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Debunking the Myths Surrounding the EU-US Trade Deal

03/11/2014 17:30 | Updated 03 January 2015

Expressing and debating differences of opinion is a welcome part of any healthy democracy. However, it can be hugely frustrating when opponents of a piece of legislation or negotiated agreement manufacture myths in an attempt to stifle debate.

Unfortunately, this appears to be happening in the context of the proposed EU-US Transatlantic Trade and Investment Partnership (TTIP), a trade agreement that, if (and only if) signed off by the European Parliament, has the potential to deliver real, tangible benefits for workers and companies in the EU and the UK. Earlier this year, I blogged about the myths being pushed by many NGOs and trade unions, specifically their false claims about the dangers TTIP poses to the NHS, environmental standards and workers' rights, as well as a number of other issues. These myths remain just that, but, given the ever-increasing number of identical emails I and my colleagues are receiving, generated by anti-trade NGOs, it is time to clarify what exactly the negotiations cover, the role that both the European Parliament and our own Houses of Parliament are playing and, lastly, what TTIP will and will not lead to.

First its merits. For all its value and importance, the EU-US trading relationship still suffers from numerous obstacles, preventing it from reaching its full potential to provide growth and jobs. An independent study, commissioned by the European Commission, estimates that a comprehensive deal with the US would benefit the EU to the tune of €120bn, which translates on average to an extra €545 (£433) in disposable income each year for a family of four in the EU.

The aim of this agreement is to increase trade and investment between the EU and the US by unleashing the untapped potential of a truly transatlantic marketplace. The agreement is expected to create jobs and growth by delivering better access to the US market, achieving greater regulatory compatibility, without lowering standards between the EU and the US, and paving the way for setting global standards on a range of difficult issues.

Despite the scare stories coming from the left, these negotiations are open and subject to scrutiny by democratically elected politicians. Discussions on this agreement began last year and are expected to continue for many more. Nothing has been finalised and a vote in the European Parliament on a finished agreement is years away. The final version will be available for everyone to see before it is ultimately approved.

The TTIP negotiations have so far been the most transparent of all the dozens of trade negotiations already concluded by the European Union. The European Parliament and the governments of the EU regularly receive technical briefings and updates (11 so far) from the European Commission, which is working with its US counterparts to reach a deal. Given that TTIP is nowhere near completed and the fact that there are many outstanding issues, it would be ludicrous to reject it before we know the outcome of the negotiations.

One thing that is already crystal clear is that the NHS will be fully protected. Public (read state-provided) services have been excluded from all global, multilateral and bilateral free trade agreements so far, and this will continue to be the case for TTIP. Furthermore, it is not only the EU that does this: the US excludes all public education and public health services from its trade deals, such as that recently signed with South Korea. The European Commission has responded directly to the erroneous claims being made by British trade unions, stating categorically that they are not true. The way the NHS is run will remain entirely the decision of the democratically elected British government.

Other socialist myths relate to the Investor-State Dispute Settlement system. In fact this is a highly effective system that has been part of international trade agreements since the 1950s, designed to give greater legal certainty to companies operating in legal jurisdictions other than their own. If a state is found to have discriminated against a foreign company or to have illegally nationalised their assets (that is, in contravention of that country's own domestic law) a company can argue their case before a tribunal, a useful guarantee for an investor if you think that a country's court may be politicised or unreliable. The company has no right to change a government's policy or a country's laws.

Of course the system could and should be improved, for example making deliberations by international panels more transparent and visible to the public, but, in the main, ISDS is already working well. Consider the following. Poland signed a trade agreement with the US in 1990 which contains ISDS provisions. Since Poland joined the EU in 2004 its government has put in place laws guaranteeing higher levels of labour, environmental, food safety and social standards, yet US firms have not launched a single case.

Lastly, there is the issue of environmental standards. In fact these will remain almost unchanged on both sides of the Atlantic. Regulatory harmonisation will only take place where the frameworks are the same. Safeguards against GM foods will remain unaltered unless a member state authorises a change. There is no debate here, and all parties participating in negotiations on behalf of the EU have made this very clear.

Many countries in the EU, particularly those in the beleaguered Eurozone, are experiencing little or no growth and would welcome the economic boost that trade agreements can provide. But whatever one's views are on open trade, it is surely better to allow negotiations to continue, with the 28 democratically elected governments of the EU and the European Parliament scrutinising progress, than to write off the agreement before the chance to debate it properly. As democrats we should welcome an informed debate, not one characterised by unfounded myths and distorted truths.