“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
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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