Transatlantic Trade and Investment Partnership- In Whose Interest?

The Transatlantic Trade and Investment Partnership (TTIP) is the current free trade agreement being negotiated between the EU and the USA.  It is not your run of the mill tariff-lowering agreement as a means of furthering trade. 

It is about regulatory issues and non-tariff trade barriers like health, safety, the environment and consumer's and worker's rights.  It is also about corporations trying to create their own rule of law.

Last night on German TV the focus of the negotiations was distilled down to two issues:

1.)  The US technique of disinfecting chicken with chlorine might be introduced in Europe which the Germans/Europeans don't want.
2.)  The laxer approach to bank regulation that has been followed in Europe since the Credit Crisis in contrast to the more draconian measures introduced in the US which the Americans don't want.

I actually think these two points are intended to keep the discussion away from a much more important point but I will come to that later.

Point #1.  In the EU generally agriculture is geared towards the prevention of disease rather than focusing on how to prevent the further spread of disease once it has occurred.

In the EU the breeding/rearing of livestock is done in a manner designed to prevent as much disease as possible at every stage from breeding to feeding to slaughter and to distribution.

In the US, presumably because it is cheaper and thereby more efficient the focus is to get the livestock through the system as fast as possible accepting the presence of disease and then "washing" the disease away  with a chlorine bath to eliminate bacteria at the end of the meat production chain.

Sounds like using chemicals to make up for inadequate hygiene standards in the meat industry....

Point #2 is also a diversion.  Bank regulation is already managed by the Bank For International Settlements (BIS) and we are in the third edition of rules known as Basle III which slowly but surely are being instated across the globe. This is a regulatory issue,not a trade issue, and that is where Investor-State Dispute Settlements (ISDS), the more important point, kicks in.

My concerns about ISDS center on a few basic points:

a.)  Currently under World Trade Organisation (WTO) legislation if a company feels that it has a case against a host (ie foreign) state it first has to convince its' own state that it has a case and the home state will raise the complaint on corporation's behalf.  This is not the case under ISDS.
b.)  A company wishing to sue a host state has the choice to sue the state under that state's laws or to move directly to ISDS counter to current law which moves cases to an international court or tribunal only after the domestic legal route has been exhausted.
c.)  Only foreign companies can use ISDS ie a domestic company could "suffer" the same damages claimed by a foreign company but have no recourse to ISDS.
d.)  International Tribunals, unlike domestic tribunals and international courts are private, confidential and essentially outside the domestic rule of law.

Now it may seem that a number of my concerns are in conflict with one another, and they are.  Host States versus Home States; Foreign Companies versus Domestic Companies and Domestic versus International Law certainly provides for different views on the same subject depending on ones perspective.

Different political systems dictate different approaches to health, safety, the environment and consumer's and worker's rights. They also result in different regulatory environments.

The current buzzword is Harmonization which inevitably means lowering standards to the lowest common denominator- but at what cost?

Neither the USA nor the EU are Third World Countries which operate outside the rule of law.
They might disagree on some interpretations and there will be instances where a government decision in one bloc will have adverse effects on a company from the other bloc.  

If these governmental decisions are neither capricious nor malicious then companies engaging in said countries, be they foreign or domestic, then such government decisions constitute part of the general risk of doing business which includes market and political risk.

ISDS is another insidious form of making corporate risks/losses public and keeping corporate profits private-at the cost of the taxpayer.

Call me old fashioned but I like a level playing field.