Bursting the Bubble

Is democracy a trade barrier?

8 January 2015 | by

In a democracy, elected representatives make laws. But with new trade agreements, businesses  could co-write legislation.

The United States and the European Union (EU) are negotiating a trade agreement, the Transatlantic Trade and Investment Partnership (TTIP).

The aim is to lower trade barriers. Unfortunately those ‘barriers’ include not just traditional trade tariffs and quotas, but also the laws your elected representatives make. For example, Pierre Defraigne, former Deputy Director-General in the EU Commission Department responsible for Trade, sees the core battle of TTIP is over “the norms and standards in terms of environmental, health and consumer protection”.

This is why the fight against TTIP is a fight for democracy. It is not about protectionism, but rather the protection of our democratic laws over their business interests.

If TTIP was to be signed, two new doors will be opened for businesses to influence legislation:

  1. Firstly, regulatory co-operation will give access to industry before laws are to be signed. This means regulators and stakeholders work together for the convergence of laws across the Atlantic.
  2. And secondly, once laws are enacted, private investors can sue the EU or US in private tribunals, outside of national courts (known as ISDS or investor-state dispute settlement).

The example of the chemical Bisphenol A illustrates what both these ‘open doors’ for business could mean in practice.

Used in everything from cash receipts to the lining of food cans, Bisphenol A is one of the most ubiquitous endocrine disruptors. As such, it disrupts the hormonal system of the body, which is responsible for all vital features such as growth, sexual development, and even behaviour.

Bisphenol A has been banned in France in all food contact materials since 1st January 2015. This ban goes further than the existing EU ban in baby bottles. Meanwhile, there are no bans on Bisphenol A in the United States.

Imagine the TTIP had been signed five years ago, and included one of the current EU proposals for regulatory co-operation: a complaint mechanism available to businesses. Had a US company found out about the French ban, it could have demanded a dialogue with EU and France representatives to “effectively resolve problems”, according to the leaked EU proposal.

Imagine France had not accepted the corporate solutions and gone ahead, listening to its parliament rather than corporations. Those investors whose business could be affected by the ban on Bisphenol A could threaten to sue France at a very expensive private tribunal.

This is how, in the flow of legislation, TTIP will give the opportunity to businesses to build dams upstream and downstream to suit their private interests.

And the TTIP will not only make positive laws with negative business impacts harder to enact in the European Union. The United States’ democracy will also suffer.

For example, Mella Frewen, Director General at FoodDrinkEurope, the biggest agribusiness lobby in the European Union, recently told the European Parliament that “the revision of the US Food Safety Act” which aims to improve standards is a barrier to trade.

A trade barrier? Or a barrier to corporatocracy?

You can read more on http://corporateeurope.org/international-trade

One Comment

  1. I agree with the author TTIP will ultimately destroy creativity by giving to much power to companies who benefit imposed standardisation.

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