Transatlantic trade and Investment Partnership (TTIP)

March 8, 2015 3:56 PM

The Issue in Brief

TTIP will increase trade between the EU and the US boosting our economy and creating British jobs. We've pushed for reassurances that TTIP will not compromise safety and environmental standards, nor lead to privatisation of the NHS. Liberal Democrats would not support it if it did.

Background Detail

TTIP is a proposed free trade agreement being negotiated between the EU and US. It aims to simplify European and American trade. The EU and US have different product regulations for food, manufactured goods and vehicles, forcing businesses to test and register their products against both European and American standards in order to sell them in both markets. This harms small businesses which often lack the capital and legal skills to manage multiple sets of regulations. The aim of TTIP is to find ways to make EU and US regulations more compatible. The agreement will eliminate most trade taxes between Britain and the US.

Concerns have been raised that TTIP could lead to forced privatisation of the NHS and lessen environmental protection and labour rights and that the negotiation process has not been transparent.

NHS privatisation: Liberal Democrats have a clear guarantee from the EU that member states' rights to provide public services directly are explicitly enshrined in TTIP - even if outsourcing has previously taken place. Services funded by the public purse are protected from liberalisation in all EU trade agreements.

Concerns have also been raised that TTIPs' investor state dispute settlement (ISDS) procedure could lead to tribunals overturning state laws or decisions, or the costs of defending the UK in cases would be prohibitively high.

ISDS protects investors from unfair or discriminatory treatment by a host government. It cannot force governments to open markets or privatise public services. Even if a tribunal ruled against the UK government, the reward is financial - usually in the form of compensation. Contrary to claims, corporations will not be able to use investment protection provisions to overturn UK laws. The rules cannot force governments to change policies, open markets or privatise public services.

Environmental/food standards: It has been suggested that "alignment" on standards would lower environmental and food safety standards. However, all food imported from the US will continue to be required to meet EU food standards so specific products like hormone treated beef and chlorine-washed poultry will be prohibited by the existing, robust, EU approval systems.

Transparency: There are concerns that the negotiation of TTIP has not been transparent and therefore lacks democratic accountability. In response, Vince Cable has sought a transparency package that goes further than current EU moves including:

  • Public commitments from the UK Government and the European Commission that consumer, health and environmental standards will not be lowered.
  • A letter from the European Commission negotiators to confirm the UK will not be forced to privatise or outsource any healthcare services via TTIP.
  • The publishing of the EU's negotiating documents to ensure full transparency.

Liberal Democrats say

  • Liberal Democrats support the EU-US Transatlantic Trade and Investment Partnership (TTIP) negotiations because:
    • TTIP will eliminate most trade taxes and streamline red tape for British businesses, potentially creating thousands of British jobs,
    • TTIP will help small British businesses, who don't have the resources to cope with trade taxes and complex red tape, export to the USA,
    • TTIP could bring estimated benefits to the British economy of between £4 - 10 billion a year[i].
  • There are genuine concerns about how TTIP is negotiated. In response to concerns raised by the public, Vince Cable has secured the following safeguards:
    • Commitments from the UK Government[i] and the European Commission[ii] that consumer, health and environmental standards will not be lowered.
    • The publishing of the EU's negotiating documents to ensure full transparency[iii].
    • A letter from the European Commission negotiators to confirm the UK will not be forced to privatise or outsource any healthcare services via TTIP[iv].
  • Liberal Democrats are also committed to ensure that an investor to state dispute settlement mechanism (ISDS) should only be included in TTIP if it works for Britain and respects our legal and democratic processes[v]. To be 100% clear, Liberal Democrats will oppose any agreement that:
    • Undermines public provision of healthcare in the NHS,
    • Lowers standards of consumer, health or environmental protection.

Labour

They say: We want to ensure the agreement does not increase privatisation in the NHS.

We say: We've made sure that TIPP will not lead to further privatisation of the NHS.

Conservatives

They say: David Cameron has displayed optimism towards the TTIP, claiming that it can boost the economy and that claims that the NHS is threatened are myths.

We say: We support free trade, but we've fought for greater transparency in this negotiation, and we've got the reassurances the public rightfully expect on protecting the NHS and environmental/food standards.

Key Statistics/Quotes

  • A European Commission impact assessment estimated the average benefit for a family of four at around £400 per year.
  • It's estimated that the British economy could benefit by between as much as £10bn a year[i] and £100bn to the EU Economy.
  • TTIP will help increase wages in the EU by 0.5%.
  • Over the EU it will result in millions of new jobs.[ii]
  • 2013 UK goods exports to US $52,817 million, imports $47,353 million.[iii]
  • 2013 EU exports to US 2013 = €447.1 billion, imports to €342.2.1 billion.[iv]
  • The EU chief negotiator Ignacio Garcia Bercero has said: 'Public services are always exempted ... The argument is abused in your country for political reasons'.
  • A letter from EU Trade Commissioner Cecile Malstrom[v] specifically states "member states do not have to open public health service to competition from private providers, nor do they have to outsource services to private providers."
  • The UK has over 90 bilateral trade agreements with other countries and there has not been a single successful ISDS case brought against the UK.

[i] European commission - Trade and sustainable development p.2

[ii] Office of US trade representative; European Commission press statement 2013

[iii] European Commission - EU-US trade

[iv European Commission - opportunities for small and medium-sized enterprises 2013; US trade representative

[v] European Commission - TTIP the Regulatory part p.2 2013

[vi] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/329716/42014-Cm-8907-Transatlantic-trade-and-investment-partnership.pdf

[vii] http://europa.eu/rapid/press-release_SPEECH-15-4182_en.htm

[viii] http://trade.ec.europa.eu/doclib/press/index.cfm?id=1231

[ix]https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/198115/bis-13-869-economic-impact-on-uk-of-tranatlantic-trade-and-investment-partnership-between-eu-and-us.pdf

[x]https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/329716/42014-Cm-8907-Transatlantic-trade-and-investment-partnership.pdf

[xi] http://europa.eu/rapid/press-release_SPEECH-15-4182_en.htm

[xii] http://trade.ec.europa.eu/doclib/press/index.cfm?id=1231

[xiii]https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/398608/Letter_to_Lord_Livingston_from_Cecilia_Malmstr_m_NHS_TTIP.pdf

[xiv] Vince Cable has proposed the following ISDS reforms:

  • companies must choose either domestic courts or ISDS,
  • ISDS judges must be senior judges from the US/EU,
  • ISDS tribunals must be transparent, open processes,
  • Introducing an appeal process

[xv] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/198115/bis-13-869-economic-impact-on-uk-of-tranatlantic-trade-and-investment-partnership-between-eu-and-us.pdf

[xvi] European Commission economic analysis - Transatlantic Trade and Investment Partnership, p. 8 2013

[xvii] United States Census Bureau - Trade in goods with the UK

[xviii] European Commission - EU-US trade

[xix] https://www.gov.uk/government/publications/nhs-and-ttip-letter-from-eu-trade-commissioner-cecilia-malmstrom