Still in the Dark on TTIP: Trade Agreement with the European Union Is a Black Box

April 8, 2016 | 4:51 pm
Celia Wexler
Former contributor

Negotiations for the Trans-Pacific Partnership (TPP) have been concluded. Citizens now have access to the 30-chapter agreement that is several thousand pages long. The TPP has been opposed by four major presidential candidates, and faces criticism in Congress. Nevertheless, it is likely that the trade deal will get a vote sometime this year.

But waiting in the wings, and still being negotiated largely in secret is another, equally important, trade deal: the Transatlantic Trade and Investment Partnership (TTIP). The agreement, between the U.S. and the 28-nation European Union, has been formally discussed through 12 rounds of negotiations, with another round scheduled for some time this month. Both sides would like to conclude this treaty by the end of 2016.

Because Congress has approved fast-track legislation last year, TTIP also would get an expedited up-or-down vote by Congress, with no chance for amending the treaty. The fast-track law covers trade deals that extend into the next administration, over a period as long as six years.

Here’s my greatest fear about the TTIP: It will pressure regulators on both sides of the Atlantic to settle for the least restrictive public health and safety rules.

Millions of European and American activists share my concerns. Particularly on the EU side of the Atlantic, there has been spirited public opposition to the TTIP. In part, that’s because the EU has publicly disclosed the text of its proposals.

Unfortunately, the US Trade Representative still refuses to publicly disclose U.S. proposals on TTIP, a state of affairs that has drawn the criticism of members of Congress and activists. It also has greatly reduced the level of concern among the general public, who have been largely left out of the discussion.

What we have learned about some of these proposals is incomplete but disquieting. The TTIP may open the door to “mutual recognition” of a variety of products, including drugs, medical devices and chemicals, so that if they meet the standards of the US or the EU, the products won’t have to be approved by the other side’s regulators.

The EU’s proposals on regulatory cooperation could export some aspects of rule-making in the US that often delay and weaken rules. For example, business interests might get more influence over the regulatory process and regulators might have to prove that regulations did not have a harmful impact on the economy by increasing the cost of compliance for businesses.

And while both the US and the EU are alike in many ways, in some ways, they are far different.  Take the regulation of chemicals. The EU has the Registration, Evaluation, Authorization, and Restriction of Chemicals regimen, or REACH, a stringent system that uses the precautionary principle. Chemicals can’t be sold until they are proven to be safe. In the US under the existing Toxic Substances Control Act, chemicals are assumed to be harmless unless the EPA can demonstrate they should be regulated.

In an ideal world, REACH would apply to both countries under TTIP. What many chemical reformers fear is that the opposite will happen—that REACH will be jeopardized by the agreement, and that chemical companies will take advantage of our more lax regulatory assessments and opt to be initially approved in the U.S. and then be automatically accepted in the EU.

The US continues to be the gold standard when it comes to drug and device approvals. Will TTIP make it easier for US companies to bypass FDA scrutiny if their products are approved by the EU?

Another, more imminent, threat is that the EU’s recent push to make clinical trial data more transparent could be halted if the TTIP enforces strict confidential business information rules. This transparency is crucial to public health and safety.

There also is concern that TTIP’s proposals on regulatory cooperation may impede the ability of state governments to impose strict restrictions when federal regulators fail to act, whether it is food safety, labeling of toxic chemicals, or a ban on certain materials.

The EU has pushed for regulatory cooperation that goes beyond discussions between U.S. and EU regulators, and potentially involves more oversight of state regulations. States have been the drivers of science-informed aggressive regulation. If their actions have to be monitored or assessed by a federal regulator or by an extra-national regulatory cooperation council, that would delay and discourage these crucial public protections.

Investor State Dispute Settlement also is on the table. Despite the fact that the U.S. and the EU have sophisticated legal systems that could accommodate any type of litigation brought by foreign corporations, business interests continue to push for an extra-national tribunal to hear their disputes.

ISDS permits a foreign corporation that believes it has been treated unfairly by a nation through its federal, state or local policies, to sue for damages for harm to its profits before an international three-person tribunal, generally composed of trade lawyers.

There has been massive resistance to ISDS, including protests by well over 100,000 people in Germany alone. They are concerned that ISDS could jeopardize food safety and environmental standards if foreign companies challenged protective European policies. Germany, for example, was hit by a major ISDS lawsuit when it decided to phase out it reliance on nuclear energy after the disaster at Fukushima. The Swedish nuclear company Vattenfall sued Germany for $4.7 billion Euros in damages.

The EU has tried to mollify this opposition by proposing an alternative to a three-person tribunal: an international trade court to hear such cases. But the U.S. is resisting this proposal, and many critics, including the 16,000-member German Association of Judges, strongly oppose it. German judges are concerned that a permanent court, comprised of judges who must be trade experts, would not be independent enough from corporate influence. They also argue that foreign corporations do not need a separate tribunal, when they can sue in domestic courts.

Secrecy means that citizens in this country are deprived of the information they need to influence these negotiations in any meaningful way. It means that even our elected representatives cannot engage in meaningful dialogue about this crucial trade deal with their constituents.

TTIP may not be as bad as hundreds of thousands of activists fear. But the problem is that we won’t know until it is too late to do much about it. We can ask Congress to reject the trade deal, but we will not have the ability to influence it as it is being negotiated. That’s a losing proposition for everyone.