Chillax, there’s little reason to worry about TTIP

3 mins read

In the latest spat of anti-globalization sentiments, people one both sides of the Atlantic are getting worried about the TTIP, or Transatlantic Trade and Investment Partnership agreement, which is currently under negotiation between the US and the EU. The negative hyperboles have found their way to Uttryck, where Mel Rideout gives air to fears over the free-trade agreement’s effects on not only the environment and health standards – but our very democracy itself.

Trade policy is tricky business, and keeping up with what’s going on is not always easy. Case in point: Rideout writes that the “US recently passed ‘fast track’ TTIP negotiation [or Trade Promotion Authority, TPA], the EU is vying for the same.” An unremarkable claim, had it not been that the first procedural step for TPA legislation was blocked by the Senate only days before the article was published, passed the day after its publication, and has not yet been voted on in the House. And the feature is unique to American politics, so no, the EU is not “vying for the same” – it neither needs nor can do so. Does it sound confused? Trust me, it gets worse. Here are a few reasons to stop worrying about the coming deal:

No, corporations will not rule us under TTIP

The much-dreaded letters ISDS (investor-state dispute settlement) have given rise to a lot of controversy. They refer to a clause that’s in all likelihood going to be included in the agreement, which serves the purpose of ensuring investor confidence. Critics claim that this will enable corporations to sue governments on arbitrary basis, blocking laws that will affect foreign companies’ profits. Sure, there are cases where the mechanism has been used in dubious ways, but those are peripheral and do not represent the majority of even a small minority of the cases. In fact, the EU has already signed 1’400 agreements (mostly Bilateral Investment Agreements) that include similar ISDS clauses – yet our democracy is intact, we are not ruled by corporate overlords. Sceptics have yet to explain in what way this will be significantly different.

Of course free trade agreements spur growth

Rideout presents a seemingly new economic theory: free-trade agreements only have short-term benefits. It’s unclear why this is said to be the case, it’s presented as were it axiomatic, as if proof would be redundant. That’s strange, undoubtedly regulatory convergence gives American investors an incentive to put their money in European projects, and vice versa, a mechanism that will be just as important ten or twenty years from now as it is today. Researchers from the Centre for Economic Policy Research estimates that EU exports to the US will increase by a quarter if the final deal includes non-tariff barriers. No, it doesn’t amount to the 15-20 percent across-the-board growth Rideout mentions (a standard by which any single policy shift would fall short). But it would be a welcome boost to our economies – especially in these trying times.

Negotiations are conducted by “unelected officials”, give me a break

Judging from Rideout’s account, the reader would get the impression that not only is democracy in jeopardy, its demise is already on display in the minimal impact it has on the ongoing negotiations. How are the negotiations being conducted? “In secret by unelected officials”, Rideout claims. That refers to the Commission and the Council of ministers (a collection of national cabinet members). In a sense that’s correct, we haven’t directly voted for any of those. Then again, we don’t consider our national indirectly elected cabinet ministers to possess illegitimate power, so why should it be different at the EU level? The same goes for the Commission, which was appointed by (and can be removed at the will of) our directly elected European Parliament. So what’s the issue?

Slippery slope argument, really?

After having pondered the potential roads to corporate serfdom forced onto the people by the TTIP, Rideout concludes that in the end, “it doesn’t matter” if any of those apocalyptic accounts hold ground. “What matters” she continues “is the direction we chose to follow.” Well, in the same sense as raising taxes would be bad if it by default led to hundred percent in taxation, which will kill jobs, and conversely lowering taxes would be dreadful if it meant abolishing taxation and thereby empty the government’s purse. Luckily such arguments are not accepted anywhere else, and they should be used here either.

So, what are we to make of it all? In contrast to the gloomy accounts of the protectionists, TTIP is something we should be looking forward to. It will bring much-needed help to our economies and – which is possibly just as important – it will demonstrate how we despite partisan division and nationalism will manage to strive for the common good of our peoples, an example that our democracies are fully functioning.

By Pär Nyrén

Cover: Independent UK

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