TTIP is not a reason for leftwing voters to support Leave
Jonathan Lindsell, 1 March 2016
I wrote critically about the Transatlantic Trade and Investment Partnership in 2013 and 2014, both on the Civitas website and on Left Foot Forward. Like many others, I was concerned by the possibility that TTIP would erode health and safety standards by compromising with America, that the deal could add small stabs of privatisation to European national health services, and most of all, that an investor protection mechanism could allow American corporations to sue member states that sought to alter health, public safety or environment rules. (This mechanism is called the Investor-State Dispute Settlement mechanism, or ISDS: some of the most objectionable cases of investor-state protection abuse are here.)
However the EU has shown itself genuinely responsive to public pressure and endangered the whole deal to address people’s fears. Several committees in the European Parliament, most of which were dominated by socialists and greens, put pressure on the European Commission in 2014-15, adding to the anger displayed by protests in Belgium, Germany and France. The trade commissioner, Cecilia Malmström, suspended talks on the chapter including ISDS and – at what must have been of considerable annoyance to America and a loss of face in the deal’s progress – proposed a brand new system of business-state arbitration through an international court that would be more transparent and include an appeals process. After a delay Malmström has won agreement on the improved system from Canada.
This is not perfect, but most people would agree that foreign businesses do deserve some protection in case governments literally seize their physical or intellectual property. The Commission also appears to have taken heed of product and safety standards, causing another long delay, meaning that the biggest scare stories (hormone-enhanced beef and chlorine-washed chicken) will not be included in TTIP.
Lord Ian Livingstone, trade minister and David Cameron’s personal friend, wrote several defences of TTIP’s ISDS system before it was reformed, as did Kenneth Clarke, former Conservative Chancellor. The original, unreformed version of TTIP was one the British government thoroughly supported, lobbied for within the EU, and championed on the outside. It seems odd to imagine that a Conservative government, led by the Leavers after a Brexit, would turn its back on the strain of free-market theory it has long supported. When Leave promises post-Brexit free trade deals with America, India, China and New Zealand, it has TTIP-like deals in mind. Even Ukip, which now decries TTIP, used to quietly support the unreformed deal until its leaders noticed in 2013-2014 that criticising TTIP might win left-leaning sympathisers.
Prominent left-wing commentators fear TTIP could add to the privatisation of the NHS and consider voting Leave as a way to thwart this. This is a poor gamble. The Conservatives’ reorganisation of the NHS in the last parliament went further than TTIP ever could in introducing market competition and tendering to the NHS. Nothing Jeremy Hunt has done shows a convincing appetite to reverse privatisation. Again, the only reasonable conclusion is that a Conservative post-Brexit government would allow areas of privatisation to continue, and would write them into UK-only free trade deals. However on TTIP, the Commission has again responded to public pressure and promised that national health and social security systems will not be affected.
If you do not trust the Commission’s assurance, consider how important the European Parliament has become. We have already seen that the Commission responds to the serious pressure the parliament exerted during earlier TTIP stages. The European Parliament has the power to delay or strike down the final deal when it is agreed if it does not meet proper safety and health standards. The British government will also have this veto power. This means there is actually one extra level of democratic protection pre-Brexit than post-Brexit. If the Conservative government considers TTIP does not threaten the NHS but members of the European Parliament do not, it can still be stopped.
Another fear linked to TTIP is that UK workers would be in direct competition with less protected US workers, so outcompeted or forced into a race to the bottom on labour conditions and protection. However, this is more likely after exit: either because the Conservatives sign a TTIP-like deal, or because they use their freedom from EU social laws to reduce British workers’ rights.
The EU is noted for including social and environmental chapters in its trade agreements, something right-wing or laissez-faire critics often decry. If a Conservative-led government negotiated trade deals with China or India, they would hardly push for those countries to boost their labour standards, meaning that once the deals came into force, British workers would be competing with sweatshop conditions. In the face of such competition, UK manufacturing is likely to lose out in many cases, or see UK workers required to work harder and longer.
In theory a Labour government could try to undo the damaging effects of Conservative-written trade deals, if they take power in 2020, but in practice governments seldom go back on treaties signed by their predecessors. In any case, the labour effects may not have emerged yet, and the other sectors of the economy that benefit from the deals would lobby hard against reversal.
In short, it makes little sense to vote for Leave because you fear TTIP will allow the privatisation of the NHS, diminished food standards, attacks on labour rights, or corporations strong-arming the government. So far, the EU has shown itself far more sympathetic to these concerns than our current government.
Comment by David Green, Director of Civitas
The fatal mistake in this blog is its claim that the proposed multilateral arbitration system (which does not yet exist) will be better than the bilateral arbitration systems currently in operation.
In September 2015 EU Trade Commissioner Cecilia Malmström proposed a new dispute settlement court, with 15 independent judges and allegedly more transparent procedures. This proposed court would also have an appellate mechanism of six judges. The internationally qualified judges would be appointed publicly by the US, the EU, and a third country. More details are given in this EU press release of February 2016.
The proposal has been seen through by critics, including MEP Ska Keller from the Greens/European Free Alliance. She said it was ‘a marketing stunt which fails to address the core problems of ISDS: It would remain a separate arbitration body, outside the established legal system, created for the benefit of corporations to challenge state authorities and democratically-approved laws’.
Ordinary citizens have to use the ordinary courts and so should international companies.
The blog author also asserts that foreign businesses deserve protection ‘in case governments literally seize their physical or intellectual property’. But that is already against our laws. We do not need any new machinery.
Finally, the author asserts that the European Parliament has protected us from a Tory government that has so far supported ISDS. This claim reveals a profoundly anti-democratic attitude. A system of self-government based on consent means that we have our discussions here in the UK and reach a compromise. Because this issue has been settled in Brussels there has been hardly any discussion in the UK. As recent debates about planned Tory welfare reforms have revealed, when public opinion is clearly against them the Tories change their policies, even when they are central to Budget calculations. If the issue had been debated here in full, instead of overseas, Tory ministers would not have been able to hide their opinions from the people and from Parliament. Based on their record so far, the full glare of publicity is likely to have brought them to their senses.