Download Presentation Free Trade Agreements EAPN Germany (A. Kraake)

International Free Trade Agreements
(CETA, TiSA, TTIP)
Meeting of the Executive Committee
Brussels, 14.03.2015
Alexander Kraake, EAPN Germany
Content
•
•
•
•
•
•
•
•
•
•
Introduction
General Critizism
Impact on Economy and Employment
Investment Protection
Regulatory Cooperation
Social Services of General Interest
Additional concerns
EAPN Germany Activities
Other EAPN members activities
Possible EAPN Activities
Introduction
International Free Trade Agreements
• EU-Canada: CETA (Comprehensive Economic and
Trade Agreement); negotiations completed, wording
published in September 2014 (1650 pages!)
• EU-USA: TTIP (Transatlantic Trade and Investment
Partnership), also called TAFTA (Trans-Atlantic Free
Trade Agreement); negotiations since July 2013, aim to
complete until end 2015
• 23 members of the World Trade Organisation (WTO):
TiSA (Trade in Services Agreement); negotiations since
2012
 European Commission got the mandate to lead the
negociations for EU member States from European
Council
General Criticism
• Free Trade Agreements are part of international law
which is superior to national law (and EU secondary
law); obligations in CETA, TTIP or TiSA could lead to
adoptions in national/European law; concerns free
trade norms dominate the norms of European socialecological market economy
• Negotiations in secret lead to loss of legitimacy and
refusal in public; European Commission (EC) starts
Civil Society Dialogue and publishes general
negociation status, proposals and papers but not the
final wording of the treaty; it is planned to publish the
treaty texts only after the completion of the negotiations
• TTIP has no cancellation clause and thus unlimited
validity; changes have to be approved by all treaty
partners
General Criticism
• Adoption only by EC, European Parliament and
European Council is not a sufficient legitimation, even if
trade policy is exclusively transferred to the EU; free
trade agreements require that all national governments
and parliaments of EU Member States discuss and
adopt the treaties; for CETA, the adoption of all EU
national parliaments was decided recently
• The EC decision to disapprove the European Citizens'
Initiative "Stop TTIP" for legal concerns strengthened
the democratic deficit and the doubts of many citizens
and NGOs
Impact on Economy and Employment
• The EC argues that TTIP could bring 2 million extra
jobs to the EU and “significant economic gains as a
whole for the EU (€119 billion a year) and the US (€95
billion a year) once the agreement is fully implemented.
This translates on average to an extra €545 in
disposable income each year for a family of four in the
EU.”
• However, there is a growing number of critical analyzes
doubting that TTIP will have significant employment
and growth effects and, on the contrary, TTIP could
bring dislocation of European employment, as
companies might source jobs to the USA where labour
standards are lower and trade union rights are nonexistent
Impact on Economy and Employment
• The North American Free Trade Agreement (NAFTA)
between the USA, Canada and Mexico caused the net
loss of over one million US jobs and a significant
decline of wages
• There are also concerns that TTIP could lead to a
downgrading of any labour standards identified as
‘barriers’ to trade, such as collective labour
agreements; the USA has refused to ratify ILO
Conventions on core labour standards such as
collective bargaining, freedom of association and the
right to organize
• Critics see TTIP as an opportunity to relocate
production to where wages and workers’ rights are
lowest, in order to reduce labour costs and increase
corporate profits
Investment Protection
• CETA has - like many other free trade agreements clauses on investment protection, which are also
foreseen for TTIP
• Especially the Investor-state dispute settlement (ISDS)
is controversial; ISDS includes the implementation of
private international arbitration tribunals which could be
able to decide on compensation claims of companies
against the future contractual states - without the
possibility of an independent judicial review
• Gateway for such suits are clauses such as "fair and
reasonable treatment", "non-discrimination",
"investment" etc. (included in investment protection
agreements) which are open to wide interpretation
Investment Protection
• As a result, an investor would have the option to sue a
state for compensation if an expected investment
environment changes by e.g. policy making
• Legal amendments in environmental protection,
consumer protection, health, labour and social affairs
could be classified as trade barriers and become the
object of investment protection suits
• In addition, the appointment of private arbitrators is
controversial because of their own economic interests
and assumed pro-corporate bias; due to lack of
transparency, conflicts of interest, lack of involvement
of third parties etc. a fair trial can not be guaranteed
Investment Protection
• ISDS creates a parallel private legal system besides
the existing ordinary jurisdiction; its added value for the
contractual states is not evident; there are legitimate
concerns that the capacity of policy decision-making
and thus the democratic sovereignty of contractual
states could be restricted by excessive levels of
corporate compensations; most likely, negative impact
for the income and living conditions for most deprived
persons because the public has to pay compensation
• This negative assessment was confirmed by the results
of the EU consultation on investment protection in TTIP
which were published in early 2015; the analysis of
150,000 contributions resulted in a rejection of 97 %
Regulatory Cooperation
• For TTIP, regulatory cooperation and the establishment
of a Regulatory Cooperation Council (RCC) is
intended; RCC is expected to examine standards and
laws of the contractual states to its compatibility with
TTIP; but mandate, binding power of its decisions,
appointment of members etc. are still unclear
• EC refers to TTIP as a “Living Agreement" which could
indicate that the negotiating partners agree on a
general framework and continue to advance the
implementation and application in the RCC; this could
mean that crucial decisions of our community would be
shifted to intergovernmental advisory bodies; the
establishment of RCC could be a fundamental cut in
state sovereignty and democratic rights in the EU and
the Member States
Regulatory Cooperation
• This could result in a delay or prevention of urgently
needed regulations and standards, such as
environmental and consumer protection; also, it is
suspected that business representatives could gain
exclusive access to proposed legislation in the RCC
and might change on their behalf; in the RCC,
regulatory measures could be discussed and decided
long before parliaments get to see these proposals
Social Services of General Interest
• Social and health services, so-called Social Services of
General Interest (SSGI), are affected by the Free Trade
Agreements
• For TTIP and CETA a general liberalization imperative
is agreed by EU and US, meaning all economic sectors
will be liberalized; only precisely described exceptions
are excluded (“negative list approach”); in addition, all
new future services would be liberalized per se by this
approach
• However, for SSGI various definitions exist in the US,
EU and its Member States; proposed exceptions, terms
and definitions are not always clear; thus, the “negative
list approach” for SSGI is problematic, but also
generally questionable; the areas to be liberalized
should be explicitly and precisely stated in positive lists
Social Services of General Interest
• If liberalization areas are defined in vague terms, they
could become the starting point for further deregulation
(by ISDS); the claim in the EC negotiating mandate to
try to maintain the high standards of SSGI would be
undermined; the return to the previous principle of
positive lists is necessary in Free Trade Agreements
• Altogether, SSGI – as defined in the Treaty on the
Functioning of the European Union – should be
excluded from the scope of the agreements (like the
cultural exception insisted by French government) but
both negotiating partners disagree
Social Services of General Interest
Exceptional clauses in CETA:
• EU level: EC reservation permits to fund, promote and
provide tax privilege to SSGI that receive state support
of any kind (annex II, p. 1511) ; thus, the non-profit
service delivery of SSGI will be possible in future
• National level: German reservation allowing national
measures in the SSGI system (other member States as
well); the organization and structure of service
provision by free welfare organizations is not affected
Social Services of General Interest
• In CETA no market access commitments are included
which go beyond the WTO agreement on services
(GATS); there are some GATS commitments on market
access concerning social and health services in
Germany, like hospitals, sanatoria, nursing and
retirement homes; these obligations apply for 20 years;
Germany accepts no further obligations in CETA; a
large part of social services is thus exempt from the
requirements of CETA
 For TTIP regulation is not known, could follow CETA
requirements
Additional concerns
• Further market-opening in the area of ​public services
(e.g. water supply, education, housing, energy)
• Removal of “Regulatory barriers to trade”: deregulation
of financial services, weakening of data protection,
deregulation of food safety (including restrictions on
genetically modified organisms), undermine
environmental regulations (e.g. EU ban on Fracking)
• Compatibility with European and national constitutions
• Impact on global trade and developing countries
EAPN Germany Activities
In cooperation with German welfare organizations:
• National level: EAPN Germany is being informed of the
meetings of the TTIP advisory board of the Federal
Ministry for Economic Affairs and Energy; joint position
paper of the Ministry and welfare organisations
• EU level: the office of German welfare organizations in
Brussels is informing EAPN Germany about the Civil
Society Dialogue of the EC
• Effort to impact on the European Parliament
recommendations (2014/2228(INI)) to the EC for the
negotiations on TTIP; responsible rapporteur: German
MEP Bernd Lange, chairman of the Committee on
International Trade (INTA)
EAPN Germany Activities
• Talks and exchange with European and German
Parliament members and representatives from German
ministries as well as EC
• EAPN Germany preparing a short, comprehensible
paper; on this basis, it is intended to cooperate with
experts (universities etc.) for an extensive analysis
Other EAPN members activities
• Document by Stephan Backes (EAPN Belgium) based
on the presentation at the EXCO meeting in November
2014
• EAPN France Position paper
• Other activities?!
Possible EAPN Activities
Recommendations (i.a. Stephan Backes):
• Adopt a position paper outlining basic standpoints that
are accordable in EAPN (including impact on
employment, revenues, social protection etc. of most
deprived persons)
• Support and join alliances and actions of civil-society
organizations and trade unions and make them more
visible; e.g. “Stop TTIP” – a self-organized European
Citizens' Initiative collecting signatures Europe-wide
• Link the challenges of TTIP to the EAPN work on the
Strategy Europe 2020 as they follow the same
paradigm
• Reflect on private and corporate funding within EAPN
Thank you for your attention
For questions and suggestions please contact
Alexander Kraake, EU Policy Officer at German Red Cross
[email protected]