The US–EU Transatlantic Trade and Investment Partnership (TTIP) was agreed on at the G8 summit in Northern Ireland in June. It would be the world’s largest trade agreement, and Obama has declared it a priority for his administration, intended to be signed by the end of 2013. Over 98 percent of EU tariffs would be eliminated. The first round of the trade negotiations has now happened, and a further round will yet take place, but the earlier rounds were delayed by the US shutdown and the NSA spy scandal revealed by Edward Snowden.
NSA whistleblower Edward Snowden leaked information showing the extent of US espionage on allies abroad. EU diplomats weren’t satisfied with the answers they received in Washington regarding the spying on EU leaders by the US. France and other EU members said there could be no trade negotiation unless the US guaranteed it would halt spying operations on EU allies. Germany threatened to be particularly tough after the revelations of US NSA special surveillance on 80 European leaders and embassies as well as Chancellor Angela Merkel’s mobile phone, and implied it would want data protection guarantees as a condition for signing the treaty. US Secretary of State John Kerry amazingly said he thought the trade partnership is “separate from any other issues”. Germany with Brazil submitted a draft resolution to the UN General Assembly calling for an end to excessive electronic surveillance, and data collection methods. But the US has given no guarantees it will curb spying on its allies.
Non-tariff barriers such as different standards and definitions increase the cost of business, and, as NASA’s mix up of metric and imperial showed, can be dangerous. A car, crash-tested in the USA, need not be tested again in Europe. But limiting health, safety and environmental regulations to boost trade will leave the ordinary citizens worse off in these respects. Glyn Moody, journalist and author, says the US and EU are “putting the corporation above the nation”. Giant corporations like Monsanto would use the new trade agreement to sue the EU for billions of dollars if they refuse to import their products like GMO.
The agreement is being sold as a huge boost to trade with the potential to boost economic growth by $100 billion per year in reduced tariffs, lifting employment on both sides of the Atlantic, and disposable income. The extended bilateral trade ties (the Pacific one as well) will cover about 50 percent of global economic output, 30 percent of global trade and 20 percent of global foreign investment. UK Prime Minister, David Cameron, said at the G8 summit the TTIP could add US$157 billion to the EU economy, over $125 billion to the US economy, and $133 billion to the rest of the world. The EU says (“Reducing Transatlantic Barriers to Trade and Investment”, March 2013) it means an extra $730 (€545) in disposable income for a family of four in Europe and an extra $875 (€655) per family in the US.
These figures however are largely conjectural. Moody rightly commented that people may not want to have their food less safe or environment polluted for the sake of more money. All that is certain is that transnational corporations will gain immensely in profits and in power to stop governments from regulating against them. Their profits are at the expense of ordinary workers, who will suffer a loss of quality as a result, and the supposed household gains, if they ever emerge, will soon disappear as the huge additional corporate power is used to squeeze wages as well as standards, leaving any gains to be accrued by the rich. Socialist legislation would be impossible, change would require revolution, and the country that took it on would then be treated as a pariah state like Syria is now, and will be forced into conformity. Menacingly, President Obama has called it the “economic NATO”.
In summary, Glyn Moody said that there would be fewer constraints and companies will benefit, but:
The public will pay in terms of regulation reduced protection and that is never calculated in these trade agreements. It’s always about the bottom lines of the big companies.