AGREEMENT FRAUGHT WITH CONSEQUENCES

The dark clouds are hovering over the Transatlantic Trade and Investment Partnership (TTIP) between the United States and Europe, one of the most ambitious ideas put forward by the current US President Barack Obama. Many euroskeptics are inclined to even bury this project, which would consolidate 46% of the global GDP and the one third of international trade turnover.

Zero efficiency

Even the French President of France has expressed his desire to stop the negotiations, which have been ongoing in vain for more than three years. As mentioned by the German Vice-Chancellor and Minister of Economy Sigmar Gabriel, the parties had held 14 rounds of talks on 27 clauses of the agreement, but they had failed to achieve any consensus on any of these clauses.

No consensus on any of the clauses! Even the “light version” of TTIP has not been accepted! The Americans invented this trick at the beginning of this year, when it became clear that the agreement would not be signed by the end of Obama’s presidential terms. The ardent opponents of the “light version” were the representatives of European engineering industry and industrial manufacturing, strongly supported in the US. That is, the main beneficiaries of the agreement. And the reason is simple: the “light version” has not considered them at all.

But how magnificent it all began! The rhetoric of politicians on both sides of the Atlantic, including the current US presidential candidate Hillary Clinton, were full of exclamatory adjectives such as Economic NATO! They were supported by EU Commissioner for Trade Cecilia Malmström: “A political arm for promoting European - and universal - values ​​in the world!” and the US Secretary of Commerce Penny Pritzker: “Thanks to this project, both the US and Europe will be able to dictate the trade rules of the 21^st century!”

However, the initiative had not advanced since except the fancy words uttered here and there. Not a single step forward. The negotiators had too different views regarding the role of the state, rights of owners and democratic values. For example, the agreement may well jeopardize such European standards as the quality of food, stability of financial markets, and the chemical safety.

Full-court press

So, what is the deal? Well, it is certainly not about the elimination of existing small tariff barriers hindering mutual trade! WTO is on top of it anyway. It is all about establishing a completely new set of rules for global free trade. Moreover, the proponents of TTIP both in the US and in Europe, refer to this measure as a proactive step to limit globalist aspirations of China.

A very wide range of important issues is discussed between both sides of the agreement, including the regulation of environmental protection actions, food safety, rules for the use of chemicals in industry and agriculture, as well as the protection of intellectual property rights, privacy of the Internet users, interests of consumers and foreign investors. All of these issues will affect the labor laws, banking regulations, public services, and many other spheres of economy.

This agreement is trying to make fundamental changes in legal, judicial and regulatory structures of the states involved in the project. This is the reason why the negotiations extend over three years, although unsuccessfully.

It is difficult to expect something different from TTIP when you understand that, instead of developing a set of universal regulations, the US, in fact, is making a proposal to Europeans to simply copy the American format and rules of doing business. In particular, it concerns the mechanism for resolving conflicts between the investors and the state. Private companies are vested with authority to appeal to the so-called commercial arbitration courts on charges of alleged violations of the rules by the state. This simply implies that the private companies will be able to appeal against government actions, if they consider that the latter reduce profitability of their activities. For instance, to block any bill that increases the demands on the manufacturer, whether in the field of environment or public health, under the pretext of violation of the principles of free trade. Moreover, neither governments nor individuals are not empowered the same rights to hold corporations liable for their actions.

According to experts, such a traditional American mechanism can paralyze the supervisory and regulatory authorities in Europe and reverse the legislation adopted in compliance with the principles of European democracy.

Meanwhile, the US strongly reject any reciprocal European proposals on the possibility of resolving conflicts in the courts of general jurisdiction and granting the right to supply appeals.

Yet another example. Washington is ready to reset the import duties for European cars, but only if American agricultural products have an access to the EU markets.

In Europe, there are severe restrictions on the use of genetically modified foods and plants. Even a mere suspicion that such products may be hazardous to human health may lead to withdrawal of these products from the market. The US observes a different principle: it is possible to produce and sell the products unless it is proved that they are harmful to humans.

Anticipating a negative public reaction, the German officials have publicly declared that they would not allow “meat with hormones” to the country.

Europe will also prevent public educational services from subordination to commercial trade rules. Audiovisual services are not part of the TTIP discussions. This was encouraged by the desire to preserve cultural and linguistic diversity within the European Union.

It also became clear that the copyright applies to all but agricultural goods in the United States. In American supermarkets, for example, one can buy local feta cheese, as well as California wines branded as “champagne”, “burgundy” and so on. The EU requirements on the prohibition of production of such products under the names assigned to the manufacturers of specific regions of the European countries are rejected on the pretext that it is a form of protectionism.

The Trojan horse

While the trade agreement with the United States is stalled, a similar agreement with Canada (CETA) is virtually agreed and waiting for ratification at the EU-Canada Summit planned on 27 October in Brussels. According to Sigmar Gabriel, this was possible thanks to the fact that Ottawa, unlike Washington, had largely adopted the EU requirements.

However, the experts have noticed in the text of the agreement with Canada the conditions that make CETA a Trojan horse of TTIP, as CETA protects the rights of all corporations operating in Canada, regardless of location of their head offices. That means that not  only Canadian but also American transnational companies may be the party to the agreement, if they are at least engaged in some activities in Canada.

And yet, despite the European Parliament's favorable attitude to CETA, the agreement should undergo hearings in national parliaments. TTIP does not provide for such a condition.

Yes, we can stop TTIP!

Once the slogan of the Obama campaign in 2008, “Yes We Can!” has become extremely popular among the opponents of his own project. However, the slogan was slightly updated and now reads “Yes, we can stop the TTIP!” Hundreds of thousands of people have taken to the streets with these posters all over Europe for the last three years to make the leaders of their countries abandon the agreement, which, in their opinion, would lead to lower environmental and social standards in Europe, as well as the erosion of existing trade rules and regulations.

On the eve of elections

The supporters of national sovereignty and protectionism both in Europe and in the USA are gaining momentum.

Despite the fact that the terms of TTIP are carefully hidden, the leaked contents of the draft agreement is gradually lowering the support for the initiative in Europe and the US. If two years ago it was 50%, it barely reaches 15% now. This is eventually reflected in the electoral ratings.

The representatives of the ruling parties in Europe have begun to realize that the further support of the project may turn out to defeat at future elections. It was the dynamics of public opinion that has changed the position of political leadership with regard to TTIP in the leading European countries (Germany, France, Italy and Austria).

The idea of ​​free trade is also losing support in the US. Hillary Clinton, who was actively supporting the agreement during her term as the Secretary of State, was forced to promise during the presidential campaign that she would not sign TTP or TTIP. In addition, many in the Democratic Party are opposed to the agreement with the EU. The Republican majority in Congress is also against TTIP. Trump also is one of the opponents of the agreement.

Negotiations postponed indefinitely

Despite the skepticism of leaders of the leading European countries in to the TTIP, the foreign trade ministers of EU have recently concluded at the Bratislava Summit to continue the negotiation process.

At the same time, the Ministers have acknowledged that the signing of TTIP would not be possible before the end of the presidential terms of the incumbent US President Barack Obama.

So, it was decided to take a break. The negotiations are interrupted until the end of the presidential elections in the US (November 2016) and in France (Spring 2017), as well as parliamentary elections in Germany (fall 2017).

In fact, the negotiations may resume only by the end of 2017 - beginning of 2018.