With just a few days left before Parliament dissolves ahead of the general election, a flurry of select committees are publishing reports on inquiries which have been held in recent months. Among them is the Business Innovation and Skills Select Committee’s report on the Transatlantic Trade and investment Partnership (TTIP), published yesterday.
I gave evidence to the TTIP inquiry on behalf of Global Justice Now.
TTIP is an ambitious neoliberal trade agreement being negotiated between the EU and USA. Its purpose is to create new trading opportunities for EU and US business by reducing tariffs, removing unnecessary regulation, liberalising some sectors and giving new protection for investors. The controversy around TTIP is about what regulation is deemed unnecessary, which sectors will be liberalised and that business will benefit at the expense of governments.
The gravity of these concerns has ignited a furious public campaign on TTIP from trade unions, environmental organisations, international development groups and NHS campaigners, united in their call for the negotiations to stop.
The findings of the BIS select committee report vindicate the public’s concerns.
Many of the arguments for TTIP rest on the benefits it will bring to the UK, European and US economy, often breaking this down to a £400 benefit to every UK family every year. The economic models used to churn out these figures are fundamentally flawed (http://blog.policy.manchester.ac.uk/featured/2013/12/the-false-promise-of-eu-us-trade-talks/) and present a best case scenario which would not deliver any benefits until 2027 and then only £2 per person a week - equivalent to a packet of fishfingers.
The 11 MPs from across the political spectrum find that “it is impossible at this stage to quantify those benefits in any meaningful way”. They are critical of the figures the UK government uses to promote TTIP and instruct it to undertake a comprehensive assessment of the likely economic benefits of various possible outcomes on TTIP.
Without this evidence, there can be no case for TTIP.
The report goes further to call for a sector by sector analysis of the potential benefits and risks of TTIP. There was an audible gasp from MPs when Sean McGuire of the CBI gave evidence in the inquiry and admitted that the CBI was arguing that TTIP would be good for British business without having undertaken a sector by sector analysis of its impact.
Proposed new rules to protect businesses investing abroad are one of the most controversial proposals in TTIP. These are the rules that have been used by Philip Morris to sue the Australian government for the negative impact on its profits as a result of introducing plain packaging on tobacco products as part of measure to protect public health.
Many civil society groups, including Global Justice Now, have argued that there is no need for these additional rules in TTIP because the EU and US already have robust judicial systems. Including new investment rules (known as Investor State Dispute Settlement) is hugely beneficial to business at the expense of governments – and the taxpayer.
This is backed up by research from 2013 commissioned by the Department for Business Innovation and Skills itself which found that “an EU-US investment treaty that does contain ISDS is likely to have few or no benefits to the UK, while having meaningful economic and political costs”.
Perhaps the most significant conclusion of the BIS select committee is that they “do not believe that the case has yet been made for ISDS clauses in TTIP”. This echoes the conclusion of Parliament’s Environmental Audit Committee, from just a couple of weeks ago, which said that “a compelling case for the inclusion of an ISDS in TTIP has not yet been made". With 97% of the public who completed the European Commission’s consultation on ISDS also saying they do not want ISDS in TTIP, the UK Government’s current pro-ISDS position seems increasingly untenable.
The report nods towards the political pressure to include ISDS in TTIP by suggesting possible modifications should ISDS be included. In particular, the committee asks for a “loser pays principle” to protect states from frivolous claims by business.
The committee also acknowledges the huge public concern about the impact of TTIP on the NHS and other public services, in particular by campaign group 38 degrees. While they report the reassurances that public services will be unaffected by TTIP, without being able to see the text of the negotiations, they ask the government to make an unequivocal public statement that public services are protected at present as well as the right to expand them in the future. It would be stronger if the report went further and asked about the cost associated with expanding public services in the future, under TTIP rules. However, this broad clarity from the UK government is something we have been calling for since TTIP negotiations were launched. It is one thing for the TTIP negotiations to enable EU governments to liberalise public services though TTIP. But it is the decision of each national government to decide which public services will be covered or excluded from TTIP.
With 6 weeks until the general election, the big question is what the position of the UK government will be on TTIP after the 7 May? The Conservatives and Liberal Democrats remain committed to TTIP and ISDS of some sort. The Green Party and Plaid Cymru oppose TTIP in its entirety. The Labour Party will only support a deal on TTIP if ISDS and public services are taken out, and standards are raised and not lowered. The SNP wants to see the NHS excluded from TTIP.
The first indication may be the government’s official response to this report by the BIS select committee, usually expected within 2 months.
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