EU Referendum


EU Referendum: the TTIP leaks


03/05/2016




We've not written a great deal on TTIP on the blog (although it is covered comprehensively in Flexcit) for one very good reason. I've never believed is will happen. Even if it is finally agreed (which I doubt), I would expect Congress to refuse to ratify it.

Now, it appears, it may not get even that far. The massive leak of hitherto restricted documents by Greenpeace Netherland is being widely reported – not least be the BBC as spelling the death-knell for any agreement.

But perhaps more interesting is that, after 13 negotiating rounds since the talks were formally launched in June 2013, several newspapers are reporting that the documents reveal there are "irreconcilable differences" in some areas of the draft treaty.

We've dipped into some of the documents to take a look, and it does seem that there are some quite substantial differences, even after nearly three years of negotiations, with the starting gun actually being fired in November 2011. This does not say much for any Brexit talks with the EU being concluded inside two years, where a settlement easily as complicated as TTIP might be expected.

Looking at the document headed: "Consolidated Proposed Customs and Trade Facilitation Text" gives a good illustration of the divide. Under "International Standards", the EU proposed text is this:
1. The Parties agree that their respective customs provisions and procedures shall be based upon international instruments and standards applicable in the area of customs and trade, including the substantive elements of the International Convention on the Simplification and Harmonization of Customs Procedures, the International Convention on the Harmonized Commodity Description and Coding System, the SAFE Framework of the WCO, the WCO Data Model and related WCO recommendations, and the WTO Agreement on Sanitary and Phytosanitary Measures.
By contrast, the US proposal is very different:
1. Each Party shall share relevant information, and best practices, on the implementation of international standards for import, export, or transit procedures as appropriate. The Parties shall, as appropriate, discuss specific standards for import, export, or transit procedures and whether they contribute to trade facilitation.

2. Each Party shall endeavour to implement common standards and elements for import and export data consistent with the World Customs Organization (WCO) Data Model.
One very interesting thing here is the extent to which the EU proposal adopts the globalisation agenda, calling for joint procedures to be based on standards developed and promulgated by global bodies.

If this was the extent of TTIP, and there was accord on the detail, one might ask why a separate agreement is necessary. Since both the EU (or its member states) and the US are already parties to the named agreements, they could work within the existing frameworks, without having to go to all this trouble.

However, the US is clearly not playing ball. All it wants to commit to is to "discuss specific standards" for import, etc., procedures, calling for each party to "endeavour" to implement common standards and elements, "consistent with" the WCO Data Model.

This is a very much weaker, anodyne proposal, and demonstrates an all too-typical reluctance of the US to work within the frameworks set by global bodies. Despite Mr Obama wanting us to hand the UK on a plate to the EU, the US is very jealous of its sovereignty and tends to hold international bodies at arms length.

Another example of this is seen in the document on "Sanitary and Phytosanitary (SPS) Measures". While the EU proposal is couched in terms of furthering the WTO SPS Agreement, the US simply states that each Party recognises that achieving an equivalent level of sanitary or phytosanitary protection as its own SPS measures "can facilitate trade between the Parties".

A clinical assessment of the leaked papers might suggest that the EU is actually making the running, with the US a reluctant partner, very much dragging its heels.

However, with the addition by the US of a long section on risk assessment, Greenpeace and others are complaining that EU standards on the environment and public health risk being undermined by compromises with the US.

Here, the green NGOs may be protesting too much, especially as the US does not challenge any existing international standards. What concerns them though, is the absence of any reference to the "precautionary principle" which has enabled European activists to block progress on GMOs and some pesticides.

But what is likely to prove an additional (and perhaps absolute) blockage is the dispute settlement mechanism. This is the notorious Investor-State Dispute Settlement (ISDS) and, although there is clearly agreement in principle, there are significant differences between the Parties on details, and many obvious areas of disagreement.

This agreement was supposed to have been settled before the end of 2015 and there is now some concern to get it finalised before November, before Obama leaves office. Even if it gets a Presidential signature though, there is still Congress to confront.

There may also be greater obstacles on the European side. Although trade is an exclusive competence of the EU, which is empowered to sign trade deals in its own name, TTIP is likely to be what is known as a "mixed agreement" which will require unanimous ratification by all Member States. Given the widespread opposition throughout Europe, this cannot be taken for granted.

Looking at the agreement in the round, though, there does not seem to be a great deal there that could not be pursued on a multilateral basis, using existing agreements, working with global bodies already in place.

The advantage of a bilateral treaty seems mainly to fall with the Americans, who can leverage the need to conclude an agreement against concessions in particular sectors. Thus see the US demanding greater access to the European market for agricultural goods, in exchange for concessions on the motor vehicle market.

In essence, this is the last of the great dinosaurs – and the only sure way to prevent the UK being saddled with it is to vote leave in the June referendum. It seems to offer nothing that we could not leverage through existing agreements and institutions, while standing outside it would avoid us having to make concessions on dispute settlement and other matters, which are unlikely to be to our advantage.

Therein lies the real irony, as the green NGOs are largely in favour of continued British membership of the EU. If they really want to block our participation in TTIP, though, they are going to have to join the "leave" camp.

Yet, if we told them that we feel their pain, there is a distinct possibility that we might be greeted with some scepticism – if we're able to hear their words though the growing volume of sniggering. It is so sad that the greens should be caught thus – but at least they can vote in private to avoid any further embarrassment.

All we need to do is remind them that the cross goes on the bottom box.