PHM Europe: TTIP will not bring health and wealth to the majority, but challenge democracy.

15 May 2014

What is the TTIP?
On 17 June 2013, the European Commission announced the start of negotiations for a far-reaching trade deal, the Transatlantic Trade and Investment Partnership (TTIP) or Transatlantic Free Trade Agreement (TAFTA). A sixth negotiation round is planned in July 2014 in Brussels. The TTIP is to liberalise trade and investment between the EU and the US, which together make up 40% of global economic output. What is called “the biggest trade deal in the world” is aimed to be finalized by the end of 2014.

Will the TTIP bring economic growth and to whom?
“Because of the pressures of international competitiveness, there is a tone of inevitability in the discourse of trade liberalisation. Countries are pushed to adopt policies which are reassuring private investors”. The main argument used to support the TTIP is that it would bring  economic growth. However, its own growth study estimates show that the TTIP wouldn't be able to live up to the promise of economic prosperity. And even if it would be the case, the benefits of economic growth rarely reach the world's poorest people, with the advantages of globalization remaining unequally distributed. On top of that, in rich countries, health is affected by inequalities within countries.
In the 90's, Bill Clinton's promised the creation of millions of jobs with the North Atlantic Trade Agreement ( NAFTA ). Verdict 20 years later : loss of nearly one million jobs in the United States . In Mexico, many corn farmers went bankrupt due to the competition from the U.S. corn market , with a decrease of 1.4 million companies in 10 years . With NAFTA being the blueprint of the TTIP, why would it be different this time?

What about social protection?
Open economies are more vulnerable to sudden change and unable to absorb external shocks, which creates economic instability. In fact, in times of economic instability social security systems become more important to reduce the health risks related to psychological stress and material conditions. Social protection should stabilise and distribute gains of globalization to groups that would otherwise be excluded. Instead, within the European Union, austerity is being promoted as a solution to the eurocrisis, with public spending cuts in social protection programs and blatant examples from the south of Europe (Greece, Spain, ...).

Investor-state-dispute settlement mechanisms?
On top of that, the TTIP would include notorious investor-state-dispute settlement mechanisms that enable corporations to pursue countries on the grounds of the loss of current or future profits. A bilateral trade and investment agreement that contains legal rules, could thus have an effect on national health sovereignity and could limit the public sector's policy space. There have been several examples:

  • Free trade agreements VS public health

 When Australia decided that cigarettes packages should be marked with shocking health warnings, the tobacco company Phillip Morris sued Australia before an offshore tribunal, using a trade agreement it struck with Hong Kong.

  • Free trade agreements VS social protection

During its crisis, Argentina imposed a freeze on people's energy and waterbills and was therefore sued by the utility companies. For this, the country has been forced to pay billions of dollars in compensation.

  • Free trade agreements VS environment

In El Salvador, communities persuaded the government to refuse permission for a goldmine. The Canadian mining company is now suing El Salvador for $315 million for the loss of its anticipated future profits. In 2012 the Swedish company Vattenfall filed a request for arbitration against Germany, because of its decision to phase out nuclear energy.

What about public health legislation?
On 12 March, European Trade Commissioner Karel De Gucht said: "I have repeated hundreds of times that we will not get American beef with hormones on our plates!" However, a U.S. lobby group claimed in November 2013 that "the strict European regulations on the use of hormones can block more than $ 4 billion, or 40% of U.S. agricultural exports to the European Union, and thus brings the TTIP negotiations at risk. " The purpose of the transatlantic trade agreement is the "harmonization" of regulations. But how does one apply this "harmonization"? Assuming to lift standards and respect the European precautionary principle? Or does one adapt them to American standards? Never before have bilateral or regional free trade agreements been used to strengthen health legislation, on the contrary. So why would we believe it this time?

Can we reconcile fracking and environmental health?
Shale gas extraction (or fracking ) is part of the mandate for negotiations on the EU-US free trade agreement. In Latin America fracking projects prove to be a threat to the environment and human health. Each well requires between 4 and 30 million liters of water , and incloudes 80 to 300 tonnes of carcinogens such as benzene , toluene , ethyl benzene and xylene that could endanger the health of the surrounding communities. Extraction projects for oil , gas and mineral extraction are numerous and pollute land and water, resulting in a loss of biodiversity.

It is very unlikely that the TTIP would bring prosperity to the majority of people. Examples from existing free trade agreements show no benefit for the wealth and health of the general population and the environment. On top of that, it includes irreversible investment protection mechanisms which could seriously challenge the very principles of democracy. Policy makers should chose their priorities right. Knowing that free trade agreements, once signed, become effectively irreversible, a far higher treshold of certainty is required before signing bilateral trade agreements, especially with possible impacts on health and crucial service sectors. Governments need to guarantee the collective right to health of the population they represent. The precautionary principle should be handled; as long as there is no proof that population health will not be affected by the agreement, no agreement should be signed.

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Article by Natalie Van Gijsel from M3M

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