Nick Dearden: History shows trade deal threat

"Since 1994, 127 known cases have been brought against 20 EU states." Picture: Genevieve Stevenson
"Since 1994, 127 known cases have been brought against 20 EU states." Picture: Genevieve Stevenson
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BUSINESS Secretary Vince Cable has been working overtime to convince MPs that Britain has nothing to worry about from the Transatlantic Trade and Investment Partnership (TTIP), the United States-EU trade deal.

Our country, he says, has never been successfully sued under the controversial process which allows multinationals to sue governments for taking action which damages their profits, and TTIP won’t change that.

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Fortunately, no-one in the outside world believes him. This month a European petition against TTIP and its sister agreement CETA (the Canada-EU deal) reached one million signatures. That’s happened in just two months.

What’s more, the EU Commission has got itself into a complete mess over a consultation it issued on TTIP earlier in the year. A record-breaking 150,000 people responded to the densely technical document – the vast majority saying, unsurprisingly, “We don’t want US multinationals to be able to sue us for passing environmental laws, food safety laws, laws to protect our health services.”

European citizens have spoken, but the Commission doesn’t want to listen. It was supposed to report on the consultation last week, but instead warned it will take longer because campaigners “hijacked” the process and the result is unclear – a claim that must be a downright lie unless a 95 per cent “no” lacks clarity.

The Commission’s problems don’t end there. The French parliament has just passed a resolution to say it opposes several aspects of TTIP, including the corporate legal system already mentioned (called ISDS, or Investor State Dispute Settlement).

Over the pond, as Republicans dither on whether to give President Barack Obama the fast-track authority he needs to get TTIP through, senior Democrats sent a letter to the administration warning that TTIP could stop Congress being able to prevent another financial crisis. They are quite right – that’s why the City of London likes it so much, so they can challenge US banking regulations.

This month also saw an eye-opening report from Friends of the Earth Europe, which shows just how much TTIP would open our regulations and public services to challenges by multinationals.

The Hidden Cost Of EU Trade Deals documents a host of previously unreported cases that multinationals have taken, especially against East European states, under similar agreements. Most incredible is the scale of the cases. Since 1994, 127 known cases have been brought against 20 EU member states. Although most of these are secret, we know that in 62 of these cases the compensation amounts to a whopping ¤30 billion of EU taxpayers’ money.

The report documents cases brought by energy, mining, food and health companies. It shows that EU laws can and have been challenged: Romania lost a case against food investors because the government had to remove tax incentives when it acceded to the EU membership.

We also learn, despite what we’re told by Vince Cable, that these tribunals do impact on government policy. When Swedish company Vattenfall sued Germany in 2009 for trying to increase environmental protections on a coal-fired power station, the city of Hamburg agreed to lower those standards again.

The report also shows that “no matter who ‘wins’ the case, legal and arbitration fees that states have to bear for their defence, cost large amounts of public funds”. This is perfectly shown by a Polish case where the government paid a massive ¤2bn to a health insurance company in a “settlement”. The case came about when Poland reversed a partial privatisation of its health insurance body, realising that one company, Eureko, would otherwise end up with a controlling stake. Poland was slapped with a £9bn lawsuit.

Given the botched and costly public private partnerships agreed by British governments, it would surely be only a matter of time before we see such a case here too if TTIP is passed.

Still think the health service is safe under TTIP, Vince? «

Nick Dearden is director of the World Development Movement

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