "De Gucht's officials invited industry to submit wishlists for 'regulatory barriers' they would like removed during the negotiations".
Business groups are clearly seeking to use the negotiations to promote deregulation. The Transatlantic Economic Council has affirmed "its commitment to removing barriers to transatlantic commerce; to rationalizing, reforming, and, where appropriate, reducing regulations to empower the private sector".
Europe's comprehensive REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) legislation of chemicals that affect health and environment is a target of US corporations.
REACH is based on the precautionary principle ... and requires industry to prove that a chemical is safe before it can be certified for commercial use. By contrast, the USA's 1976 Toxic Substances Control Act (TSCA) requires the public regulator to prove that a chemical is unsafe before its use can be restricted, and further limits any restriction to the 'least burdensome' measure possible.
Europe's restrictions on genetically modified food and labelling requirements would also be at risk. Whilst 70% of processed food products sold in US supermarkets contain genetically modified material, there is almost none sold in Europe and any that does must be labelled.
On the announcement of the new trade talks Max Baucus, the Chairman of the [US] Senate Finance Committee, and Senator Orrin Hatch, the ranking minority member of the Committee, wrote a preemptive letter to the U.S. Trade Representative in which they insisted that a precondition for American involvement in the talks should be gaining acceptance of the less restrictive American food policies toward sales and processing of GMO foods... On both sides of the Atlantic, international food manufacturers such as Nestle and Kraft, and giant grain traders such as ADM and Cargill, are supporting the negotiations as a way to loosen European restrictions.
Although the negotiations have been kept secret, a leak has revealed the EU intention to establish a non-elected "Regulatory Cooperation Council" that would evaluate government regulations in Europe and the US, both present and those proposed in the future, and subject them to an cost-benefit analysis of their impact on trade.
The negotiations are secret, access to negotiated drafts being only accessible to participating negotiating teams and their advisors, mainly business people. This is a measure that is meant to keep those affected by the agreement from being able to effectively oppose the agreement during the negotiations.
All papers, documents, emails and negotiating minutes have been marked secret. Only the senior-most party members in the European Parliament's International Trade Committee are allowed to see documentation relating to the negotiations and they are forbidden from discussing what they see... In addition, the US has forbidden the EU from passing along American position papers, even to members of the European Council and European Parliament...
In an effort to appear accountable, a consultation session was held at George Washington Unversity in December 2013 where stakeholders were able to present their views to negotiators.
For the roughly two-and-a-half-hour session, the USTR reserved five different rooms where representatives of various "stakeholders"—ranging from the AFL-CIO to Friends of the Earth to the National Pork Producers to Intel Corporation—could deliver speeches no longer than ten minutes.
Meanwhile hundreds of US corporate "trade advisors" from corporations such as Wal-Mart and Cargill and from industry groups have full access to negotiating texts and are kept up to date with negotiations because they are members of industry trade advisory committees [ITACs].
In Europe there had been 130 consultations with stakeholders by September 2013. However 93% of these were with corporations and their lobbyists including the US Chamber of Commerce, the German industry federation BDI, chemical lobby groups CEFIC and VCI, pharmaceutical industry coalition EFPIA, DigitalEurope, the Transatlantic Business Council, arms industry lobby ASD, the British Bankers Association, and corporations like Lilly, Citi and BMW.