The Transatlantic Trade & Investment Partnership: what to be afraid of?

It’s been a couple of weeks since I received the latest issue of the Ethical Consumer magazine.  Having glimpsed at the table of contents, I was immediately drawn to an article with the latest news on The Transatlantic Trade & Investment Partnership (TTIP), about which I’ve been catching occasional bits of quite disturbing news during the last several months. This has become an issue to which no socially aware person can stay indifferent, and given that the proposed deal has direct consequences for the food industry, I thought I couldn’t ignore it any more either.

A little bit of background information to start with. TTIP is a bi-lateral trade agreement between the EU and the US which has already been through seven rounds of negotiations since the launch of official talks at the G8 summit in 2013. Presented as an anti-crisis measure, the deal is intended “to increase EU-US trade and investment to support mutually beneficial job creation, economic growth, and international competitiveness” (Webb, 2014, p. 2).  This is meant to be achieved by boosting trade and investment across the Atlantic through a reduction of tariffs, lifting non-tariff barriers to trade, harmonization of regulations and standards, opening public services and government procurement to private investors, and the provision of investor-state dispute settlement (Webb, 2014). Behind these promising statements, many have discerned real threats to democracy and public interest. Indeed, the proposed deal will have a profound impact upon the most important areas of life:

Finance – regulatory convergence may drive America to loosen its banking regulations;

Public service provision – healthcare and education sectors will face the risk of privatisation;

Food industry and environment – EU’s food safety regulations and environmental protection standards can slacken or be completely dispensed with;

Sovereignty of nation states – ISDS system granting corporations the power to sue governments severely undermines the ability of national jurisdiction to protect citizens’ rights and interests.

ISDS mechanism is indeed one of the most controversial and worrying elements in the proposed agreement. The system allows foreign investors to bring tribunal cases against individual governments if the latter are deemed to be damaging the companies’ profits by enforcing national policies. In practice, this means overturning the power of national governments to enforce critical environmental, health, and safety regulations aimed at protection of public interest and health. The most notorious examples of ISDS mechanism brought into action include a tribunal case filed by the Swiss tobacco company Philip Morris against the government of Uruguay. The tobacco giant claims that Uruguay’s smoking control measures (e.g. health warnings should be covering 80% of a cigarette pack), go against the investment treaty between the two countries. The company is now claiming financial compensation for the damage supposedly caused to its trademark and investments by Uruguayan anti-tobacco legislation (Bermingham, 2014). Another ill-famed case was initiated by a Swedish company Vattenfall against German government’s decision to close down its nuclear power industry after the Fukihsima disaster in Japan. Vattenfall, an owner of two nuclear plants in Germany, considered the measure as an infringement on its energy investments and demanded compensation of €3.7 billion. While this dispute is still awaiting the outcome of the ruling, another energy giant, an oil company Occidental, has already won its case against the government of Ecuador over the termination of an oil-concession contract and is now due to receive $2.3 billion in compensation (“The arbitration game”, 2014).

With negotiations taking place in secret (“otherwise it would be like showing the other player one’s cards in a card game”, European Commission’s official webpage claims!) and with no public consultation (but with active involvement of big business), one can easily see why concerns over the “free-trade” deal continue to grow. A self-organised European Citizens’ Initiative to Stop-TTIP has collected over 900.000 signatures, and there are dozens of other anti-TTIP petitions all over the virtual space. While the activists’ battle for safeguarding our economic, social and food systems against corporate invasion goes on, the very least every individual person can do is to be aware of potential consequences of the agreement. Since I take a special interest in the environment and food issues, I will return the next week with an overview of TTIP’s prospective impact on the EU’s food and environmental standards.


Bermingham, F. (2014, October 20). TTIP and ISDS: The Obscure Trade Clause Threatening to Tear European Politics Apart. International Business Times. Retrieved from

The arbitration game (2014, October 11). The Economist. Available from

Webb (2014). The Transatlantic Trade and Investment Partnership (TTIP), House of Commons Library Standard Note SN/EP/6688, 18 November 2014, available at


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s