EU-Logos

“I think that’s a particularly bad agreement and let me say why… it’s not about trade : trade barriers and tariffs between Europe and America are already come down. It’s not about property rights. […] This is not about being attractive for foreign investment. It’s about stopping the European Parliament and the US Congress from passing regulations that would protect our economy, our people, our health … this is an attempt to increase the power of corporations, to run our economies, our societies. To me, this is at the heart of democracy. It’s not a trade agreement [1] ”

It is with these words, during an interview held in October 2015 for an association of scholars, that Joseph Stiglitz [2] describes the TTIP, one of the new generation treaties that have been negotiated in recent years. In fact, many bilateral treaties, with difficult acronyms, have begun to be negotiated over the years: TTIP, CETA, EUSFTA, ASEAN, JFTA [3] . The latter are free trade agreements that the European Union wants to conclude with certain countries of the world.

These « new
generation » treaties are distinguished by traditional agreements signed
between EU and third countries because they do not just aim to reduce tariffs,
but they try to break down any barriers

to trade.
Thus, they allow the European Union to increase trade and compete with the
world’s major economic powers, such as China and the United States.

The CETA
(Comprehensive Economic and Trade Agreement) was one of the earliest treaties
that the  European  Union 
has  negotiated.  It 
represents  a  new 
agreement  model  that 
aims  to  become universal. One of the causes of the
creation of this agreement is the economic and financial crisis of

2008.  People 
no  longer  had 
the  same  purchasing 
power,  thus  countries 
began  to  understand 
the importance  of  exports. 
The  EU  has 
understood  the  prominence 
of  extending  and 
strengthening trading relations in order to get out of the crisis.

However,  it 
must  be  remembered 
that  these  agreements 
do  not  only 
take  into  account 
the commercial  facet  of 
relationships  between  countries, 
but  also  much 
more  complex  and 
delicate aspects. This type of treaty developed following the halting in
2008 of the Doha Round multilateral negotiations in the World Trade
Organization, which aimed to intensify global trade.

What
issues around these new generation agreements?

The first discontentment on these treaties concerns the lack of transparency of the negotiations, widely perceived as fundamentally undemocratic. Indeed, the text of these documents is negotiated in an absolute reserve. The article 218 of the Treaty on the Functioning of the European Union (TFEU) gives to the Commission the power to negotiate any commercial agreement “on behalf of the Members States”. Behind the scenes in the European Commission, business lobbyists have been dominating the preparation of the negotiations, at the expenses of trade unions, environmental and consumer groups [4] .

New generation agreements also tend toward the harmonization of national regulations in sanitary, social, technical and environmental matters. Regulatory cooperation under TTIP and CETA can perhaps be described as a process seeking to establish procedural frameworks on how governments can regulate. In many areas industries are no longer local and interest promoted at EU level will be similar to those in USA. It is clear that common regulatory process and requirement standards set under influence of multinational actors can be against public interest and the interest of citizens of European Union Members States and citizens of United States. For instance, the TTIP risks bringing in Europe food and substances (pesticides or GMO, for example) that are forbidden in the European Union but allowed in the United States [5] .

The dispute settlement mechanism between investors and States (ISDS – Investor-State Dispute Settlement) represents another novelty of the new generation treaties. It is a system of supranational courts that judge controversies between states and companies when they consider themselves spoiled by a decision of the State [6] . Trade agreements aim to make it easier for enterprises to invest in the partner country and this mechanism allows companies to sue the foreign State if they feel

cheated by changes in public policies. Strong criticisms have been made to the ISDS. Indeed, it is considered as an asymmetrical Court between investors and states, favouring companies and dissuading states from putting in place policies that could damage them or benefit citizens.

The  fourth  novelty  (found  in  CETA,  for  instance)  is  the  « principle  of  liberalization  by  negative lists »:  rather  than  cite  the  sectors  they  want  to  liberalise,  the  States  assume  that  all  services  are liberalized, except for the sectors they have protected. This reverse mechanism implies the need for the State to specify beforehand its strategy of privatization and liberalization and a danger for the future, because it will not be possible to determine which public services will not be subject to the market in a later time.

Flavio Mastrorillo

SOURCES

[1] https://ged-project.de/topics/competitiveness/an-interview-with-nobel-laureate-joseph-stiglitz/

[2] Joseph Stiglitz is one of the leading American economists and a professor at Columbia University. He is chief economist of the World Bank. He was awarded the Nobel Prize for Economics in 2001.

[3] TTIP: commercial treaty between EU-USA ; CETA: trade agreement between EU-Canada ; JFTA: commercial treaty between EU-Japan ; ASEAN: trade agreement between EU-Vietnam/Thailand/Malaysia ; EUSFTA: commercial treaty between EU-Singapore.

[4] https://corporateeurope.org/international-trade/2014/07/who-lobbies-most-ttip

[5] http://www.peah.it/2015/07/no-ordinary-free-trade-agreements-health-and-the-new-generation-trade-agreements/

[6] http://www.europeanpapers.eu/en/europeanforum/investment-court-system-new-generation-eu-trade-and-investment-agreements

For more informations:

GED.       An       
Interview       with       Nobel        Laureate       Joseph       Stiglitz        https://ged- project.de/topics/competitiveness/an-interview-with-nobel-laureate-joseph-stiglitz/

Corporate Europe
Observatory.  TTIP  reloaded: 
big business  calls the  shots on new 
EU-US trade talks  https://corporateeurope.org/international-trade/2019/02/ttip-reloaded-big-business-calls-shots-new-eu-us-trade-talks

Corporate Europe Observatory. Who lobbies most on TTIP? https://corporateeurope.org/international-trade/2014/07/who-lobbies-most-ttip

Toute  l’Europe. 
CETA,  TAFTA,  JEFTA…Qu’est-ce  qu’un 
accord  de  libre-échange 
« nouvelle génération » ?        https://www.touteleurope.eu/actualite/ceta-tafta-jefta-qu-est-ce-qu-un-accord-de-libre-echange-nouvelle-generation.html

WTO. The Doha Round https://www.wto.org/english/tratop_e/dda_e/dda_e.htm

Peah. No ordinary
Free  Trade Agreements  – Health and The New Generation Trade
Agreements http://www.peah.it/2015/07/no-ordinary-free-trade-agreements-health-and-the-new-generation-trade-agreements/

European Papers. An Investment Court System for the New Generation of EU Trade and Investment Agreements: A Discussion of the Free Trade Agreement with Vietnam and the Comprehensive Economic and Trade Agreement with Canada http://www.europeanpapers.eu/en/europeanforum/investment-court-system-new-generation-eu-trade-and-investment-agreements

Borta L., « CETA – Bilateral Trade Agreement between the EU and Canada », 2014, CES Working, Papers Volume 6 (n* 1), p. 17 – 31

Yencken E., « Lessons from CETA : Its implications for future EU Free Trade
Agreements »
, 2016, OFSE Workshop Programme 1-B

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