Jim McCluskey, informed by his experience in the world of civil engineering, writes:
“In my previous letter I warned that the secret negotiations for a Transatlantic Trade and Investment Partnership (TTIP) will transfer power from government to multinational corporations. TTIP aims to remove regulations which limit the potential profits of transnational corporations. It gives corporations the power to sue governments if the corporation alleges protective legislation threatens their profits”.
He quotes a view, held by many commentators, that ‘TTIP elevates transnational capital to a legal status equivalent to that of the nation state’:
“Disputes between government and corporations will be dealt with in secret in front of a tribunal composed of a small clique of lawyers. The system is called ‘Investor State Dispute Settlement’ (ISDS). Corporations are already suing governments under investor-state regulations- over 500 known cases have now been filed against at least 95 countries:
- The Canadian company AbitibiBowater sued the government and the government has to pay it 122 million dollars.
- We, the UK taxpayer, are paying 700 million pounds to Fujitsu over a NHS contract.
- Philip Morris sued the Australian government over its plain packaging rules.
- The Swedish corporation Battenfall sued the German government over its decision to phase out nuclear power
- and a French firm is suing the government of Egypt over its increase in minimum wage.
“Regulations which could be under threat include those which protect labour rights, food safety, genetically modified organisms in plants and animals, regulations regarding toxic chemicals, banking safeguards and digital privacy”.
Jim McCluskey hopes that readers will consider asking their MP why our government is secretly negotiating to pass massive powers to corporations.
“The Trans-Atlantic Trade and Investment Partnership: European Disintegration, Unemployment and Instability”
Dr Clive Peedell, (NHAP), has forwarded information about the work done recently by Jeronim Capaldo, a research fellow at the Global Development and Environment Institute (GDAE) at Tufts University in Boston, highly ranked by QS and Times Higher Education.
According to proponents such as key mover, Stuart E. Eizenstat, the Trans-Atlantic Trade and Investment Partnership will stimulate growth in Europe and in the US. Eizenstat enthuses at length in AT&T’s international public policy blog.
Some projections endorsed by the European Commission point to positive, though negligible, gains in terms of GDP and personal incomes. Others make greater claims, asserting that the deal will add over £100 billion to the UK and European economies every year.
Recent literature has pointed out several problems in the most influential assessment of the TTIP’s effects. Projections by different institutions have been shown to rely on the same Computable General Equilibrium model that has proved to be inadequate as a tool for trade policy analysis, ‘lacking microfoundations and the dual instability problem’.
Jeronim Capaldo’s Working Paper 14-03 assesses the effects of TTIP using the United Nations Global Policy Model, which is said to incorporate more valid assumptions on global trade, macroeconomic adjustment and employment dynamics.
The UN site explains: “The model allows users to . . .trace macro-economic outcomes over short, medium and long-term timescales. It is a model of the world economy design to simulate the macroeconomic impacts on countries and regions of exogenous shocks to the global economy, the potential effects of ‘sea changes’ in market confidence (such as reversals in financial market confidence following asset price bubbles), changes in international regulation of trade and finance and the international spill-over effects of major policy changes in major economies”.
Capaldo and his team project that TTIP will lead to a contraction of GDP, personal incomes, employment, an increase in financial instability and a continuing downward trend in the labor share of GDP: “Evaluated with the United Nations model, TTIP appears to favor economic dis-integration, rather than integration, in Europe. At a minimum, this shows that official studies do not offer a solid basis for an informed decision on TTIP”.
A link to his paper is given above and the Executive Summary may be read in alarming detail here.
Dr Clive Peedell’s party has already argued that TTIP poses multiple threats to the UK, opening up the NHS to further and permanent privatisation, removing key social and environmental protections from transnational corporations and allowing corporations to sue the UK under the Investor-State Dispute Settlement (ISDS) clause. He adds:
“But this latest research blows a further hole in the economic argument of those who claim the deal will add over £100 billion to the UK and European economies every year. If the entire economic basis of TTIP is also now in question, there seems little reason for the deal to go ahead.”
Jeronim Capaldo (email: email@example.com)
Tags: Computable General Equilibrium model, Dr Clive Peedell, European Commission, GDP, Global Development and Environment Institute, Investor-state dispute settlement, Jeronim Capaldo, NHAP, NHS, Stuart E. Eizenstat, Tufts University, United Nations, United Nations Global Policy Model
A few days ago an alert received from George Monbiot pointed out that the proposed Transatlantic Trade and Investment Partnership (TTIP) would greatly extend their power in the European Union by including the investor-state dispute settlement system in trade treaties.
This would allow big business to sue governments: a panel of corporate lawyers could overrule the will of parliament and remove legal protections from the individual.
He points out that investor-state dispute settlements are already being used in favour of corporates in many parts of the world, for example:
- The Australian government, which decided cigarettes should be sold in plain packets marked with health warnings, is being sued for the loss of the tobacco company’s intellectual property.
- Argentina imposed a freeze on people’s energy and water bills. It was successfully sued by the international utility companies whose bills had prompted the government to act.
- In El Salvador, local communities persuaded the government to refuse permission for a vast gold mine which threatened to contaminate their water supplies. The Canadian company which sought to dig the mine is now suing El Salvador for $315m – for the loss of anticipated future profits.
- In Canada, the courts revoked two patents owned by the US drugs firm Eli Lilly, because the company had not produced enough evidence that they had the beneficial effects claimed. Eli Lilly is now suing the Canadian government for $500m and demanding that Canada’s patent laws are changed.
Monbiot thinks that the US and the European Commission have been captured by the corporations they are supposed to regulate, and are pressing for investor-state dispute resolution to be included in the agreement because our courts are generally not biased or lacking independence:
“The EC seeks to replace open, accountable, sovereign courts with a closed, corrupt system riddled with conflicts of interest and arbitrary powers”.
Political corporate alliances are also vigorously seeking to extend power in the Pacific region via the Trans-Pacific Partnership (TPP)