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CORRECTIV follows up on its investigations after first publication. We continue to investigate, we update and we publish individual stories. All of these you can find here.

TTIP

Why we investigate TTIP

There are many rumors about the Free Trade between the EU and the USA. We want to know more because the negotiations have an impact on all of us. This website explains the Free Trade and shows the dealer in an interactive network analysis. But this is just the starting point for us. We will observe the negotiations on the long term, we will investigate and analyze what is important about TTIP.

von Justus von Daniels , Marta Orosz

The free trade agreement TTIP is a hot political issue. In the future, the USA and Europe want to form a zone in which goods and services can be bought and sold freely. In theory that sounds great: more competition will lower prices for consumers. Corruption will become more difficult and industry will have access to new markets when standards are harmonized. That means: more growth, more profits and more jobs.

But there are also significant concerns: will companies be able to undermine laws and impose their own interests against democratic decisions when TTIP establishes arbitration tribunals? Could local authorities be forced to sell their property? Will consumers be sold unsafe products?

Most discussions revolve around the question: are you for or against TTIP? We think thats too simplistic. If TTIP is signed, it will affect us all. For that reason we need to know what the agreement is about. Who is negotiating what? Who influences whom and in what way? Which interests are represented?

We want to monitor what is changing for the worse and for the better. We want to follow the negotiations and examine how various lobby groups are trying to influence them. We want to analyze the news as it comes in and see which issues are controversial and which ones are blown out of proportion. 

For that reason we want to go back to the beginning. We will explain in a comprehensible way what is being negotiated in TTIP, what free trade means and how it developed historically. On this TTIP website by CORRECTIV we collect documents, give updates on the latest developments and investigate everything that concerns the public. 

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At the same time we want to make transparent who is negotiating in our name. We have gathered the resumes of the negotiators from both the USA and Europe as far as it was possible. We want to know the backgrounds of the people determining our future. Who have they worked for? To whom do they have obligations? The task is difficult. The EU but also the US are trying to keep this information secret. Several requests for information and resumes were denied or not answered. Nobody should know who speaks for hundreds of millions of Europeans. We were able to clear up some issues, on others we are still in the dark.

That is why we need your help: if you have any further information about the negotiators, send it to us. We review everything und publicize what we can responsibly release. Send us an email at: ttip@correctiv.org

If this is not secure enough or if you want to send us confidential documents, you can use our anonymous secure mailbox.

Our goal is that everyone should know what is being negotiated in TTIP. That way we can all be satisfied with the result. 

If you want to help us, twitter using #TTIP

TTIP

The tricky schedule

Internal documents reveal: negotiations on the most important free trade agreement between Europe and the USA getting bogged down. TTIP could fail.

von Justus von Daniels

It should all be so easy. The Member States of the EU and the USA have a close relationship; popcorn and chips are popular in both continents and their economies are closely interrelated. So it should be possible to hammer out a trade agreement fairly quickly. But it now seems that the TTIP timetable is breaking down – and that means the deal itself is under pressure.

Internal documents from the German federal government reveal that there are disagreements on just about all of the areas being negotiated. Even the EU Commission is admitting (in internal documents) that a lot more time is needed to broker a good deal.

Federal Chancellor Angela Merkel and President of the EU Commission Jean-Claude Juncker would like the TTIP deal to be wrapped up by the end of this year – so as not to be drawn into the US presidential election race. If this were to happen, negotiations could be wrecked.  Presidential candidates have to protect American interests – so they can’t just promote free trade with Europe.

Everything running smoothly… officially

Almost nothing has been revealed so far about the problems with the negotiations. At the wish of both EU and American leaders the deal is being negotiated behind closed doors. The secretiveness is clearly designed to cover up any problems.

At least that’s the impression when reading the internal TTIP documents CORRECTIV has published on its website.

The most recent round of the secret talks was held in Brussels in February. „There was steady progress“ in all areas stated the Commission in its press release at the end of the five-day talks. The EC also published a nine-page explanatory summary of the major points in the talks. There was no mention here of major progress having been made; the Commission wrote that there had been „constructive“ work in all the working groups. So far, so successful.

But we get a different picture from an internal information event organised by the Commission for representatives of the EU member states. We have a copy of the minutes, which went to the Federal Government.

The document is rather brief, but it is clear that the negotiations are not at all proceeding well – even in areas which had previously been thought to be uncontroversial and fundamental to free trade. The German Ministry of Economics also composed a separate report on the internal information event which was passed to the Parliament and other ministries. This report has been available on the Web since early March. This report also reveals conflicts in the negotiations – even if the wording in the Economics Ministry paper is significantly toned down. The question is – why was the ‘toned down’ paper leaked – and not the internal minutes of the EU event?

Disagreement on tariffs

If one compares the minutes of the EU event with the official press release, one might think they report on two different events.

For example: officially, both sides agree that the tariffs between the EU and US should be abolished to a great extent. Business expects to receive a big boost through being able to sell products more cheaply on both sides of the Atlantic in future. The Commission’s press release states: 

“Parties took stock of discussions held so far on agricultural tariffs. (…) Further engagement is expected in the next round.“

The internal document is rather clearer: 

“There was a large discrepancy between the preliminary tariff offers from the US and the EU. These must now be avoided if at all possible“.

In plain English this means: even after this eighth round of talks there is no prospect of agreement regarding tariffs – even though it should be easy to abolish them.

Investor protection on the back burner

The lack of progress particularly affects core areas. For example, investor protection isn’t even mentioned in the EU minutes. It’s a very contentious issue. Special courts are supposed to be set up to protect transatlantic investors – for example, if the parliament of a European member state passes a new law, US companies should be able to take the state to court if they believe that the new law contravenes the provisions of the trade agreement. Critics fear that the courts could effectively cancel democracy itself in Europe: an anonymous court would be superior to parliaments.

To date there isn’t much clarity about the courts. Both sides have agreed that the courts should consist of three private judges. But it’s not clear if the courts are meant to hold their sessions in secret or in public; nor whether a loser in a case has a right of appeal.

Similar courts are not uncommon in international trade. There have been lots of similar court processes involving other countries Germany has trade agreements with. The Europeans would like to limit the influence of the courts in the context of TTIP – also as a way of countering the critics of the deal. The US would like to increase their influence so as to continue to protect its investments in Europe.

But instead of making things clearer, the last round of TTIP negotiations simply failed to tackle the courts at all. And they won’t be on the agenda for the next round either. This part of the deal is at a standstill.

The EU insists on the right to bid for public procurement contracts In the US

The talks are also stalled on a second major issue: the awarding of public procurement contracts. The EU absolutely wants to have access to public procurement deals in American municipalities – German companies should be able to install sewage pipes in Wyoming. But the US would like to prevent that. Currently there is a law in the US saying that only American companies can bid for public contracts such as road-building, schools or the supply of official vehicles. Liberalization in this area would be very profitable for the EU. European companies are very competitive and would be able to make some good profits in the US market. But an agreement seems still very far away. The Commission press release says that 

‟…discussions …  have allowed a better understanding on each side priorities and sensitivities and showed that there is a need to intensify discussions…“

However, the internal German government paper states: 

“Opening up the American market for public procurement is a politically very sensitive issue in the US due to fears of direct impacts on the labour market“. 

This means that neither the individual US states nor Congress want to open their domestic municipal market to foreign companies. That would be bad for politics. As mentioned, there are elections in the not-too-distant future. The Americans fear that if TTIP is agreed, the very competitive European companies will pose a big threat to their American counterparts. Rather than jobs being saved in Kentucky, workers in Hannover would be getting the benefit.

Will there be a deal on the courts?

A deal could still break the stalemate: the Americans have already indicated that they might be prepared to talk about the courts under new conditions. If the EU was willing to take investor protection back into the negotiations, the Americans would be prepared to negotiate opening up public procurement. The Europeans could get their hands on some lucrative deals in the USA if the American investors were able to get investment protection in Europe. The courts are thus assuming the character of a bid in poker. The Economics Ministry report states:

“In relation to public procurement the US side has linked further concessions to the resumption of talks about investor protection/ISDS“.

US Congress doesn’t want to be told what to do

Another core part of TTIP is just as controversial – the idea of shared council tasked with preparing draft legislation. The plan looks simple. The trade deal should include the setting up, by the administrations, of a council whose job it would be to ensure common standards are agreed on – even before relevant draft legislation on commercial matters was referred to parliaments. I.e. if there is to be a new law, the governments of the EU and the USA should get together and consider how the law should be formulated so that it can apply on both sides of the Atlantic. And this should happen before elected representatives debate the draft laws. It’s not about laws governing how we live together in society or laws designed to keep the public safe – but all those laws that regulate economic life, and which are part of the trade deal.

A similar process has been operating in the EU for decades. All the EU Member States have negotiations on EU directives, which must then be translated into national law. With TTIP, the idea doesn’t go as far as this: the proposals coming from the joint TTIP Council would not be legally binding as in the EU, but would merely be well-intentioned suggestions. Nonetheless, critics fear that via the TTIP Council lobbyists could acquire much greater say than they would ever have in the national parliaments. This could allow environmental and job security standards in Europe to be watered down.

But the fears are not coming only from civil society critics. The TTIP Council is also controversial within the US and EU administrations. The EU is annoyed that the Americans are proposing what they see as an unfair deal. The US wants European laws to be subjected to a vote, whereas only laws proposed by administrations in the US should be included i.e. no laws proposed by the US Congress. The ministry report reveals the extent of the annoyance on the EU side:

“The disparity in relation to the field of application continues to represent a considerable obstacle“.

Quarrel over machines too

There is no agreement over standards either. This refers to technical specifications which have to be met on either continent before products can be sold there. In Germany plugs and lamps have to meet DIN standards – only then can they be sold in supermarkets. In the USA the corresponding standard is ANSI.

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The different standards are supposed to be harmonized in the context of TTIP so that all manufacturers can sell their products in other countries. At the start of negotiations both sides said that they wanted to recognize each other’s standards – as long as they are technically comparable. That ought to be possible with mechanical products – as with fitting windscreen wipers into cars, for example. In its press release the EU states in relation to negotiations about machines that 

‟The EU and the US discussed the proposals for cooperation already presented in previous rounds“.

That begins to sound like a sensible discussion: there’s no agreement, but both sides are negotiating.

But the internal minutes give a different impression. The USA clearly has no interest at all in basically recognizing EU norms in respect of mechanical engineering. According to the minutes, it was difficult „to get the US side to commit itself“.

Why would the USA have no interest in recognizing the standards? Perhaps their concern is to protect their own market from European products. German companies producing machine parts and electronics components in particular could put a lot of pressure on their American competitors. So far, the different standards have helped them to avoid the pressure of competition.

The Americans put up the shutters and the EU Commission acknowledges that „there is a need for further discussions in order to overcome the diverging points of view“.

The EU has to pay high prices

In the area of food safety the negotiations appear to be going well. In its official report, the Commission states that there was 

‟a deep discussion of the US proposal. (…) The EU and the USA are now preparing a consolidated version of the text to be discussed in the next round“.

The internal document also speaks initially of a good negotiating atmosphere. However, the US proposal „differs significantly from that of the EU. (…) Animal protection is not included in the US text. There are diverging views between the EU and the US on its inclusion.“

What this reveals is a conflict on the issue of how animals are protected in agriculture and what kind of ‘manipulations’ of animals should be allowed. The EU representative on this issue is the EU Commissioner Cecilia Malmström. She said she will not negotiate on allowing imports of beef treated with growth hormones or of GMO plants. The US will not be too pleased about that. The Americans want to export their GM food. There seems little prospect of agreement on this any time soon.

Suntan lotion holding up the negotiations

The Commission likes to use the example of suntan lotion to demonstrate advantages of the TTIP deal. As of now, such creams and lotions made in the EU cannot be sold in the US. This is because the US has different test methods for suntan lotions than the EU. The Commission uses this as an example to show how pointless the different testing standards are; the TTIP deal is meant to change that. But there’s no convergence even for suncreams. The official Commission statement is that in relation to cosmetics 

“Both sides agreed that further technical discussions among scientists are necessary in order to approach requirements and methods for safety assessment of cosmetic ingredients“. This also applies to UV filters – and thus to suncreams.

However, the internal memo reveals that this is not about simple discussions between experts – but that there is a lot more that has to be resolved before even suncream can be sold on the other side of the Atlantic.  The report states drily:

“In relation to cosmetics there are large regulatory differences (e.g. suncream).“

Even before the negotiations started it was clear for many areas that it would be difficult to reach agreement. After the eighth round we can see that almost no progress is being made in these areas.

The offer is „a joke“

Among other areas, things are supposed to be made easier for the service sector – for instance telecommunication and private security. In order to promote transatlantic business models the US has put a proposal on the table which it believes is comprehensive. The EU has also put its own list on the table – a list which it sees as far-reaching. But – stupidly – both sides consider the other’s proposal as inadequate. As a result, the atmosphere is rather strained. US circles describe the EU’s offer as „a joke“.

This is how the Commission’s press release presents the matter:

‟a comprehensive review of the respective offers has resulted on a better understanding on how to achieve an ambitious outcome, while respecting our sensitivities.“

The internal document is more precise: „In order to make progress with the negotiations the diverging perceptions would have to be overcome. (…)  The Commission aims to avoid large discrepancies in a new exchange of proposals. This is an enormous challenge“.

Or, as said: what is on the table is „a joke“.

EU wants privileges for banks – US blocks the idea

Among the services that are to be harmonized there is also the financial market. The EU would like to negotiate some financial products and regulations with the US. But the Americans don’t want to be drawn into discussions on this topic. It’s only a few years since the big banking and finance crash – and banking rules are much tighter in the US than in the EU.

The subject of finance isn’t mentioned at all in the official press release. The internal report points out that it is very much in the EU’s interest to talk about financial matters: „But the Commission (…) made it clear that [finances] must be embedded in the TTIP. (…) Financial services would have to remain an integral component of the TTIP negotiations“.

A pity that the Americans don’t want to do that. They reject any common regulation or even liberalization of the financial markets. That’s why the EU negotiators see it as a success that the Americans are at least prepared to talk informally about the issue.

There are more of the same difficulties. The EU would like to import oil and gas from the US without any restrictions. To date that isn’t possible. The Americans want to satisfy their own hunger for energy with their own resources. The official position of the EU is that the negotiators are discussing „the scope of possible TTIP provisions on energy and raw materials.“

Negotiators don’t know what they are talking about

The negotiations about protecting intellectual property also seem to be extremely vague. The official line is that „short“ and „productive“ discussions have taken place. The Ministry report is more precise: „Even after more than one and a half years it remains to a great extent unclear what the content of the IPR Chapter should be“.

This area includes the important question as to whether the free exchange of data and thus data protection itself should be part of the agreement. Even the negotiators themselves don’t know.

There is also progress

Of course it isn’t all about conflict and disagreement. In some areas, TTIP is making good progress. There are few obstacles to agreement on the question of whether vehicle indicator lights can be simply approved both in the US and Europe. In the area of chemicals and pharmaceutical products there is agreement that no major agreements are to be expected and that a few pilot projects on common testing procedures should be launched instead. There are also some general sections in the agreement where one can find formulated proposed texts that are ready to be signed – for example on sustainability or support for small and medium-sized businesses to make it easier for them to enter the market. But even here there are specific conflict areas which seem almost bizarre:

“The US side reaffirmed its refusal to set up a central website such as the EU has. The Commission pointed out that this was an important demand of European SMEs“.

There are massive construction sites in almost every part of TTIP. Naturally, in international negotiations that are as wide-ranging as TTIP, conflicts are normal. The script for such negotiations usually provides for the big obstacles to be cleared out of the way shortly before the negotiations end. The Americans are well-known in trade negotiations for only putting their real offers on the table late in the day and then making the final deals in a couple of late-night sessions. But the internal report of the German federal government shows that there are fundamental conflicts of interest in many areas – not to speak of the detailed provisions, which are especially explosive in trade deals.

Officially, both the EU Commission and the Americans continue spreading optimism. But the Commission has already said in its internal document that significantly more time is needed: „More time pressure leads to less progress“ is what it says in the internal minutes. The eighth round of negotiations, it says, shows that the „TTIP negotiations cannot be concluded in the very near future. We have to have a politically realistic timetable“. If TTIP were to be ready by the end of this year, its two years of negotiations would set a free trade record. The CETA deal with Canada took five years.

Elections trouble the dealers

Pressure is mounting. If the quarreling over TTIP gets into the American election race the negotiations will really dry up. If there is a change of government there will also be a change in the leadership of the US Department of Trade. By the time a new US President decides how to proceed with TTIP there will have been national elections in Germany. Or in France. It will stay tough and slow.

The next two rounds of negotiation will decide whether there will be a quick final deal in which everything that is contentious will be auctioned off at the end. Currently, that’s just about everything. A delay could therefore give the deal a chance for prudence to come before speed. The next round takes place in New York. The dealers now have four days to make some progress.

Translated from German by Paul Carline

Schiedsgerichte TTIP Investorenschutz

TTIP

EU Plan for TTIP Arbitration Tribunals

The EU’s plan to introduce private arbitration tribunals for the free trade agreement TTIP has met harsh criticism. Now the EU Trade Commissioner Cecilia Malmström (Liberals, Sweden) has made a new proposal to calm her critics. It would give the states a greater power of influence over TTIP arbitration tribunals. And it seeks to end the current dispute.

von Justus von Daniels , Marta Orosz

The EU Trade Commissioner Cecilia Malmström has released a concept paper that proposes handling private arbitration proceedings in line with regular court proceedings. Arbitration tribunals are an aspect of the free trade agreement, their function is to protect companies that see their rights threatened. Malmström also proposed to establish an international court to deal with investor protection, which the German Economics Minister Sigmar Gabriel (Social Democrats) demanded several days ago. These proposals seek to reduce the possibility of companies misusing such proceedings for their own ends. Private arbitration tribunals, which are supposed to give companies special protection, are an issue in negotiations for the free trade agreement TTIP between the EU and USA which have been running since 2013. Among other things, they would allow companies to sue for compensation if they lose their investments due to legislative changes or nationalization.

The Commission’s proposal is a reaction to persistent public criticism of arbitration tribunals. Almost 150,000 EU citizens spoke out against the tribunals in an online questionnaire that the EU Commission released last year. The leftist group in the European Parliament also opposes arbitration tribunals. They fear that companies can use the tribunals to undermine laws approved within the EU that go against their interests. That would threaten democracy in Europe.

Arbitration tribunals are well-established

Arbitration tribunals set the framework for arbitration proceedings, which have been a standard aspect of trade agreements between states since 1959. They are supposed to regulate relations between companies and states in the context of foreign direct investment. The idea first arose through a German initiative. Germany had negotiated a trade agreement with Pakistan. The countries agreed that companies could sue for compensation before an international tribunal if they were dispossessed. This measure aimed to create legal security and foster investment. These mechanisms were aimed in particular at countries with badly functioning legal systems, preventing them from seizing foreign companies’ factories on their territory without cause. Since then, over 1300 trade agreements have been approved worldwide that include this type of protection for foreign investors.

Until the 1990s arbitration proceedings were rare. Around 500 lawsuits were launched against states. Germany has only been sued twice, both times by the energy company Vattenfall. The first case ended with a settlement, the second case is ongoing. It concerns the German nuclear energy phase-out that was approved in 2011, which required Vattenfall to shut down two nuclear power plants. In the worst case, Germany will have to pay the company compensation for lost profits – when Vattenfall bought the nuclear plants, it assumed that they could run until the operation license expired. So far, most arbitration tribunal cases have been carried by EU companies against states on other continents.

Companies cannot annul laws or regulations through arbitration proceedings. They can only demand compensation if new regulations lead to a loss of investments. But critics argue that the possibility of compensation demands could prevent states from increasing environmental or health standards if they fear that foreign investors could sue them.
Those who oppose arbitration tribunals say that these proceedings are not necessary in states where the rule of law is well-established. They argue that national courts in the USA and EU offer enough protection because expropriation without cause is illegal. Opponents hope to eliminate these proceedings entirely.

Arbitration tribunals have also come under fire for lack of transparency. The parties in dispute usually name an arbitrator to decide on the claims. Business lawyers often take on this task. Before negotiations for TTIP began, the EU already announced that they would increase transparency in these proceedings. There have been no plans to eliminate private arbitration proceedings.

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In her concept paper, Trade Commissioner Malmström has now proposed to make arbitration similar to court proceedings. The EU Commission plans to publish a fixed list of arbitrators named by the states. Ideally, these arbitrators should be professional judges. The initial plan was that companies and states could freely determine the arbitrators. There are also plans to introduce a system of appeals for arbitration judgements – another novel measure. Furthermore, the free trade agreement TTIP should stipulate that every state has the right to pass laws in the general public interest. No company should be able to launch a claim against these „public good laws“. „Publicly appointed independent judges are a stepping stone towards a permanent public commercial court“, says Viviane Reding, the former EU Justice Commissioner (Conservatives, Luxembourg).

According to critics, the Commission is still on the wrong path. Pia Eberhardt, a researcher at Corporate Europe Observatory (CEO), a non-governmental organization in Brussels, critizises the new proposal. „The fundamental question remains: why would we give extra rights to foreign investors in TTIP, threatening democracy, public budgets and our court system?“ National courts would provide enough protection for foreign investors.

Gabriel wants a public investment court

In February, the German Economics Minister Gabriel and six trade ministers from EU countries proposed a new model. Instead of improving private arbitration tribunals, they sought to establish an international investment court. Last week Gabriel presented a concrete plan. Initially, the investment court would deal with disputes between Europe and the US within the framework of TTIP if companies feel disadvantaged by new laws. Other countries that are not party to TTIP could later join the investment court.

Gabriel has support from the Social Democrats in the European Parliament. According to sources in the parliamentary Trade Committee, the parliament is currently preparing a resolution in which lawmakers reject EU plans for investment protection. Initial votes in various parliamentary committees have not produced majorities for the Commission’s plans.
EU Commissioner Malmström has described Gabriel’s idea of establishing an investment court as „interesting“. Malmström does not see a realistic chance of establishing a public court within the framework of TTIP. Accordingly, the Commission continues to support a private arbitration tribunal that would have new elements. In her position paper, she writes that these proceedings should be moved „closer to an established court“.

With her new proposal, Malmström seeks to achieve a compromise within the EU. She has set the long-term goal of establishing an international investment court. According to the Commission’s paper, the work towards that end „has already begun“. At the same time, she wants to prevent the TTIP negotiations from collapsing over the question of arbitration tribunals. The USA favors the well-tried solution of using private arbitrators. With this proposal, the Commission wants to regain the initiative in the debate on investment protection.

The EU wants to regain the initiative

It is unclear whether Malmström can convince the European Parliament with her initiative and whether lawmakers will support the Commission’s plans in a resolution they plan to pass in July. „So far, it appears the Commission is playing for time. If it made a serious effort now to establish a proper court with the USA, there could be a large majority“, says MEP Joachim Schuster (Social Democrats). Schuster is one of the lawmakers preparing the resolution in the Trade Committee. He remains skeptical as the Commission continues to support private investment protection outside of national legal processes. The Commission also does not want to change this in the trade agreement with Canada (CETA). The position paper only includes a vague reference to the idea of establishing an international investment court.

There has been no reaction from the US to these proposals within the EU. The US is negotiating on the basis of its own model treaties, which all stipulate private arbitration proceedings. But even there critics are beginning to voice their opinions. In a letter to President Barack Obama, several Democratic members of Congress spoke out against including investor arbitration proceedings in future trade agreements. 

TTIP

Why we are publishing secret TTIP documents

TTIP has been negotiated in secret so far. We think this is unworthy for a democracy. This is why we decided to grant public access to internal documents - just in time for the tenth round of negotiations starting Monday in Brussels.

von Markus Grill

At the moment, it is primarily the opponents who are interested in TTIP. That is a mistake. Because if this free trade agreement is implemented, it will affect 820 million people in the European Union and the United States.

But isn’t free trade an issue of the past? Haven’t nearly all customs duties been abolished? Correct. For that reason, negotiations for the Transatlantic Trade and Investment Partnership (TTIP) now revolve around regulations, product standards and the controversial issue of investment protection. For example, whether indicators on cars should blink orange (Europe) or red (USA). Whether genetically modified foods should have to be labelled. Or whether an energy company like Vattenfall can sue a sovereign state such as Germany for compensation if the government decides to phase out nuclear power.

At the end of the day, TTIP affects us all. This makes it all the more disturbing that a caste of bureaucrats would like to negotiate everything in secret and then present the parliaments as well as the public with a finished treaty at the very end. Take it or leave it.

As a news organization, we reject this secrecy that leads to fear and uncertainty. In our view, greater transparency will lead to a better debate on the treaty. For that reason, we are today publishing numerous internal documents on our website: www.correctiv.org/ttip. These include reports from meetings between the EU Commission and government representatives from Germany, France and other EU states. They also include documents from the EU Commission which were taken into negotiations with US representatives. And papers in which the member states communicated their positions on individual issues to the EU.

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In the first stage, we are today publishing around 100 such documents. They reveal how negotiations with the USA are coming along and where there are conflicts. The transcripts are relatively easy to read and convey the mood during the individual negotiation rounds. For example, they show how Greece adamantly wants to prevent debt haircuts from leading to cases in front of investment tribunals. Or that France wants to let TTIP fail if certain types of cheese are not protected. But the transcripts also show how dissatisfied European governments are because EU authorities give them too little insight into negotiations. This leads to the fear that the issues which are important to the countries will end up falling out of the negotiations. Follow our reports on specific topics.

The other types of documents (EU documents and position papers) are more technical in nature. They revolve around concrete proposals which are brought into the negotiations. Is it unfair that the secret documents we are publishing are only from the EU? So far, US documents have not been leaked. But we would be happy if there was also information from the perspective of US negotiators.

We have redacted some parts of the documents. Why? We redacted personal data, email addresses and mailing list names. We do not want to personally call out or attack individual negotiators.

On Monday 13th July, a new round of negotiations is beginning in Brussels that will last the entire week. Our TTIP reporter Justus von Daniels (justus.von.daniels@correctiv.org) will be on the ground in Brussels and will provide regular updates in a live blog. Our TTIP team Marta Orosz (marta.orosz@correctiv.org) and Justus von Daniels will follow the negotiations with reports. Get the latest updates by following us on Twitter: @ttip_correctiv

We are already preparing the next larger package of hitherto secret documents for publication. And we would be happy if CORRECTIV made you feel well informed. Send your feedback to: ttip@correctiv.org

rs155_150714_correctiv_im-7792-1

TTIP

Exclusive: TTIP-Leak

Prompted by the release of over 100 secret TTIP negotiating documents by CORRECT!V earlier this summer, trade commissioner Cecilia Malmström ruled that the detailed report of the 10th round of negotiations should be available only in a special reading room in Brussels. Barely anyone has seen it. In spite of this, we were able to acquire a copy of an official report on the 10th round of negotiations concluded in July. We are publishing the original document – because we still believe that transparency is essential for TTIP.

von Marta Orosz

The Commission’s report summing up the 10th round of negotiations is nine pages long. 

The main points are:

  •  many member states are concerned about the “tough negotiations”
  • most areas under negotiation are at a standstill. The US and EU are moving forward at a snail’s pace. One of the main areas of contention, public procurement, is not even on the table yet. 
  • the issue of sustainability is not on the agenda.
  • the Commission is very concerned about the leak of 100 documents by CORRECTIV, which, it claims, is weakening its own negotiating position.

But let´s take them one by one.

First: The “tough negotiatons”

EU member states such as France, Italy, Poland and Ireland expressed concerns about the “tough negotiations in all essential areas”, quotes the report.

This summer, EU and US negotiators had hoped to finish a draft of the treaty by the end of 2015, planning to have it ratified by the end of 2016, while Obama is still in office. In view of the many fundamental differences remaining, it is becoming increasingly doubtful, whether this ambitious time plan can be achieved.

Second: Standstill

The report also says that the key area of public procurement was not discussed: “Discussion in this area will take place at the level of chief negotiators or higher”. The Europeans, especially Germany and France, want EU firms to have access to public sector contracts in the USA. But the US has made no firm commitments in this area.

With regard to regulatory cooperation – the harmonisation of regulations in certain industrial areas – “negotiations are tough”. As we know from previous rounds, the US is unwilling to make commitments with regard to financial services. European negotiators want to cooperate with the US in the regulation of finance markets, but the US rejects this, claiming that their laws in this area are stricter than those of the EU.

There was progress in areas where both sides foresee gains – cars, pharmaceuticals, cosmetics and engineering, and also on the mutual recognition of professional qualifications.

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The tenth round was devoted mostly to the services chapter. Again, both sides exchanged market access offers, which means that they presented the economic sectors  where they are willing to open their markets, as well as listed relevant exceptions.

Hoewever, the Commission thought that “US offers did not contain any essential improvements”. The EU is familiar with the American endgame strategy: the best offer is laid on then table right at the beginning and it is only close to the end that the EU partner can hope for concessions.

There was no movement in other areas: “The US was defensive especially in the areas of marine services, air transport and mobility”. The US was also not forthcoming with regard to geographical indications, i.e. the protection of regional products (e.g.: can Camembert be produced in Kentucky?). 

There was also no coming together on the question of energy. The US wants this to be negotiated under the chapter on services. The EU, pressured by member states such as Poland, Lithuania, Croatia and the Czech Republic, wants to have a special chapter on energy in the treaty. Background to this is the desire from EU member states to be able to import oil and gas from the US where energy costs are half what they are in the EU. But the Americans are reluctant to open their energy market.

Prompted by Germany, the Commission approved a “general discussion of patents”. This is an important issue for the German pharmaceuticals industry because a stronger patent law guarantees profits over a longer period.

Third: Sustainability

The negotiators have not discussed the theme of sustainability. According to the Commission’s report: “In the run-up to the negotiations both parties agreed to postpone a discussion of sustainability”. Critics of TTIP are missing a strong sustainability chapter from the treaty. 

Fourth: The Leaks

There was a lot of discussion in this session of the Trade Policy Committee on the #openTTIP leaks by the CORRECTIV. The Commission called the publishing of around 100 original documents in July as “a breach of trust with the US partner”. In addition, this had weakened the EU’s negotiating position. Trade Commissioner Malmström directed afterwards directed that the protocol of negotiations from the 10th round should be viewed exclusively in the Reading Room of the EU Commission and would no longer be sent to national parliaments.

The original Protokol (in German) is available here.

We thank Gus Fagan for his contribution on the English translation.

EU-Handelskommissarin Cecilia Malmström, BDI-Chef Ulrich Grillo und Wirtschaftsminister Sigmar Gabriel an einer Veranstaltung im Februar 2015© dpa Picture-Alliance

TTIP

35 square meters of transparency

German MPs can now read the secret TTIP consolidated texts but are not allowed talk about what they read. A restraint document obtained by correctiv.org shows the harsh penalties in case of disclosure.

von Justus von Daniels , Marta Orosz

This article was published in cooperation with the Brussels based eu observer.

“It is not a milestone for transparency. It’s just a reading room“, said German economy minister Sigmar Gabriel at the much-awaited opening of a special reading room last Thursday (28 January) in Berlin.

The room that has been set up in the ministry of economy, is the first of its kind offering members of national parliaments the opportunity to read the texts on the EU-US Transatlantic Trade and Investment Partnership (TTIP).

Over the past year transparency has been a key issue in the German debate on TTIP. MPs regardless of their political affiliation demanded bigger insight into the consolidated texts of the planned agreement.

Consolidated TTIP texts have been available so far only in the European Commission in Brussels for a limited number of EU officials involved in the negotiations.

In Germany, the country thought to be one of the biggest beneficiaries of the trade deal, the US embassy in Berlin offered 140 accredited government officials a chance to read the secret documents. Only one German MP was granted entrance.

“Finally, parliamentarians get their right to read“, Gabriel said.

But the rules for reading the documents are quite strict. MPs have to schedule an appointment as the room opens only twice a day for two hours. Before entering the room, they have to leave their mobile phones and any electronic device in a secure locker.

They can read the documents only on a computer screen which is not connected to the Internet. They may take notes but are not allowed to copy any quotes from the consolidated texts.

The room, reminiscent of an internet cafe, hosts up to eight MPs at a time guarded throughout their visit by a security officer.

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There is also an English-German dictionary provided for MPs with difficulties understanding the complex trade texts in English.

On her last visit to Berlin, EU trade commissioner Cecilia Malmstroem was asked by German MPs to provide translated versions of the texts, too. Some MPs expressed that they felt disadvantaged by not getting the texts in German.

Malmstroem replied that the commission would provide a translation of the final draft of the agreement, but no consolidated texts will be translated.

Gabriel announced that the ministry would try to assist with translators if a member of parliament wished.

It was the US and the EU which agreed to these rules mainly to control the amount of information becoming public on the ongoing negotiations.

MPs may finally find out what the different positions are in the chapters negotiated on, but they are not allowed to speak publicly about the content or quote any information in the Bundestag debates.

Open on trial basis

A restraint document from the commission shows the consequences of disclosing information.The document, obtained by correctiv.org, lays out the detailed agreement between the US and the EU about access to the consolidated texts.

The US indicates that the availability of the TTIP texts will be on „a trial basis, pending demonstration of the integrity and reliability of the approach“.

In the case of unauthorised disclosure of information, the US „may withdraw its consent to the placement of TTIP consolidated texts in any or all of the member states reading rooms“. This means if an MP leaks or quotes any sensitive information, the parliament may be denied access to the documents.

Gabriel said to the press that it was the joint decision of the EU and the US to set the rules. He would have preferred to have had the reading room in the Bundestag. „I would also prefer to have more transparency“, he said.

The room opens Monday (1 February) at 10am local time. The first MP scheduled for an appointment is Klaus Ernst from the leftist party Die Linke.

obstschale

TTIP

Tariffs dropped to zero

The EU had offered to eliminate most of the tariff lines entirely during the trade negotiations with the US. CORRECTIV has now published a confidential document: the detailed list of the tariff offer. It shows which products could become cheaper for consumers – some industries on the other hand fear competition from cheaper US goods. Some firms will profit from continued protective tariffs.

von Justus von Daniels , Marta Orosz

This article is also published by EUobserver and opendemocracy.

The TTIP negotiations entered a decisive phase on October 15, 2015. That’s when US and EU negotiators laid their cards on the table, exchanging offers for tariff reductions. Up until then, the US had only broached hypothetical reductions; now they were openly offering to remove 87.5 percent of tariffs completely.

That was more than the EU expected. European negotiators had to come up with a better offer or risk derailing the deal. A week later, they came up with a new deal: reductions in 97 percent of tariff categories.

The EU’s secret offer, which CORRECTIV has seen in its entirety, is made up of 181 pages of densely-printed text and can be found online at correctiv.org. It’s got almost 8,000 categories: Every species of fish, every chemical has its own tariff category. Importing a parka? Wool, or polyester?



EU offer to US as excell-file (704.2 KB)



New offer for chemical products as excell-file (58.9 KB)

Poker game

Trade deals are like poker games. Europe’s big offer comes with a big hope: That the US will open up its public bidding process to European firms. That way, European construction companies like Hochtief could bid on contracts to build US highways, or BMW could sell cop cars to American sheriffs. They also indicated in the document that the reduction on certain agricultural products depends on the acceptance of the extension of Geographical Indications by the US side.

For the first time, the tariff offer makes clear what TTIP might do for consumers. Remove duties, and prices tend to drop. With tariffs on parts gone, cars could get cheaper. Per part, tariffs add just a few cents on the euro, but altogether European car manufacturers could save a billion Euro each year, according to German Association of the Automotive Industry calculations. Manufacturers could then pass the savings on to consumers.

Farmers are worried

Some duties are levied on foodstuffs. Right now, peppers from the US have up to 14 percent import tariff. Fish caught on US coastlines are charged up to 25 percent; raspberries 9 percent. Take those away, and it could make economic sense for American food producers to export to the EU – putting domestic farmers under pressure.

Grain and meat, on the other hand, are largely left out of the cuts for now. „The meat industry would definitely loose“, says Pekka Pesonen, general secretary of the European Farmers Association (COPA-COGECA). Animal feed is produced much more cheaply in the US than in the EU. And for products like meat, „there are a lot of reasons it’s complicated to fully liberalize trade“, Pesonen says – animal welfare is more regulated in Europe, and using growth hormones is forbidden.

Opening the agricultural market completely would be difficult for Europe’s small family farms in particular, as they already struggle to compete against industrial-scale farms. That means the back-and-forth over grain and meat is likely to continue.

But the EU has to make a few offers here, too, because the US is eager to see the European agricultural market open up a bit. Pork or seed corn, for example, could be offered up for tariff cuts. The EU has yet to decide when the tariff cuts come into effect. The process is alarming for farmers, who aren’t eager to have their products used as negotiation tools.

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Butter vs. Electronics

Both sides have placed conditions on their offers. There are 19 pages of tariffs on clothing, for everything from parkas to shoes, coveralls and yarn. Tariffs hover between 9 and 12 percent, but the EU is offering total cuts, with an „R“ for „reciprocity.“ In other words, we’ll cut ours only if you cut yours. The US, on the other hand, has made clear that cuts on textiles depend on opening a discussion over country-of-origin labels.

For example, if a shirt is sewn in Vietnam but packaged in the US, is it „Made in Vietnam“ or „Made in the USA“? Once that’s worked out, it’ll be possible to discuss whether the new duties apply to that shirt or not.

Take a look at the EU’s confidential offer and it’s clear some industries have been privileged. Next to the many zeroes on the list are phase-in periods of three or seven years. Some aluminum products, for example, won’t be allowed into the EU duty-free for seven years. Hydraulic motors, too, have a grace period. Duties on LCD monitors won’t go down immediately; consumers will have to wait seven years for import duties to drop. That, in theory, will give these industries time to adjust to competition. It has to be seen if these lines are still being negotiated.

Thus far, access to the specifics of the TTIP deal was limited to a small circle: Negotiators, government officials, the US Congress, the EU Parliament and 600-odd „trade advisors“ in the US. Publishing the tariff schedule lets citizens and the representatives of small industry associations or companies without lobbyists in Brussels or Washington see what will change for them – or at least what the EU has proposed. That’s fair for everyone.

A milestone

The tariff offer is a milestone for TTIP. Without concrete tariff reductions, concluding a trade deal would be impossible. In theory, such arrangements have to be handled by the World Trade Organization (WTO); bilateral deals are, technically, forbidden by the WTO. Other states could file to have the deal overturned.

But there’s an exception in the WTO rules: Article 24 of the General Agreement on Trade and Tariffs (GATT) states that a deal like TTIP is allowed when both sides drop their tariffs substantially and show that they’re making trade easier. Both the EU and the US have just done that.

The EU is now waiting for the US to offer a substantial deal on public procurement. In a September 15 report obtained by CORRECTIV, the EU Commission says „it definitely expects that the US will offer to open public procurement at a future point in time, in exchange for the revised tariff offer.“

That report also indicated that the US „promised to make a proposal regarding public procurement for the first time“ when the EU and US put forth their symmetrical tariff reductions, eliminating 97 percent of all tariffs.

Public bids are a major TTIP sticking point. The EU wants the US to finally open its markets to allow firms like Hochtief or BMW to compete when cities put out a call for bids on a new building or fleet of cars. The US is less than eager, because that would subject domestic companies – which are already allowed to bid on projects in the EU – to increased competition.

Four days before the next negotiation round starts, the EU Commission has now indicated that they don’t expect a comprehensive offer from the US side. Sources said, that the US haven’t sent their offer yet and that talks about public procurement will be held after the official negotiation week. The 12th round of negotiations started this Monday in Brussels.


Note on the document:

The tariff offer contains two documents. The main offer of the EU and the revised offer on chemicals. We publish a transcript of the original document in order to protect the sources. There are certain details missing which couldn’t be read. We welcome support for completing the few missing parts.

The tariff offer of the EU and the revised offer for chemicals

 

© Ivo Mayr

TTIP

TTIP: EU exporters worry about US harmonisation issues

TTIP is supposed to harmonise standards to avoid unnecessary double testing, but in the US standards and norms are often set locally and not on a federal level. For Europe, this means that the central promise of the Transatlantic Trade and Investment Partnership (TTIP) might not be kept because US negotiators are not actually in a position to decide on these regulatory issues.

read more 4 minutes

von Justus von Daniels , Marta Orosz

This text has been published in cooperation with EUobserver.com.

On 15 March, the TTIP advisory board for Germany’s economy minister Sigmar Gabriel discussed this problem. 

According to information obtained by Correctiv, Gabriel was informed about the issue shortly afterwards and thought it was „highly interesting“. 

It became clear to the German ministry that instead of one central testing and certifying organisation like the German TUV, in the US there are 17 so-called Nationally Recognised Testing Laboratories (NRTLs) issuing technical certifications. 

Moreover, a certificate from one of these 17 laboratories does not automatically mean the product in question may actually go in use – this decision belongs to local authorities. This way it might be the local sheriff or the fire marshal deciding whether a grinder may eventually go into industrial use.

It is not only the certificates that are different, but the norms as well. 

Volker Treier of the German Chambers of Commerce gives an example: „For machinery there is a different colour regulation in every US state for power, aerial and water cables, which makes it costly to adapt for exporting companies.“

If a European manufacturer wants to export machinery in the US, it has to dig deep to pay for additional certifications. Products have to be tested again on the other side of the Atlantic. 

These barriers should be eliminated with TTIP – at least this is one of the main arguments European governments try to win small and medium enterprises with (SMEs) for the trade agreement.

But as mentioned above, US negotiators are not able to control these regulatory issues. The 17 NRTLs are accredited by a federal agency — Occupational Safety and Health Administration — but they are not under its control.

While an EU regulation provides consistency and harmonisation among the national accreditation bodies across the member states, there is no such comprehensive guideline in the US. 

Some of the US regulations on testing, verifying and authorising an engineering product were taken on a federal level, but many of these are state or local regulatory provisions defined by local NRTLs.

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Commission’s concern

A major problem with these testing laboratories (NRTLs) is that they do not recognise each other’s test results. 

This means that if a European manufacturer certifies its product at one of these NRTLs this does not automatically mean that it can be sold or put into operation in every federal state. 

This mainly concerns electronic machinery, but the lack of an internal market in the US poses a costly obstacle for European exports in other areas too.

This fragmented market has been causing serious concerns for European manufacturers for decades. 

An internal meeting report of the European Commission obtained by CORRECTIV quotes the concerns of the European engineering industry: „They noted strong divergences in regulatory approach, especially regarding liability issues.“ 

“Their main concerns are the local element (local inspections and regulations), complexity of the US regulatory system, tariffs and certification its related costs – for instance number of audits by NRTLs.“ 

The meeting report concludes: „The US certification industry is a key player; It will prove difficult to change the status quo.“

The German Association for Small and Medium-sized Businesses representing over 270.000 German businesses is also concerned about the issue.

“Mutual recognition of norms is a one-way road“, says the association’s president Mario Ohoven, who fears a distortion of competition causing disadvantages for the European industry. 

While for US companies exporting to the EU there is a unitary EU guideline for standards and norms, European SMEs have to find their way in the US through the above mentioned maze of norms and certificates.

The German Electrical and Electronic Manufacturers Association suggests that the US should recognise the internationally accepted ISO and IEC standards. Big companies like Siemens support this claim.

Up to now the US is one of the countries adopting only a few of the international norms. This explains why the issue of standards and norms plays such a crucial role in the EU-US free trade agreement negotiations.

© Ivo Mayr

TTIP

Small business still waiting for TTIP breakthrough

The US and EU are making the same claim: a free-trade deal would improve conditions for medium-sized companies. But the progress in negotiations is very slow.

read more 8 minutes

von Justus von Daniels , Marta Orosz

This article was also published in the EUobserver (April 26)

The company Code Mercenaries can be found in the south of Berlin, several miles outside city limits. 

This is where Guido Koerber and his eight employees produce microprocessor chips for keyboards. Not for PC or Apple computers, but personalised orders for industrial machines. 

Koerber’s company does exactly what Germany’s small and medium-sized enterprises are praised for: offering a highly specialised niche product that is successful overseas. Roughly 90 percent of Koerber’s merchandise stays in the EU, the other 10 percent goes to customers in the US.

But when it comes to exporting across the Atlantic, there is significant room for improvement. For Koerber, the biggest problem is various regulatory standards in America. 

Patchwork in the US

When it comes to permits and product licensing, the US is a patchwork of different rules and regulations. Each of the 50 states of the US sets its own safety standards. 

When selling within Europe, it is straightforward. Koerber’s company produces its microprocessors according to CE-standards, which are accepted by all of the EU member states. He can bring his product to market anywhere in the EU as long as he complies with these regulations. 

If he wants to sell a product in the US, he first needs to be certified by a US institute, despite already meeting the CE-standard of approval.

„In the US, there are multiple certification institutes, but not all certifications are recognised everywhere in the country. This can cost me upwards of €10,000“, Koerber said.

Seatbelts and headlights

There is no single industry standard in the US and there are 17 competing certifiers. What is approved in Arizona might not be accepted in Florida. This regulatory chaos isn’t only bad for international companies, but for American companies as well.

Ideally, this is where TTIP, the transatlantic trade pact, would step in. For example, indicators for cars have been proven safe in both regions of the world; US thermometer safety has been recognised and EU machines have proven to be fire-safe. The companies that produce these products were promised that the quality and safety standards would be recognised by both sides, thanks to TTIP. Meaning these businesses could export their products without dealing with the extra bureaucracy. 

This has been one of the main pillars of argument in support of TTIP.

But it looks like this promise will go unfulfilled.

On Monday (25 April), the Hannover Fair, one of the world’s leading trade fairs for industrial technology, kicked off. President Barack Obama and German chancellor Angela Merkel opened the event. Other senior TTIP negotiators and European Commission President Jean-Claude Juncker will also visit the fair.

World leaders will be watching closely and looking for signs as to whether TTIP will be adopted by the end of 2016. 

But what kind of TTIP will be adopted? Who stands to benefit from this trade pact?

Slow progress

After the last round of negotiations in February, EU trade commissioner Cecilia Malmstroem announced that progress had been made regarding car standards. „We have reached an agreement on seatbelts and headlights“, Malmstroem said. 

Seatbelts and headlights. Nothing else after nearly three years of negotiations? Surely it should have been possible to address blinkers, rear view mirrors and crash tests during this same time period?

Apparently not.

Public records from the last round of negotiations in Brussels show that things move slowly: „The parties exchanged detailed information on each of the issues, agreeing that more detailed inter-sessional work on technical details would be needed“, the chapter on cars read.

In other words: Nothing was accomplished.

Crumbling support

This is also true in other areas. In many cases, progress is negligible. Take engineering for example. At an internal meeting, the European Commission cautiously suggested excluding this chapter from the negotiations due to the lack of progress made so far.

In an internal report from February 2016 obtained by Correctiv, the commission stated that negotiations related to the TTIP-Annex on machinery and engineering „failed to make substantive progress“ and should be resumed, but „some member states have responded by demanding negotiations to continue“.

So far, German businesses associations are still supportive and standing behind TTIP. But the front is crumbling. There are growing doubts even within the larger organisations. The Federal Association of Medium-Sized Enterprises (BVMW) is less sure of the benefits.

According to the association, 62 percent of small or medium-sized enterprises had a „rather negative“ or „very negative“ view of the proposed agreement. Many companies feel like the wool is being pulled over their eyes.

The mutual recognition of standards was always a benefit of the trade agreement. The Federation of German Industries (BDI) even produced campaign videos featuring production managers explaining the cost savings that will follow if they no longer have to worry about the extra inspections and certifications when exporting to the US.

Even critics of TTIP agree this makes sense. But it is becoming more and more clear that these benefits are not likely to be included when the agreement is accepted.

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Neither the negotiators nor other stakeholders will publicly state that the American side is unwilling to negotiate the removal of these extra inspections, but that is what it boils down to. The American side cannot mandate the removal because each individual state decides how products are approved.

According to an internal report obtained by CORRECTIV a commission official warned member states already in 2014 that „the US negotiation partners referred to the lack of legal opportunities“ that would empower them to enforce the 17 testing laboratories to adopt unified norms.

Safety and truck standards

“Normalising standards has played a smaller role in free trade agreements because most countries move products within the international standardisation system“, said Sybille Gabler of the German Institute for Standardisation (DIN).

“This is not the case in the United States where international standards are used less, if at all. That is why this issue in TTIP is particularly important.“

But there are areas where the US government can negotiate, like motor vehicles. 

The German Automotive Industry Association (VDA) estimates that German car manufacturers would save the equivalent of a 26 percent custom duty if vehicles from both sides of the Atlantic had the same standards.

However, given differences in road conditions, equivalence could be dangerous for motor industry. This is why the sides are miles away from coming to a consensus.

In 2014, the US motor industry commissioned a study by the University of Michigan, among others, that suggested the risk of accidents in Europe and the US varied. European roads are more winding and narrower than US roads and cars in Europe go at a higher speed.

Furthermore, recognising one another’s standards would raise the risk of accidents on the respective countries’ roads, the study said. „In more than one way, these vehicles are not equal. Simply recognising them is not advisable“, said Carol Flannagan, one of the lead researcher of the study.

Negotiators are also facing other difficulties. Sorting out the details that would allow recognition is extremely tricky.

The EU negotiators have done case studies in which they compared both governments’ protocols for seatbelt and headlight approval. The results after more than two years? 

Approval can be met, but only after both sides make adjustments. To date, other car-related issues like crash tests, brakes and car frames have yet to be negotiated in detail.

Even the industry issues occasional warnings. The Association of European Auto Suppliers (CLEPA) is for TTIP, but has still voiced concern and issued warnings about recognising certain safety standards. They are concerned that doing so could reduce the overall safety of vehicles.

In an email sent February 2014, the association wrote to the EU Commission about brakes for heavy-duty transport trucks: „From a European perspective it must be asked if the EU Commission and the Member States would support what is seen as a reduction in safety standards if vehicles approved to FMVSS-121 were allowed to operate within the European Union.“

The email goes on to say: „Drivers would be faced with the different options which in an emergency situation could cause problems.“ The association is of the opinion that the practical application of recognising US standards „would in our opinion be zero“.

TTIP light?

After nearly three years of negotiations, it is becoming clear that there are no easy answers. When it comes to testing methods, admission procedures and safety precautions, the markets are too different. 

The invested agencies are almost at a standstill. We would need 10 years to make any real progress, said an EU negotiator to CORRECTIV during the last round of negotiations in Brussels.

Didn’t the negotiators know this before? Koerber thinks that they were naive and „underestimated the difficulties associated with regulating the standards“. In any case, TTIP negotiators should put in extra effort to try to improve the sluggish collaboration with the US.

From the industry perspective, there is a very specific dilemma when it comes to working with the US. The reason for the differing systems is that the US does not accept the internationally approved standards, such as those issued for the motor industry or the ISO standards for appliances. 

US doesn’t like worldwide standards

Around the world, most countries have agreed to adopt the ISO committee’s common standards. Although the US is officially a part of this committee, they have yet to change rules at home to allow for acceptance of these standards.

“Harmonisation can and must be carried out by the international ISO and IEC standards organisation“, said the German Electrical and Electronics Industry. Companies like Siemens also stand behind this demand. 

The European negotiators are therefore trying to convince the US to particulate at the international level, but before the Americans can join in, they first need to change the internal structure. 

Future cooperation

Does this mean that corporations are losing their interest in TTIP?

Most corporations retain interest, despite the likelihood many of their concerns will remain unresolved after TTIP is adopted. This is partly because within the TTIP framework, an „expert panel“, the so-called joint regulatory body will be formed. Comprised of officials and stakeholders, together they will discuss and prepare future standards and go on to present these standards to policy makers. Once a major concern, this could now be the most influential factor for both regions’ economies.

Some critics see this panel as a potential threat to democracy.

When it comes to safety or all around health, preliminary decisions could fall to the TTIP panel. This would be very difficult for parliaments to prevent, said Klaus Mueller, Chairman of the Federation of Consumer Organisations. 

And once industrial lobbyists join the mix, their ability to influence policy makers’ decisions will only grow.

Ultimately, TTIP could now simply become an agreement that focuses strictly on developing standards and appropriate approval mechanisms for future trade between the EU and the US. And while negotiators reject the term “TTIP light“, because it implies there is not enough benefit for either side, when it comes to the direct effects on businesses, the only way to describe the impacts is, in fact, light.

papier

TTIP

openTTIP – Share your comments

The published drafts of the planned TTIP chapters give us the opportunity to understand and make an impact on the free trade agreement. We invite both experts and the public to leave public comments on the TTIP-drafts on our openTTIP site.

von Justus von Daniels , Marta Orosz

The top secret TTIP drafts are now available for everyone. We want to take the opportunity and assess with you the positions of the US and the EU and what should be improved. So that everyone sees what TTIP is all about – because, if concluded, TTIP will change our future.

13 out of 24 planned chapters were first released in May as the #TTIPLeaks. We now want to take a step forward combining the knowledge, criticism and suggestions that we´ve collected. We think, this should have been done by the governments in the first place. Now, we created a tool for everyone involved to leave their comments and contribute suggestions.

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CORRECTIV ist das erste gemeinnützige Recherchezentrum im deutschsprachigen Raum. Unser Ziel ist eine aufgeklärte Gesellschaft. Denn nur gut informierte Bürgerinnen und Bürger können auf demokratischem Weg Probleme lösen und Verbesserungen herbeiführen. Diese Recherche wurde mit der Unterstützung unserer Fördermitglieder realisiert. Jetzt spenden!

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EU-Ratspräsident Tusk, der kanadische Premier Justin Trudeau und EU-Kommissionspräsident Junker nach der Unterzeichnung von CETA© dpa/Stephanie Lecocq

TTIP

Inside CETA

Together with the French daily "Le Monde" we looked into the 1500-page treaty to see if criticism still holds and whether governments are just playing down risks.

read more 10 minutes

von Justus von Daniels , Maxime Vaudano , Marta Orosz

They finally got the deal. The EU and the Canadian government concluded the CETA last Sunday. This was possible after the Wallonian government made some concessions and decided not to stand in the way of the treaty. As a next step CETA will be applied provisionally as soon as the European Parliament appoves it – most probably by January 2017.

But criticism that CETA is solely a gift for corporations or that it´s a threat to democracy did not cease. The EU and Canada claim the opposite. 

Our CETA review

The aim of the 1500-page treaty is to liberalize the economies. For this, unnecessary barriers to trade need to be lifted. But market liberalization also evokes fears about losing control in a more globalized world.

Together with the French daily Le Monde, we review some of the most debated issues of the trade deal in detail. Are the arguments of protesters still accurate? Do governments play down shortcomings of the treaty?


The tribunals – A threat to democracy?

Private arbitration courts became the main symbol of anti-trade protests. Usually, if a state enacts a law that reduces profitability of foreign companies in a discriminatory way, businesses can sue these states in a private tribunal if there is a trade agreement in place. This might have been useful in the past, when it came to investments in states with poor or unpredictable legal structures. The tribunals were ad-hoc, organized by private arbitrators – mostly lawyers – and secret. The new court system proposed by the European Commission, however, should overcome the flaws of the traditional arbitration courts.

The idea that these courts should be established parallel to the national courts of France, Germany or Canada was strongly criticized. The counter-argument suggested that courts favor the interests of the big corporate lobbies. Protests were successful and the European Commission changed the original plans introducing safeguards. Now the current system looks a bit more like a traditional court. But again, the text provides a lot of uncertainties.

For example, CETA generally excludes claims of financial firms in case of debt cuts in a financial crisis (e.g. Greece). This should be a safeguard for states who don’t have to fear claims by private funds for any restructuring. The language of the text leaves room for interpretation, say legal experts. Companies could use this to threaten or even actually to sue governments.

The European Commission did improve the old defective system and could be an important example for future trade deals. Some barriers were included to avoid claims meant to chill governments´ decisions – in case a state aims to raise health or environmental standards. The Wallonians now reached an important goal: the European Court of Justice will scrutinize whether or nor these courts are compatible with EU law.

The treaty, however, cannot fully prevent that companies from occurring legal loopholes. All in all, this court system is still close to a private arbitration with judges paid case by case than a permanent court even if its risks are lower than publicly stated. Several NGOs demanded to completely exclude these courts from CETA and TTIP. This would have dissolved remaining fears of companies using possible loopholes for legal remedies.


Environment as a trade barrier – Are higher standards possible?

On the request of the European Commission experts clearly proved that oil obtained from tar sands is 23 per cent more carbon intensive than conventional oil. After these figures were out, the EU had to act. Oil from tar sands was attributed a higher value of CO2 emissions — thus „dirtier“ than other oils and creating more damage to the environment. In the so-called Clean Fuel Directive of 2011 the status of this unconventional oil was reviewed. For the EU this would have been a step towards its goals to reduce greenhouse gas emissions.

This regulation, however, thwarted Canadas plans of exporting tar sand oils to the EU. Lobbies rushed to hinder a stricter regulation on tar sands. Whether it was the result of skilled Canadian lobbies or the concerns related to Europe´s energy security, at the end of 2014 the European Parliament scrapped the labelling on tar sands. Canada started its exports to the EU in the same year.

Expert and environmental groups hope that the EU regulators will review their decision and will not give up on their environmental goals. A crucial question on CETA is related to the right to regulate: Will the EU or its member states be willing to improve their environmental standards while these might negatively affect Canadian corporations´exports? The treaty itself guarantees the „right to regulate“.

Meanwhile, CETA includes protection for investors also in the field of fossile energy and raw materials. The possibility of Canadian Natural Resources Ltd or other major companies claiming their losses because of stricter EU restrictions is a realistic scenario. Canadian mining companies, for instance, are already claiming the loss of their expected profits after their mining concessions were rejected. The European Commission, however, sticks to the argument, that neither CETA, nor any free trade agreement will stand in the way of future regulations.


Does democracy vanish in CETA committees?

CETA will enable Canadian and EU industries´regulators to work together in the future on harmonizing standards. The goal for the chemical, electric or pharmaceutical industries is to agree in the future on product standards that would apply in both economies. A hair dryer or a painkiller produced in Canada should be also easily marketed  in the EU and vice versa  – something that the industry has been aiming for for a long time. How exactly these joint regulatory bodies will work, is still largely unknown. Fears arose that corporations will have an easier access to regulators once they pursue their work without parliamentary control.

Concerns of CETA giving birth to undemocratic bodies reached recently the German Constitutional Court (Bundesverfassungsgericht). German petitioners supported by a significant number of citizens demanded that the Court verifies these claims. While the Court did not give its final verdict on CETA yet, a preliminary assessment was taken. According to this, it is the responsibility of the German Government to make sure that the joint regulators are not free to take legally binding decisions. This means, that the EU-Canada joint board should not be able to regulate without being backed by an unanimous vote of the EU governments.

This preliminary note of the Constitutional Court also guarantees, that the judges in Germany will be keeping an eye on the developments of this committee. Should the Court have any doubts that these conditions are not fulfilled after CETA is applied, they can urge the German Federal Government to opt out of the deal.


Does CETA force privatization?

Whether certain services, like energy or water supplies, are public or run by private companies, is decided by states. Other than in the US and in Canada, in Europe public services have a strong tradition. CETA, the trade deal aiming to liberalize the economy, seems to threaten this public control. The treaty contains a so-called negative list: Both Canada and the EU had to exclude the specific branches they want to leave open to be privatized or later re-communalized in the future. Thus, all other services missing from this list, would be up for the market once they´re open to privatization.

Public water suppliers were shocked. Their fight to prevent the European Commission from privatizing water ended not just some years ago. Now it is in form of the Canada-EU trade deal that public utilities might be liberalized. A binding joint declaration of the European Commission and Canada promises that this will not happen. Even the German Public Companies´Association, earlier severely criticising this issue, now toned down its worries. It becomes increasingly clear, that public services will not be forced into private hands. Nevertheless, it´s the little uncertainties in the text of the treaty and  the longterm aim of more liberalization that creates unease.

Water, for example, is definitely excluded from CETA, but is waste disposal, too? It is not mentioned in the German translation of the text. Such details (or the lack of them) make the treaty unforeseeable for the future. If a city wants to re-communalize a service, this will be possible if the state put this service on the so-called negative list. The Commission is confident, however, that states made all important reservations.

In this sense CETA will not mean an immediate threat to public utilities. But municipalities have to be cautious when framing a privatization, so that they are able to draw back a concession in the future. Otherwise the liberalization might not be reversible.


Feta, Champagne und Parma ham: Are European regional products protected?

The EU has a special tradition to protect produce with a geographical indication. Regional names like Champagne, Bavarian beer or Feta cheese are bound to the region where these products traditionally come from. The goal of this protection is to preserve the quality of certain products but also to indirectly promote regional economies. The EU aimed to preserve this protection in the EU-Canadian Free Trade zone. So far, Canada only applied some basic geographical indications. A Canadian company could thus register for a trade mark „Parma ham“ or „Prosciutto di Parma“ and prevent italian imports of Parma ham.

Especially these european particularity of protection for traditional produce, made the negotiations very complicated. Both sides agreed in the end on a list of 145 european products, from wine to cheesse, which will be protected in Canada as well. There were complaints on the European side that this list contains only a small part of all products protected in the EU. The EU has registered 1500 products which can only be marketed it they are produced in a certain region.

In CETA, the list contains the most imported produce to Canada: for example Feta cheese, Camembert, Champagne and parma ham. Those Companies don’t have to fear the competitors from Canada. It remains to be seen how this agreement will affect the products which didn’t make it on the list. In the end, it is the consumer who decides if she buys the Blackforest Ham or the canadian ham „blackforest style.“


Beef hormones and genetic engineering: Is the precautionary principle at risk?

A main goal of the CETA is to align standards in the EU and in Canada. Instead of harmonizing all standards, both parties should decide in every single case whether safety standards for electronic appliances, foodstuffs or drugs are equivalent. For instance technical safety standards will not be harmonized by CETA. Authorities will verify instead in special committees whether the Canadian safety standard for a certain appliance can be acknowledged as being equivalent to the EU norm. All this should facilitate exports. Critics, however, fear that this could lead to the acceptance of standards currently not in line with EU regulations. According to them the so-called precautionary priniciple related to foodstuffs is at stake in case Canadian standards will be tolerated.

The precautionary prinicple says, that a produce cannot be approved if there is a chance that it might imply health risks. Contrary to the EU, in Canada and in the US produce can be banned only if these health risks are scientifically accounted for. Critics of the EU-Canada trade deal are worried because the precautionary priniciple is not mentioned in the treaty. They want to make sure that it will not be possible for companies to challenge a regulation which prevents risks.

Experts, on the other hand, do not acknowledge these risks. They say that CETA does not force the EU or Canada to give up their own regulatory practices. “Europe and Canada are and will remain free to define their benchmarks on safety standards,” says Alberto Alemanno, professor of law in Paris. In case the precuationary principle will be violated, it´s up to European authorities to deal with it.

What does this mean for imports of hormone-treated meat? Even after CETA the EU bans hormone-treated meat and chlorinated chicken. Canadian meat producers may export a certain amount of meat in the EU, but they have to constrain to these rules. Meanwhile, Canadians are free to produce hormone-treated meat for their own markets.


It´s a patchwork

Revisions in CETA came only after the secret negotiations were finished and the draft text was made public so that parliamentarians and civil society groups had the chance to look at it. Immediate criticism emerged and protesters across the EU demanded changes or even calling off the treaty. Finally, governments, coordinated by Germany and the Netherlands, agreed to change the defective system of the tribunals and to include changes in the treaty in accordance with Canada.

Not every improvement made it into the actual CETA text. Canada and the EU agreed on a Joint Decleration which states that CETA doesn’t force privatization of public utilities. This means that states would be able to regulate and set envirmonmental or labour standards. Both sides wanted to send a clear message about CETA not freezing in future policy-making in favor of corporations. The question, however, remains on whether or not this declaration is binding? What is the actual legal value of such papers?

According to the EU Commission the Joint Declaration solely confirms what is already in the treaty. If this is true, many fears will prove to be unsubstantiated. But the Commission´s point of view is ambiguous, mainly because the ample treaty leaves in many cases room for interpretation. Pundits demand that the Joint Declaration be a regular part of the treaty in order to guarantee it has a clear binding character.

Furthermore, the German Constitutional Court made an important reservation to secure democratic rights just two weeks before the EU-Canada summit. According to this decisions to amendments by CETA committees have to backed by an unanimous vote of the EU governments. These committees will be established to foster future cooperation. Currently the Court assessed the competencies of such committees to be quite unclear. They also missed that the EU didn’t meet proper standards to make sure that national governments still have a say on new rules. But again, this claim is not part of the treaty itself.

CETA today looks much better than a year ago due to last-minute-improvements. Nevertheless, what we have here is a patchwork text: the German Constitutional Court´s claims, a declaration as an annex and so on. There are still many unclear wordings in the 1500-page package which are not backed by the general guarantees.

Minimum standard

Late improvements, no time to discuss real changes, unwillingnes to reopen the treaty: the hasty finishing of the treaty demands a new mandate for future trade deals, especially TTIP:

  • Negotiations must be transparent. Civil society groups must be informed about the positions and first drafts in order to properly review results and be able to make their own suggestions in an earlier phase of the negotiations.
  • Guarantees laid down in the Joint Declaration are minimum requirements for any future trade deal. They need to be formulated as binding principles which guide any interpretation of the text. It must be clear that changes of the treaty have to be backed by democratic institutions and are not primarily in the hand of a committee easily influenced by lobby groups.

Dismissal still possible

Most parts of CETA will be applied provisionally after the European Parliament approved the trade deal. But CETA has to be ratified by all national and some regional parliaments – in Germany by the Bundesrat as well. This process could still lead to new concessions – or in the end to a failure of the deal. The German government expects for this process to take years.

Our cooperation with Le Monde in more detail (English version):

on arbitration tribunals

on agriculture

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