The decision to leave the European Union has definitively rescued the United Kingdom from being part of TTIP – the trade deal between the EU and the US maligned by critics as ‘the end of democracy’. But as we reported last month, the deal already had little chance of being signed anyway, and its most controversial elements may even still see the light of day via a similar but separate deal.
The Transatlantic Trade and Investment Partnership (designed to increase business by reducing regulation) requires all existing EU member states to support it before coming into effect. The likelihood of this has been hindered by ‘irreconcilable differences’, most notably over corporations being allowed to sue governments if their policies damage profits.
Negotiations have been plunged into further disarray now that Britain, which represents 16% of the EU market, plans to sever ties with the European Union.
Now the goalposts have been moved, campaigners say the proverbial Pandora’s Box has been opened, with the likelihood of a UK-US bilateral trade deal similar to (or even worse than) TTIP looming.
TTIP on steroids
Nick Dearden, director of campaign group Global Justice Now, warns of a potential deal he described rather colourfully as “TTIP on steroids”:
“Alongside US lobbyists, the British government has done everything possible to push the most extreme and toxic version of TTIP, so there’s every reason to suspect that the UK will look to develop a bilateral deal with the USA that could end up being even more disastrous for labour protections, consumer standards and public services than TTIP was going to be.”
Brighton Pavilion MP Caroline Lucas, an ardent voice against TTIP, warned last year:
“Our own government are the loudest cheerleaders for TTIP, and ministers would happily create an equally dangerous bilateral deal with the US if we left the EU.
Indeed you only have to look at our proposed trade deal with Ethiopia, or our recent deal with Colombia, to see that the UK government is more than happy to sign up to bilaterals that do just as much damage as TTIP.”
So it may be that EU membership was, for some, a moderating influence on the nature of our international trade deals. Others will feel we’re freer to make deals on our own terms. Of course, it will be a long time before any deals of this nature can be finalised, due to the conditions of Brexit still being up in the air. However, in the meantime, another deal from across the pond is causing unrest amongst campaigners. Yes, get ready for yet another boring/scary looking acronym.
A deal between the EU and Canada named CETA (the Comprehensive Economic and Trade Agreement) ticks many of the boxes that angered campaigners about TTIP. This includes giving Canadian corporations (and US subsidiaries in Canada) the power to sue European governments when their laws are deemed a ‘barrier to trade’, albeit under a slightly more transparent system.
Unlike its big brother TTIP, CETA has already progressed to the extent that it could pass into law before Britain officially exits the EU (two years after Article 50 is eventually signed). According to advice from the legal expert Sam Fowles, the deal would even remain in force for 20 years after Brexit.
Once CETA has been translated into all the official languages of the EU, it will be voted on by the EU Council of Ministers (representing the governments of all the member states) and the European Parliament.
There is also a possibility, if the deal is considered not just a matter for European Institutions, that it would also be presented to the national parliaments of all EU member states for each of them to agree to separately.
Small business benefits and concerns
The FSB listed the abolishment of tariffs and the speeding up of customs processes as potential benefits for small businesses, while some exporting firms are hoping that deals can be struck to simplify their access to non-EU markets.
On the other hand, there are small businesses owners who are concerned that having to compete with companies from across the Atlantic with far lower production and labour costs could put them out of business.
This is without even factoring in the prospect of corporate courts (aka ‘regulatory cooperation’), which would realistically only benefit larger companies able to sufficient legal representation. The Veblen Institute for Economic Reforms claimed that this would “possibly give rise to a two-speed democracy, with on one side the least protected players, including SMEs, and citizens struggling to make themselves heard by political authorities, and on the other side, powerful interests with the ability to influence the rules to their advantage”.
It’s difficult to predict how and when such negotiations will now proceed – but we will be keeping you updated as the news happens.
What do you think – are critics overreacting, or are they right to be concerned? Or perhaps a little bit of both? Let us know in the comments below.