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The US-EU Trade Deal Could Make the UK Election Mostly Pointless

Critics say the Transatlantic Trade and Investment Partnership treaty is a power grab by corporate elites that will allow them to privatize everything, overrule legislation, and sue governments.

by René Lavanchy
Mar 25 2015, 8:00pm

An anti-TTIP protester (photo by Lilly Rose Thomas)

This post originally appeared on VICE UK.

Picture the scene: It's November 2015, and fresh from his unexpected election landslide in May, a smug Prime Minister Ed Miliband (bear with me) is admiring himself in the mirror of his office suite in Parliament, as he prepares for the Queen to deliver her annual speech in the House of Lords unveiling the new government's policies. Top of the page is Miliband's plan to bring the National Health Service back into full public ownership. This radical move has already had weeks of positive press coverage, even from the papers that usually hate Labour, and now it's time to seal the deal.

The phone rings. It's an urgent call from the Attorney General, the government's chief lawyer. "It's, um, about the NHS thing, Prime Minister. I'm afraid we can't do it—we haven't got the legal powers."

"What... What are you talking about?" stutters Ed. "We're the government, we can do whatever the fuck we want... Can't we?"

"Well, not quite, Prime Minister. Remember TTIP?"

TTIP, or the Transatlantic Trade and Investment Partnership, is the latest in a long line of boring-sounding international trade treaties drawn up by the European Union. Unlike the other ones, however, TTIP has turned into a bitter ideological dogfight between the business lobby on one hand and Guardian readers on the other. The European Commission and the US, who are negotiating the deal insist that TTIP will boost the economies of both sides by allowing businesses freer access to hundreds of millions of extra customers. It's fans include the Tories, the Lib Dems, and Labour (but they want an opt out clause for the NHS). Critics, all the way from UKIP to Greece's Syriza via the Green Party, say it's a shady power grab by grasping corporate elites that will allow them to privatize everything, overrule legislation they don't like, and sue governments which pass laws that dent their income.

So rattled has the Commission been by the criticism that it's gone to the bizarre lengths of posting meaningless video footage of the TTIP negotiators in their meeting room on its website—presumably to reassure anyone who expected to see bureaucrats cavorting in a giant silver gravy-boat filled with champagne, rather than rows of suits sitting on swivel chairs in grey offices.

If the boo-boys and girls are right, and TTIP really does take power away from democracies and hand it over to big businesses, a new government elected in May could find itself unable to carry out the policies in its manifesto. In that sense, a lot of the parties' policy making is wildly uncoordinated—supporting one policy that stops your other policies from happening. When you think about it like that, you wonder if there's any point in the election happening at all. But is this really such a big deal? Are the critics right? And if so, what policies could be threatened? Here's a look at the issues, via a small selection of the election's hot-topics:

Striking NHS workers (photo by Jason Demetriou)

KEEPING THE NHS SAFE FROM GREEDY CORPORATIONS

"We will repeal the Government's Health and Social Care Act, ensuring an NHS based on collaboration and integration, not competition and fragmentation" – Labour policy document, 2014

"I don't want to hand faceless private sector companies control of our health service. We've now had two successive governments that have done that and its' clear that it doesn't work" – Nigel Farage, November 2014

Ed Miliband has vowed to abolish the Health and Social Care Act, which increased the range of NHS services that can be outsourced to the private sector, from a hip operation to running a whole NHS trust. His shadow health secretary, Andy Burnham, has vowed to make the NHS the "preferred provider" of services ( whatever that means). Nigel Farage is less specific but wants to end the use of PFI in the NHS, in which private companies build and look after hospitals in exchange for ginormous fees that have driven some NHS trusts to near-bankruptcy.

TTIP could stop that. The treaty is set to include a so-called "investor-state dispute settlement" (ISDS) clause, which basically means that private companies who think they've been harmed by a government's actions can sue the government in special tribunals, where corporate lawyers are drafted in as judges. The mere threat of getting taken to the bank is enough to put governments off passing laws that risk upsetting The Man, critics argue.

A Dutch company, Achmea, has already used a separate ISDS deal to win $33 million off the Slovakian government after it tried to renationalize its health insurance system. When the government said it would try again, Achmea tried and stop them passing the new law. Could the British government get sued if it tried to re-nationalize NHS hospitals or services?

Commission bosses have responded to the panic and said, basically, no. As long as the NHS is publicly funded, they insist, the government is free to bring outsourced contracts back in-house without worrying about getting sued, because public services are usually excluded from private competition under EU treaties. "If a future UK government would like to change the way these [NHS] services are run today, TTIP or any other EU trade deal will not stop them," a source at the Commission tells me.

There are at least two possible catches here. One is that in order for the NHS to be excluded in this way, the government needs to actually ask the EU negotiators to exclude it. "They could have said 'We completely exempt it... They've refused to do that again and again," says Nick Dearden, director of pressure group Global Justice Now.

To understand the second catch, it's worth looking at other party policies that could be threatened by ISDS—because far more is at stake than the NHS.

Photo by Tom Johnson

PLAIN FAG PACKETS

"We will be bringing forward legislation for standardised packaging before the end of this Parliament" – Jane Ellison MP, Conservative health minister, January 2015

All three main parties want to make fag packets plain because they think what drunk kids in parks love about smoking is the handsome blue cardboard on a fresh pack of Pall Malls. The Coalition has promised to bring in a law before the election. But if it's delayed and TTIP were to come into force first, the ISDS clause could make that rule more expensive than it's worth.

In 2011, soon after Australia brought in a law requiring plain packaging, tobacco giant Philip Morris sued under a trade treaty between Australia and Hong Kong, which features an ISDS clause. The company claimed that its Australian business was being "expropriated"—i.e. valuable assets like the packaging design were effectively being taken away by the state—as a result of the policy. The jury's still out on the case. The same Philip Morris have already threatened to take Britain to court over plain packaging regardless of TTIP. Could the treaty make it that bit easier?

Anti-Fracking protesters. Photo by Chris Bethell

ELECTRICITY THAT DOESN'T KILL THE FUTURE

"Labour will set a legal target for decarbonising electricity by 2030" – Labour policy document, 2014

All three parties plus the Greens (obviously) talk a good game on doing something about the fact that all the power we use might end up making the planet uninhabitable. Labour and the Lib Dems want to wean us off fossil fuels with mandatory targets. The Tories' plan to save the planet involves ending subsidies for new wind farms. But that's OK, because it's up to each EU country to decide how it wants to decarbonize its energy—for now.

American oil and gas firm Lone Pine Resources is currently suing the Quebec government for $190 million after they banned fracking for oil and gas under the St Lawrence river, using—yup—an ISDS clause in a trade treaty between the US and Canada. Even if that case fails, many critics fear that TTIP would make this kind of legal action easier and, again, put governments off regulating—stopping fracking for instance—for fear of being handed a massive bill. Could all Vivienne Westwood's campaigning be in vain?

MAYBE WE DON'T HAVE TO WORRY

No problem, says the Commission to these types of concern: This ISDS will be more tightly defined in the treaty text than previous examples of that clause, so companies can't sue just because they've lost profits. They also promise that TTIP will protect the "right to regulate and to pursue legitimate policy objectives." Both the Philip Morris and fracking lawsuits wouldn't be allowed under TTIP, the Commission source tells me.

Nick Dearden from Global Justice Now

According to Nick Dearden of Global Justice Now, however, these caveats risk being interpreted out of existence in investor courts. "It doesn't make any difference what the EU says. That's the problem. It doesn't even matter what's in the treaty in some cases, because essentially ISDS hands all power over to the adjudicators. 'Right to regulate' is almost always protected in these treaties but it evidently doesn't work, because regulations are regularly challenged."

"I have no doubt at all that the Commission does not want Philip Morris to sue them for passing laws... but they're going to, it doesn't matter what they say!"

CONCLUSION: YOU REALLY CAN'T BE SURE

These policies are just a snapshot. There are plenty of other party proposals whose intended effect could, in theory, be blunted by TTIP. Take online privacy—Nick Dearden says current protections are threatened by the deal, but my Commission source says, "oh no they're not." And even if the existing rules are safe, where does that leave the Lib Dem proposals to tighten current protection even more? It's not clear.

So would a new PM really have his hands tied? Thanks to the opaque nature of the negotiations, we don't really know. We don't know what TTIP is going to say, and we may not know until the deal is signed off by the Commission, whereupon the treaty will have to be approved by every EU member country. And even if that happens, the final test will be in court.

For critics, that very uncertainty probably means TTIP shouldn't happen at all. On the other hand, if you believe my European Commission source, the UK has never actually been forced to pay compensation over one of its existing investment treaties, so why should this one be any different?

I don't know, sorry—we'll have to wait and see.

Follow René Lavanchy on Twitter.

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