Transatlantic Trade and Investment Partnership – TTIP

„Manchmal kommt mir in den Sinn nach Amerika zu segeln, nach dem großen Freiheitsstall, der bewohnt von Gleichheitsflegeln“ – Heinrich Heine

Introduction  – Quick Facts about TTIP

  • TTIP is a trade and investment agreement under negotiation between the EU and the US.
  • TTIP is designed to drive growth and create jobs.
  • Independent research shows that TTIP could boost:
    • the EU’s economy by €120 billion;
    • the US economy by €90 billion;
    • the rest of the world by €100 billion
  • Talks started in July 2013.

TTIP aims at removing trade barriers such as

  • tariffs
  • unnecessary regulations
  • restrictions on investment
  • in a wide range of economic sectors so as to make it easier to invest and buy and sell goods and services between the EU and the US.

European Economists for an Alternative Economic Policy in Europe
– Euromemorandum 2014 by EuroMemoGroup

The deepening divisions in Europe and the need for a radical alternative to EU policies

Are there alternatives to the current industrial policy?

  • Industrial policy played a marginal role since end of Fordism.
  • The current EU industrial policy aims of short-term market performance.
  • An alternative should link the objective of long-term industrial performance with concerns for a socio-ecological transformation.

European Commission’s policy flagship initiative – ‘A Stronger European Industry for Growth and Economic Recovery’ – October 2012

  • Investment in innovation
    • advances manufacturing technologies for clean production
    • key enabling technologies
    • bio-based products
    • sustainable industrial and construction policy and raw materials
    • clean vehicles and vessels
    • smart grids
  • Better market conditions
    • Internal market
    • International markets
  • Access to finance and capital
    • European Investment Bank
    • by unlocking private funds
  • The development of human capital and skills
    • job creation
    • promote industry’s competitiveness

Two fundamental weaknesses of the current Industrial policy –The EuroMemo Group criticizes

  • wrong basic approach
  • market mechanisms remain dominant
  • major industry players are not challenged
  • no political long-term orientation
  • Inability to shape change in Europe’s industries
  • lack of adequate resources
  • lack of adequate governance mechanism
  • industry lobbies influence outcomes

An alternative industrial policy in six dimension

  • A Europe-wide public investment plan
  • A reversal of the major loss of industrial capacity
  • An urgent drive to developed new environmentally sustainable, knowledge intensive, high skill and high wage economic activities
  • A reversal of the massive privatisations of recent decades and substantial public-sector support for new activities
  • The setting of a new trend towards a different kind of ’security‘
  • The creation of a major new policy tool for an ecological transformation

EuroMemo‘s  alternative industrial policy tools

  • EuroMemo‘s alternative industrial policy tools
  • Renewal and integration of existing EU institutions in short-run
  • Establishing of a new dedicated national and supra-national institution in long-run
    • European Public Investment Bank
    • European Industrial Agency
  • Permanent reshaping of economic activities
  • Funds from Europe-wide resources
    • European Public Agency obtains receipts of a once-for-all wealth tax and of the newly introduced Financial Transactions Tax
    • European fiscal reform

EuroMemo Group questions several topics regarding TTIP

  • Regulatory standards in many highly sensitive public policy areas are very different between the trading parties
  • Regulatory philosophies in some areas are diametrically opposed to each other
  • Major differences between the EU and the US approach to data privacy and the exchange of private data
  • TTIP does not impair the democratic debate over these issues in the future
  • Investor-to-state dispute settlement (ISDS) will impose upon democratic decision-making in the public interest
  • More rights and protection to the financial industry

EuroMemo Group criticizes EU’s assessment of the impact of the TTIP

  • Two European Commission studies (ECORYS 2009 and CEPR 2013) on TTIP are
    • not reliable nor accurate
    • biased and too optimistic
  • because the equilibrium model
    • is imperfect.
    • clashes with empirical data.
    • assumes that there is no long-term unemployment.
    • bases on assumption of perfect competition.

An alternative approach to TTIP is needed

  • European Parliament and civil society must be fully informed
  • Relevant documents must be published
  • Individual studies should look at the likely consequences for
    • labour rights and conditions
    • the environment
    • the institutional set-up being proposed for future regulation, transparency, and democratic control

The public interest must be safeguarded!

  • No lowering of standards with regard to public health, public safety, the rights of workers and consumers, as well as the protection of the environment.
  • No de-facto transfers of regulatory competences from democratic institutions to unelected technocratic bodies.
  • No investor-to-state dispute settlement. The Commission’s proposal to insert a safeguard clause against ‚frivolous claims‘ by investors is insufficient in this respect.
  • No liberalisation and/or regulatory standstill with regard to financial services as well as public services, in particular in sectors such as health, social services, culture and water
  • No reductions in policy autonomy in crucial areas such as using public procurement for purposes of local development, or other public policy goals.

Karel De Gucht Düsseldorf  – Düsseldorf Speech 2014-01-22

Four Aspects of negotiations of TTIP

  • Regulatory barriers on trade
  • Investment Rules – ISDS
  • Involving people in TTIP negotiations
  • Benefits for EU

Regulatory barriers on trade – Why is it relevant?

Karel deGucht on TTIP

The European Union will not

  • lower standards of protection for citizens regarding food or the environment
  • abandon our policy on genetically modified food or on beef hormones
  • give the banks a free hand to speculate with people’s savings

The European Union will

  • talking about the present and future barriers between EU and US
  • find solutions that are in the interest of both sides
  • not compromise our values or lower the level of protection
  • reduce unnecessary costs

Investment Rules – ISDS

Investor-to-state dispute settlement allows companies to take direct claims against governments on investment matters to international arbitration panels.

Does ISDS corrupt democracy?

  • Investment protection rules are needed for global trade
  • ISDS objective is to reinforce the legitimacy and transparency of investment protection rules
  • Issues in practice and intense public interest raised qustions about ISDS.
  • Three month period of reflection for consultations about ISDS.
  • ISDS is paused.

Involving people in TTIP negotiations

Three ways to gain guidance and input from stakeholders

  • Involving European Union’s institutions – the European Parliament and the Council
  • Other institutions advise us on how to proceed and on the scope of the negotiations
  • People’s representatives (EU-Parliament) have to approve any trade agreement.
  • Nevertheless negotiations need confidentiality.
  • “If we want a good result, some level of confidentiality is required.”

Benefits for EU – Why TTIP?

  • Strengthen the European economy.
  • TTIP simulation shows “an output gain of about a half a per cent of GDP once all the effects of the agreement are felt”.
  • This means about 545 euro to the annual income of each European household.


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