TTIP, TISA and TTP – world trade revolution?

Article as analysis
The industrialized countries are increasingly turning their backs on WTO multilateralism. It is being replaced by regional and thematic mega-agreements. And this, much to the detriment of emerging and least developed countries.

The USA opened the first front in 2010. It had enough of the resistance by developing countries – including China, which is catching up at an astonishing rate – to further liberalization in the World Trade Organization (WTO) framework. It therefore launched the Trans-Pacific Partnership, known under its English acronym TPP. So far there are 12 States in the Asia-Pacific region participating in the negotiations on a comprehensive regional agreement in the fields of trade and investment (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam).

Although the negotiating texts are still secret, it is known that the TPP goes further than the WTO in all areas. More specifically, tariffs on industrial goods are to be reduced to zero, services, especially financial services – provided they are not expressly ruled out based on a "negative list" – and investments are to be liberalized. Investments are protected through the controversial Investor-State Dispute Settlement mechanisms. They allow only the investor to take legal action, but not the State in which the investment is made. Also being negotiated is the strengthening of patent protection such that it would render access to generic drugs and seeds more difficult. The TTP is also taking aim at those markets and services that are controlled by State-run enterprises. Surprisingly, the agreement does not contain a specific chapter on agriculture, which makes it all the more difficult for observers to gauge the potential impact of the TPP on this highly sensitive area for food security.

TTIP: USA and EU on the attack

In 2013, the USA and the European Union – whose trade together accounts for about half of world trade – opened a new front: negotiations on the Transatlantic Trade and Investment Partnership (TTIP). Because customs tariffs between the USA and EU are already very low, the focus lies on harmonizing various regulations. European NGOs are vehemently opposed to the TTIP for fear that it will undermine social and environmental standards, consumer protection, all of which are much more effectively developed in the EU than in the USA. Genetically modified fruits and vegetables, chlorinated chicken, hormone-treated beef, the reduction of labour rights to the level prevailing in the USA, which has ratified only two of the eight core conventions of International Labour Organization (ILO) – all these elements underlie the justified fears on the European side of the Atlantic. Also in the picture are the environmentally hazardous methods by which the USA undertakes shale gas fracking. But the most controversial part of the agreement relates to investment protection. As with the TPP, the aim of the United States is for investment disputes to be settled by means of largely non-transparent arbitration bodies. Given the opposition from civil society and individual countries, the EU has launched an online consultation and suspended negotiations on this chapter until the 100,000 responses received have been evaluated. Germany, which is facing a  Euro 3.7 billion lawsuit from the Swedish energy giant Vattenfall over the decision to abandon nuclear power, is also critical. For technical legal reasons, the EU Commission rejected the initiative of the "Stop TTIP" action alliance to open up the treaty for discussion through a European Citizens' Initiative (ECI).

TISA: deregulating services

Alongside these regional mega-agreements, work is also proceeding on plurilateral thematic agreements. The leadership in these cases rests mostly with the industrialized countries. In 2012, some 50 countries, including the USA, EU, Switzerland and some developing countries close to the United States, launched negotiations on a comprehensive services agreement, the Trade in Services Agreement (TISA). TISA could deregulate whole swathes of the economy and open them up to privatization: these include public services, financial services, State-owned enterprises, and government procurements. For NGOs and trade unions, this is also a matter of safeguarding existing social and environmental standards, protecting workers, consumers and privacy.
What do all these agreements have in common? They aim for the broadest possible privatization, deregulation and liberalization of the world economy. They may set new standards that will be applied to all countries – including those not even involved in the negotiations, or which subsequently accede to the agreement.

These mega-agreements constitute a thinly veiled attack on China, India and South Africa, all countries that, in the WTO framework, oppose the liberalization of trade in industrial goods, services, government procurement and investments, and are stubbornly insisting on more just global rules in agriculture. In short, trade flows are to be channelled in a new direction, to the disadvantage of the emerging countries in the South. The countries that will suffer are not just those that have trade agreements with both the USA and the EU. Mexico's textile industry, for example, which is bound by free-trade agreements with both blocs, could be squashed between the European and the US industries if the TTIP is adopted. Another example is that the EU currently imports lemons mainly from Egypt, Morocco and South Africa. With the TTIP, the USA would step up its citrus fruit exports to the EU. The poorest countries too are at risk: according to a recently published study, reduced exports from least developed countries to the EU would mean a 3% contraction of their gross domestic product (GDP).

It is no chance matter that the major emerging countries are not taking part in these negotiations – at least for now. Should there be a breakthrough with TISA, industrialized countries could finally lose all interest in the WTO Doha Round. And the emerging and developing countries would be robbed of their most powerful lever for negotiating better conditions in the agriculture sector.
Switzerland is involved in the TISA talks and is following the Atlantic mega-deal with great interest, as it could also be affected. The position of Alliance Sud is that Switzerland should withdraw from TISA. The risks to its independent public services are too great, and the possibility that countries could regulate at their own discretion is too significant. And not least of all, Switzerland should decisively oppose the attack on a fair, multilateral trading system.