Defending European Consumers and Public Services Against International Corporations

By Julio Godoy Reprint | | Print |

BERLIN, Jun 2 2014 (IPS) - For many months, the Transatlantic Trade and Investment Partnership (TTIP) debates between the European Commission (EC) and the U.S. government were a matter for insiders.

In July 2013, government officials and representatives of international corporations agreed behind closed doors that such a free trade agreement (FTA) would be a great step forward towards homogenising social, environmental, health, industrial, and labour standards across the Atlantic Ocean.

Until recently, only a handful of civil society organisations, mostly based in Brussels, questioned the wisdom of such an agreement, and revealed the secret dealings of governments, in particular those referring to the so-called ‘investor protection clauses’ and the downgrading of social and environmental standards in Europe, to the detriment of European consumers and parliaments.

But, under pressure from civil society groups, the EC agreed earlier this year to launch a process of public consultation on the TTIP. And, since early May, after demonstrations by numerous consumer, environmental protection and labour groups, the TTIP has become a theme debated across society, and criticism of the way the EC and the U.S. government, in close cooperation with corporate lobbyist groups, have managed the secret negotiations is now general.

By early May, some 500,000 people in Germany alone had signed a petition against the TTIP, complaining that the agreement would “undermine democracy and the rule of law… endanger our health… and (would be) practically irreversible.”

Even sectors of governments have become outspoken critics of the TTIP. During a conference on the TTIP held in Berlin on May 20, the German Minister of State for Culture and Media, Monika Gruetters, said: “We Europeans have plenty to lose,”  if the FTA with the United States were to forbid state subsidies for theatre, music, public radio, and cinema production.

Gruetters even used a slogan typical of anti-globalisation activists, by saying that “culture is not a commodity.” That’s why, Gruetters explained, European states subsidise cultural production, “to permit arts to be critical, complex, (and) heterogeneous.”

However, she said, for the U.S. government such subsidies are “protectionist measures.” To confirm this view, Gruetters quoted a “recent conversation” she had with the U.S. ambassador to Berlin, John B. Emerson.

“State privileges for cultural production belong to the European self-conception,” Gruetters insisted. “We oppose a new deregulation of culture (as demanded by the TTIP) because we are afraid we would lose our unique cultural landscape.”

German Minister for Economic Affairs and Energy, Sigmar Gabriel, has also adopted the critical position of civil society groups against the investor protection clause that makes up the bulk of the TTIP. According to this clause, transnational corporations would be allowed to challenge national labour, health, environmental and other standards before non-governmental tribunals.

The deliberations of such tribunals are secret and their verdicts are definitive and cannot be appealed against.

Pia Eberhardt, expert for trade and investment at the Corporate Europe Observatory (CEO), says that transnational companies around the world “are using such clauses contained in practically all FTAs to claim compensations for perfectly legitimate government policies to protect health, the environment and other public interests – because they claim these policies have the indirect effect of undermining corporate profits.”

The Brussels-based CEO, an anti-lobbying watchdog organisation, is one of the leading civil society groups questioning the TTIP. It has forced the European Commission to reveal secret protocols of the deliberations between European and U.S. government officials, and has also shown that the EC most of the time adopts the positions presented by industrial lobbyists as its own.

A typical example of such corporate actions against states is the ongoing lawsuit that U.S. tobacco company Philip Morris, based in Switzerland, launched in 2010 against Uruguay. Philip Morris is demanding two billion dollars as compensation for alleged economic losses from Uruguay, claiming that the South-American country’s anti-smoking legislation devalues its cigarette trademarks and investments.

In a similar case, the oil and gas company Lone Pine Resources is suing the Canadian government for 250 million dollars for, as the company’s lawsuit puts it, the “arbitrary, capricious and illegal revocation of (Oil Pine Resources’) valuable right to mine for oil and gas under the Saint Lawrence River.”

In 2012, Quebec’s regional government suspended fracking, the controversial method to exploit shale gas fields. According to Lone Pine Resources, the measure violates Chapter Eleven of the North American FTA.

For civil society groups in Canada, such a lawsuit is “outrageous”.

“Based on the principle of precaution, Quebec government’s response to the concerns of its population is appropriate and legitimate,” said Martine Châtelain, president of Eau Secours!, the Quebec-based coalition for a responsible management of water. “No companies should be allowed to sue a State when it implements sovereign measures to protect water and the common goods for the sake of our ecosystems and the health of our peoples.”

For Maritta Strasser, leading activist behind the German petition against the TTIP, the investor protection clauses are “a tool to blackmail legitimate governments and parliaments.”

Strasser’s fears are well founded. As a former Canadian government official has been quoted as saying, “I’ve seen the letters from the New York and DC law firms coming up to the Canadian government on virtually every new environmental regulation and proposition in the last five years. They involved dry-cleaning chemicals, pharmaceuticals, pesticides, patent law. Virtually all of the new initiatives were targeted and most of them never saw the light of day.”

For Eberhardt of CEO, the law suits against governments prove that FTAs “create two different systems of justice. One, full of privileges for corporations, and another one for the rest of the society.”

Many consumer groups are also concerned that the TTIP would facilitate the import of U.S. food stuffs, that otherwise would not satisfy present European health standards, into the European Union, such as genetically modified agricultural products, or hormone- or chemically-treated meat and poultry.

By now, even for German Economic Affairs Minister Sigmar Gabriel, “it is unconceivable that an investor protection clause would annul German or European laws.” Gabriel also opposes non-governmental tribunals ruling over conflicts between governments and corporations.

“Both the United States and Europe are democratic state structures that guarantee the rule of law,” Gabriel said. There is no reason, then, “to allow special jurisdiction tribunals to rule over our laws and over our social, environmental and health standards.”

He also demands that from now on the negotiations between the EU and the U.S. government be “carried out in the most transparent way,” adding that “if the European Commission believes that it can leave the national parliaments out of the negotiations, than the TTIP will be a sound failure.”

This has not, however, dented European Trade Commissioner Karel de Gucht’s interpretation of the negotiations. “The U.S. government demands that the TTIP negations remain confidential and that the agreement contains an investor protection clause,” he told the German ZDF public television channel.

The result is that most of the protocols of the negotiations continued to be classified, as demanded by the U.S. government, and only private corporations and a restricted number of European government officials and members of the European Parliament have access to the documents.