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TTIP: What’s really at stake

The recent failure by the European Parliament to vote on its own interim report on the current state of the TTIP negotiations has again thrown the spotlight on the now infamous free trade negotiations between the EU and the USA writes Carole Tongue. .

This is the most potent issue before MEPs who up till now have received in excess of 7000 emails on the subject from various civic organisations, trades unions, NGOs and concerned individuals worried about the potential loss of national and EU sovereignty to legislate freely in the future to mitigate the effects of free market economy. Add to that a large number of petitions signed by many thousands of citizens objecting to the negotiations.

In the end, this debate all revolves now around whether this trade agreement should contain an Investor-State Dispute Settlement (ISDS) or not.

Jude Kirton Darling, prominent MEP who works diligently on this issue, says: “ISDS has been subject to by far the greatest amount of concern. And rightly so: ISDS is a system of private arbitration through which corporations are able to sue governments for passing laws that threaten their profits. It is a para-judicial and often secret world in which hefty fines, at the expense of the taxpayer, are up for grabs.” Her view seems to command a majority inside the S&D group.

Pervenche Beres MEP, leading French socialist, puts it as follows: “There must be no introduction of a dispute settlement mechanism between investors and states that would allow foreign companies to bypass national courts and allow them to attack a country before a Court of international arbitration if it considers that a law has harmed its interests. Multinationals should not obtain more guarantees than those seeking to enact public policy!.”

In the S&D Group, which contains members from all 28 Member States, 18 national delegations do not want any kind of ISDS in the draft TTIP. They acknowledge that the EP interim report contains excellent provisions to protect Member States and EU legislative sovereignty in any future trade agreement, but would only vote for it without an ISDS.

The EPP (Christian Democrats) and ALDE (Liberals) stand ready to find a compromise with the S&D Group on a reformed ISDS. The Conservatives and their allies want TTIP to be adopted as soon as possible with an ISDS included.

The Confederal Left Group (GUE) does not wish to see any kind of free trade agreement succeed. Similarly, in the Green group there are major concerns with deregulation (via regulatory convergence) and transparency. They oppose any mechanism to provide private, extra-judicial means for corporations to challenge democratically-decided laws.

Far right groupings are against TTIP from a protectionist point of view but also wish to destroy the chance of the EP expressing an opinion on the matter. Same goes probably for Farage and his band of UKIP MEPs.

So it is on this issue that the future of TTIP now hangs. Many fear that such a mechanism could be used to undermine the democratic legitimacy and sovereignty of Member States and the EU to legislate in social, cultural, environmental, consumer protection, public health areas. Thus, quoting one anti TTIP campaigning ex MEP: “if this goes through, we are entering an era of post democracy”.

Blame for the failure of the EP to vote on its own interim report on TTIP is still flying around. It depends where you are coming from. EP President Martin Schulz realized just before the vote that there was going to be an anti-ISDS majority view expressed (? via an amendment?) and feared that the Centre and Right groupings in the EP would then vote the whole report down. The EP would have been left without an opinion on this critical and attention-grabbing subject where the EP has been given extra veto powers by the Lisbon Treaty. It would be quite a missed opportunity! In addition, failure to agree on this kind of grand coalition between the S&D, EPP and ALDE, it is argued, allows victory to Le Pen and Farage who want to wreck the EP’s ability to have a strong voice and role in the future direction of the EU.

Others argue that the EP not having an opinion is a true reflection of the state of public opinion which runs from completely opposed to TTIP to sceptical about what it would mean.

German Vice Chancellor Sigmar Gabriel has proposed a new permanent EU/US court, which Commissioner Malmström has said she might accept “in the long run”. This view, with provision for a reformed judicial procedure attached to the agreement, may well be the position that prevails.

Before this debate over ISDS, another area of controversy over the TTIP negotiations – now less in the spotlight – had been the exclusion of audio-visual services from the discussions.

Needless to say that the decision of EU Member States on June 14th 2014 to exclude audio-visual services from the negotiating mandate and reiterate the EU’s commitment in favour of the protection and promotion of cultural diversity, was a great victory for the whole sector.

What it means is that EU Member States can retain the right to support, subsidise and legislate via special measures to ensure that local films and TV programmes can continue to be made in every EU country and for cultural diversity of expression to be upheld and further developed.

Like other organizations, the European Coalitions for Cultural Diversity (of which I am chair) were deeply involved in the process preceding this success, actively defending the protection of the so-called “exception culturelle”.

In addition to our day-to-day advocacy activities, we organized a conference in Paris in June 2013, with high-level decision-makers, creators, professionals and civil society, in order to raise awareness on the potential danger of the inclusion of cultural services in the mandate. We also did our part with other organizations to relay the famous petition “The cultural exception is non-negotiable”, signed by more than 8000 movie-makers, creators and artists.

Even though the decision of the European Council reassured everyone, cultural organizations cannot help but still feel concerned. The ambition of American negotiators in this domain is only too well-known. Encouraged by big internet players such as Google, Amazon and Apple, the United States has long been calling for a distinction between traditional audiovisual services and services delivered though digital means (whose definition would be vague enough to include digital audiovisual services, such as Video On Demand), with the latter no longer being subject to European obligations regarding creation funding mechanisms and European works promotion.

As a result, the very capacity of Member States to develop public policies promoting European cultural diversity in content on the Internet, connected TV and on all future devices and technologies would be then at stake. If a free market for cultural services is adopted, it would signify the end of the EU Audiovisual Media Services directive that imposes broadcasting quotas for European works and national TV channels; it would mean the end of the  national treatment clause that prohibits imposing different conditions for companies of different nationalities, such as access to public funding in some countries; and if the clause of the preferred nation applies, the US will be entitled to preferential treatment reserved normally for local AV productions.

We therefore welcomed the declarations made by the new President of the European Commission, Jean Claude Juncker, and the new European Commissioner for Trade, Cecilia Malmström, who both committed, as soon as they were nominated, to respect the negotiating mandate in this area. Jean Claude Juncker declared: “I will not sacrifice Europe’s safety, health, social and data protection standards or our cultural diversity on the altar of free trade”.

With the belief that tough negotiations can sometimes lead to compromises that can go against first commitments, we now call on the European Commission to remain vigilant when it comes to negotiate the Transatlantic Trade and Investment Partnership and to strictly fulfill its mandate, which must apply in both the linear and online world. Commitments in other fields such as e-commerce or telecoms could potentially have an impact on the audio-visual sector. Therefore, the Commission must ensure that it does not introduce notions that have been used in other agreements, such as “digital products”, which usually include digital audio-visual services.

More generally, the Commission must ensure that cultural policies at local, national and European levels cannot be challenged in the context of trade negotiations, so as to guarantee the protection and promotion of cultural diversity. The capacity of Member States to adopt and adapt regulations in the digital era is therefore crucial. And that is why the debate over the investor-to-state mechanism is also a debate we follow closely.

Controversies over ISDS or the cultural exception in a way both relate to the same thing: what is at stake is to ensure that when negotiating a free trade agreement the EU retains enough leeway to protect and support what is fundamental. Capacity of Member States to regulate and adapt regulations is key, especially in the cultural sector. Let’s hope that TTIP does not challenge these very fundamental principles!

Carole Tongue is a former MEP and is currently chair of the European Coalitions for Cultural Diversity.

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