After being delayed by the U.S. government shutdown, talks for a Transatlantic Trade and Investment Partnership (TTIP) are quietly gearing up again. Tariff barriers between the U.S. and EU are already low, so these negotiations are focused squarely on achieving “regulatory coherence.”
In other words, industry lobby groups and their political allies on both sides of the Atlantic see the trade deal as an opportunity to get rid of rules and regulations that limit their ability to buy and sell goods and services. The outcome of TTIP has implications for the rest of the world. Leaders from both regions have made clear, the terms of this trade agreement will set the standard for future free trade agreements.
TTIP could affect a broad range of issues, from energy to the environment, and intellectual property rights to labor rights. It could also have a significant impact on the evolution of agricultural markets and food systems in the U.S. and EU, as well as solidify the ability of corporations and investors to challenge new regulations that could affect expected profits through international tribunals. Unfortunately, little concrete information is known about the content of the TTIP proposals, since the governments involved have refused to publish draft text.
In both the U.S. and EU, the time to influence the substance of the agreement is before it is completed. That’s a tricky task, since the negotiations are happening behind closed doors, but it means that civil society groups and legislators need to pay close attention to what is on the agenda, even without complete information.
In Promises and Perils of the TTIP: Negotiating a Transatlantic Agricultural Market, (which we are co-publishing with the Heinrich Boell Foundation) we outline some of the key differences between rules in the U.S. and EU that will likely be on the negotiating table during the trade talks:
- Food safety: Differing food safety standards, especially around GMOs and controversial growth hormones have been the subject of trade disputes between the U.S. and EU for years, at the WTO and in standards setting bodies. TTIP proposals seek to go beyond WTO commitments, and allow food safety standards to be challenged directly by corporations. There is also pressure to lower EU standards on meats and poultry, including controversial growth promotion hormones, such as ractopamine, and chlorinated rinses of poultry. The EU, for its part, is seeking to overturn limits on its exports of beef despite concerns over EU member state controls to prevent Mad Cow Disease. This deregulatory approach could carry over into emerging technologies, such as the use of nanotechnology in food and agriculture, even though there are no clear U.S. regulatory definitions of nanomaterials or risk assessment of their impacts on human health and the environment.
- Chemical policy reforms: Rules on the use of potentially toxic chemicals would be negotiated in the Technical Barriers to Trade chapter of TTIP. These rules could affect the regulation chemicals like Bisphenol A (BPA) used in food packaging that disrupt the delicate hormone balance in the human body. Rules to regulate those chemicals are advancing at the US state and EU member state level. The EU’s Regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) process is firmly grounded in the Precautionary Principle. In the U.S. to the contrary, the outdated Toxics Substance Control Act of 1976 (TSCA) puts pressure on the Environmental Protection Agency to prove that chemicals are unsafe, rather than on the industries producing the chemicals to prove that they are safe before they enter the market.
- Procurement policies and local foods: As part of the global movement towards healthier foods, new governmental programs, such as U.S. Farm to School Programs and similar initiatives in Italy, Denmark and Austria, include bidding contract preferences for sustainable and locally grown foods in public procurement programs. Both the U.S. and EU have criticized “localization barriers to trade.” The EU, in particular, has been insistent on the inclusion of procurement commitments in TTIP at all levels of government, for all goods, and in all sectors—potentially including commitments on these public feeding programs, taking the preference away from locally grown.
- Financial service reforms: The links between agriculture, food security, financial services and commodity market regulation are multifaceted. New rules being developed to implement Dodd-Frank in the U.S. and the EU’s revised Markets in Financial Instruments Directive (MiFID) process seek to increase the transparency and comprehensiveness of reporting to regulators by market participants and prevent market disruption by unregulated, dark market trading. Efforts at upward harmonization of financial and commodity market regulation could be derailed by proposals to include them in the TTIP financial services chapter and to make financial reforms subject to investor legal challenges.
Discussions on these rules on safer and more sustainable food systems need to happen under conditions of full transparency and should not be subsumed within a trade agreement.
If there is any hope that the focus on regulatory coherence does not simply mean shifting standards toward the lowest common denominator, then the U.S. and EU governments need to prioritize human and environmental well-being over market openings for multinational corporations. That seems entirely improbable given statements made by the governments up to this point. Improbable isn’t the same thing as impossible though. The current approach is a political choice; a different path is possible.