The disastrous effects of the Transatlantic Treaty (TTIP)

The new free trade agreement between Europe and the United States is causing a stir.

An amalgam of acronyms are appearing to describe the same thing. And it is not without reason. The opacity by which this new free trade agreement between the U.S. and Europe is being free trade agreement between the United States and the European Union is being dealt withThe opacity by which this new free trade agreement between the United States and the European Union is being treated leads to a lack of consensus among media actors. Even so, the acronym TTIP (Transatlantic Trade and Investment Partnership)[1], made available by the supranational institutions, has been generally accepted in the press.

However, the alphabet soup does not end with TTIP. CETA (Comprehensive Economic and Trade Agreement) and the SPA (Strategic Partnership Agreement) are agreements of a commercial and political nature between the countries of the Union and Canada. The latter will serve as a bridge to implement the TTIP. On September 26, 2014, negotiations between the two parties were concluded pending ratification of the treaty by the European Council and Parliament (the competent body) and by the respective parliaments of the EU member states (if their constitutions so require).

But what is TTIP?

It seems to be understood that this treaty involves, in a general way, to organize the largest free trade market in the world, which would bring together more than 800 million consumers and more than half of the world's GDP (54%). (54%) while allowing to dop the European economies by 120 billion euros and the American economies by 95 billion euros (data prepared by the Center for Economic Policy Research)[2]. With this economic outlook, a European citizen would have no doubts about its implementation, but... but why so much secrecy?

The TTIP goes far beyond "simple" free trade agreements, since it pursues three very important objectives that need to be clarified. The first would consist of eliminating the last customs duties (tariff barriers), which are already very low[3]. The second aims to "harmonize" non-tariff barriers (standards) between the countries involved[4]. Finally, it consists of guaranteeing legal mechanisms, called ISDS (Investor-State Dispute Settlement), so that investors do not encounter regulatory or legislative obstacles in the markets they intend to enter and, if they do, can avoid them. In other words, the TTIP (or CETA as well) aims to prioritize the interests of big business over the States, with the obvious loss of sovereignty.with the obvious loss of sovereignty that this would entail[5]+[6].

In fact, the negotiations have been instigated by numerous American[7] and European[8] lobbies, but officially it is the officials of the respective governments who are dealing with it[9]. The negotiations will theoretically be finalized next year, but will be preceded by a long process of ratification in the Council and the European Parliament as well as in those countries whose legislation so requires. This process will not be an easy task in this period of economic, social and political crisis in Europe (especially in the South). From this context plus the uncertainty about the possible consequences of TTIP, we can deduce the impermeability of the institutions[10].

What advantages or disadvantages will TTIP bring?

The advantages or disadvantages for European or American societies are different according to each case, and according to the ideological prism from which one looks at it. According to the report prepared by the banking lobby CEPR for the European Commission (who also states that it is an economic prediction and, obviously, inevitably lacks certainty), the advantages are linked to economic growth (0.5% increase in EU GDP and 0.4% for the US) especially in certain sectors: especially the automotive sector (40% increase in exports), the metallurgical sector (+12%), processed food (+9%), chemicals (+9%)... Regarding employment, the study commissioned for the Commission predicts a transfer of jobs between sectors (relating to 7 jobs out of 1000 in 10 years) and not really the creation of jobs. This is important! Politicians always play the job creation trump card to justify the free trade agreement (or other interests of dubious legitimacy) when they do not really adhere to the data of the official studies of the institutions they represent.

Moreover, the disadvantages materialize on multiple other levels, which are not mentioned in the CEPR study (of too economistic analysis): the treaty risks the social, economic, health, cultural, environmental, political and even geopolitical level.... For example, the eight fundamental rights proposed by the International Labor Organization (ILO) are adopted by the EU member countries. On the other hand, only two of them have been ratified by the United States government. The experience of free trade agreements suggests that the "harmonization" of standards is established on the basis of the lowest common denominator, which would lead to a loss of fundamental rights for European workers, a section specifically mentioned by the CEPR, which affirms the need for deregulation of employment.

Another example we propose, because of its social sensitivity, are the threats to the environment. A free-trade market will increase the traffic of goods as well as energy expenditure and, with it, pollution. On the other hand, the free entry and use of certain polluting technologies such as shale gas extraction (fracking), allowing the use of agro-industrial chemicals (do you like chlorinated chicken and hormone-treated beef? sic.) or opening the doors to GMOs (although in Spain the practice of transgenics is deeply rooted[11])... would be some of these effects to be considered.

To conclude this point, we will mention the most worrying one: the loss of democracy. Politicians and citizens constantly affirm that we live in a democracy. But democracy does not exist or cease to exist, but is more or less depending on the productive structure and the interlocution of the competent actors within the system (where society is the legitimate actor in a democracy). The lack of transparency of the European Union around a TTIP that is in itself undemocratic, denounced by the Court of Justice of the European Union (CURIA), is symptomatic of the loss of democratic quality that the treaties will cause. The economy is overtaking politics and definitively subjecting society to the laws of the market.

The "anarchy" of the (neo) liberal Market

A Europe submissive to the dictates of the large transnationals will lead to a transformation of the productive system, and therefore of the social system, as well as to a regression in the sovereignty of the States (the little that remains to them after signing the transfer of sovereignty in the Lisbon treaties). A liberation of the capacity of action of large companies, which will increase competition (hyper-competition), leads to a scenario where small producers may be severely punished if they are not able to adapt to these new circumstances (adaptation to e-commerce would be essential), causing conflicts at all levels of society.

Monopolies, oligopolies... will have the opportunity to increase their capacity of action against the States.The structural reforms, experienced in an extreme manner in Spain, are the basis for the free movement of workers, who would be deprived of the legal tools to do so (remember the ISDS state-business arbitration mechanisms). Structural reforms, experienced in an extreme manner in Spain, are the basis for the establishment of free movement. The latter, if it materializes, will be a new step towards economic globalization, with the United States starting with a certain advantage. All this thanks to the influence of its Internet giants: Google, Amazon, Facebook, Microsoft, etc... This deregulation of markets will also increase the possibility of crises. First, as a result of productive specialization in a given territorial area, which would tend to intensify against productive diversity, whose resistance to the secular economic crises of capitalism is more effective. Second, the States, as mediators of social forces and employers' forces, would lack the competence to prevent the collapse of the productive system. The loss of democracy in favor of control of the economy is the final price.

Notes:

[1] http://ec.europa.eu/trade/policy/in-focus/ttip/ind...

[2] The CEPR is an organization (lobby) financed by various private banks.

[3] According to the World Trade Organization, tariff barriers in Europe vary according to products, but the average is 5.8%. The products with the highest tariff burden are agricultural products with an average of 13.24 %. On the other hand, customs duties imposed on industrial products are much lower at 4.2 %.

[4] According to a study conducted by the Fondation Res Publica on September 16, 2013, the "harmonization" of standards will be done from the "bottom up". That is to say, the national or supranational norms whose restrictions are less "harmful" to capital flows will be taken.

[5] The fine of almost €9 billion imposed on the French banking group BNP Paribas by the US government for an alleged investment in countries under US embargo (Cuba, Iran and Sudan) augurs that American economic law will prevail over the others. It seems paradoxical that when a transatlantic treaty is in the making, in which the interests of multinationals defended by future international courts will prevail, the American government can impose its law (given its control over the dollar) on European companies.

[6] We feel it is important to point out that the main US interest is imperialist and therefore geopolitical (or geostrategic). The reason is conditioned by the Chinese government's new protectionist stance, especially with regard to the protection of its own high-tech brands for domestic consumption. Likewise, its monetary ambitions aim to rival the dollar little by little (even if this remains distant). In addition, the US wants to rebalance its trade deficit of recent years as well as to ensure its hegemony over the legislation of industrial products. This would induce the need for third countries to adapt to the production rules of the Transatlantic treaty. While European interests, for their part, remain as simple mercantilist issues (without any political ambition to counter American domination), the USA is seeking to maintain its hegemony at all costs, which will entail an attempt to marginalize China and Russia. The process is not easy, since the latter are looking for allies to counter American hegemony. The clearest example is the BRICS meeting in Brazil coinciding with the World Cup, as well as Vladimir Putin's tour in Latin America. It is worth mentioning his agreement to set up a common investment bank between the BRICS and the gas pipeline that will link China and Russia.

[7] Of which, the agri-food industry, the cultural industry or, even more, the new information technology industry would be among the most interested sectors. According to Corporate Europe Observatory,

[8] German industrial groups, especially vehicle manufacturers, are the most interested in this process and see an opportunity to partially relocate their industry to the United States. The latter is modernizing its industrial technology and has more lax legislation in the field of labor.

[9] From July 14 to 18, the sixth round of negotiations between the United States and the European Union took place in Brussels. From October 29 to 3, the seventh round of negotiations will take place in Maryland (USA).

[10] Moreover, the opacity of the negotiations has facilitated the election of the "ultra-liberal" Jean-Claude Junquer to replace José Manuel Durao Barroso at the European Commission. The latter initiated the transatlantic negotiations with the United States in 2013.

[11] http://www.greenpeace.org/espana/es/Trabajamos-en/...