In Germany, CETA is as unpopular as TTIP. Berlin, October 2015.
EXCLUSIVE / Romania will not ratify the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada which was concluded in 2014, as an angry reaction to the refusal by Ottawa to lift the visa requirement of its nationals, but also for the lack of EU solidarity for solving the issue.
The Romanian Ministry of Foreign Affairs has published a position regarding Canada maintaining the visa requirement for Romanian citizens, expressing disappointment that Ottawa had not delivered on its promise to solve the issue, contained in the Statement of the 2014 EU-Canada summit.
Canada has a visa-free regime with all EU countries except Romania and Bulgaria.
“In this situation the Romanian authorities will reassess, at EU level, the approach to the relationship between the EU and Canada so as to secure the goal of having obligatory visas for Romanian citizens eliminated”, the Position of the Romanian foreign ministry reads.
Asked to explain this text, a Romanian high official who asked not to be named said that Romania would “veto” the CETA ratification.
Normally the ratification of CETA should conclude by the end of 2016 or 2017. Romania however will not ratify the agreement, EurActiv was told.
The official also expressed anger at the way the European Commission had handled the issue.
On 12 April, the College of Commissioners met exceptionally on a Tuesday, not on a Wednesday. This is because 12 April was the deadline for the Commission to propose how EU countries should “react in common”, as an EU regulation requires, in cases where foreign countries “subjects [EU] citizens to differing treatment”.
Based on an in-house made assessment, the Commissioners decided that the consequences of the EU imposing visas to Canada and the USA would be so dire, that the EU legislation requiring reciprocity was impossible to be applied.
“According to the assessment, it is highly unlikely that member states would be able to process the increased number of visa applications in accordance with the Visa Code within 90 days following the entry into force of such visa requirement decision and moreover such visa requirement could result in a decrease in the number of travellers from Canada and the US,” the Commission stated.
“The Commission therefore recommends to the Council and the Parliament not to apply the EU legislation,” the Romanian official said, adding that this amounted to “treachery”.
EurActiv contacted the Bulgarian authorities for their position on the issue. It appears that Sofia has not yet decided what position to take.
More work to do
There is still more work to be done before the visa dispute between Canada and the European Union can be resolved, Canada’s Immigration Minister John McCallum was quoted as saying by the Toronto Sun.
“We have not offered full visa lift but we have offered something called Canada plus, which is easier access for regular travellers,” McCallum said.
The minister also said he’s not concerned how the dispute might affect CETA, adding that it was a separate issue.
According to the Canadian press, the authorities in Ottawa have been aware that the unsolved visa issue may inspire unspecified member states to block the ratification of CETA.
Un collectif d’organisations non gouvernementales (ONG), dont Health Action International (HAI), s’est inquiété, dans une position publiée le 18 février 2016, des conséquences du Partenariat transatlantique de commerce et d’investissement (TTIP) sur l’accès aux médicaments. En effet, selon les ONG, ce dernier pourrait nuire à l’accessibilité, au développement d’une innovation centrée sur les besoins et à la conception de structures d’incitations alternatives, en raison notamment de dispositions visant à restreindre les décisions nationales en matière de prix et de remboursement de médicaments et renforcer la propriété intellectuelle. En outre, les négociateurs souhaiteraient entériner la réglementation en matière de secret des affaires, réduisant ainsi l’accès à l’information sur les médicaments. La mise en place de groupes de travail de coordination bilatérale sur la propriété intellectuelle et les décisions de prix et de remboursement pourrait également influencer les politiques nationales dans le sens d’une réduction des barrières au commerce. La proposition d’inclusion d’un mécanisme de résolution des différends entre investisseurs et Etats inquiète les ONG dans la mesure où elle pourrait permettre à des investisseurs d’attaquer des décisions nationales visant à préserver la santé et l’intérêt publics. Enfin, la coopération notamment en matière de propriété intellectuelle et de prix et de remboursement risque de nuire aux politiques des pays en développement pour améliorer l’accès à des médicaments abordables.
U.S. Trade Representative Michael Froman last week placed pressure on the European Union to finalize a Transatlantic Trade & Investment Partnership (TTIP) deal before President Obama leaves office, signaling that the U.S. is in a position to make a significant push to complete the deal this year — but the EU must step up to the plate as well.
“Now is the time. For two-and-a-half years, negotiations have made good, steady progress. The Obama Administration is prepared to make every effort to reach an ambitious, comprehensive, high-standard agreement, and we have demonstrated our willingness to invest political capital in expanding trade,” Froman said in a Feb. 12 speech to the Bavarian Parliament.
“But if we are going to succeed with T-TIP, we need political will on both sides to step up the pace and bring a pragmatic, problem-solving approach to the negotiations.”
Froman made similar remarks at the Munich Security Conference the same day, saying that the U.S. and EU “have the opportunity to bring these negotiations to a successful close. The Obama Administration is prepared to make every effort to conclude T-TIP, but to do so, we need both sides to apply the necessary political will.”
Froman’s remarks contrast a position long held by EU officials who say a lack of progress in key areas and the United States’ preoccupation with finalizing and securing congressional passage for the Trans-Pacific Partnership have severely diminished prospects for finishing TTIP this year.
In December, European Trade Commissioner Cecilia Malmstrom and Froman committed to accelerate TTIP talks, but despite the agreement to speed up work on the trade deal, Malmstrom in January continued to place the responsibility for concluding the deal on the U.S.
“The EU is ready to finish this agreement under the Obama Administration. We have the political and human resources to do that. However, the U.S. must also be prepared to commit if we are to get a result,” Malmstrom said in a Jan. 14 speech at the Welt Economic Summit in Berlin.
Three rounds of negotiations are set to take place in February, April and July, a timetable that largely mirrors last year’s negotiating schedule. The first round of the year, which will take place from Feb. 22 through the 26th in Brussels, is expected to focus on an exchange of government procurement offers, regulatory issues, and the EU’s proposal for an investment court system.
NEW YORK – The United States and the world are engaged in a great debate about new trade agreements. Such pacts used to be called “free-trade agreements”; in fact, they were managed trade agreements, tailored to corporate interests, largely in the US and the European Union. Today, such deals are more often referred to as “partnerships,”as in the Trans-Pacific Partnership (TPP). But they are not partnerships of equals: the US effectively dictates the terms. Fortunately, America’s “partners” are becoming increasingly resistant.
It is not hard to see why. These agreements go well beyond trade, governing investment and intellectual property as well, imposing fundamental changes to countries’ legal, judicial, and regulatory frameworks, without input or accountability through democratic institutions.
Perhaps the most invidious – and most dishonest – part of such agreements concerns investor protection. Of course, investors have to be protected against the risk that rogue governments will seize their property. But that is not what these provisions are about. There have been very few expropriations in recent decades, and investors who want to protect themselves can buy insurance from the Multilateral Investment Guarantee Agency, a World Bank affiliate (the US and other governments provide similar insurance). Nonetheless, the US is demanding such provisions in the TPP, even though many of its “partners” have property protections and judicial systems that are as good as its own.
The real intent of these provisions is to impede health, environmental, safety, and, yes, even financial regulations meant to protect America’s own economy and citizens. Companies can sue governments for full compensation for any reduction in their future expected profits resulting from regulatory changes.
This is not just a theoretical possibility. Philip Morris is suing Uruguay and Australia for requiring warning labels on cigarettes. Admittedly, both countries went a little further than the US, mandating the inclusion of graphic images showing the consequences of cigarette smoking.
The labeling is working. It is discouraging smoking. So now Philip Morris is demanding to be compensated for lost profits.
In the future, if we discover that some other product causes health problems (think of asbestos), rather than facing lawsuits for the costs imposed on us, the manufacturer could sue governments for restraining them from killing more people. The same thing could happen if our governments impose more stringent regulations to protect us from the impact of greenhouse-gas emissions.
When I chaired President Bill Clinton’s Council of Economic Advisers, anti-environmentalists tried to enact a similar provision, called “regulatory takings.” They knew that once enacted, regulations would be brought to a halt, simply because government could not afford to pay the compensation. Fortunately, we succeeded in beating back the initiative, both in the courts and in the US Congress.
But now the same groups are attempting an end run around democratic processes by inserting such provisions in trade bills, the contents of which are being kept largely secret from the public (but not from the corporations that are pushing for them). It is only from leaks, and from talking to government officials who seem more committed to democratic processes, that we know what is happening.
Fundamental to America’s system of government is an impartial public judiciary, with legal standards built up over the decades, based on principles of transparency, precedent, and the opportunity to appeal unfavorable decisions. All of this is being set aside, as the new agreements call for private, non-transparent, and very expensive arbitration. Moreover, this arrangement is often rife with conflicts of interest; for example, arbitrators may be a “judge” in one case and an advocate in a related case.
The proceedings are so expensive that Uruguay has had to turn to Michael Bloomberg and other wealthy Americans committed to health to defend itself against Philip Morris. And, though corporations can bring suit, others cannot. If there is a violation of other commitments – on labor and environmental standards, for example – citizens, unions, and civil-society groups have no recourse.
If there ever was a one-sided dispute-resolution mechanism that violates basic principles, this is it. That is why I joined leading US legal experts, including from Harvard, Yale, and Berkeley, in writing a letter to President Barack Obama explaining how damaging to our system of justice these agreements are.
American supporters of such agreements point out that the US has been sued only a few times so far, and has not lost a case. Corporations, however, are just learning how to use these agreements to their advantage.
And high-priced corporate lawyers in the US, Europe, and Japan will likely outmatch the underpaid government lawyers attempting to defend the public interest. Worse still, corporations in advanced countries can create subsidiaries in member countries through which to invest back home, and then sue, giving them a new channel to bloc regulations.
If there were a need for better property protection, and if this private, expensive dispute-resolution mechanism were superior to a public judiciary, we should be changing the law not just for well-heeled foreign companies, but also for our own citizens and small businesses. But there has been no suggestion that this is the case.
Rules and regulations determine the kind of economy and society in which people live. They affect relative bargaining power, with important implications for inequality, a growing problem around the world. The question is whether we should allow rich corporations to use provisions hidden in so-called trade agreements to dictate how we will live in the twenty-first century. I hope citizens in the US, Europe, and the Pacific answer with a resounding no.
In 1997, Canada restricted import and transfer of the gasoline additive MMT because it was a suspected neurotoxin that had already been banned in Europe. Ethyl Corp., the U.S. multinational that supplied the chemical, sued the government for $350 million under the North American Free Trade Agreement and won! Canada was forced to repeal the ban, apologize to the company and pay an out-of-court settlement of US$13 million.
The free trade agreement between Canada, the U.S. and Mexico was never designed to raise labor and environmental standards to the highest level. In fact, NAFTA and other trade agreements Canada has signed—including the recent Foreign Investment Promotion and Protection Agreement with China—often take labor standards to the lowest denominator while increasing environmental risk. The agreements are more about facilitating corporate flexibility and profit than creating good working conditions and protecting the air, water, land and diverse ecosystems that keep us alive and healthy.
Canada’s environment appears to be taking the brunt of NAFTA-enabled corporate attacks. And when NAFTA environmental-protection provisions do kick in, the government often rejects them.
According to a study by the Canadian Centre for Policy Alternatives, more than 70 percent of NAFTA claims since 2005 have been against Canada, with nine active cases totaling $6 billion outstanding. These challenge “a wide range of government measures that allegedly interfere with the expected profitability of foreign investments,” including the Quebec government’s moratorium on hydraulic fracturing, or fracking.
Quebec imposed the moratorium in 2011 pending an environmental review of the controversial gas-and-oil drilling practice. A U.S. company headquartered in Calgary, Lone Pine Resources Inc., is suing the federal government under NAFTA for $250 million. A preliminary assessment by Quebec’s Bureau d’audiences publiques sur l’environnement found fracking would have “major impacts,” including air and water pollution, acrid odours and increased traffic and noise. Fracking can also cause seismic activity.
According to the CCPA, Canada has been sued more often than any other developed nation through investor-state dispute settlement mechanisms in trade agreements. Under NAFTA, “Canada has already lost or settled six claims, paid out damages totaling over $170 million and incurred tens of millions more in legal costs. Mexico has lost five cases and paid damages of US$204 million. The U.S. has never lost a NAFTA investor-state case.”
NAFTA does, however, have a watchdog arm that’s supposed to address environmental disputes and public concerns, the Commission for Environmental Cooperation. But Canada is blocking the commission from investigating the impacts of tailings ponds at the Alberta oilsands.
Environmental Defence, Natural Resources Defense Council and three people downstream from the oilsands asked the CEC to investigate whether tailings leaking into the Athabasca River and other waterways represent a violation of the federal Fisheries Act. According to the complaint, the tailings ponds, which are actually much larger than what most people would think of as ponds, are spilling millions of litres of toxic liquid every day. Environmental Defence says the CEC found “plenty of evidence that tar sands companies were breaking Canadian law and lots of evidence that the Canadian government was failing to do anything about it.”
It’s the third time in the past year that Canada has prevented the commission from examining environmental issues. Canada earlier blocked an investigation into the protection of polar bears from threats including climate change and one concerning the dangers posed to wild salmon from BC fish farms.
Trade agreements are negotiated in the best interests of corporations instead of citizens. On top of that, federal and provincial governments keep pinning our economic hopes on volatile oil and gas markets, with little thought about how those resources could provide long-term prosperity. Recent plummeting oil prices show where that leads.
These priorities are screwed up. We end up with a boom-and-bust economy and the erosion of social programs as budgets are slashed when oil prices drop. Skewed trade deals allow corporations to override environmental protections that haven’t already been gutted, and create a labor climate in which wages, benefits and working standards fall.
New Report ‘Prosperity Undermined’ Fact Checks Administration, Corporate Lobbyists and GOP Leadership With 20 Years of Data on Jobs, Economy
Fast Tracked trade deals have exacerbated the income inequality crisis, pushed good American jobs overseas, driven down U.S. wages, exploded the trade deficit and diminished small businesses’ share of U.S. exports, a new report from Public Citizen’s Global Trade Watch shows. The report, “Prosperity Undermined,”compiles and analyzes 20 years of trade and economic data to show that the arguments again being made in favor of providing the Obama administration with Fast Track trade authority have repeatedly proved false.
President Barack Obama is expected to push Fast Track for the Trans-Pacific Partnership (TPP). The pact, initiated by George W. Bush, literally replicates most of the job-offshoring incentives and wage-crunching terms found in the North American Free Trade Agreement (NAFTA) and would roll back Obama administration achievements on health, financial regulation and more.
“It’s not surprising that Democrats and Republicans alike are speaking out against Fast Track because it cuts Congress out of shaping trade pacts that most Americans believe cost jobs while empowering the president to sign and enter into secret deals before Congress approves them,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “In their speeches and commentary, the administration, corporate interests and GOP leadership disregard the real, detrimental impacts that previous fast tracked trade deals – which serve as the model for the Trans-Pacific Partnership – have had on America’s middle class over the past 20 years.”
The new report shows a 20-year record of massive U.S. trade deficits, American job losses and wage suppression. More specifically, data show that:
Trade Deficits Have Exploded: U.S. trade deficits have grown more than 440 percent with Fast Tracked U.S. FTA countries since the pacts were implemented, but declined 16 percent with non-FTA countries during the relevant period. Since Fast Track was used to enact NAFTA and the World Trade Organization, the U.S. goods trade deficit has more than quadrupled, from $216 billion to $870 billion. Small businesses’ share of U.S. exports has declined, while U.S. export growth to countries that are not FTA partners has exceeded U.S. export growth to FTA partners by 30 percent over the past decade. ‘
Good American Jobs Were Destroyed: Nearly 5 million U.S. manufacturing jobs – one in four – were lost since the Fast Tracking of NAFTA and various NAFTA-expansion deals. Since NAFTA, more than 845,000 U.S. workers have been certified under just one narrow U.S. Department of Labor (DOL) program for Americans who have lost their jobs due to imports from Canada and Mexico and offshored factories to those countries.
U.S. Wages Have Stagnated, Inequality Soared: Three of every five manufacturing workers who lose jobs to trade and find reemployment take pay cuts, with one in three losing greater than 20 percent, according to DOL data. Overall, U.S. wages have barely increased in real terms since 1974 – the year that Fast Track was first enacted – while American worker productivity has doubled. Since Fast Track’s enactment, the share of national income captured by the richest 10 percent of Americans has shot up 51 percent, while that captured by the richest 1 percent has skyrocketed 146 percent. Study after study has revealed an academic consensus that status quo trade has contributed to today’s unprecedented rise in income inequality.
Food Exports Flat, Imports Soared: Under NAFTA and the WTO, U.S. food exports have stagnated while food imports have doubled. The average annual U.S. agricultural deficit with Canada and Mexico under NAFTA’s first two decades reached $975 million, almost three times the pre-NAFTA level. Approximately 170,000 small U.S. family farms have gone under since NAFTA and WTO took effect.
Damaging Results of Obama’s “New and Improved” Korea Trade Deal: Since the Obama administration used Fast Track to push a trade agreement with Korea, the U.S. trade deficit with Korea has grown 50 percent – which equates to 50,000 more American jobs lost. The U.S. had a $3 billion monthly trade deficit with Korea in October 2014 – the highest monthly U.S. goods trade deficit with the country on record. After the Korea FTA went into effect, U.S. small businesses’ exports to Korea declined more sharply than large firms’ exports, falling 14 percent.
“Big dollars for big corporations and special interests calling the shots – that’s what the American people hear when only the country’s top corporate lobbyists are shaping America’s trade agreements,” said Wallach. “With such high stakes, we cannot let the Fast Track process lock Congress and the public out of negotiations that will have lasting impacts on the livelihoods, rights and freedoms of American families, workers and businesses.”
Throughout the week, rallies, creative actions, meetings, and town halls were planned in a number of countries to draw attention to the secret deal that threatens to limit domestic policies that promote food safety, access to medicine, internet freedom, and environmental protection. The deal would also empower corporations to sue governments in extrajudicial foreign tribunals, challenging public interest laws that they claim frustrate their expectations. (And that’s just what we know based on leaked texts, because the negotiations are taking place entirely in secret).
Over 700,000 petitions against Fast Track are delivered to U.S. Congress
In the United States, a broad coalition of labor unions, environmental, consumer, faith, online, and other groups assembled on Capitol Hill to deliver 713,674 petition signatures opposing “Fast Track,” the Nixon-era procedure that would empower President Obama to sign the deal before Congress is able to vote on it. Corporations are trying to revive Fast Track to railroad the TPP through Congress, as it would greatly limit lawmakers’ oversight over the content of the agreement by only allowing 20 hours of debate and forcing an up or down vote (with no opportunity for amendments).
The groups also launched an online campaign resulting in thousands of calls and hundreds of thousands of e-mails to Members of Congress urging them to vote “No” on Fast Track. Across the country, 20 rallies and town halls brought the anti-Fast Track message to lawmakers’ home districts.
Thousands protest against the TPP in New Zealand
More than 10,000 New Zealanders took to the streets in 17 locations to protest the TPP, gaining national news attention and social media buzz, and pushing the #TPPANoWay hashtag to number 2 worldwide. Protesters were joined by lawmakers from a number of political parties, including leaders from the Green Party and Labour Party. Participants rallied against the secrecy of the negotiating process and TPP’s inclusion of the controversial Investor-State Dispute Settlement (ISDS) mechanism, among other issues.
Meanwhile in Japan, 50 activists staged an action outside of Prime Minster Shinzō Abe’s official residence in opposition to the TPP. More than 100 individuals representing farmers, labor groups, consumer organizations, medical advocates, lawyers, and university professors met with Japanese lawmakers to discuss concerns related to the TPP.
A number of flash mobs were organized around Australia. Opposition to the TPP was heard in Sydney, Canberra, Perth, Hobart, Adelaide, and Melbourne. A few days later, concerns about the TPP were represented during G-20 educational forums and protests which attracted thousands.
Australian protestors rally against the TPP in Perth, Hobart, and Sydney
While negotiators and corporate advisors are hiding their agenda in confidential documents, activists worldwide are spreading their concerns on the Internet, Twitter, Facebook, and e-mail blasts. While leaders and trade ministers are meeting behind closed doors in undisclosed locations, thousands of citizens are responding by gathering on the streets, in libraries, town halls, and their lawmakers’ offices.
The message of citizens across the globe is clear: we are not willing to accept a « trade » deal negotiated in secret in the interest of corporations and at the expense of our rights to safety, democracy, and health.
A trade deal between the United States and Europe is hard to imagine without strong investor protection, US Trade Representative Michael Froman said on Thursday (30 October), hours after outgoing Commissioner Karel De Gucht said the US may break off talks unless Europeans show a firmer willingness to include investment-protection provisions in any deal.
Negotiations on the so-called Investor-State Dispute Settlement or ISDS have been frozen after criticism in Europe and the European Commission is digesting the results of a public consultation before deciding how to go ahead.
The clause would allow foreign investors to use arbitration panels instead of domestic courts to make claims against a national government when an investment is harmed, for example through expropriation. Some politicians in the EU oppose the clause because of the potential limits it places on governments’ ability to regulate in the public interest.
Froman said including investor-state dispute settlement provisions would not impinge on a government’s ability to regulate in the public interest.
« It’s hard to imagine a high standard agreement … that does not have a high standard of investor protections as well, » he said at the Washington Ideas Forum.
Publié : 27/10/2014| Auteur :Non merci|Classé dans :English, OMC - ONU|Commentaires fermés sur World Trade Organization Rules Against Popular U.S. Country-of-Origin Meat Labels on Which Consumers Rely
Compliance Panel Says U.S. Policy Still Violates WTO Despite Changes Made to Comply With 2012 WTO Order; U.S. Should Not Change COOL Policy
Today’s ruling by a World Trade Organization (WTO) compliance panel against U.S. country-of-origin meat labeling (COOL) policies sets up a no-win dynamic, and the Obama administration should appeal the ruling, Public Citizen said.
If the administration were to weaken COOL, U.S. consumers would lose access to critical information about where their meat comes from at a time when consumer interest in such information is at an all-time high and opposition would only grow to the administration’s beleaguered trade agenda. If the administration again were to seek to comply with the WTO by strengthening COOL, then Mexico and Canada – the two countries that challenged the policy – likely would continue their case, even though cattle imports from Canada have increased since the 2013 strengthening of the policy.
The ruling further complicates the Obama administration’s stalled efforts to obtain Fast Track trade authority for two major agreements, the Trans-Pacific Partnership and the Trans-Atlantic Free Trade Agreement. Both of these pacts would expose the United States to more such challenges against U.S. consumer, environmental and other policies.
“Many Americans will be shocked that the WTO can order our government to deny U.S. consumers the basic information about where their food comes from and that if the information policy is not gutted, we could face millions in sanctions every year,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “Today’s ruling spotlights how these so called ‘trade’ deals are packed with non-trade provisions that threaten our most basic rights, such as even knowing the source and safety of what’s on our dinner plate.”
The WTO compliance panel decided that changes made in May 2013 to the original U.S. COOL policy in an effort to make it comply with a 2012 WTO ruling against the law are not acceptable and that the modified U.S. COOL policy still constitutes a “technical barrier to trade.” The panel decided that the strengthened COOL policy afforded less favorable treatment to cattle and hog imports from Canada and Mexico, despite a 52 percent increase in U.S. imports of cattle from Canada under the modified policy. The panel stated that the alleged difference in treatment did not “stem exclusively from legitimate regulatory distinctions.”
The United States has one chance to appeal this decision before the WTO issues a final, binding ruling. Under WTO rules, if the U.S. appeal fails, Canada and Mexico would be authorized to impose indefinite trade sanctions against the United States unless or until the U.S. government changes or eliminates the popular labeling policy.
“The WTO again ruling against a popular U.S. consumer protection will just spur the growing public and congressional concerns about the big Pacific and European trade deals the administration is now pushing and the Fast Track authority to railroad through Congress more agreements that undermine basic consumer rights,” said Wallach.
The COOL policy was created when Congress enacted mandatory country-of-origin labeling for meat – supported by 92 percent of the U.S. public in a recent poll – in the 2008 farm bill. This occurred after 50 years of U.S. government experimentation with voluntary labeling and efforts by U.S. consumer groups to institute a mandatory program.
In their successful challenge of COOL at the WTO, Canada and Mexico claimed that the program violated WTO limits on what sorts of product-related “technical regulations” signatory countries are permitted to enact. The initial WTO ruling was issued in November 2011. Canada and Mexico demanded that the United States drop its mandatory labels in favor of a return to a voluntary program or standards set by an international food standards body in which numerous international food companies play a central role. Neither option would offer U.S. consumers the same level of information as the current labels. The United States appealed.
The WTO Appellate Body sided with Mexico and Canada in a June 2012 ruling against COOL. The U.S. government responded to the final WTO ruling by altering the policy in a way that fixed the problems identified by the WTO tribunal. However, instead of watering down the popular program as Mexico and Canada sought, the U.S. Department of Agriculture responded with a rule change in May 2013 that strengthened the labeling regime. The new policy provided more country-of-origin information to consumers, which satisfied the issues raised in the WTO’s ruling. However, Mexico and Canada then challenged the new U.S. policy. With today’s ruling, the WTO has announced its support for the Mexican and Canadian contention that the U.S. law is still not consistent with the WTO rules.
WASHINGTON, D.C. — A World Trade Organization tribunal ruled today that the U.S. law requiring country-of-origin labeling for meat violates international trade law, essentially denying Americans the right to know where their meat comes from. The United States is likely to appeal, but the WTO Appellate Body has in the past consistently ruled against U.S. food safety and product labeling measures.
All this happens in the context of likely congressional consideration of Fast Track trade promotion legislation. Fast Track would grease the skids for congressional approval of the Trans Pacific Partnership and Transatlantic Trade and Investment Partnership trade agreements, which are currently under negotiation. Both deals would undermine government regulatory authority to ensure that food is safe and that consumers can make informed decisions about which products to buy. Like the WTO, they would impose restrictions on food safety, labeling, and other environmental and health safeguards.
Kari Hamerschlag, Senior program manager for Friends of the Earth’s Food and technology program, made the following comment:
This latest World Trade Organization ruling against country-of-origin labeling for meat directly counters the growing American desire for transparency about their food. The ruling powerfully evidences how international trade deals like the Trans Atlantic and Trans Pacific agreements will undermine food safety, product labeling standards and a wide range of other safeguards. The United States should appeal the WTO tribunal decision and take food safety and labeling measures off the table in the Pacific and Atlantic trade negotiations.
To prevent future similar abuses of the consumer public, Congress must reject any legislation providing for Fast Track approval of such deals. Fast Track would force quick up or down votes on these trade agreements, without the possibility of making congressional amendments to preserve food safety, labeling and other common sense public health and environmental measures.
The WTO tribunal ruled that revisions to U.S. country of origin labeling safeguards made in May 2013 did not conform to a 2012 WTO appellate ruling against the original U.S. law on country-of-origin labeling. While the U.S. can appeal it, this most recent tribunal decision follows in a train of successful WTO challenges in similar cases related to dolphin-safe tuna labeling and sale of clove and candy flavored cigarettes.
Despite mounting evidence that the TPP should not be completed — including the leak of another part of the top-secret text earlier this week — President Barack Obama wants the TPP done by November 11. That is when he will be meeting with other TPP-country heads of state in China at the Asia-Pacific Economic Conference.
With the TPP’s threats to food safety, Internet freedom, affordable medicine prices, financial regulations, anti-fracking policies, and more, it’s hard to overstate the damage this deal would have on our everyday lives.
But the TPP isn’t the only threat we currently face. We are also up against the TPP’s equally ugly step-sisters: TAFTA and TISA. And Obama wants to revive the undemocratic, Nixon-era Fast Track trade authority that would railroad all three pacts through Congress.
The Trans-Atlantic Free Trade Agreement (TAFTA) is not yet as far along as the TPP, but TAFTA negotiations recently took place in Washington, D.C., and more are set for a few weeks from now in Brussels. The largest U.S. and EU corporations have been pushing for TAFTA since the 1990s. Their goal is to use the agreement to weaken the strongest food safety and GMO labeling rules, consumer privacy protections, hazardous chemicals restrictions and more on either side of the Atlantic. They call this “harmonizing” regulations across the Atlantic. But really it would mean imposing a lowest common denominator of consumer and environmental safeguards.
The Trade in Services Agreement (TISA) is a proposed deal among the United States and more than 20 other countries that would limit countries’ regulation of the service sector. At stake is a roll back of the improved financial regulations created after the global financial crisis; limits on energy, transportation other policies needed to combat the climate crisis; and privatization of public services — from water utilities and government healthcare programs to aspects of public education.
TPP, TAFTA and TISA represent the next generation of corporate-driven “trade” deals. Ramming these dangerous deals through Congress is also Obama’s impetus to push for Fast Track. Fast Track gives Congress’ constitutional authority over trade to the president, allowing him to sign a trade deal before Congress votes on it and then railroad the deal through Congress in 90 days with limited debate and no amendments. Obama opposed Fast Track as a candidate. But now he is seeking to revive this dangerous procedural gimmick.
Because of your great work, we’ve managed to fend off Fast Track so far. This time last year, the U.S. House of Representatives released a flurry of letters showing opposition to Fast Track from most Democrats, and a wide swath of Republicans. This is something the other side was not expecting, and they were shocked. We won that round, but Obama and the corporate lobby are getting ready for the final push.
Because Fast Track is so unpopular in the House, Speaker John Boehner has a devious plan to force the bill through Congress in the “lame duck” session after the November elections. We need to make sure our “ducks” are in a row before that.
Some members of Congress are working on a replacement for Fast Track. U.S. Sen. Ron Wyden (D-Ore.) says he will create what he calls “Smart Track.” It is not yet clear if this will be the real Fast Track replacement we so desperately need, or just another Fast Track in disguise.
Sen. Wyden will want to be ready to introduce his Smart Track bill right as the new Congress starts in January 2015. This means we have only a couple of months left to make sure his replacement guarantees Congress a steering wheel and an emergency brake for runaway “trade” deals.
With all these deadlines drawing near, it’s clear that a knock-down, drag-out fight is imminent. But we will be ready. The TPP missed deadlines for completion in 2011, 2012, and 2013 — if we keep up the pressure, we can add 2014 to that list as well. That’s why there will be a TPP/TAFTA/TISA international week of action Nov 8-14 — more details coming soon!
By Andrew WalkerBBC World Service Economics correspondent
Protesters took to the streets in Berlin on Saturday
There are rising concerns in Europe over negotiations to liberalise trade with the United States.
The project, the Trans-Atlantic Trade and Investment Partnership, or TTIP, aims to remove a wide range of barriers to bilateral commerce.
Demonstrations were taking place across Europe on Saturday, with large numbers of events in Germany, France, Spain and Italy, In Britain, events were planned in at least 15 cities and towns.
One campaigner involved in planning the day of action said she expected at least 400 local actions in about 24 European countries.
The EU and the US launched the negotiations last year and the aim is to stimulate more trade and investment, and, in the process, to produce more economic growth and employment.
It has proved to be extremely controversial.
One aim of the negotiations is to reduce the costs to business of complying with regulations. A firm in, say Europe, that wants to export to the US often has to comply with two sets of rules.
Critics say the result of this would be lower standards of protection for workers, consumers and the environment. Food safety is a particular concern among European opponents of the negotiations.
People in the French city of Narbonne joined the protests
Demonstrators in the UK are worried about the impact on the National Health Service
In the EU, campaigners say that consumers could be faced with more genetically modified food, hormone treated beef and chicken meat that has been rinsed with chlorine.
Another major concern is the provisions under discussion to enable foreign investors – for example American firms investing in the EU – to sue a host government in some circumstances if they are hit by a change in policy.
The UK government has called a meeting with environmental groups on Monday to quell their opposition to TTIP.
The groups are worried that the plan would allow American industry too much influence over the setting of standards for improved efficiency of goods.
The environmentalists are also disturbed by plans for a dispute settlement procedure. They say it could be used by multi-national corporations to block moves to protect the environment.
The government meeting – at the Foreign Office – has been called by the climate change minister Amber Rudd.
She will say that removing trade barriers to green goods and services, like solar panels, will benefit the environment by helping reduce costs and encouraging innovation. She says she looks forward to hearing the groups’ views.
Tom Burke from the environmental organisation body e3g will tell her that the deal will be unacceptable unless it guarantees that the highest possible standards will always apply.
In Britain, there is a specific concern among campaigners about the possible impact on the National Health Service (NHS). They fear that if a government ever wants to reverse any contracting of health services done by a previous administration, it could be expensive – because, they say, any American companies that lose business as a result could sue, using those controversial provisions for foreign investors.
Some campaigners even believe that TTIP might force governments to privatise some health services.
The trade union Unite wants health explicitly excluded from any TTIP deal. The union’s Assistant General Secretary Gail Cartmail said recently: « It is clear this government thought they could do this deal in secret, a deal that would mean the irreversible sell-off of our NHS to America. »
But the Health Minister Earl Howe says it would not be in the interest of British pharmaceutical firms to exclude health from the negotiations as they currently face trade barriers in the US.
Again, the European Commission says the concerns are misplaced, stating that TTIP « could have no impact on the UK’s sovereign right to make changes to the NHS. »
[This reporter clearly has NO clue how ISDS works. An interesting question is WHO pitched this counter spin story… Probably worthwhile for some folks in Brussels to educate him on how ISDS works – as if there is a question about whether a domestic court ruling would trump a final ISDS order…]
Did Jean-Claude Juncker just come out against including “investor-state dispute settlement” in the trade deal now under negotiation between the U.S. and the European Union? That issue – the creation of a system for foreign investors to challenge what they believe is unfair treatment by the host government of their investment – has become one of the most controversial points in the negotiations.
The European Parliament on Tuesday approved the former Luxembourgish prime minister and consummate European insider to become the next president of the European Commission, the EU executive body. Mr. Juncker published a document outlining the priorities of his presidency on the morning of the vote.
Among them: “Jobs, Growth and Investment” – some things never change. Completing the U.S.-EU trade deal is also on the list, with this intriguing line: “Nor will I accept that the jurisdiction of courts in the EU Member States is limited by special regimes for investor disputes.”
That sounds like opposition, but the reality is considerably fuzzier.
A little background here. Investor-state dispute settlement offers foreign investors from one country legal protections from mistreatment by the government of the other. Typically, ISDS allows a foreign-owned company to bring complaints against its host government before a tribunal.
Both the EU and the U.S. want to include ISDS in the agreement, but an uproar from non-profit groups prompted the EU to launch a public consultation on the topic, which closed this week. Environmental groups and others fear that investors could use ISDS to block governments from tightening environment and health regulations, on the grounds that such rules could diminish the value of an investment. They want ISDS erased from the deal.
The EU says it wants to draft ISDS provisions that prevent frivolous claims and leave no doubt that governments on both sides of the Atlantic can regulate in the public interest. Both the U.S. and the EU want the ISDS provisions negotiated in the deal to serve as a template for ISDS negotiated elsewhere.
The line in Mr. Juncker’s list of priorities applies to one issue: could the finding of an ISDS tribunal overrule the ruling of a domestic court? The European Commission in its public consultation notice says it wants to minimize the possibility of that occurring by forbidding companies from raising the same claim in an ISDS tribunal and a domestic court at the same time.
“As a matter of principle, the EU’s approach favours domestic courts. The EU aims to provide incentives for investors to pursue claims in domestic courts or to seek amicable solutions – such as mediation,” the commission says.
But the document doesn’t say who wins when a tribunal and domestic court are in open conflict. For example, suppose the German government orders a European chemical company and a U.S. company to pay for the clean-up of toxic waste at a factory site they jointly own — but orders the U.S. company to pay the majority of the costs. The U.S. company says the costs should be evenly divided and appeals to an ISDS tribunal, which sides with the U.S. company.
Then a German court upholds the German government’s decision.
Mr. Juncker’s position appears to be that the German court would have the final say. A spokeswoman for Mr. Juncker declined to elaborate.
Do you wonder which businesses are pushing most for the proposed EU-US trade deal TTIP? Or where they come from? And who has most access to EU negotiators? CEO’s at-a-glance info-graphics shine a light on the corporate lobby behind the TTIP talks.
When preparing the TTIP negotiations in 2012 and early 2013, the European Commission’s trade department (DG Trade) was lobbied by 298 ‘stakeholders’ – 269 of them from the private sector. Of the 560 lobby encounters that the Commission had – in consultations, stakeholder debates and behind closed doors meetings – 520 (92%) were with business lobbyists. Only 26 (4%) of the encounters were with public interest groups. This means that, for every encounter with a trade union or consumer group, there were 20 with companies and industry federations. (Check the full data here and how we gathered it here).
There is evidence that DG Trade actively encouraged the involvement of corporate lobbyists, while keeping pesky trade unionists and other public interest groups at bay. For example, in autumn 2012, DG Trade chased pesticide lobby group ECPA to participate in the then-ongoing public consultation on TTIP. As “the European crop protection/pesticides industry, is one of the key sectors we would be looking at in terms of improving the framework for business,” a DG Trade emailed ECPA, their contribution “would be most welcome”. The official added: “A substantial contribution from your side, ideally sponsored by your US partner, would thus be vital to start identifying opportunities of closer cooperation and increased compatibility”. ECPA responded (link is external) a few weeks later, together with its US sister organisation CropLife America, demanding “significant harmonisation” for pesticide residues in food. Trade unions, environmentalists and consumer groups did not receive such special invites.
DG Trade’s responses to contributions to the public consultations also differed greatly. While trade unionists received a standard confirmation receipt, business lobbyists were invited to intimate follow-up meetings with negotiators. The Association of Automotive Suppliers (CLEPA), for example, got an email from DG Trade thanking “you for your readiness to work with us,” and offering a meeting, “to discuss about your proposal, ask for clarification and consider next steps”. Again, public interest groups did not receive this special treatment.
BusinessEurope and the US Chamber of Commerce, two of the most powerful pro-TTIP lobby groups, also had a follow-up meeting in November 2012, after responding to one of the Commission consultations on TTIP. On the table: their proposal for regulatory cooperation, a “potential game changer” which would allow business lobbyists to “co-write legislation”, as they put it. At the table: officials from DG Trade, but also DG Enterprise and the General Secretariat of the Commission. The atmosphere was clearly friendly. And the Commission stressed its desire to work closely with the two business lobbies to refine the proposal (renewed in another meeting with BusinessEurope in February 2013 where the Commission noted the importance of EU industry “submitting detailed ‘Transatlantic’ proposals to tackle regulatory barriers”1). A year later, the EU negotiation position for regulatory cooperation in TTIP was leaked. The demands of the US Chamber and BusinessEurope had been largely accommodated – one example showing that, while the number of lobby encounters does not simply equal influence, these encounters do pay off.
DG Trade’s biased questionnaire (link is external) in the public consultation on TTIP published in summer 2012 is another example of its business-biased consultation policy. How would the average citizen respond to questions such as: “If you are concerned by barriers to investment, what are the estimated additional costs for your business (in percentage of the investment) resulting from the barriers?” So, clearly, the close involvement of business lobbyists in drawing up the EU’s position for the TTIP talks is a result of the privileged access granted to them by DG Trade.
These are the lobby groups that had most encounters with DG Trade when the TTIP negotiations were prepared in 2012 and early 2013:
BusinessEurope (the European employers’ federation and one of the most powerful lobby groups in the EU) and the European Services Forum (a lobby outfit banding together large services companies such as Deutsche Bank, Telefonica, and TheCityUK).
ACEA (the European car lobby, working for BMW, Ford, Renault, and others), CEFIC (the European Chemical Industry Council, lobbying for BASF, Bayer, Dow and others) and Freshfel (lobbying for the interests of producers and traders of fruits and vegetables).
Eucolait (the dairy traders’ lobby) and Food and Drink Europe (the biggest EU food industry lobby group, representing multinationals like Nestlé, Coca Cola, and Unilever).
The US Chamber of Commerce (the wealthiest of all US corporate lobbies), Digital Europe (whose members include all the big IT names, like Apple, Blackberry, IBM, and Microsoft) and the European Generic Medicines Association.
The American Chamber of Commerce (one of the most powerful business associations in the world), the Confederation of British Industry and the Federation of German Industries.
Check the full list here and how we gathered the relevant data here.
Among the top-25 “stakeholders” who had most lobby contacts with DG Trade when the TTIP negotiations were being prepared, there was no trade union, environmental organisation or consumer group. Among the top 50, there were 3. (Check the full data of our analysis here and learn how we gathered it here.)
Despite this evidence, the Commission does not tire of claiming (link is external) that it does “involve everyone with a stake in the outcome”. In January 2014, it created a “special Advisory Group of experts representing a broad range of interests, from environmental, health, consumer and workers’ interests to different business sectors” – which it hails as a confirmation (link is external) of its “commitment to close dialogue and exchange with all stakeholders in the TTIP talks”. So, have things changed since 2012 and early 2013, when the TTIP talks were being prepared? Has DG Trade’ consultation policy become less business-biased?
On the contrary, DG Trade seems to have continued with big business as usual. Its public ‘stakeholder’ events on TTIP still are industry-dominated as this analysis (link is external) by Friends of the Earth Europe shows. And so are the intimate behind-closed door meetings of TTIP negotiators. An internal DG Trade list of 154 ‘stakeholder’ meetings on TTIP between 1 July 2013 and 20 February 2014 reveals that at least 113 of them were with large corporations and their lobby groups. This means that around 74% of the meetings that took place around the launch of the TTIP talks and in the months after were with big business. (Read Friends of the Earth’s story (link is external) on the issue)
These business sectors had most encounters with DG Trade when the TTIP negotiations were being prepared in 2012 and early 2013:
Agribusiness and food, including multinationals like Nestlé and Mondelez (formerly Kraft Foods) and numerous lobby groups for producers and traders of food, drinks, and animal feed such as Food and Drink Europe (the EU’s biggest food industry lobby group, representing multinationals like Nestlé, Coca Cola, and Unilever), Eucolait (the dairy traders’ lobby), Clitravi (lobbying for the EU meat processing industry), Spirits Europe (working for alcohol producers such as Bacardi-Martine and Pernod-Ricard) and FEFAC (the animal feed lobby).
Lobby groups representing multiple business sectors such as the European employers’ federation BusinessEurope (one of the most powerful lobby groups in the EU), the US Chamber of Commerce (the wealthiest of all US corporate lobbies), the Transatlantic Business Council (representing over 70 EU and US-based multinationals) and national industry federation such as the Confederation of British Industry (CBI) and the Federation of German Industries (BDI).
Telecommunication and IT, including giant corporations such as Nokia and Ericsson as well as industry lobby groups such as Digital Europe (whose members include all the big IT names, like Apple, Blackberry, IBM, and Microsoft).
Automobiles, with some of the most powerful car brands (Ford, Daimler, BMW…) and automotive suppliers such as tyre producer Michelin as well as industry lobby groups such as ACEA (representing Europe’s car, van, truck, and bus manufacturers) and the German automotive industry association (VDA).
Engineering and machinery, including manufacturing behemoths such as Siemens and Alstom as well as industry federations such as Orgalime (lobbying for the mechanical, electrical and metalworking sectors) and the German Engineering Federation VDMA.
Chemicals, including CEFIC (the EU’s biggest chemical industry lobby group, representing BASF, Bayer, Dow, and others) and its US counterpart ACC (also lobbying for BASF, Bayer, Dow, and others), the Germany industry federation (VCI) and direct lobbying by chemical giants such as Dow.
Finance, with lobbying by some of the world’s largest banks and insurers (Morgan Stanley, Allianz, Citigroup…) and powerful financial sector lobby groups such as the Association of German Banks (BDB) and Insurance Europe (Europe’s main insurance lobby).
Health Technology, with, for example, Eucomed (“representing the medical technology industry in Europe”, including large corporations such as Siemens and Procter & Gamble), Cocir (lobbying for “medical imaging, health ICT and electromedica” companies such as IBM, Samsung, Orange, and Agfa healthcare “to open markets… in Europe and beyond”).
Audiovisuals & media, with media giants like Walt Disney and Rupert Murdoch’s News Corp as well as industry lobby groups such as the International Confederation of Music Publishers (lobbying for Sony, Universal, Warner and others) and the Motion Picture Association of America (also lobbying for Sony, Universal, Warner, Walt Disney…).
Pharmaceuticals, including direct lobbying of large pharmaceutical companies such as GlaxoSmithKline (GSK) and lobby groups such as EFPIA (Europe’s largest pharmaceutical industry association, representing multinationals such as Bayer, Eli Lilly, GSK, and Pfizer) and its US sister organisation PHRMA (lobbying largely for the same companies).
Check the full data here and how we categorised it here.
In the preparatory phase of the TTIP talks, no one had as many lobby encounters with DG Trade as the agribusiness lobby. Out of a total of 560 encounters, 113 were with food multinationals, agri-traders and seed producers. They had more contacts with DG Trade than lobbyists from the pharmaceutical, chemical, financial, and car industries together. (Check the full data here and how we categorised it here.)
The fact that the European Commission liaised so closely with these aggressive agribusiness lobby groups when preparing the TTIP negotiations is a good reason to be concerned that (future) food safety standards will be sacrificed by the TTIP negotiations. Read here how the rules discussed for TTIP could lead to precisely that (despite efforts by politicians to reassure the public that food safety standards will not be axed).
The preparatory phase of the TTIP negotiations was largely driven by businesses with headquarters in the US, Germany, and the UK and by industry lobby groups organised at the EU level such as BusinessEurope and the European Services Forum. We did not come across a single lobby encounter between DG Trade and businesses from Greece and large parts of Eastern Europe (Poland, Bulgaria, Hungary, Czech Republic, Slovenia, Estonia, Lithuania, Latvia).
This is in line with warnings (link is external) that these countries will carry the weight of the social costs of TTIP as a result of the increased competition. With US export interests targeting mainly those sectors where the European periphery has defensive interests – such as agriculture – the opening up of the EU to more transatlantic competition is likely to exacerbate the divide between the EU’s economic core and its periphery, in other words: the EU’s richer and its poorer countries. It seems that businesses in the poorer EU countries have little to gain from TTIP and are therefore not pushing for the deal.
More than 30% (94 out of 269) of the private sector interest groups which have lobbied DG Trade on TTIP are not registered in the EU’s Transparency Register, amongst them large companies such as Walmart, Walt Disney, General Motors, France Telecom, and Maersk. Some of the industry associations lobbying hardest for TTIP such as the US Chamber of Commerce and the Transatlantic Business Council are also lobbying under the radar. Also, a text search for “TTIP” and “EU-US” in the EU’s register reveals very few results. Only 5 of the 298 ‘stakeholders’ who have lobbied DG Trade in the preparatory phase of the TTIP talks mention TTIP amongst the important issues they are currently lobbying on.1 So, for those who want to find out who is lobbying on TTIP and what amount they spend to make the deal happen, the register provides few to no answers.
This indicates two serious flaws of the EU’s Transparency Register: first, it is voluntary, which leaves companies and lobby groups free to avoid appearing in it – as many do. Second, disclosure requirements are limited as registrants are, for example, not obliged to report exactly which specific issues they lobby on (such as TTIP).
But the public has a right to know who is lobbying for TTIP, how many lobbyists are involved and how much money they spend. Only a mandatory register which requires comprehensive and reliable information about lobbying will shed light on corporate lobby pressure behind the TTIP talks. The EU must make its lobby transparency register TTIP-proof!
While the European Commission claims that “there is nothing secret (link is external)” about the ongoing EU-US trade talks, it is carefully hiding how it teams up with big business to develop its positions for the negotiations. Pro-actively published lists of meetings with lobbyists on TTIP can be found nowhere on its website. Responses to freedom of information requests are delayed for months. And once they are released, reports about meetings with business lobby groups on TTIP are heavily censored.
One example is an freedom of information request (link is external) which Corporate Europe Observatory sent in April 2013, to get an overview of the Commission’s contacts with industry, in the context of the preparations for the EU-US trade talks. The most recent documents (link is external) arrived 14 months after the request was filed (while EU law requires a response within 15 working days). Many of the meeting reports that were released are heavily censored. The Commission has either ‘whitened’ or ‘blackened’ the parts it wants to keep from public scrutiny. In some cases, like a meeting with lobbyists from Fertilizers Europe, every single word has been removed from the document (see our story on the issue here).
If the European Commission is serious about lobbying transparency and openness in the TTIP negotiations, it should post lists of all meetings with lobbyists on its website. This would be a crucial step towards securing citizens’ right to know who influences the EU-US negotiations. It would also save a lot of time and energy for the many watchdogs, journalists, and others who must resort to access-to-documents requests, as well as for the Commission itself in replying to them. For several years the UK Government has been making available lists of meetings with lobbyists (link is external) per government department, updated quarterly.
In meetings behind closed doors, the Commission is sharing information about the EU’s position in the TTIP talks with industry lobbyists, while refusing the public access to that same information. This includes information relating to the EU’s positions and strategies in the TTIP negotiations.
One example is a report of a meeting between the head of the office of Trade Commissioner Karel de Gucht, Mark Van Heukelen, and BusinessEurope on 5 October 2012 where industry “asked about the inclusion of sensitive services areas” in TTIP. Van Heukelen’s response, however, is deleted from the minutes that were publicly released as a result of CEO’s freedom of information request. According to the Commission the censored part “is revealing information regarding the tactical approach towards the ongoing EU/US trade negotiations” and that “release of that information would have a negative impact on the EU’s ability to conduct the negotiations.”
In another report about a meeting with BusinessEurope, Commission comments about the link between TTIP and the infamous Anti-Counterfeiting Trade Agreement (ACTA) agreement have been deleted on the same grounds. Sharing information about the EU’s negotiating position with industry while refusing civil society access to that same information is unacceptable discrimination. CEO has been challenging this practice of the Commission for years, including through a case at the European Court of Justice.
by Professor Jane Kelsey, Faculty of Law, University of Auckland, New Zealand
This memorandum provides a preliminary analysis of the leaked financial services chapter of the Trade in Services Agreement dated 14 April 2014. It makes the following points:
The secrecy of negotiating documents exceeds even the Trans-Pacific Partnership Agreement (TPPA) and runs counter to moves in the WTO towards greater openness.
The TISA is being promoted by the same governments that installed the failed model of financial (de)regulation in the WTO and which has been blamed for helping to fuel the Global Financial Crisis (GFC).
The same states shut down moves by other WTO Members to critically debate these rules following the GFC with a view to reform.
They want to expand and deepen the existing regime through TISA, bypassing the stalled Doha round at the WTO and creating a new template for future free trade agreements and ultimately for the WTO.
TISA is designed for and in close consultation with the global finance industry, whose greed and recklessness has been blamed for successive crises and who continue to capture rulemaking in global institutions.
A sample of provisions from this leaked text show that governments signing on to TISA will: be expected to lock in and extend their current levels of financial deregulation and liberalisation; lose the right to require data to be held onshore; face pressure to authorise potentially toxic insurance products; and risk a legal challenge if they adopt measures to prevent or respond to another crisis.
Without the full TISA text, any analysis is necessarily tentative. The draft TISA text and the background documents need to be released to enable informed analysis and decision-making.
Unprecedented Secrecy Reverses WTO Trend of Disclosure
The cover sheet records that the draft text will not be declassified until 5 years after the TISA comes into force or the negotiations are otherwise closed. Presumably this also applies to other documents aside from the final text. This exceeds the 4 years in the super-secretive Trans-Pacific Partnership Agreement (TPPA)! It also contradicts the hard-won transparency at the WTO, which has published documents relating to negotiations online for a number of years.1
Secrecy during the negotiation of a binding and enforceable commercial treaty is objectionable and undemocratic, and invites poorly informed and biased decisions. Secrecy after the fact is patently designed to prevent the governments from being held accountable by their legislatures and citizens.
The suppression of background documents (travaux preparatoires) also creates legal problems. The Vienna Convention on the Law of Treaties recognises they are an essential tool for interpreting legal texts. Non-disclosure makes it impossible for policy-makers, regulators, non-government supervisory agencies, opposition political parties, financial services firms, academics and other commentators to understand the intended meaning or apply the text with confidence.
The participants in the TISA negotiations are Australia, Canada, Chile, Chinese Taipei (Taiwan), Colombia, Costa Rica, Hong Kong China, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, South Korea, Switzerland, Turkey, the USA and the European Union, including its 28 member states.
The leaked text shows the US and EU, which pushed financial services liberalisation in the WTO, are the most active in the financial services negotiations on TISA. The third most active participant is the renowned tax haven of Panama.
To understand the implications of the TISA proposals on financial services it is necessary to understand the comparable WTO texts. What is commonly called the Financial Services Agreement is a composite of texts:
the General Agreement on Trade in Services (GATS) sets the framework for rules that govern services transactions between a consumer of one country and a supplier of another;2
the Annex on Financial Services applies to all WTO Members;3
schedules of commitments specify which financial services each country has committed to the key rules in (i) and (ii), and any limitations on those commitments;4 and
a voluntary Understanding on Commitments in Financial Services5 sets more extensive rules and has an ambivalent legal status in the WTO.6
Financial services are defined by a broad and non-exclusive list, which ranges from life and non-life insurance, reinsurance, retrocession, banking, trading derivatives and foreign exchange to funds management, credit ratings, financial advice and data processing (see Art X.2).
The rules apply to measures that ‘affect’ the supply of financial services through foreign direct investment (commercial establishment) or offshore provision by remote delivery or services purchased in another country (cross-border). They also aim to ‘discipline’ governments in favour of a light handed and self-regulatory model of financial regulation. The substantive rules target what the financial services industry sees as obstacles to its seamless global operations, including:
limits on the size of financial institutions (too big to fail);
restrictions on activities (eg deposit taking banks that also trade on their own account);
requiring foreign investment through subsidiaries (regulated by the host) rather than branches (regulated from their parent state);
requiring that financial data is held onshore;
limits on funds transfers for cross-border transactions (e-finance);
authorisation of cross-border providers;
state monopolies on pension funds or disaster insurance;
disclosure requirements on offshore operations in tax havens;
certain transactions must be conducted through public exchanges, rather than invisible over-the counter operations;
approval for sale of ‘innovative’ (potentially toxic) financial products;
regulation of credit rating agencies or financial advisers;
controls on hot money inflows and outflows of capital;
requirements that a majority of directors are locally domiciled;
This combination of liberalisation of financial markets and light-handed, risk-tolerant financial regulation enabled the excesses of the powerful US and European finance industry and the growth of the shadow banking system. Various WTO Members called for a review of the rules after the financial crisis. For example, the WTO Ambassador from Barbados tabled a paper in the Committee on Financial Services in March 2011 that said:
the crisis has served to highlight flaws in the global regulatory and compliance environment which hamper the implementation of corrective measures and in some cases make them open to challenge. Unless it is assumed that such problems will never again recur, they point to a need to review some aspects of the global rules including WTO GATS rules within which countries operate, so as to permit remedial measures to be implemented without running the risk of having them viewed as contraventions of commitments. 7
Subsequent attempts led by Ecuador to secure a debate in the Committee were eviscerated to the point that the eventual discussion in April 2013 was meaningless.8
Similar concerns were expressed outside the WTO. The commission established by the President of the UN General Assembly in 2009 to review the financial crisis (the Stiglitz Commission) wrote in its interim report that trade-related liberalisation of financial services had been advanced under the rubric of these agreements ‘with inappropriate regard for its consequences on orderly financial flows, exchange rate management, macroeconomic stability, dollarization, and the prudential regulation of domestic financial systems’.9 Their final report called for the agreements to be critically reviewed. The major players at the WTO, led by the US, Canada, Australia, Switzerland and the EU, consistently refused to accept there is any relationship between the WTO’s financial services rules and the GFC. Instead, they have continued to negotiate bilateral free trade and investment treaties that lock governments more deeply into that regime and extend their obligations even further.
In many cases, the major powers have presented these demands to countries from the global South as part of a non-negotiable FTA template. Poor countries that carefully limited their exposure on financial services at the WTO have often become bound to a more extreme version of those rules and obligations through the FTAs.
The US insisted that the negotiation of the Financial Services Agreement during the Uruguay round of the GATT continue for several years after the round had finished, until it was satisfied with the commitments that were made. The final package was estimated to cover 95 per cent of international trade in banking, securities, insurance, and information services as measured in revenue.10
Moves began in 2000 to expand those commitments further, as provided for in the GATS. Those talks were incorporated into the Doha round of WTO negotiations in 2001. The round stalled in the mid-2000s. Moves to advance the services negotiations through plurilateral negotiations failed.
The governments that were pushing these talks moved outside the formal WTO boundaries to pursue TISA. They call themselves the ‘Really Good Friends of Services’. Their goal is to make TISA the new platform for financial services. The US has said it wants to establish new negotiating rules in TISA, get enough countries to sign on that will enable it to be incorporated into the WTO, and then have the same rules adopted for negotiations at the WTO.11 The European Commission has said TISA will use the same concepts as the GATS so that it can ‘be easily brought into the remits of the GATS.’12
It is not clear how that might happen. Either two thirds or three quarters of the Members would need to agree to TISA coming under the WTO’s umbrella, even as a plurilateral agreement.13 Countries like Brazil and India have been very critical of TISA, and the US has not allowed China to join. But the pressure on WTO Members will be immense. If the plan did succeed, many South governments that resisted the worst demands of the GATS and the services aspects of the Doha round will find they end up with something more severe.
If TISA remains outside the WTO its coverage will be limited to the signatories. That is dangerous itself. The countries that were at the centre of global finance and were responsible for the GFC will be bound to maintain the rules that allowed that to happen. The minimal reforms they have adopted post-GFC will become the maximum permitted regulation. Several recent IMF papers have referred to the ‘state of denial’ among affluent economies about the potential for further devastating crises if they maintain the current policy and regulatory regime.14 They also point out that many developing countries that took prudent steps after their experience with the Asian Financial Crisis and similar traumas are much less exposed.15 Yet the architects of TISA aim to force those countries to adopt the flawed rules they had no role in negotiating, either as the new ‘best practice’ for FTAs or through the WTO.
The development of global finance rules under the guise of ‘trade’ was the brainchild of senior executives of AIG, American Express, Citicorp and Merrill Lynch in the late 1970s. Their role, and subsequently a broader lobby called the Financial Leaders Group, is well documented. The former director of the WTO’s services division himself acknowledged in 1997 that: ‘Without the enormous pressure generated by the American financial services sector, particularly companies like American Express and Citicorp, there would have been no services agreement’.16
As the lobby evolved it was still led from Wall Street, but expanded to include the major insurance and banking institutions, investment banks and auxiliary financial services providers, from funds managers to credit-rating agencies and even the news agency Reuters. They were later joined by the e-finance and electronic payments industry, which includes credit, stored value and loyalty cards, ATM management, and payment systems operators like PayPal.
The industry lobbyists have also set the demands for financial services in TISA. The Chairman of the Board of the US Coalition of Service Industries is the Vice Chairman of the Institutional Clients Group at Citi. When the industry’s demands, as expressed in the consultation on TISA conducted by the US Trade Representative in 2013, are matched against the leaked text it becomes clear that they stand to get most of what they asked for. Extracts from their submissions are listed at the end of this document.
A number of the provisions in the leaked text are already in the GATS financial services instruments, especially the voluntary Understanding. However, Colombia, Costa Rica, Pakistan, Panama and Peru, which are participating in TISA, appear not to have adopted the Understanding.
The new elements of TISA build on the GATS-plus rules in Korea-US Free Trade Agreement, and those proposed in the Trans-Pacific Partnership Agreement (TPPA) and the Trans-Atlantic Trade and Investment Partnership (TTIP). The TISA parties that are not yet bound by such agreements would therefore face especially onerous new obligations.
The following selection of provisions shows some of what is new and/or dangerous about TISA. They are only a sample of the legal issues.
The biggest danger is that TISA will stop governments tightening the rules on the financial sector. As noted above, this risk is greatest for countries that have not already adopted the WTO’s Understanding on financial services, do not already have extensive financial services commitments with the US or EU under a FTA, or both. But it is a serious risk for all TISA parties, especially those with weak systems of financial regulation.
When the GATS was first developed governments were given some control over the extent to which the regulation of services was subject to the core GATS rules. Those core rules cover the right of foreign financial firms’ to set up and operate in the host country; the cross-border supply of the broad range of financial services and products; the ability of their nationals to purchase of those services and products in another country; and the kind of domestic regulations they could adopt.
There are different ways of allowing governments to exercise control over such commitments.
The GATS gave governments flexibility to list the services that would be subject to the core rules, and further limit their exposure in those sectors (a ‘positive list’ approach).
The voluntary Understanding worked on a ‘negative list’ that required governments to specify what was not covered by its additional rules. This approach is increasingly common in FTAs, especially those with the US.
Under negative lists governments to bind the hands of their successors, even in the face of unforeseen new challenges. There are also high risks of error. Proposals to adopt negative lists have been resisted in the GATS, including in the Doha round.
It is not clear exactly how the schedules will work for financial services in TISA without access to the rest of the text. It is believed that TISA proposes a ‘hybrid’ of positive and negative lists. The rules may guarantee foreign firms’ access to a country’s services market using the positive list approach; that would allow a government to specify which services and sectors will be covered by the market access rules.
However, the requirement of non-discrimination, where a foreign service supplier must be treated no less favourably than domestic competitors, would follow a negative list approach. Governments would have to state what services, activities or laws are not subject to that rule; special restrictions on foreign services, products or measures would only be permitted where they were explicitly listed. This would apply even in sectors that were not opened in the market access (positive) list.
A standstill would also apply: governments would have to bind their existing levels of liberalisation and not introduce new restrictions in the future.
There are also suggestions of a ratchet. When a government reduces restrictions on foreign financial firms, services or products, those changes would automatically be locked in.
Finally, it has been suggested that there may be no provision to add new reservations to the schedules; there is such a provision in the GATS, although it is extremely difficult to use.
The leaked financial services text seems to follow this path.
Access to a country’s financial market
The US has made specific proposals for the scheduling of commitments on financial services.
Under Art X.3.1 parties must list their commitments to allow foreign financial service suppliers from TISA countries to establish a presence in their country.
Their commitments to allow the supply of financial services across the border would apply only to a truncated list of financial services in Art X.8. These mainly relate to insurance and a range of auxiliary services, plus electronic payments and portfolio management services; they do not include mainstream services involving banking and trading of financial products.
Those commitments would be made in accordance with Art I-3 of the main TISA text, which is presumably based on a positive list.
Hong Kong China wants to make it clear that parties can put limitations on the extent to which they are committing a particular financial service, as permitted in the GATS. This proposal implies that the US does not want to allow governments to impose any limitations on a sector they agree will be covered by those rules.
Without the rest of the agreement it is unclear what rules would apply if the US proposal were not adopted. Presumably Art 1-3 of TISA would apply to financial services just like all other services.
Not discriminating against foreign firms
The US proposal for Art X.3.2 involves commitments not to discriminate against financial services from other TISA countries, known as national treatment. This paragraph only applies to financial services that are supplied across the border. Those commitments are again limited to the services listed in Art X.8.
There is a cross-reference to Art II-2 of the main TISA text, which has not been leaked.
On its face, it looks like this provision restricts national treatment of financial services to those cross-border services, unless a TISA country says it also applies to foreign direct investment (establishing a commercial presence). But that is impossible to verify.
It seems likely that the commitments for national treatment use a negative list, but again that is impossible to verify.
So far, this analysis suggests that TISA parties can decide what financial services to commit to these rules, but the US wants to limit the extent to which they can pick and choose within those sectors.
The crucial provision is Art X.4, which would apply a standstill to a country’s existing financial measures that are inconsistent with the rules. That means governments must bind their existing levels of liberalization for foreign direct investment on financial services, cross-border provision of financial services and transfers of personnel. The current rules will be the most restrictive of financial services that a government would be allowed to use. They would be encouraged to bind in new liberalization beyond their status quo.
Australia wants to keep more flexibility, with the standstill to apply from the date TISA comes into force. That would allow governments to adopt new regulations before that date, thereby securing themselves more regulatory space than they have now. It also expressly allows for the rollover of such measures.
It is not apparent from the leaked text whether a ratchet applies to lock in any new liberalisation of financial services.
Art X.7 (commercial presence) and Art X.8 (cross-border trade) show the EU and US are taking a hard line by saying that these scheduling arrangements define a country’s commitments on a financial service or sector. Australia wants the broader ability to list conditions and qualifications on the services listed in the schedule (similar to what Hong Kong China proposed in Art X.3.1).
The implications are huge. The aim is to secure much more extensive levels of commitments than exist in the GATS, or were promised in the Doha round, or even exist in most FTAs. It would also commit governments to maintain the current failed system of financial regulation. A TISA party could be sued if it sought to tighten financial rules that were put in place during the last three decades, which were marked by reckless or ill-considered liberalisation or deregulation. In the realm of financial services, this is high risk indeed.
Article X.21 requires regulatory procedures to be designed to expedite the ability of licensed insurers to offer insurance services across borders and in country. Examples of expedition include a time limit for disapproving an insurance product, after which the product must be allowed; exempting various kinds of insurance from requiring product approval; and allowing unlimited new products.
The GFC illustrates the implications. Credit default swaps (CDS) were one of the innovative products at the core of the crisis. Swaps operate as a form of insurance: the buyer of the swap accepts the risk that a borrower might default and pays up if they do, in return for receiving income payments. An estimated 80 percent were ‘naked’ CDSs, where the investor taking the insurance does not even own the asset being insured17 – they were basically betting on whether insured assets owned by someone else would fail. Around $60 trillion was tied up in CDSs in 2008.18 AIG, a key instigator of the financial services rules, held $440 billion exposure to CDSs when the bubble burst, and was bailed out by US taxpayers.
Art X.21 is a license for similar disasters. As the GFC showed, governments can be slow and reluctant to regulate financial products, especially if they are complex and the insurer or the entire industry is pressuring them. The transparency provisions, described below, add to their leverage. Often regulators will only discover the dangers of an insurance product when it is too late. There is growing pressure to shift from regulating in ways that welcome and tolerate risk-taking to regulation that judges financial services providers and products on their merits. This provision would help to shield insurance products from that trend.
The entire services lobby wants to stop governments from requiring data to be processed and stored locally. The firms that dominate cloud-based technology are mostly US-based. US firms also dominate the information and communications technology sector in general. The right to hold data offshore is especially important for the finance industry because finance is data. The US insurance and credit card industries have been especially vocal in their opposition to ‘localisation’ requirements.
Art X.11 has two proposals. One is from the EU and Panama and is couched in negative terms: a party shall not prevent such transfers. The state’s right to protect personal data, personal privacy and confidentiality is limited by an obligation not to use that right to circumvent the provisions of TISA. This is a catch-22: the government cannot adopt any privacy etc measures if they arguably breach any provisions of TISA. But they could have taken such measures anyway!
The US proposal is much more direct. It wants a blanket right for a financial services supplier from a TISA party to transfer information in electronic or other form in and out of the territory of another TISA party for data processing where that is an ordinary part of their business. It is hard to think of a form of financial service where data processing is not part of the business. This obligation is stated in a positive, unfettered form. There is no pretence of any right for the state to protect personal privacy and data.
At first sight that protection might be found in Art X.18, as proposed by the US and EU. But the provision is negatively worded: nothing shall be construed to require a Party to disclose information regarding the affairs and accounts of individual consumers. That means TISA does not affect states’ ability to require disclosure of information, presumably to the government, about individuals. It is not concerned with protecting personal privacy or preventing those who hold the personal data from abusing it for commercial or political purposes.
When data is held offshore it becomes almost impossible for states to control data usage and impose legal liability. Protecting data from abuse by states has become especially sensitive since the Snowden revelations about US use of domestic laws or practices to access personal data across the world.
Again there are two proposals, one from the EU and Trinidad, and a more extensive version from the US. Both require prior consultation on proposed new regulation ‘to the extent practicable’ with ‘all interested persons’ or, for the US more explicitly ‘interested persons and [state] parties’.
In addition to ensuring they have a reasonable opportunity to comment, the US says the final decision should, to the extent practicable, address in writing the substantive comments from interested persons on the proposed regulations. Equally, where an application from a financial service supplier to supply a financial service has been declined, they should be informed of the reasons.
This may sound pretty reasonable until it is put in context. Recall how capture of the regulatory, supervisory, and other public oversight agencies by the finance industry contributed to the GFC.19 The risk-based model of financial regulation and the Basel II standards for prudential regulation of banks allowed the industry itself to become the front line regulators. The resources and capacity of regulatory agencies were depleted, as was their knowledge and confidence to engage in active regulation.
The US also wants all financial regulation to be administered in a ‘reasonable, objective and impartial manner’. But they are highly subjective criteria and provide fertile grounds for contest and if necessary a dispute.
Transparency needs to be seen as part of a broader spectrum of industry influence. Pressure on regulations by deluging them with arguments and studies, and demanding explanations, is reinforced by requests for consultations from their patron states and if necessary threats of a dispute. The aim is to ‘chill’ or stifle the regulator. If the intervention is considered necessary and important enough, the industry can push its patron state to bring a dispute.
Giving more power to the industry will make it very difficult to restore more direct regulation, including for precautionary reasons. That is why the industry wants these provisions. The avenues through which they or their parent states will be able to exercise leverage is not clear, but TISA is likely to provide peer review by other parties and a mechanism for them to request consultations, as well as the enforcement mechanisms.
This is a standard provision in financial services agreements. Defenders of the GATS financial services agreement and advocates of TISA describe it as a carveout that protects governments’ ability to regulate for prudential reasons. But it doesn’t. It is only a weak defence that a government can argue if it is subject to a dispute. There are many practical problems with discharging the burden of proof.
More problematically, the article is comprised of two sentences that contradict each other. If a government takes a prudential measure that is inconsistent with the agreement, it cannot do so as a means to avoid its commitments under the agreement! So any prudential measures must be consistent with the other provisions in the agreement.
The TISA negotiations were an opportunity to revise this exception and provide a meaningful protection for the right of governments to regulate for precautionary and remedial reasons. Instead, TISA extends countries’ exposure to the rules and then repeats the same impossibly circular language.
The US and EU appear to be in dispute about the extent to which financial regulation should be harmonised. The EU, supported by the Trans-Atlantic finance industry, wants a harmonised system. That would pull back some of the post-GFC regulatory changes in the US, such as the new requirements and restrictions on the finance industry under the Dodd-Franks Act (formally the Dodd-Franks Wall Street Reform and Consumer Protection Act).
The services offer from the EU in its negotiations with the US for the Trans-Atlantic Trade and Investment Agreement (TTIP) was leaked this week. The explanatory note from the European Commission says:
The draft TTIP offer does not contain any commitments on financial services. This reflects the view that there should be close parallelism in the negotiations on market access and regulatory aspects of financial services. Given the firm US opposition to include regulatory cooperation on financial services in TTIP it is considered appropriate not to include any commitments on financial services in the EU’s market access offer at this stage. This situation may change in the future if the US show willingness to engage solidly on regulatory cooperation in financial services in TTIP.20
In other words, the EU is playing hardball in TTIP to force the hand of the US. Whatever ends up in TTIP is also likely to end up in TISA.
US Securities Industry and Financial Markets Association21
Suppliers should be able to choose their corporate form (e.g., a 100%-owned subsidiary, a branch or a joint venture) and be treated no less favorably than domestic suppliers (i.e., national treatment).
Other measures, such as the protection of cross-border data flows and transfers, and the inclusion of investor-state dispute settlement commitments, the ability to store and process data from a central regional location, rather than establishing a local facility is essential.
Buying and selling financial products across borders, participating in and structuring transactions, and providing investment advice, without establishing a commercial presence and without being subject to separate licensing and approval requirements that generally apply to firms commercially present in a market.
Permit consumers traveling outside their territories to utilize any capital markets related service in the other Party’s jurisdiction
Agree not to adopt or maintain measures that prevent or restrict transfers of information or the processing of financial information, including transfers of data by electronic means, or that prevent transfers of equipment, where such transfers of information, processing of financial information, or transfers of equipment are necessary for the conduct of the ordinary business of a financial service supplier.
Each Party should permit temporary entry into their territories for persons who supply capital markets-related services to work with clients or to staff a commercial presence.
At a minimum ensure that commitments in any comprehensive trade and investment agreement reflect the level of market access afforded under their domestic laws.
The competitiveness of financial services firms depends on their ability to innovate, often rapidly in order to meet the special needs of customers by developing and offering new products and services. Ensure that regulators allow private firms to meet these needs, while maintaining appropriate prudential supervision.
Regulators should: (i) propose regulations in draft form and provide interested parties the opportunity to comment on such draft regulations, where practicable; (ii) make publicly available the requirements that suppliers must meet in order to supply a service; and (iii) enforce laws and regulations on a non-discriminatory basis, according to fair and transparent criteria.
A strong investment chapter that applies equally to financial services investors, including with respect to core protections and investor-state dispute settlement, is vital. Such core protections would include ensuring that suppliers could establish a commercial presence, protection from expropriation, dispute settlement, and the free transfer of capital.
TISA might include consultation among capital markets participants and regulatory authorities which would lead to the development of a list of regulatory obstacles where recognition arrangements could be developed.
Establish the right of foreign financial services firms to invest in another TISA party using the corporate form of their choice, without restriction on the establishment of a new commercial presence or the acquisition (in part or in full) of an existing enterprise in another TISA country.
Guarantee national treatment for foreign companies in the financial services sector to ensure that TISA parties afford foreign enterprises and investors the same treatment as domestic investors for regulatory and other purposes.
Grant foreign financial services firms the right to provide cross-border services without establishing a commercial presence and without being subject to separate licensing and approval requirements that generally apply to firms with a commercial presence in a market.
Permit dissemination and processing (within country and cross-border) of financial information to provide clients with services necessary for the conduct of ordinary business.
Allow consumers to travel outside their home country to obtain any capital markets related service.
Mandate that regulatory and supervisory bodies allow full market access and national treatment for all lines of insurance, including personal and commercial.
Guarantee that domestic insurance regulation is made applicable to all companies equally in a given market, regardless of nationality.
Establish clear disciplines to level the playing field between government-affiliated insurance entities and the private market within a reasonable time frame, including with regard to taxation, subsidization, or the provision by the government of any other commercial economic advantages, with such government-affiliated insurance entities subjected to supervision by the same regulatory authority as private companies.
Prohibit the improper delegation of regulatory authority to non-governmental entities that dilute confidentiality and process protections accorded through governmental administrative procedures.
Support the creation of a regular annual insurance dialogue on implementation.
Subject to reasonable levels of protection, secure the right to cross-border transfer of customer and employee data for legitimate business purposes including the provision of more efficient and cost-effective service.
US Coalition of Services Industries: … we recognize the necessity of certain regulations (e.g., for national security, data protection, prudential reasons), there should be parameters and limitations for their application. For example, prudential carve-outs should limit the scope of allowable prudential measures to non-discriminatory measures that are subject to a rule of “least trade and investment distorting” (or something along those lines). Similarly, capital requirements should not be used as disguised barriers to entry or competition with domestic suppliers of comparable services (e.g., financial services, insurance).
Information processing: when an act, policy or practice of a relevant authority seeks to restrain cross-border data transfers or processing, that authority must demonstrate that the restriction is not an unnecessary restraint of trade or investment in light of alternative means by which to achieve the objective of protecting the identity of the customer, security of the data or the performance of prudential oversight.23
The American Insurance Association wants 100 percent market access for the insurance suppliers of a TISA party in the markets of all the other parties, including freedom from discriminatory treatment, the absence of quantitative restraints and investment restrictions, the freedom to choose the form of legal entity through which they operate in a given jurisdiction, and the ability to provide insurance on a cross-border basis. This means strong disciplines on behind-the-border measures that indirectly restrict or limit market access, including state-owned enterprises, and discriminatory measures and regulatory schemes that operate as disguised trade restrictions. Prudential measures must be nondiscriminatory and no more restrictive than necessary to achieve prudential objectives.24
Visa wants to ensure the electronic payment industry’s access to foreign markets, to ensure that foreign governments maintain a competitive marketplace through transparent regulation, and to ensure that electronic payments providers maintain control over, and are able to freely move, information cross-border.25
Bloomberg Financial Information Services believes the new approach to scheduling commitments will expand its level of access to countries markets, and wants no exemptions for financial information and data processing services.26
6 As of 2009, the 33 countries whose current schedules reference the Understanding include: Australia, Austria, Bulgaria, Canada, Czech Republic, Finland, Hungary, Iceland, Japan, Liechtenstein, New Zealand, Norway, Slovak Republic, Sweden, Switzerland, and the United States, as well as the European Communities members as of 1994 (Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain and the United Kingdom.) The only developing nations that utilized the Understanding were Aruba, Netherland Antilles, Nigeria, Sri Lanka (for banking not insurance), and Turkey. Additionally, eight countries (Cyprus, Estonia, Latvia, Lithuania, Malta, Poland, Romania, and Slovenia) were in the process of revising their commitments to match the EC schedule.
7 WTO Committee on Trade in Financial Services, ‘Communication from Barbados: Unintended Consequences of Remedial Measures taken to correct the Global Financial Crisis: Possible Implications for WTO Compliance’, JOB/SERV/38, 18 February 2011, para 3; discussed in ‘Remedial actions to tackle crisis not WTO-compliant?’, SUNS, No. 7116, 25 March 2011
8 Committee on Trade in Financial Services, Report of the Meeting held on 20 March 2013, S/FIN/M/76, 19 April 2013
9 Report of the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System, Preliminary Report, 2009, 87
13 The Agreement Establishing the WTO would require either a two-third or three quarters majority of Members to secure an amendment of this kind.
14 Carmen Reinhart and Kenneth Rogoff, ‘Banking crises: An equal opportunity menace’, Journal of Banking and Finance, 37, 2013, 4557-4573; Carmen Reinhart and Kenneth Rogoff, Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten, IMF Working Paper WP/13/266, December 2013
15 Phakawa Jeasakul, Cheng Hoon Lim, Erik Lundback, Why Was Asia Resilient? Lessons from the Past and for the Future, IMF Working Paper WP/14/38, February 2014, 9
16 David Hartridge, ‘What the General Agreement on Trade in Services (GATS) Can Do’, speech to the Clifford Chance Conference on ‘Opening Markets for Banking Worldwide: The WTO General Agreement on Trade in Services’, London, January 1997
Today, WikiLeaks released the secret draft text for the Trade in Services Agreement (TISA) Financial Services Annex, which covers 50 countries and 68.2%1 of world trade in services. The US and the EU are the main proponents of the agreement, and the authors of most joint changes, which also covers cross-border data flow. In a significant anti-transparency manoeuvre by the parties, the draft has been classified to keep it secret not just during the negotiations but for five years after the TISA enters into force.
Despite the failures in financial regulation evident during the 2007-2008 Global Financial Crisis and calls for improvement of relevant regulatory structures2, proponents of TISA aim to further deregulate global financial services markets. The draft Financial Services Annex sets rules which would assist the expansion of financial multi-nationals – mainly headquartered in New York, London, Paris and Frankfurt – into other nations by preventing regulatory barriers. The leaked draft also shows that the US is particularly keen on boosting cross-border data flow, which would allow uninhibited exchange of personal and financial data.
 For example, in June 2012 Ecuador tabled a discussion on re-thinking regulation and GATS rules; in September 2009 the Commission of Experts on Reforms of the International Monetary and Financial System, convened by the President of the United Nations and chaired by Joseph Stiglitz, released its final report, stating that « All trade agreements need to be reviewed to ensure that they are consistent with the need for an inclusive and comprehensive international regulatory framework which is conducive to crisis prevention and management, counter-cyclical and prudential safeguards, development, and inclusive finance. »
EU negotiators have explicitly called for TTIP to roll back Wall Street reforms introduced by Barack Obama, with new “disciplines” that would limit the regulation of banking, securities and insurance. They have explicitly targeted the Volcker Rule (a ban on hedge fund-style trading by commercial banks), the Federal Reserve’s proposed rules for foreign banks, and state-level regulation of insurance. US negotiators, advised by Wall Street banks, have also proposed TTIP rules that conflict with proposals to ban toxic derivatives, limit the size of too-big-to-fail banks, enact financial transaction taxes and reinstate the Glass-Steagall Act (voted in by Congress in 1933 and abrogated by the Clinton administration in 1999).
2. Risk of ‘mad cow’ beef and tainted milk
In 2011, 28 of the 29 cases of bovine spongiform encephalopathy (BSE or mad cow disease) identified by the World Health Organization occurred in the EU. More than 50 countries worldwide have restricted imports of EU beef as a result. Corporations that are part of the lobby BUSINESSEUROPE have listed “the [US] ban on EU beef exports linked to BSE” as a trade barrier to be eliminated. European agribusiness corporations have also listed US safety standards for grade A milk as an “obstacle” that they hope can be removed via TTIP.
3. Growing dependence on fuel
BUSINESSEUROPE, which represents European oil corporations such as BP, has asked that TTIP ban tax credits for alternative, more climate-friendly fuels such as algae-based and other emerging fuels that reduce carbon emissions.
4. Unsafe medicines
European pharmaceutical manufacturers have called for the US Food and Drug Administration to relinquish its current responsibility to independently approve the safety of medicines sold in the US. They propose that the US government automatically accept a European determination that a drug produced in Europe is safe for US consumers.
5. More expensive medicines
The Pharmaceutical Research and Manufacturers of America (PhRMA), the powerful lobby group for US pharmaceutical corporations such as Pfizer, is pushing to limit the ability of the US and EU governments to negotiate lower healthcare costs for taxpayer-funded healthcare programmes through TTIP. The US government already uses such measures to lower medicine costs for veterans of armed conflicts and others, and the Obama administration has proposed to do the same to limit rising Medicare costs.
6. Invasion of data privacy
US technology and communications corporations have bluntly asked that TTIP make it easier for them to gather our personal information (mobile, location, social, PC and offline) to create ongoing targeted profiles of consumers.
7. Loss of local job creation through ‘buy local’ rules
EU officials and corporate interests are prioritising the elimination, through TTIP, of popular “buy American” and “buy local” policies, which ensure that US tax dollars are reinvested in US government projects are used to create US jobs. The EU hopes that TTIP can be used to eliminate “buy local” policies used by state and local governments to reinvest tax dollars in creating jobs at home.
8. Unlabelled genetically modified food
About half of US states now have legislation in play to label food containing genetically modified organisms (GMOs). Unable to stop this trend domestically, GMO-producing firms like Monsanto are pushing for TTIP to quash GMO labels.
9. Dangerous toys
European toy companies (represented by Toy Industries of Europe) have recognised that there are differences between EU and US toy safety regulations, including “flammability, chemical and microbiological hazards”. However, their stated goal is for US parents to trust the safety of toys inspected abroad.
10. Subordination of states to laws tailor-made for multinationals
The 75,000 Companies that Could Attack Clean Water Safeguards, Green Energy Policies and Wall Street Reforms
For over a decade, U.S. and European corporations have pushed for an agreement between the United States and Europe – the Trans-Atlantic Free Trade Agreement (TAFTA) – that would roll back consumer, environmental and other important safeguards on both sides of the Atlantic and establish new corporate rights and privileges. In July 2013, European Union (EU) and U.S. negotiators launched TAFTA negotiations, aiming to finish a sweeping deal by 2014.
A “trade” deal only in name, TAFTA would grant foreign firms the power to directly attack domestic health, financial, environmental and other public interest policies that they view as undermining new foreign investor privileges and rights that TAFTA would establish. TAFTA would empower individual foreign corporations to drag the U.S. and EU governments before extrajudicial tribunals, comprised of three private attorneys, that would be authorized to order unlimited taxpayer compensation for domestic policies or government actions seen as undermining corporations’ “expected future profits.” This extreme “investor-state” system already has been included in a series of U.S. “free trade” agreements, forcing taxpayers to hand more than $400 million to corporations for toxics bans, land-use rules, regulatory permits, water and timber policies and more. Just under U.S. pacts, more than $14 billion remains pending in corporate claims against medicine patent policies, pollution cleanup requirements, climate and energy laws, and other public interest polices. The EU is proposing for TAFTA an even more radical version of investor privileges than that found in past U.S. pacts.
TAFTA would vastly expand the investor-state threat, given the thousands of corporations doing business in both the United States and EU that would be newly empowered to attack public interest policies. More than 3,300 EU parent corporations own more than 24,200 subsidiaries in the United States, any one of which could provide the basis for an investor-state claim. This exposure to investor-state attacks far exceeds that associated with all other U.S. “free trade” agreement partners. Similarly, the EU would be exposed to a potential wave of investor-state cases from any of the more than 14,400 U.S.-based corporations that own more than 50,800 subsidiaries in the EU. In sum, TAFTA would newly enable corporate attacks on behalf of any of the U.S. and EU’s 75,000 cross-registered firms.
Below are the maps of the locations of multinational corporations that would get these new privileges if TAFTA would take effect. Zoom in using the « + » button to see which corporations could challenge zoning, environmental and other local policies in your community. Click on the dots to see the names of the corporations and their industry. The color of the marker indicates the country of the parent company. The red lines on the map are the borders of the districts of the U.S. House of Representatives. Click here for a full list of companies based in EU countries that operate in the United States, sorted by congressional district.
Below is a map of U.S. corporations operating in EU countries that would gain greater rights than domestic firms under TAFTA. Zoom into a specific country by double clicking on the map to view the corporations located there.
The table below lists the number of companies in each country that could provide the basis for an investor-state attack against public interest policies.
Number of U.S. Corporations in EU Countries &
EU Corporations in the U.S.
This table indicates, for example, that 867 U.S. corporate affiliates are established in Austria, while 24,249 corporate affiliates from EU countries are established in the United States.
At the end of March, the European Commission launched a public consultation over its plan to enshrine far-reaching rights for foreign investors in the EU-US trade deal currently being negotiated. In the face of fierce opposition to these investor super-rights, the Commission is trying to convince the public that these do not endanger democracy and public policy. See through the sweet-talk with Corporate Europe Observatory’s guide to Investor-State Dispute Settlement (ISDS).
LONDON: Over 170 civil society organizations have voiced their “deep concerns” that the new EU-US trade deal could jeapordize international action on climate change ahead of negotiations this week.
In an open letter to US Trade Representative, Ambassador Michael Froman and EU Trade Commissioner, Karel De Gucht, the Centre for International Law is seeking assurance that Trans-Atlantic Trade and Investment Partnership (TTIP) will not threaten environmental protections. Lire la suite »
Traduction : Lori Wallach ( Public Citizen, USA ) explique pourquoi le TAFTA mettrait en péril les interdictions du fracking en Europe
L’une des raisons pour lesquelles il est si dangereux d’avoir le système ( d’arbitrage) investisseur-état dans l’accord ente les USA et l’Union européenne, c’est parce que nous avons désormais des exemples de toute une série de lois et de politiques actuellement attaquées. Donc, dans… Au départ, ce système etait juste censé servir (à obtenir) une compensation si une usine était nationalisée par un gouvernement, mais aujourd’hui, par exemple, nous avons vu une attaque directe contre l’interdiction du fracking au Québec. La compagnie américaine de gaz, Lone Pine, annonce que même si cette politique au Québec s’applique aux compagnies nationales, des compagnies étrangères – si une compagnie arrivait de Mars, – cette politique s’appliquerait – Aux termes du NAFTA ( North American Free Trade Agreement ), un gouvernement n’a pas le droit d’interdire le fracking, ou, s’il veut le faire, il doit donner de l’argent public à une compagnie de gaz et de pétrole à cause d’une politique qui est simplement une bonne politique gouvernementale, et non de la discrimination par rapport à cette compagnie.
Ce qui fait vraiment peur, c’est que nous avons déjà le cas sous NAFTA de Lone Pine qui attaque l’interdiction du fracking au Canada, et nous avons maintenant des compagnies comme Chevron, qui, vous savez, regardent les nouvelles lois en Allemagne et qui disent : » Nous nous en occuperons plus tard ! Nous savons comment ! » Donc, en fait, on peut prédire le genre de multinationale….une fois que cela commence, qu’une porte s’ouvre dans un cas, toutes les autres ( multinationales) suivent. La première fois qu’une loi sur les matières toxiques est attaquée avec succès, dans un tribunal –investisseurs, alors, toutes les compagnies produisant des matières dangereuses, arrivent. Elles paient et font la même chose. Donc, le fait que cela a déjà commencé dans (les pays signataires du) NAFTA constitue un avertissement clair de ce qui se passera en Europe avec les interdictions du fracking.