Reflections on TTIP

En ny start för Ukraina

december 17, 2015

The European Liberal Forum, with the support of Svenska Bildningsförbundet, and together with The Friedrich Naumann foundation for Freedom and Fores hosted a seminar in Helsinki on November 27, 2015. The topic was the ongoing TTIP negotiations, that evoke many emotions both for and against. A sober and intellectual discussion on this topic is often difficult – but the seminar “TTIP – an opportunity or a threat?” provided an exception – and the level of discussion was excellent. The most important question we need to answer is “Are we better off with our without TTIP?”

The complete seminar is available online at https://youtu.be/kw7MYOayZks

From left to right:
Moderator: Mr Mats Löfström, member of the Finnish Parliament (Swedish Parliamentary Group)
Professor Karl-Heinz Paqué, Vice Chairman of the Friedrich Naumann Foundation for Freedom, Dean, Faculty of Economics, Otto von Guericke University Magdeburg
Ms Susan Elbow, Deputy Chief of Mission, US Embassy Helsinki
Mr Nils Torvalds, Member of the European Parliament (SFP)
Ms Johanna Jacobsson Trade lawyer and researcher at the European University Institute
Mr Jufo Peltomaa Start-up entrepreneur, Finland
Mr Jörg Wolf Editor-in-Chief, Atlantic Community, Germany
not in the picture Mr Carl Haglund, member of the Finnish Parliament and Party President of SFP

Here is a short summary of the discussions by Jaan Siitonen and Andreas Elfving, Political Advisers at Svenska Bildningsförbundet

– Europe and the World are experiencing an unprecedented change that affects our way of life, our societies, and business. Our world is getting more global and therefore global structures are needed in order to make sure our values prevail, concluded the Chair of the Swedish People’s Party Carl Haglund in his opening remarks. According to him the TTIP (Transatlantic Trade and Investment Partnership) plays a significant role in achieving this.

The panel consisted of very distinguished speakers. They reminded that TTIP has awaken unprecedented resistance among the people in Europe and the United States. Just a few weeks ago 150 000 people marched against the TTIP in Berlin. When discussing free trade, critical voices have to be taken seriously. The deal naturally needs popular support. On the other hand the deal should not be resisted based on gut feeling or principle – but based on facts, reminded the panelists.

According to the discussion, the long-term economic benefits of free trade are obvious. Free trade brings growth and development and works to unite the European and American markets, which together stand for over 50 % of the world GDP. Many of the panelists told that in short-term there could be a significant amount of losers, since many businesses would be more exposed for competition. Due to the economic weight of the partners, the TTIP-agreement would help setting global standards for world trade – such as work safety, environmental protection and product quality. The panelists reminded the audience that most people probably would agree that it better to let Europe and the United States set these standards – than countries like China and India.

Political benefits are also very important if not even more important. On the world stage the influence of the west is shrinking, and with that also the notion that western values should be the norm. Free trade treaty would reinforce western liberalism and therefore be part of setting the political standards of the future when it comes to governance.

Why is TTIP criticized?

During the discussion the panelists tried to list the main reasons why people are against TTIP. Many of the reasons are very general and TTIP can be seen more as a target of a much broader frustration. Here are some of the reasons that were explored:

Rapid societal change due to digitalization and automization: the future seems unpredictable and scary. Most of the people fear loosing their current jobs due to technological improvements and they feel that there is no guarantee for them to find new ones.

The increasing global wealth gap and general criticism towards capitalism.
Anti-Americanism. The trade treaty between E.U. and Canada (CETA) looks a lot like TTIP. Despite this it has faced very little criticism, making it easy to conclude that this is because it is made with Canada not the United States.
The 2008 financial crisis created a lot of general mistrust in the World and there is a fear of big business getting more powerful than national governments.
Conspiracy theories that are wildly circulating in the social media on variety of topics.

A lot of mistrust and anger towards TTIP are based on these general changes, which are happening, whether there is a TTIP-agreement or not. TTIP can make these changes smoother and help to keep us more competitive in the future. This depends of course on what is in the deal itself.

The two big problems: Transparency and the ISDS

The two big threats or problems with the TTIP has been the lack of transparency regarding the negotiations and then the issue of investor protection.

The panelists agreed that the TTIP-process has been too secretive, especially in the beginning. Despite the fact that the main negotiation partners, the U.S. government and the European Commission, are getting better in informing the public, there are still many things that can be done to improve transparency. The lack of understandable official information on the deal leaves a lot of room for misinformation that is being spread on social media.

The other major problem with TTIP is the investor-state dispute settlement (ISDS). In other words, how to solve conflicts inside the free trade area. Many critics of the TTIP-agreement say that ISDS would undermine the judicial systems of Europe and the United States.

A company could sue a government and the dispute would not be handled in a normal court but in a non-governmental dispute organization. The big fear is that the big companies could lobby ISDS more effectively than they could with national courts. The critics fear that this would lead to undemocratic and totalitarian corporate rule. This is a very legitimate and important concern that the negotiators must take into consideration, the panelists reminded us.

According to the panelists the norm in trade deals is to have an ISDS and usually it not a sensitive subject. However TTIP is the biggest trade deal in human history and therefore the ISDS could have greater influence on our lives. Could there be a TTIP without ISDS? It is possible, but at the moment the consensus is that in order to get an agreement some form of investor protection needs to be included. The United States wants a comprehensive deal – but even a narrow deal, if that is the only possibility, is better than no deal at all some of the panelists reminded us.

TTIP is not good or bad in itself - it depends what’s in it!

Free trade is a natural state of mind and history tells us that it has created enormous benefits for humanity. Free trade of goods and ideas has brought us the welfare we have now. However, humanity also needs governance and rules: Humans have always formed interest groups and institutions in order to make their needs better met. The biggest dilemma is that these institutions will not always work for the benefit of everyone. As one panelist described the companies and other institutions form bunkers to protect their interests. The deeper they dig, the more problems they start to create.

Without TTIP these big companies and other interest groups are digging deeper and going to make it much harder for startups and other newcomers to enter the market. A great fear of course is that these same companies get to dictate what is being written to the TTIP-treaty itself.

It is very unwise to be for or against TTIP-agreement because of principal reasons. At the end of the day TTIP is just an agreement: It depends what is going to be in it that matters. It is very important that civil society and the general public have taken an active role criticizing the way the agreement is being negotiated. This forces the negotiators to be more transparent, which is likely to make the deal only better.

Being against TTIP in principle is not good, since the alternative of doing nothing is definitely not going to promote liberalism, equality, democracy and well-being. If the United States and Europe are not able to deregulate, lower tariffs and make the laws in general more compatible with each other we are likely to see bigger corporate rule in the world. The information age has created the largest monopolies that we have ever seen in human history: Facebook, Google etc. These companies have no problem paying extra fees for hundreds of lawyers figuring out how to work in different market places. These companies can easily obstruct many forms of competition. TTIP could help to level the playing field.

At its very best, TTIP has the possibility to make Europe and the United States more relevant and dynamic markets. It opens up possibilities for new startups to easily enter a huge unified market without huge costs. World needs more effective governance and larger structures. There is a clear need for global rules and standards. Of course we can sit back and do nothing and pretend that the World still revolves around the west. But one day we will wake up to realize that others make the standards and these standards are most likely much worse than what TTIP can bring.

En ny start för Ukraina

The two big problems: Transparency and the ISDS

TTIP is not good or bad in itself - it depends what’s in it!

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