Sunday 26. September 2021
#195 - July-August 2016

Is the TTIP compatible with the EU’s basic objectives?

The Transatlantic Agreement on Trade and Investment Partnership (TTIP) between the United States and the European Union has sparked off a highly controversial and multifaceted debate.

Although the TTIP is an agreement being negotiated primarily at European level, its consequences will also be felt at national level. The same is true for ­CETA (Comprehensive Economic Trade Agreement) between Canada and the EU. What are the most significant bones of contention?


Defenders of TTIP refer to three key arguments. First, they claim that this kind of agreement enables more growth and thus greater prosperity, although all its forecasts (for example those which predict 2% more growth and 17% more trade) are extremely uncertain. What is not being addressed here is the extent to which poorer countries and ethnic groups stand to profit from TTIP. Second, TTIP supporters argue that doing away with non-tariff trade barriers (such as technical standards) will ease trade. However, there are concerns that this could lead to the dismantling of social and environmental norms (like the precautionary principle, a core ILO standard). Third, they argue that people should also consider the geostrategic objective of establishing standards for future world trade agreements, thus bolstering the western economic bloc and gaining a head start over the Chinese, for example.


Critical questions

TTIP affects the fundamental values and standards which underpin the European Union. Criticism of TTIP takes many forms, so we can only outline a few of them here. Negotiations are being conducted mostly behind closed doors and lack a great deal of transparency. Moreover, it is unclear how far the European Parliament and the national parliaments will need to agree with them. All of this contradicts the principle of proximity to citizens, and that could further aggravate the current European crisis.


In the opinions of many experts, TTIP undermines existing sovereignty. The proposed protection of investors contains clauses which allow companies to claim damages and place other obligations on Member States in arbitration tribunals exterior to their existing legal systems. There is no need for this, given that all Member States involved have well-established legal systems which offer perfectly adequate protection to investors. On international level, the dispute settlement procedure has proved itself to be reliable within the framework of the WTO and has led to behaviour which complies with the terms of the contract.


What is totally unacceptable is the planned ‘Regulatory Cooperation Body’ (RCB), let alone the other expert committees which will be continually updating the ratified agreement without parliamentary consensus. The RCB will even be consulted at the early stages of national legislative processes.


Social and ecological criteria

Under no circumstances may a liberalisation of trade through TTIP be allowed to weaken the social market economy across wide stretches of Europe. But this is exactly what would happen if powerful companies were to stand outside national jurisdictions. No one can deny that governments have sometimes failed, but, equally, one can point to just as many market failures. Especially problematic are the so-called ‘negative lists’ which specify that all sectors can be liberalised unless they are explicitly listed. A better approach would be to provide a positive catalogue explicitly listing the areas in which such liberalisation openings are advocated.


The EU promotes growth that is environmentally-friendly (green). Yet this aspect hardly ever comes up in the negotiations. It would therefore seem fitting to look in greater detail at the implications of increased trade, especially its impact on climate change, since more transport will generally lead to higher emissions pollution. Not only that, it will promote a lifestyle which revolves around consumption. What is at stake here is the coherence of the various EU policy fields; it also affects the sustainable development goals (SDGs) to which the United Nations and the EU signed up in 2015.


Where does this leave the poorer countries?

For a long time, the EU has given particular support to the poorest countries of the global south (ACP), and this is now incorporated into the framework of the WTO. However, trade agreements being brokered between powerful economic blocs are undermining these joint framework conditions. Most third countries will end up worse off through the effects of diverting trade, an anticipated by-product of TTIP, which means that poorer countries will be the very nations that will see their market access decrease. If poor countries are shut out of such negotiations, this will also run counter to the principle of procedural justice.


It is still too early to make any final judgment. Whatever happens, we must keep a highly critical eye on how further negotiations unfold. This calls for the greatest possible level of transparency, without any time pressures, and also for the democratic involvement of parliaments and the inclusion of civil society.


Johannes Müller SJ

Professor for Social Science and Development Policy at the Munich School of Philosophy


Translated from the original text in German



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