TTIP – Quite frightening

Assistant National Secretary for the Campaign for Trade Union Freedom Adrian Weir writes:

“In his State of the Union address in February 2013 President Obama announced that he was opening talks with the European Union with the aim of signing a Transatlantic Trade & Investment Partnership (TTIP), in other words a free trade agreement covering two of the world’s largest trading blocs.

Although many of the aspects of such a deal may seem quite benign – mutual recognition of the regulatory framework in each bloc covering the licencing of new goods and services – there are other issues that are quite frightening.

For example, it is reported that the TTIP would establish in law the right of multinational corporations to sue nation states in a special court – the Investor-State Dispute Settlement (ISDS) – if the nation’s regulatory framework were deemed a “barrier” to free trade.

As late as January 2014 campaigners, including the TUC, were still working for the exclusion of the ISDS from the treaty. In a letter to treaty negotiators the campaigners said:

ISDS is a one way street by which corporations can challenge government policies, but neither governments nor individuals are granted comparable rights to hold corporations accountable. [i]

In the same article TUC General Secretary, Frances O’Grady, is quoted as saying: “these clauses could thwart attempts by a future government to bring our health service back towards public ownership”.

There are examples from around the world where such procedures included in trade agreements have been used against the nation state. $22 million paid in fines by the government of the Slovak Republic after it reversed the liberalisation of its health insurance and the as yet unresolved case of big tobacco suing the federal government of Australia after its introduction of plain packaging for cigarettes.

This initiative in Britain reprises that made on the international stage by the ITUC, ETUC and AFL-CIO in 2013 where these three trade union internationals wrote to the trade deal negotiators about health care procurement and unfavourably comparing what could come from TTIP with the US-Korea free trade agreement (KORUS):

It is imperative that these trade and investment agreements result in increased savings for patients and national budgets instead of further enriching a few pharmaceutical and medical corporations. Public health, as well as access to affordable medicines and healthcare, are human rights that should be strengthened, not undermined, by trade arrangements. [ii]

Needless to say, the proponents of the TTIP argue that there will be economic winners on both sides of the Atlantic; Michael Froman, US lead negotiator arguing that the TTIP would generate annually an extra €120 billion, or an extra €545 annually in extra disposable income for an average European family.

However, such benefits should be treated with some scepticism. It has been widely reported that when the North American Free Trade Agreement was signed 200,000 new jobs were promised to US workers but in the event there was a net loss of 680,000 jobs as manufacturing headed due south and set up new plants on the Mexican side of the border – the Maquiladora.

The US unions have certainly learned from this episode. The AFL-CIO arguing that:

Unfortunately, experience has shown that despite rosy predictions by the US International Trade Commission (ITC) and various free trade advocates about export and job growth, promised gains from NAFTA-style agreements generally fail to pan out … In each case the estimates of job creation by the ITC, experts and Democratic and Republican Administrations were wildly inaccurate … As a result the AFL-CIO will be closely monitoring developments in the TTIP discussions. The Administration must abandon the corporate driven, NAFTA style model and adopt an entirely new approach … [iii]

Judith Kirton-Darling of the ETUC has made the point, in late 2013, that the European Commission is making grand promises on jobs but has not yet carried out the econometric analysis to back up such claims:

We know that the Commission is trumpeting 2.2 million jobs which could result from the current FTA negotiations. But currently we lack a comprehensive sustainability and employment impact assessment. The Commission has only just completed the tendering which means the analysis won’t be completed until the end of next year (2014), despite the fact that text will already be on the table from the start of the year”. [iv]

However, for trade unionists it may be any chapter in the treaty on labour rights that will be a major cause for concern.

The background for the US unions is that twentyfour (of fifty) states are “right to work” states, that is the state has passed a law, as so entitled under the Taft Hartley Act, 1947, to outlaw any form of union membership agreement (closed or agency shop) between unions and employers.

Not surprisingly therefore Owen Tudor of the TUC has warned us: “… an opinion column in the Wall Street Journal … explains … Congressional Republicans are only willing to agree TTIP if extending EU labour standards … to the US is ruled out in advance.” [v] US Trade Representative, Ron Kirk, has said that the agreement would seek “substantial progress on … addressing liberalisation in areas of service investment, labor and the environment …”

Many in the US trade unions see a labour chapter in the TTIP as opening the possibilities of having a European style worker dialogue with employers. George Kohl of the Communication Workers of America optimistically arguing: “now we get to benchmark against a more progressive economy and raise up labour engagement here in the United States, we hope that the trade discussions would make improvements to how corporations treat their workers here.”

However, whilst noting some of positive possibilities in incorporating EU labour standards in the US, particularly on information and consultation, health and safety and agency workers, the AFL-CIO has noted that, like the US, the EU is not an homogenous labour rights entity:

“… it is important to note that the EU now includes Romania, Bulgaria, Cyprus and Slovakia – countries whose economies, incomes and worker protections lag behind most of their EU counterparts. In addition, Poland has been engaging in so-called “labour market flexibilities” for a generation and Hungary’s current government has likewise been intent on destroying many worker protections. American workers should be aware that some multinational corporations could be intending to use a US-EU trade agreement to move jobs from the US to these countries whose wages and worker protections do not reach the level of the rest of the EU.” [vi]

Over and above a transposition of Euro Directives on agency workers and the like, Owen E Herrnstadt of the International Association of Machinists argues:

“Negotiators should also condition each country’s participation on its adoption, implementation and effective enforcement of fundamental human rights reflected by International Labor Organisation (ILO) Conventions and jurisprudence … Negotiators should ensure upward harmonisation of labor and employment laws, regulations, policies and directives so that both regions compete on a level playing field – a level playing field that incorporates ILO Conventions”. [vii]

In pressing for the adoption of ILO Conventions and jurisprudence Herrnstadt moves the US unions onto the ground occupied, at least publicly, by the European Commission whose initial position is:

In the labour domain, the starting point for discussions should be the parties’ exiting commitments in relevant areas, including the ILO 1998 Declaration on Fundamental Rights and Principles at Work, as well as its follow up, and the 2008 ILO Declaration on Social Justice for a Fair Globalisation, which applies to all ILO members. [viii]

The Commission goes on: “the EU considers that ILO core labour standards … are an essential element to be integrated in the context of a trade agreement.”

Although the ETUC looks across the Atlantic and raises doubts about how far the US could move towards the ILO:

The ETUC has specific concerns about the lack of ratification of ILO Conventions and violations of fundamental labour rights in the US, notably on the right to organise and negotiate collectively, and particularly but not exclusively in Right to Work states [ix]

Questions could be raised in the Mediterranean about the Commission’s role as part of the troika in dismantling labour rights in Portugal, Spain and Greece.

In the British context, it is inconceivable that the current government would sign up to enforceable ILO Conventions as our labour law, mainly enacted by the previous Conservative government, is intentionally outside of these protections – making the UK effectively a “right to work” state.

Perhaps Cameron’s stock will be so low in Europe during 2014 that any Tory calls to level down a labour chapter to UK standards, although that would be extremely difficult to make compatible with the Commission’s stated support for ILO Conventions, would go unheeded.

Could the British Conservatives sign up for the free trade parts of the treaty and seek an opt out from the labour chapter?

The Commission says that “domestic labour standards should not be … lowered as a means of competing for trade or investment” yet this was Tony Blair’s explicit position when Prime Minister – and presumably remains the right wing view – for not repealing the labour laws of the Thatcher and Major period.

All of this may be signed off before a future Miliband Labour Government could intervene on behalf of British workers and their unions. However, if ILO Conventions are the treaty standard then presumably a future Labour Government could introduce rights to organise and rights to bargain collectively to bring the UK up to the standard and not be accused of using labour law as disguised protectionism.

It would be ironic indeed if compliance with the terms of a free trade treaty were to provide the cover for Labour to positively legislate on trade union rights!

Mutual recognition of regulatory procedures for goods and services is one thing but as far as labour standards are concerned it’s a case of a luta continua.”

[i] Wright O & Morris N British sovereignty ‘at risk’ from EU-US trade deal: UK in danger of surrendering judicial independence to multinational corporations, warn activists The Independent 14 January 2014

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