TTIP

I don't know how big of a story this is in the US, but the Transatlantic Trade and Investment Partnership (TTIP) is a very big story on this side of the pond, especially in the last week. I'm sure almost everybody here knows what TTIP is, but if you don't, it's basically a free trade agreement between the US and the European Union and is generally considered to be a companion to the Transpacific Partnership (TPP). And like the TPP, Obama is pitching it big time. He was in the UK pushing it (and also threatening the Brits that if they vote to leave the EU this summer, it could take ten years for them to negotiate a trade deal comparable with TTIP with the US), and he has also been pitching it at a trade fair in Hanover, Germany. Link.

What I find remarkable about the TTIP debate is that it sounds almost exactly like the NAFTA debate back in '90s but in reverse. Europeans (especially in more advanced countries like Germany and France) are talking about the US the way Americans talked about Mexico. They're worried about cheap, low quality, and dangerous products that meet US but not EU regulatory standards flooding the European market. They're especially worried about food, particularly if US companies are allowed to sell imitation products by the same name. (For example, if Hershey wanted to sell chocolate in Europe, nobody here would want it called "chocolate.") They're worried about having to compete with American businesses who operate under much laxer environmental, labor, and safety regulations. They're worried about European manufacturers relocating to the US where such burdens are lighter and cheaper and then exporting their products back to Europe. They're also worried about the US screwing them on government contracting - not letting European firms fairly compete for federal contracts. (By the way, I completely agree with the Europeans on this. At least as a general rule, we should let foreign businesses compete for federal contracts. Why should taxpayers get hosed by corporate welfare deals with US companies?)

Frankly, as an American, I don't see much downside to TTIP. I'm sure it has a mess of sleazy deals in it for well-connected businesses on both sides of the Atlantic, but generally, it would likely open up a massive, fairly wealthy new market for our businesses, which would likely create American jobs. However, I see very little upside for a country like Germany. Right now they have a sweet deal. Manufacturing is still a huge business in Germany, and they can basically export their products all over the EU and make huge money doing so, while mostly selling them in their own currency (the Euro). Furthermore, they have no real competitor. Why would they want that market opened up for one of the few countries in the world that can compete with them, especially when that country can basically curb-stomp them on costs? Hell, the difference on energy costs alone would be astronomical. (I do see an upside for big German businesses, which could do what big American businesses did with NAFTA - flee to the cheaper country and then export to the wealthier country.)

From what I can tell, advanced countries that export heavily to the EU (Germany, Austria, and to a lesser degree, France) are very skeptical and probably lean hostile to it (except of course their big business interests who have a seat at the table in writing these sleazy deals). The UK is more supportive but fairly tepid. Poorer countries like Greece, Portugal, and Spain seem fairly supportive, and countries that are less wealthy but not broke-*** poor seem to be the most supportive. I sense that they like the idea of not being held hostage to relatively expensive German products and having the choice of buying our cheaper stuff.

Anyway, I don't have some big point to make here, but it's very weird that almost 25 years post-NAFTA, the US is now viewed more like Mexico than a more advanced version of what it was pre-NAFTA - a place that advanced countries view as being in a race to the bottom when it comes to labor and safety and whose products many of them view as low quality and dangerous.

 

Are US manufacturing regulations really that more lax than Europe? I'm not educated in this area. Cheap labor in the US? Where? Aside from widescale use of illegal immigrants in manufacturing in US-Mexico border states and in the ag industry, I'd like to know where Europe thinks this low wage labor exists. Afterall, our unemployment rates are lower than virtually every EU country.

I get the GMO concern and the power of big business over food labeling in the US. Still, has food safety been any more lax in the US than Europe?

In the end, the noise could be the EU power players trying to keep out competition.

 

This is just one industry, but I read years ago that the European pharmaceutical standards were far below what the FDA requires. I know I have read articles about side effects from the use of prescription drugs in Europe that were not approved by the FDA. I second Seattle in questioning whether US standards really are that much more lax than European standards.

^ this would be my guess.

As far as free trade goes, I think it's good policy between us and Canada. I think it is bad policy with pretty much any other country. I used to support it, but I am afraid I have to pull a Hillary and oppose it now as I do not think it has worked out very well for the American people.

 

Um what manufacturing in US border states? Down at the border there is very little manufacturing on the US side of the border, it is almost exclusively on the Mexican side of the border so your assertion of wide scale illegal immigrants in US Manufacturing plants is highly inaccurate. Illegal immigration is not a huge issue with large manufacturing......it is an issue with Agricultural and SMB type businesses. Then of course the illegal immigrants that are playing the benefits game.

Issue number two, EU Unemployment rates are lower because they are calculated differently...it is not an apples to apples comparison.

 

My father works for a Top 5 cabinet manufacturer with a large plant in the DFW area. It's an anecdotal reference but illegal migrant use is rampant there. Somehow they get a 1-day advance notification of INS/ICE inspections. Needless to say, 2/3rds of the plant doesn't show up for work that day, not to be heard from again until 6 months goes by and they show up using a different name SSN/Green card. There is a symbiotic relationship between INS/ICE and big business that is too cozy, for sure. My father had 1 of the workers replace all the doors in his house. We laughed because the guy has used 5 different names over the 8 years he's worked for the company off/on.

 

Anything that is negotiated in secret should put up a red flag. Obamacare anyone? Hello!

Most likely the deal is structured to favor US industry, but that doesn't necessarily translate to higher pay or opportunities for US citizens in general.

The biggest concern not being discussed is the potential subordination of a country's sovereignty to a panel of arbitrators. This is a big deal, that doesn't get discussed on your TV set.

 

Husker
I thought you supported punishing businesses that employ illegals.

 

I absolutely support greater enforcement against businesses. That is infinitely more successful than building a wall, IMHO. If you were to rank all the reasons illegal immigrants come to the US, jobs (read $$$) would be the runaway winner. Cutoff the demand for cheap labor and the supply would dry up overnight.

Now, if you're asking why I don't rat out my father's employer my response would be "are you serious?" He's middle management, near retirement. Clearly this employer has a handshake agreement with ICE and has for years (hint: Not just an Obama admin phenomena). I suspect this is SOP for the manufacturing sector.

 

It depends on the business. I'm no expert on this either, but I've read that regulations on things like product safety, energy efficiency, and other environmental impact issues are more stringent here. From my limited experience of buying products in Germany, this certainly seems to be the case, especially when it comes to energy efficiency. Obviously, you know about the light bulb rules, because I think that's happening in the US, but it goes much further than light bulbs here. The EU has similar rules for a myriad of consumer items. For example, I heard that they're considering banning the 4-piece toasters here because of energy usage. They do goofy **** like that all the time.

It depends on the comparison. If you're comparing a place like Düsseldorf, Germany with a big Northeastern city in the US or even Seattle, I'm sure the labor costs aren't radically different. However, if a German factory relocates to the US, it's not going to Newark, New Jersey or the West Coast. It's going to a place like Texas where the differences are much bigger. The cost of living is dramatically lower, which means the workers don't have to be paid as much. They don't have to screw around with unions. The taxes are lower. The employment laws are MUCH more favorable to the employer (and more hostile to the employee). Hell, Texas doesn't even require employers to provide workers compensation insurance for their employees. Germans can't even imagine something like that. And those are massive differences even if the company is hiring a bunch of white guys with real Social Security numbers. Hire a bunch of Mexican dudes that you can threaten to have deported anytime you want, and things get even more lopsided.

As someone else pointed out, drug regulations are tighter and slower in the US, but food safety is generally tighter here. In addition, they regulate more than just safety. They regulate quality and food content. You can't just sell any piece of crap just because the market might allow it, and you can't sell a knock-off item that's poor quality and pretend it's the same thing as the what it's imitating. If Hershey's tried to sell its candy in Europe and called it "chocolate," German and Belgian chocolate makers would throw a fit. American candymakers do sell in Europe, but the product is different. A Snickers in Munich doesn't taste like a Snickers in Oklahoma.

Undoubtedly some of them are, but most of the opposition is coming from the public and small to medium sized businesses.

 

Link.

Multinational energy company Chevron lobbied the European Union to include a provision in a potential trade deal with the US that would allow companies to challenge laws in foreign nations if they affect a corporation’s profits, a new report stated.
According to the Guardian, which obtained details of the two-year-old meeting between EU officials and Chevron, the California-based company wanted to see the controversial legal provision added to the Transatlantic Trade and Investment Partnership (TTIP) between the US and EU, arguing that it would serve as a “deterrent” against strict regulations or rulings.

Specifically, Chevron wanted to ensure the inclusion of investor-state dispute settlement (ISDS) courts in the pact, which allows companies to challenge laws or regulations in another nation if they negatively impact a business’ operations.

These courts have been vehemently opposed by environmentalists and other activists, who argue that they threaten state sovereignty and discourage nations from implementing regulations because they may face multi-billion-dollar lawsuits. Both France and Germany have stated they don’t want to include ISDS courts in the TTIP.

“ISDS has only been used once by Chevron, in its litigation against Ecuador,” the minutes of an April 2014 meeting between Chevron and EU officials reads, according to the Guardian. “Yet, Chevron argues that the mere existence of ISDS is important as it acts as a deterrent.”

The case in Ecuador revolves around a decision ordering Chevron to pay $9.5 billion to native people in the country over the company’s alleged dumping of 18 billion gallons of toxic oil waste into the Amazon. The native people and environmentalists say there have been spikes in cancer as a result, in addition to ecological problems and oil pollution.

Chevron is challenging the ruling in ISDS courts at The Hague, however. In March 2014, a US judge ruled the decision against Chevron was obtained by a legal team that used bribery, fraud and extortion to influence the case, and blocked American courts from being used to collect on the settlement.

In its meeting with EU officials, Chevron seems to have argued that the case in Ecuador is actually a positive reflection on ISDS courts.

“Chevron’s case is often used as an example not to have ISDS,” the minutes read. “This is a misperception since the case clearly proves the exact opposite. The company is raising awareness on this issue in Brussels and has handed over a more detailed analysis of the case.”

Not everyone agrees, though. One researcher told the Guardian that governments could become reluctant to see through regulations they feel are necessary if there are multi-billion-dollar lawsuits hanging over their heads.


“This document [the minutes] shows that the power to use investment arbitration as a shackle on environmental regulations is a key reason why multinationals like Chevron defend them,” said Transnational Institute researcher Cecilia Olivet, also a member of the presidential commission auditing Ecuador’s bilateral investment treaties.

In one case, cigarette maker Philip Morris sued Australia over regulations mandating plain packaging, with many saying the ruling there influenced New Zealand’s decision to hold off on its own plans to regulate labels.

On Monday, Global Justice Now reported that the British government found there are “a lot of risks and no benefit” to the EU-US investment chapter of the TTIP, which would involve use of the ISDS.

According to the report, the authors stated, “we would expect an EU-US investment chapter to be regularly invoked by US investors against the UK for governmental actions that would normally not be challengeable under UK law.”

Another provision reportedly leaked by the Corporate Europe Observatory suggested the TTIP would empower the European Commission to negotiate cooperation with the US, while domestic governments and the European Parliament would become less powerful.

In March, Director of Global Justice Now Nick Dearden criticized the leak.

“It absolutely confirms our fears about TTIP – it’s all about giving big business more power over a very wide range of laws and regulations,” he said to RT. “In fact, business lobbies are on record as saying they want to co-write laws with governments – this gets them a step closer."

A spokesman for the European Commission denied that the leak was accurate, however.

“These accusations are unfounded and are not reflected in the EU proposal for simplifying rules for EU exporters," the spokesman told RT.

 

Mus,

I didn't mention the arbitration issue, because most of the public even over here isn't sharp enough to get it. However, it is an extremely big deal.

 

Obama is certainly making a big push to get this through. The last time he pushed for something this hard...well, after it was passed we found out what it was.

 

http://www.globalresearch.ca/tpp-tt...ecret-trade-deals-vs-trump-and-bernie/5522947

Some more food for thought.

 

You may not know, but the TTIP documents were leaked in full recently. Not surprisingly, I've seen virtually no investigative, substantive analyses presented by the mainstream news agencies other than the Independent in Britain. Below are links discussing what the implications, especially for Europe, would be if this deal were to be passed.

http://www.paulcraigroberts.org/2016/05/03/ttip-american-economic-imperialism-paul-craig-roberts/

http://www.independent.co.uk/voices/ttip-leaks-shocking-what-are-they-eu-us-deal-a7010121.html

http://www.independent.co.uk/news/b...s-to-stop-it-says-leading-union-a7006471.html