In 2014 the Transatlantic Trade and Investment Partnership (T-TIP) along with its poster child, the Chlorinated Chicken, escaped the Brussels and Washington bubble. T-TIP went out into the wild of public debate. Generally this is well appreciated as the T-TIP received criticism of lack of democratic scrutiny and transparency of negotiations. Campaigning organisations of the political left and non-governmental organisations make a whole lot of noise, aim to stop the entire agreement. On the upside the greater public awareness on both sides also opens the policy space to get T-TIP right. I will outline a few proposals to this end.
Often overlooked the T-TIP is a new bottle for the wine of existing transatlantic trade disputes between the United States and the European Union. Nothing in the negotiated agreement is new on the agenda and nothing would go away if the T-TIP failed. T-TIP reaches beyond trade. It is not a free trade agreement but a settlement of existing trade disputes. T-TIP is driven by the agenda of exporting industries on both sides. With marginal tariffs on transatlantic trade the envisaged agreement streches in the regulatory domain.
Here we face an interesting struggle: The European Union sets umbrella rules for its diverse member states and its single market. Twenty-eight sovereign states with different legal and political systems set together joint rules in Brussels. Many other nations around the world adapt their rules to what was agreed by them. The reason for it is the diversity of the participating nations and the strong historical ties of large parts of the world with the European Union member states. Switzerland and Norway may not be full members of the EU but are the most prominent examples among many others.
With T-TIP an important single trading partner with a large but minor single market (= the USA) asks these EU member states to change their common rules and agree on a single transatlantic standard in certain fields, ideally on its own terms. Still European policy makers hardly realise that 2014 is not 1994 and underestimate the Brussels gravity center of regulatory convergence, and the quality and maturity of Brussels rule-setting. Europe may not have a single phone number but its regulatory compromises inspire the world because they take so many interests and traditions into account. Even more, the European rules for the single market are not only driven by exporting industries but all civic formations, traditions and political ideologies.
How to get T-TIP right?
- Member states are capable to solve the transparency issues of the European Commission in the trade domain. At the European Council of Ministers a legislative dossier is pending with a Parliament position from first reading. The pending regulation modernises the existing access to document rules (EC/1049/2001) and adapts them to the Lisbon Treaty regime. The Parliament rapporteur overstreched the competences of the European Parliament and the first reading position of the European Parliament reflects that. The 1st reading result also failed to address the transparency gap in regulatory trade matters but this can be resolved by member states in the Council. Everytime you get denied a TTIP related document from the European Commission it refuses it on grounds of the 1049 exemption of trade. Member states can solve the issue while the European Commission has to apply the current law.
- Open European institutions to transatlantic participation, for instance in the trademark field. The Alicante system of community trade mark protection works astonishing well. Once you try to extent your community trademark protection to the United States market you jump into a bureaucratic nightmare. You have to take the expensive UN WIPO trademark cooperation road with high fees for forwarding of letter from Alicante to Geneve to the US patent and trade mark office (USPTO). If you run into legal disparities you are forced to hire US accredited lawyers to sort things out with the USPTO. The Alicante system offers a best practice for a Transatlantic trademark, with the US as a destinated country. Market players on both sides would benefit from a one stop shop Transatlantic Trademark.
- Modernise US food desinfection standards. The United States should refrain to insist on its inherited rules for food sanitation. While no “scientific criteria” may justify to ban chlorinated poultry consumers on both sides of the Atlantic do not deserve disgusting food. Higher consumer standards must prevail, not the inherited practices of agro criminals. Politicians cannot sell chlorinated chicken policies to their constituency in a shopping mall, so why defend yesterday’s practices in international trade fora and endanger T-TIP conclusion.
- In more general terms surrender the transatlantic defense of worse practice policies. Address US regulatory gaps in the area of privacy protection, GMO food and chemicals. Europeans would also appreciate a termination of anti-Free Trade policies as Buy America and industrial espionage. A renewed transatlantic respect for trade secrets and privacy raises the bar towards BRIC trading partners. Overdue unilateral action on the US side would help to simplify the negotiations without a need for the liquid concrete of international agreements, and calm their Snowden scandal mischiefs in the lights of European reasonable expectations. The Commission should review disparities of the acquis communautaire with the United States and present proposals to the EU legislator where the US system provides for more advanced standards. A dedicated review process on both sides can be imagined without a binding agreement of international law between the trading blocks.
- Keep debates in the fora where they belong but give high level attention. Grace period for patents, members under the Munich Convention/European Patent Organisation system of patent protection can resolve that disparity and find a middle ground. Nothing for the EU level though but trilateral high level talks between patent specialists. Common transatlantic ground on Geographical Indications should also be possible in external fora without overstreching the T-TIP instrumental scope.
- Broader civic participation and scrutiny: Discuss proposals with lawmakers on both sides and engage them in transatlantic debates on the open issues. Trade policy should not be restricted to exporting industries stakeholders. All concerned and affected players should be granted the opportunity to participate and submit their proposals. Existing discrimination of non-traditional stakeholders should be resolved by capacity building. Broad consultations are a fruitful tool as the Commission demonstrated with its ISDS consultation
- Make the agreement text match the public propaganda layer. Table proposals that strengthen common sense, i.e. minimum standards for the transatlantic order policy framework. In general industries want carrot without stick, regardless the overall economical impact. Thus we need political leadership and Kantian rationality to trump partisan stakeholder dynamics. During the last years Europe suffered from the fallout of regulatory weakness in the United States, in banking regulation it became the bad bank of the United States housing bubble. In competition law the EU competition watchdog had to compensate for weakened US antitrust policies. European insurers suffered from the investment gaps of the US in levees. With respect to new trading partners certain essential labour standards may be recommended to avoid a “flagging out” of the transatlantic work force and an overall race to the bottom. One may explore measures against a beggar-thy-neighbour strategy for taxation, most prominently the Irish tax haven for US ICT corporations ought to be closed and new agreements concluded.
- Drop the role for Investor Protection panels (ISDS), both sides ought to trust their advanced legal systems to provide for proper legal redress in abuse cases. Trade abitrators without qualification for a judicial office cannot address the complexities and challenges of regulatory affairs. There is no need to undermine the competences of the sovereign democratic legislators. Neither the EU nor the US qualify as the banana states for which the ISDS tools were made for.
- Present the European Economical and Social Committee (EESC) with a more prominent role in T-TIP negotiations and trade debates. On the European side we witness a constant decline of EESC powers and impact. Still Europeans deserve value for money from an European institution, where its existence is enshrined in the earliest treaties. A stronger EESC role in trade can provide that other impacted business and social partners get their representation, not only exporting industries.