Following elections in May, the new European commission is currently being cross-examined by members of the European parliament. Swedish MEP Cecila Malmström has been given one of the most difficult and politically-sensitive briefs: trade. Top of her in-tray is the Transatlantic Trade and Investment Partnership currently being negotiated between the European Union and United States. Chair of the all-party group on EU-US trade and investment John Healey MP writes with advice on her new role.
Dear commissioner-designate
Congratulations on your appointment. Trade is an area of huge importance for the United Kindom and Europe – it already supports seven million jobs in the UK and a trade and investment deal between Europe and America has the potential to boost jobs and growth further. Nevertheless, you will know that there are widespread and growing concerns about the proposed EU-US deal. I hope you will continue the work of your predecessor Karel de Gucht in trying to deal with these concerns in the negotiations and offer the same strong political leadership as he has done. In particular, there are four points that I hope you will urgently consider in building support for a fair and ambitious EU-US agreement.
Remove preferential arbitration rules for foreign investors
In the UK as in other European countries, investor-state dispute settlement has become a lightning rod for dissatisfaction with the proposed transatlantic trade treaty. You and I know that the number of cases brought under ISDS is relatively small, that most claims are struck down, and that European companies are actually more likely to resort to ISDS than US firms. In the last 50 years the UK has agreed 94 bilateral trade and investment deals, most of which contain an ISDS system, though we have never lost a case.
However, the case for ISDS is extremely weak in a deal between countries with established, stable legal and democratic systems. Nor are UK citizens likely to welcome ISDS merely as a way of preparing the ground for its inclusion in future trade agreements with China or others. For many, ISDS is now a totem of all that is seen as wrong with international trade deals: too secret, too undemocratic and too skewed to the interests of international capital over those of our citizens.
But what should worry you more is that this relatively minor part of the deal, which is not a priority for businesses, is dominating debate and derailing support for the proposed TTIP as a whole. Your first step should be tackle this head-on by removing ISDS from the deal.
Focus on the specific benefits a good deal can bring
A good transatlantic trade deal could give a much-needed boost to the UK economy, including bringing thousands of jobs and wage gains for workers. It could also bring wider choices and lower costs for British consumers. However, the economic argument will not be won by talking about these gains in the abstract. A consistent focus on specific, tangible benefits is required. For example, a recent industrial success story in the UK has been car manufacturing, which now employs nearly 750,000 British workers. This success depends on trade, as eight in 10 cars produced in the UK are exported.
At the moment, UK car exports to the US face additional costs of around 25 per cent largely because of different regulatory rules for parts such as dashboard displays, lights and airbags. Removing or reducing these costs could enable us to sell more high-quality, British-made vehicles to the US and create more high-quality, British jobs as a result. Such examples exist across the EU, and the commission needs to start using them more.
Put fears about public services to rest
Europe has world-beating public services, and there are none better than the National Health Service. The British public will rightly not accept a deal that puts the NHS or other public services at risk. I met and wrote to TTIP chief negotiator Ignacio Garcia-Bercero earlier this year about this concern and received his welcome commitment that public services would not be threatened by a transatlantic trade agreement, and the NHS would be fully protected. More now needs to be done to communicate and persuade a sceptical public on this point. It will be an important task for you and your team in the coming weeks to reaffirm that commitment and provide more detail to reassure those worried about the impact on public services in the UK and across Europe.
Reduce the democratic deficit
In a democratic vacuum, half-truths and mistruths about trade flourish. As you recognised in your confirmation hearing, the European commission has a major role to play here and the public consultation on ISDS and appointment of a civil society advisory group are steps in the right direction, which I hope you will build upon.
However, the task of democratising the trade process should not fall to the commission alone. National governments also need to be much more active. Our own UK parliament provides very poor scrutiny of European affairs, in sharp contrast to other countries such as: the Germans, whose government must use parliament’s opinion as the basis for European discussions; the Dutch, who have expert sector-based scrutiny committees; or the Danes, whose European committee issue binding mandates to ministers.
There have only been two debates in the House of Commons on TTIP, both of which were initiated and led by the all-party group that I chair rather than by the UK government. I think there is a strong case to say any TTIP deal should be debated and backed by our own UK parliament, in addition to the formal agreement required from the EU council of ministers and European parliament as part of ratification.
Public information from governments about trade in general and TTIP in particular also needs to be much better if the public argument is to be won. I hope you will use your important new position to encourage national governments such as our own to be more open and more ready to involve the public and parliament on TTIP.
Good luck!
With best wishes
John Healey MP
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John Healey MP is chair of the all-party parliamentary group on EU-US trade and investment
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For far to long we have been told one thing and the other has proven the case, we have been lied to again and again. This isn’t so much a trade deal, as a power grab, the corporates want the Public Service rights of every country! Imagine, all governments spending and jobs, in the hands of corporations? Slavery would ensue, especially tied in with ISDS, Egypt are at present being sued, because they dared to raise the minimum wage?
As far as the ‘more jobs’ scenario, it has been proven in previous FTA’s signed by America, that jobs have fallen and in huge numbers, just look at our public service sector, those that can’t be placed on-line, will be ‘franchised out’, probably by the usual suspects; Virgin, Circle-Health, G4S, Serco, et al. The only winners would be the corporations and banks, who would gain from cheap labour and ever rising profits!
John, the problem is that many UK and EU citizens don’t believe or trust the UK and EU politicians. The EU seems to accept 26m unemployed as a price worth paying for a club which seems to put corporations above its citizens, and which ‘forgets’ that austerity effects real people not just numbers on a spreadsheet.
You mention the ‘success’ of the UK car industry but fail to mention that most, if not all, is owned by foreign corporations and that most of the content of the cars made here is imported – so, we have become a cheap labour assembly plant rather than a high-value manufacturer.
It is time for politicians to understand that globalisation is not working for many people, and that how the benefits of globalisation are distributed is just as important as the total ‘benefit’.