Green and labor standards proposed for EU-US trade deal | Business| Economy and finance news from a German perspective | DW | 06.11.2015
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Green and labor standards proposed for EU-US trade deal

The European Commission has proposed adding a chapter on labor and environmental standards to the draft text of TTIP - the EU-USA trade deal - but critics say the provisions are weak and unenforceable.

On Friday in Brussels, the European Commission put forward a draft text on "sustainable development," which it proposed should be added as a special, stand-alone chapter to TTIP, the comprehensive trade and investment treaty United States and European Union trade officials are in the late stages of negotiating.

TTIP, the Transatlantic Trade and Investment Partnership, is a comprehensive treaty that would eliminate trade tariffs and standardize economic regulations in North America and the European Union - regions that together generate over 40 percent of global GDP.

Green and socially responsible trade and investment?

"Trade is not just about our economic interests, but also about values," said the European Union's Trade Commissioner, Cecilia Malmström, on Friday at the release of her office's proposed draft text of TTIP's sustainable-development chapter. She claimed the proposed labor and environmental standards would be the "highest ever" to be included in a free trade agreement, and would rule out a "race to the bottom."

The new TTIP chapter "aims to make sure we reap the economic benefits of trade and global supply chains, but we are also taking responsibility for their broader impact," Malmström said.

Malmström's draft text proposes that TTIP would affirm workplace standards set out by the International Labor Organization (ILO), including the right to form trade unions and to strike, and calls for an end to child labor and forced labor. It calls for the ratification and implementation of ILO conventions.

In regards to environmental conservation, the proposed new chapter contains provisions regulating cross-border shipments of chemicals and waste, against illegal logging, and in favor of protecting endangered species.

Good luck with that

But the EU's proposal to add a "sustainable development" chapter to TTIP has not yet been approved by Washington, where it could prove a tough sell - given a Congress dominated by Republican lawmakers.

Washington has only ratified 14 or the ILO's 189 conventions to date, and has so far refused to endorse those on banning forced labor, ensuring freedom of association, the right to collective bargaining, equal pay or non-discrimination, among others.

Moreover, Malmström's draft text was immediately critized as inadequate by some observers. The environmental group Friends of the Earth (FoE) said the text was full of vaguely worded language that provided no effective safeguards for the environment.

"The only chapter that could bring strong language to protect essential regulations to build a sustainable future is weak and unenforceable," FoE said in a statement.

Officials push TTIP, the public pushes back

Malmström has been pushing hard to complete the massive bilateral deal between the US and EU as soon as possible - not least because public opposition to the treaty, which has been negotiated largely in indefensible secrecy, is growing. TTIP is very controversial in Europe. A few weeks ago, as many as a quarter of a million people joined a massive anti-TTIP demonstration in Berlin.

Critics characterize TTIP as a mechanism for entrenching the powers of transnational corporations and financial interests at the expense of democratic regulation of economies.

TTIP: Wall Street's final victory?

TTIP would establish a "Regulatory Cooperation Council" (RCC) which would review all draft regulations and legislation that affect economic policy. The RCC would be given draft regulations and laws even before legislators see them, and would rework them to ensure they don't conflict with the complex, comprehensive terms of the TTIP agreement.

Critics say the RCC will in effect become an economic government composed of unelected officials, and an opportunity for corporate lobbyists and special interests to nip any socially or environmentally progressive legislation in the bud.

A key tool for TTIP to do that is its controversial "investor protection" guarantee. European corporations with US investments could sue US state or national governments for "lost profits" caused by any future changes to regulations or laws - even though the regulations would have affected all companies equally, whether domestic or foreign.

Similar provisions in other trade deals, such as the North American Free Trade Agreement (NAFTA) between the US, Mexico and Canada, have forced billion-dollar payouts to multinational corporations, or caused governments to withdraw tightened environmental regulations.

Critics see the "investor protection" clause as wrong on principle - and as a mechanism deliberately designed to discourage any and all future regulatory changes that improve social or environmental protections or enhance working conditions for employees.

nz/hg (Reuters, dpa, EPD)

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