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Why are the negotiations secret?

I was intrigued to read our MP’s bold claim that the new proposed trade deal between the EU and US will save me £400 per year. I have not been able to trace the source of this claim and I am now publicly challenging Mr Carmichael to justify it and to show me the calculations that lie behind it. As an economist I am sceptical about these loose figures that are bandied about to persuade us to take certain policy actions, particularly because in the past many have simply failed to materialise. In this case since the trade negotiations are not only incomplete but also secret, so how can Neil Carmichael possibly know how much cheaper my basket of purchases will be every week once the deal is concluded?

I am always somewhat bemused by the implicit assumption that more trade will bring more wealth. The UK and EU are vast markets to be sure, but if I buy a pair of shoes produced in the US I will not also need shoes produced in the Five Valleys. My decision about which one of the two to buy is likely to be made on the basis of quality but also on price. And hence the trade treaty is likely to encourage working conditions that reduce the price of goods in both markets. And how can the trade deal improve the situation for producers on both sides of the Atlantic unless I buy twice as many pairs of shoes?

I do pay tribute to Neil Carmichael’s courage in bringing this debate into the open. Thus far the negotiations about this wide-ranging treaty (officially called the Transatlantic Trade and Investment Partnership (TTIP) have taken place behind closed doors and we are still waiting to hear how much will be made public from the talks that resume this week in Brussels. Some of the information we have is the result of revelations from Edward Snowden about the spying activities the US was engaged in to discover the negotiating position being taken by its partners in Europe. Because of this fundamental undermining of trust Green MEPs recently successfully proposed a motion to suspend the talks by the Parliament’s Civil Liberties Committee.

What has now been revealed about the TTIP makes clear that it is entirely misnamed. The treaty is not about trade but about money, specifically about giving corporations the power to legally defend their investments against domestic country regulation, the so-called Investor Trade Dispute Mechanism. If the corporations were allowed to have their way then might lose the democratic right to bring our railways back into public ownership, for example, or to prevent a company from selling food made with genetically modified ingredients. Were we to do so we would become liable to being sued by the corporation and taxpayers’ money would be due in compensation. This is the aspect of negotiations that has been the focus of Green MP Caroline Lucas, whose Early Day Motion 793 calls for talks to be frozen to allow full parliamentary scrutiny. Surprisingly, we are not hearing similar calls from other political parties, in spite of their rhetorical words about the importance of sovereignty.

Neil’s article suggests that a reduction in regulation would be good for local businesses but as Greens we strongly dispute this and have already raised the alarm about the damage that might be done to South-West livelihoods if the treaty is agreed. In the South West we focus on high-quality produce and high animal-welfare standards. In the proposed trade regime it is likely that corporations that focus on volume rather than quality would be able to undermine the high welfare standards that we have in the UK. As an example, in the dairy industry this might mean that we would be forced to accept milk produced from cows that have been given the BST hormone, even though consumers do not want such milk and we have worked strenuously in the EU to oppose its use.

This is not the first time that global corporations have attempted to undermine democratic power to protect their foreign investments. Around the turn of the century similar secret negotiations were launched to lead to what was known as the Multilateral Agreement on Investment. As people learned what its impact might be they rose against it and it was defeated. I believe that as more details emerge about TTIP, supported by evidence rather than optimistic claims, this new treaty it will likewise be defeated by an upsurge of popular opposition.

Molly Scott Cato, Professor of Green Economics and Lead Euro-Candidate for the Green Party

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