Adolf Ozor, a tomato farmer in the Greater Accra Region of Ghana, is struggling to make ends meet after import surges. Credit: Daan Bauwens/IPS

By Daan Bauwens
BRUSSELS, Nov 27 2017 (IPS)

In the run-up to the fifth EU-Africa summit in Côte d’Ivoire, the future of the Economic Partnership Agreements (EPAs) between Europe and its former colonies looks bleaker than ever. While most of Europe’s trade partners around the world keep refusing to sign the deals, the African Union’s Commissioner for Trade will most likely announce a moratorium on all EPAs.

Ever since independence, Europe’s former colonies have enjoyed preferential (duty-free) access to the European market. In turn they didn’t need to open their own markets. When in 2000 the World Trade Organization deemed this one-sided market opening unlawful, Europe and 79 countries in Africa, the Caribbean and the Pacific (ACP) started negotiating reciprocal trade deals."Trade between neighbors is now more difficult than trade with the EU. We are creating borders within Africa." --Gunther Nooke

The resulting deals, coined Economic Partnership Agreements or EPAs, are not pure free trade deals. Under the agreements, ACP countries are allowed to keep protecting 20 percent of their products – mostly agricultural products – with import tariffs. The other 80 percent will be liberalized gradually over the course of 20 years after the signing and ratification of the deal. The deals were negotiated between the European Commission and seven regions of several countries engaged in economic integration processes.

Stalling the implementation

Seventeen years later only two of the seven negotiated deals have been signed, ratified and implemented, one with the South African Development Community (Botswana, Lesotho, Namibia, South Africa and Swaziland) and one with the Caribbean. The EPA with West Africa is currently blocked by Nigeria, Gambia and Mauritania who refuse to sign, while in the East African region, last year Tanzania sued Kenya for signing while Uganda wants to address more concerns – President Museveni travelled to Brussels on a three-day work visit at the end of September for talks.

Almost all ACP countries fear the possible negative impact of the EPAs on their economies and therefore stall its implementation. “They already had the right to export to Europe duty-free,” said Joyce Naar, a lawyer and activist with the ACP Civil Society Forum. “Now they are expected to open up their markets to Europe without getting anything back.”

Especially in Africa, governments and analysts fear an encore of the tomato and chicken scenario. In Ghana, for instance, after IMF and World Bank-enforced tariff reductions, import surges caused the market share for domestic chicken to fall from 100 percent to a mere three percent today in less than three decades. The chicken industry, once the second largest employer in the country, has now been taken over by competing imports from Canada, Brazil, Europe and China.

As for tomatoes, after lowering tariffs Ghana became the second largest importer of tomatoes in the world and according to FAO data, market share for domestic produce dwindled from 92 to 57 percent in only five years.

Industrialization at risk

Aside from agricultural produce, NGOs also fear that entire industrialization of the continent is at risk. At a recent international trade union conference on the issue of EPAs in Togo, this point was repeatedly made. “To industrialize, we need to protect and develop the internal market until we’re ready for international competition, as has been demonstrated by China,” says Georgios Altintzis of he International Trade Union Confederation (ETUC).

At the conference, Mariama Williams, senior program officer at the South Center in Geneva, also stressed that increased competition would lead to increasing feminization of work.

“Women do the worst jobs in the worst conditions,” she stated at the conference. According to Williams, EPAs will have the greatest impact on labour-intensive industries where women are disproportionately employed. An increase of competition would raise the pressure on these sectors while the internal standards and labour conditions remain unchanged.

“Diabolic” agreements or success story?

“There has always been a diabolic whiff about EPAs,” former EPA chief negotiator Sandra Gallina said a few weeks ago at a meeting of trade ministers from all ACP countries in Brussels. “There is nothing diabolic about them, they were just extremely badly communicated. For the last five years I have been fighting a misinformation campaign.”

On the first day of the Brussels meeting, the European Commission published numbers on its website meant to illustrate the benefits of EPAs. In 2012 an agreement entered into force between Madagascar and the EU. By 2016, exports to the EU had risen by 65 percent. The same for South Africa, which signed an agreement one year ago. The last year, exports of processed fish increased by 16 percent and flowers by 20 percent.

According to Marc Maes, trade policy officer at the Flemish North South Movement 11.11.11, the figures should be taken with a grain of salt. “Madagascar is recovering from a period of total chaos,” he said. “Do these numbers show the influence of the EPA or mere economic recovery? In the case of South Africa, the mentioned period consists of just one year. It’s a bit premature to talk about a steady, reliable impact.”

Migration crisis

The criticism isn’t limited to the content of the agreements. The way in which the European Commission concludes them is also widely condemned. As agreements with entire regions are stalled, the Commission now makes agreements with individual states. Ghana and Côte d’Ivoire signed and ratified such interim EPAs a year ago, fearing they would lose preferential access to the European market.

“That’s crazy,” says Gunther Nooke, personal representative in Africa of German Chancellor Angela Merkel and one of the staunchest critics of the EPAs. “Trade between neighbors is now more difficult than trade with the EU. We are creating borders within Africa. ”

According to Nooke, in the midst of a migration crisis the only things that benefits Europe and Africa is more employment in Africa. “This can only be done by protecting the entire African market with the creation of an African Customs Union led by the African Union. African products can be made here and be freely traded across the continent without having to compete with European goods. But now, because of differences in opinion about EPAs, African countries aren’t making any progress in forming a customs union.”

Moratorium

According to Merkel’s envoy, the African Union Commissioner for Trade has already announced that he will call for a moratorium on all EPAs. “And we must respect that,” says the advisor.

Germany is in the perfect position to make its opinion be heard. The country delivers the greatest contribution to the European Development Budget: just over 6.2 billion euros in the period 2014-2020, accounting for 20.6 percent of the total. It is doubtful whether Berlin and Brussels will be able to voice their opinions in unison at the Nov. 28-29 EU-Africa Summit in Abidjan.

President Rafael Correa Delgado of Ecuador does not mince words when it comes to development. ”Neoliberal policies based on so-called competitiveness, efficiency and the labour flexibility framework have helped the empire of capital to prosper at the cost of human labour,” he told a crowded auditorium at the 15th Raul Prebitsch Lecture.

The Raul Prebitsch Lectures, which are named after the first Secretary-General of the U.N. Conference on Trade and Development (UNCTAD) when it was set up in 1964, allow prominent personalities to speak to a wide audience on burning trade and development topics.

This year, President Correa took the floor on Oct. 24 with a lecture on ‘Ecuador: Development as a Political Process’, which covered efforts by his country to build a model of equitable and sustainable development, “Neoliberal policies based on so-called competitiveness, efficiency and the labour flexibility framework have helped the empire of capital to prosper at the cost of human labour” – President Rafael Correa Delgado of Ecuador

Development, he told his audience, “is a political process and not a technical equation that can be solved with capital” and he offered a developmental paradigm that seeks to build on “people-oriented” socio-economic and cultural policies to improve the welfare of millions of poor people instead of catering to the “elites of the empire of capital”.

Proposing a “new regional financial architecture”, he said that “the time has come to pool our resources for establishing a bank and a reserve fund for South American countries to pursue people-oriented developmental policies in our region” and reverse the “elite-based”, “capital-dominated”, “neoliberal” economic order that has wrought havoc over the past three decades.

“We need to reverse the dollarisation of our economies and stop the transfer of our wealth to finance Treasury bills in the United States,” Correa said. “South American economies have transferred over 800 billion dollars to the United States for sustaining U.S. Treasury bills and this is unacceptable.”

According to Correa, people-centric policies in the fields of education, health and employment in Ecuador have improved the country’s Human Development Index (HDI) since 2007. The HDI is published annually by the U.N. Development Programme (UNDP) is a composite statistic of life expectancy, education and income indices used to rank countries into tiers of human development.

Ecuador’s HDI value for 2012 is 0.724 – in the high human development tier – positioning the country at 89 out of 187 countries and territories, according to UNDP’s Human Development Report (HDR) for 2013.

Explaining his country’s achievement, Correa said that public investments involving the creation of roads, bridges, power grids, telecommunications, water works, educational institutions, hospitals and judiciary have all helped the private sector to reap benefits from overall development.

“At a time when Hooverian depression policies based on austerity measures are continuing to impoverish people while the banks which created the world’s worst economic crisis in 2008 are reaping benefits because of the rule of capital,  Ecuador has successfully overcome many hurdles because of its people-oriented policies,”  he said.

Correa argued that by investing public funds in education, which is the “cornerstone of democracy”, particularly in higher education or the “Socrates of education”, including special education projects for indigenous and Afro-Ecuadorian people, it has been shown that society can put an end to capital-dominated policies.

“We need to change international power relations to overcome neocolonial dependency,” Correa told the diplomats present at the lecture.  “Globalisation is the quest for global consumers and it does not serve global citizens.”

The Ecuadorian president argued that developing countries have secured a raw deal from the current international trading system which has helped the industrialised nations to pursue imbalanced policies while selectively maintaining barriers.

He urged developing countries to implement autonomous industrialisation strategies, just as the United States had done over two centuries ago.

Developing countries, he said, must pursue ”protectionist policies as the United States had implemented under the leadership of Alexander Hamilton [U.S Secretary of the Treasury under first president George Washington] when it closed its economy to imports from the United Kingdom.”

Citing the research findings of Cambridge-based economist Ha-Joon Chang in his book ‘Bad Samaritans:  The Myth of Free Trade and the Secret History of Capitalism’, Correa said that protectionist policies are essential for the development of developing countries.

He stressed that developing countries, which are at a comparable of stage of economic development as the United States was in Hamilton’s time, must devise policies that would push their economies into the global economic order.

The strategy of “import-substitution-industrialisation [ISI]” and nascent industry development is needed for developing countries, he said. “However, the developing countries must ensure proper implementation of ISI strategies because governments had committed mistakes in the past while implementing these policies.”

“Free trade and unfettered trade,” continued Correa, is a “fallacy” based on the Washington Consensus and neoliberal economic policies. In fact, while the United States and other countries preach free trade, they have continued to impose barriers on exports from developing countries.

Turning to the global intellectual property rights regime, which he said is not helpful for the development of all countries, Correa said that these rights must serve the greater public good, suggesting that the current rules do not allow equitable development in the sharing of genetic resources, for example.

In this context, he said that governments must not allow faceless international arbitrators to issue rulings that would severely undermine their “sovereignty” in disputes launched by transnational corporations.

President Correa also called for the free movement of labour on a par with capital. “While capital can move without any controls and cause huge volatility and damage to the international economy, movement of labour is criminalised. This is unacceptable and it is absurd that the movement of labour is met with punitive measures while governments have to welcome capital without any barriers.”

He was also severe in his criticism of the financialisation of the global economy which cannot be subjected to the Tobin tax. “Nobel Laureate James Tobin had proposed a tax on financial transactions in 1981 to curb the volatile movement of currencies but it was never implemented because of the power of the financial industry,” he argued.

Concluding with a hint that his government’s social and economic policies are paving the way for the creation of a healthy society, Correa quipped: “The Pope is an Argentinian, God may be a Brazilian, but ‘Paradise’ is in Ecuador.”

(Edited by Phil Harris)

Hopes are high that the 10^th Asia-Europe Meeting – or ASEM summit – to be held in Milan on October 16-17 will confirm the credibility and relevance of Asia-Europe relations in the 21^st century.

ASEM has certainly survived many storms and upheavals since it was initiated in Bangkok in 1996 and now, with ASEM’s 20^th anniversary in 2016 approaching rapidly, the challenge is not only to guarantee ASEM’s survival but also to ensure that the Asia-Europe partnership flourishes and thrives.

Talk about renewal and revival is encouraging as Asians and Europeans seek to inject fresh dynamism into ASEM through changed formats and a stronger focus on content to bring it into the 21^st century.

ASEM’s future hinges not only on whether governments are ready to pay as much attention to ASEM and devote as much time and energy to their partnership as they did in the early years but also on closer engagement between Asian and European business leaders, civil society representatives and enhanced people-to-people contacts.  An ASEM business summit and peoples’ forum will be held in parallel with the leaders’ meeting.

Shada Islam. Courtesy of Twitter

Significantly, the theme of the Milan summit – “Responsible Partnership for Sustainable Growth and Security” – allows for a discussion not only of ongoing political strains and tensions in Asia and in Europe’s eastern neighbourhood, but also of crucial questions linked to food, water and energy security.

Engagement between the two regions has been increasing over the years, both within and outside ASEM. Five of the 51 (set to rise to 52 with Croatia joining in October) ASEM partners – China, Japan, India, South Korea and Russia – are the European Union’s strategic partners. Turkey and Kazakhstan have formally voiced interest in joining ASEM, although approval of their applications will take time.  There is now a stronger E.U.-Asian conversation on trade, business, security and culture.

Exports to Asia and investments in the region are pivotal in ensuring a sustainable European economic recovery while the European Union single market attracts goods, investments and people from across the globe, helping Asian governments to maintain growth and development.  European technology is in much demand across the region.

Not surprisingly, Asia-Europe economic interdependence has grown.  With total Asia-Europe trade in 2012 estimated at 1.37 trillion euros, Asia has become the European Union’s main trading partner, accounting for one-third of total trade.  More than one-quarter of European outward investments head for Asia while Asia’s emerging global champions are seeking out business deals in Europe.  The increased connectivity is reflected in the mutual Asia-Europe quest to negotiate free trade agreements and investment accords. For many in Asia, the European Union is the prime partner for dealing with non-traditional security dilemmas, including food, water and energy security as well as climate change. Europeans, too, are becoming more aware of the global implications of instability in Asia.

ASEM’s connectivity credentials go beyond trade and economics.  In addition to the strategic partnerships mentioned above, Asia and Europe are linked through an array of cooperation accords. Discussions on climate change, pandemics, illegal immigration, maritime security, urbanisation and green growth, among others, are frequent between multiple government ministries and agencies in both regions, reflecting a growing recognition that 21^st century challenges can only be tackled through improved global governance and, failing that, through “patchwork governance” involving cross-border and cross-regional alliances.

Discussions on security issues are an important part of the political pillar in ASEM, with leaders exchanging views on regional and global flashpoints.  Given current tensions over conflicting territorial claims in the East and South China Seas, this year’s debate should be particularly important.

Asian views of Europe’s security role are changing. Unease about the dangerous political and security fault lines that run across the region and the lack of a strong security architecture has prompted many in Asia to take a closer look at Europe’s experience in ensuring peace, easing tensions and handling conflicts.  As Asia grapples with historical animosities and unresolved conflicts, earlier scepticism about Europe’s security credentials are giving way to recognition of Europe’s “soft power” in peace-making and reconciliation, crisis management, conflict resolution and preventive diplomacy, human rights, the promotion of democracy and the rule of law.

In addition, for many in Asia, the European Union is the prime partner for dealing with non-traditional security dilemmas, including food, water and energy security as well as climate change. Europeans too are becoming more aware of the global implications of instability in Asia, not least as regards maritime security.

Meanwhile, over the years, ASEM meetings have become more formal, ritualistic and long drawn-out, with endless preparatory discussions and the negotiation of long texts by “senior officials” or bureaucrats. Instead of engaging in direct conversation, ministers and leaders read out well-prepared statements.  Having embarked on a search to bring back the informality and excitement of the first few ASEM meetings, Asian and European foreign ministers successfully tested out new working methods at their meeting in Delhi last November.

The new formula, to be tried out in Milan, includes the organisation of a “retreat” session during which leaders will be able to have a free-flowing discussion on regional and international issues with less structure and fewer people in the room.  Instead of spending endless hours negotiating texts, leaders will focus on a substantive discussion of issues.  The final statement will be drafted and issued in the name of the “chair” who will consult partners but will be responsible for the final wording.  There are indications that the chair’s statements and other documents issued at the end of ASEM meetings will be short, simple and to-the-point.

ASEM also needs a content update.  True, ASEM summits which are held every two years, deal with many worthy issues, including economic growth, regional and global tensions, climate change and the like. It is also true that Asian and European ministers meet even more frequently to discuss questions like education, labour reform, inter-faith relations and river management.

This is worthy and significant – but also too much.  ASEM needs a sharper focus on growth and jobs, combating extremism and tackling hard and soft security issues. Women in both Asia and Europe face many societal and economic challenges.  Freedom of expression is under attack in both regions.

ASEM partners also face the uphill task of securing stronger public understanding, awareness and support for the Asia-Europe partnership, especially in the run up to the 20^th anniversary summit in 2016.

The 21^st century requires countries and peoples – whether they are like-minded or not – to work together in order to ensure better global governance in a still-chaotic multipolar world.

As they grapple with their economic, political and security dilemmas – and despite their many disagreements – Asia and Europe are drawing closer together.  If ASEM reform is implemented as planned, 2016 could become an important milestone in a reinvigorated Asia-Europe partnership, a compelling necessity in the 21^st century.

Shada Islam is responsible for policy oversight of Friends of Europe’s initiatives, activities and publications. She has special responsibility for the Asia Programme and for the Development Policy Forum. She is the former Europe correspondent for the Far Eastern Economic Review and has previously worked on Asian issues at the European Policy Centre. 

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.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.

Critics of a potential free trade agreement between the United States and European Union worry that such an agreement could lead to increased exportation of liquified natural gas from the U.S. Credit: Bigstock

By Jared Metzker
WASHINGTON, Jun 19 2013 (IPS)

Controversy is building following the announcement that negotiations will soon begin on a free trade agreement between the United States and European Union, with critics warning that any such agreement could negatively affect a host of regulatory concerns.

On Monday, during the Group of Eight (G8) summit held in Northern Ireland, the United States, European Commission and European Council jointly announced that negotiations will begin on Jul. 8 in Washington for what British Prime Minister David Cameron called “the biggest bilateral trade deal in history”.

Proponents characterise the Transatlantic Trade and Investment Partnership (T-TIP), also known as the Trans-Atlantic Free Agreement (TAFTA), as a way to improve the struggling economies of the United States and European Union.

“The whole point,” Cameron stated on Monday, “is to fire up our economies and drive growth and prosperity around the world – to do things that make a real difference to people’s lives. And there is no more powerful way to achieve that than by boosting trade.”

He asserted that the deal could “add as much as a 100 billion pounds to the EU economy, 80 billion pounds to the U.S. economy, and as much as 85 billion pounds to the rest of the world”.

Nevertheless, there is significant opposition to the proposed deal.

“The claims that this deal will somehow be an economic cure-all and generate significant growth are simply not supported by any reliable evidence,” Lori Wallach, director of Public Citizen‘s Global Trade Watch, a public interest watchdog group based in Washington, said Tuesday.

“But we do know that the talks are based on the demands of U.S. and EU corporations that have been pushing for decades to eliminate the best consumer, environmental and financial standards on either side of the Atlantic.”"The claims that this deal will somehow be an economic cure-all and generate significant growth are simply not supported by any reliable evidence."
-- Lori Wallach

Tariffs between the U.S. and E.U. are already low, and critics note that that what the deal really seeks to accomplish is the removal of “non tariff barriers” (also referred to as “trade irritants”).

“Non-tariff barriers is a commonly-used euphemism which refers to the array of financial, environmental, health and other policies which the public has put in place to safeguard its own interests,” Ben Beachy, a research director for Public Citizen, told IPS.

Under T-TIP, standards such as those mentioned by Beachy would be “converged”, so that regulations from state to state would be more closely aligned. Supporters of the deal say this uniformity would facilitate trade, but Beachy contended that the greater effect would be to lower regulation levels to a point that “democratic electorates would never stand for.”

“The resulting effect of ‘convergence'”, he said, “will be to limit the ability of democratic policymakers to establish their own preferred levels of regulation.”

Chilling effect

Environment groups are likewise worried that such harmonisation will allow for an increase in certain energy technologies, particularly the sudden prevalence in the United States of natural gas hydraulic fracturing or “fracking”.

Countries of the European Union currently restrict fracking within their own borders due to environmental concerns. But some analysts suggest these countries would be less averse to consuming imported gas fracked in the United States.

“There are concerns that the U.S. would become a major exporter of liquefied natural gas to the E.U.,” Ilana Solomon, of the Sierra Club, an environmental protection group, told IPS.

The United States recently approved private licenses for companies seeking to liquefy gas, indicating that in the future it will export liquefied natural gas, something it does not currently do.

Under free trade agreements in the past, Solomon noted, important regulatory reviews normally undertaken when considering the advantages of exportation have often been replaced by automatic approvals.

There are also health concerns related to the agreement. Some worry that food safety standards in the United States, for example, could be compromised if European exporters –  currently subject to lower standards – could deliver their, say, milk to U.S. stores.

Regardless of where U.S. standards stood, the less-well-regulated (and possibly less expensive) European milk would be available to U.S. consumers.

Another controversial aspect of the agreement would allow European privately owned corporations to challenge U.S. domestic laws that may negatively affect their profits or even expected profits.

In what are known as “investor-state” tribunals, foreign corporations would be eligible to receive compensation from taxpayers if the corporations could demonstrate that they lost money because of laws that inhibit trade.

Being subject to these tribunals could lead to what Public Citizen’s Beachy refers to as a “chilling effect”, meaning policymakers would be less likely to pass regulations because of perceived vulnerability.

Chipping away regulation

Beachy also noted the deal could carry “very real economic costs” if it undermines financial regulations and increases the risk of economic crisis.

According to a European Commission study, regulations that may be subject to “convergence” include financial safeguards such as those included in policies enacted by the United States following the economic crisis that began in 2008.

Last year, the Association of German Banks indicated what it hoped would emerge from any transatlantic deal regarding the aligning of U.S. and European standards.

“We would not like to see U.S. regulators applying standards to our banks that are extraterritorial, duplicative or discriminating … we have a number of such concerns regarding the ongoing implementation of the Dodd-Frank Act,” said the Association, referring to the most significant U.S. regulatory legislation passed in the aftermath of the financial crisis.

According to Beachy, it is doubtful that the free trade agreement could succeed in removing all its targeted “irritants”.

The European Commission study confirmed that this would be “unlikely”, noting that to do so in some cases would require “constitutional changes” and that “political sensitivities” might stand in the way.

Still, opponents worry that by specifically targeting these barriers, the broad agreement could succeed in chipping away at a significant number of them.

“The corporations that favour the agreement know they won’t get everything they want,” Beachy said. “But they think they can get a lot.”