The chemicals industry claims that Europe’s protection against toxic chemicals – for example through the REACH directive (the EU’s premier regulation to register and restrict toxic substances) or the pesticides regulation – is the largest trade barrier for US manufacturing. The US government has maintained this position for a long time, saying in 2014 that the EU’s laws “are discriminatory, lack a legitimate rationale, and pose unnecessary obstacles to trade”.
REACH requires companies that want to market a chemical in the EU to prove that it is safe (or to use alternatives). The default approach under US law is that all chemicals are safe, unless proven otherwise. The EU bans thousands of chemicals that are harmful to the environment or health in cleaning products, cosmetics, paints, clothes, and electrical appliances. The US is much more lax, with only a handful of chemicals banned.
TTIP negotiations even had a ‘chilling effect’ on efforts in Europe to regulate a new category of chemicals, endocrine disrupting chemicals (EDCs), which can cause cancer and reproductive diseases, and are particularly harmful to children. EU regulation of EDCs had been repeatedly delayed, despite clear evidence of harm. Several EU countries criticised the Commission for its lack of action. In December 2015, the European Court of Justice ruled that the Commission had in fact “breached EU law” by failing to act.
Food, pesticides and GM crops One of the fundamental threats from TTIP in Europe is that the burden of proof on whether a product is safe or not could be shifted to fall on public authorities, not on those who seek to sell it. This is the general approach in the US. Under such a system, a pesticide that is scientifically linked to cancer could still be approved, unless there is a 100 per cent consensus on its harmful effects.
Another area of concern is the use of antibiotics for farm animals. This practice is common to industrial livestock farming on both sides of the Atlantic, but is particularly prevalent in the US. It is a major cause of resistance to antibiotics among humans.
The Commission’s proposal also fails to address many of the fundamental concerns raised by the European Parliament in its resolution of 8 July 2015, where it says it wants “to replace the ISDS system with a new system for resolving disputes between investors and states”.
ICS preserves preferential treatment for foreign investors over local businesses. The ICS court is not a real court and the judges are not real judges – they are not permanently assigned to the court and can still act as lawyers for corporate clients, raising serious conflict of interest concerns. ICS also flouts democratic principles and the right for governments and institutions to adopt and enforce laws. The court would have the power to force a state to compensate investors whose profits it believes are constrained by regulation. An indirect ‘chilling effect’ would be to discourage public authorities from enforcing public interest safeguards for fear that they could be challenged.
Many studies have been published on the potential effects of TTIP on the economy. An optimistic economic forecast carried out for the European Commission says an “ambitious and comprehensive” TTIP deal would translate into economic gains of €119 billion for the EU and €95 billion for the US, after ten years. This means €11.9 billion annually, or €54.5 for each European family. The annual GDP increase would be 0.05 per cent. Even these meagre figures rely on a rosy outlook for the European economy. In any case, economists warn that empirical economic analysis of the effects of a future deal, with proper modelling, is almost impossible
Secondly, the EU and the US are entangled in a complex web of trade treaties with conflicting provisions and differing timelines. The US has recently signed the Trans-Pacific Partnership (TPP) trade deal, while the EU and Canada are finalising the CETA agreement. Canada is also a party to the TPP agreement. TPP and CETA have been agreed but are yet to be ratified. These treaties include a controversial mechanism known as ISDS, allowing foreign corporations to sue sovereign national governments if they believe their investments are unfairly restricted by regulations. For TTIP, the EU is backing an alternative mechanism – but which raises similar concerns – known as the Investment Court System (ICS). The EU would like to include this new system in the CETA agreement. This would leave Canadian investors with different mechanism in different treaties. The US has so far rejected ICS. The European Parliament – who will have to sign off the agreement – has instead demanded a system to replace ISDS.
So far, Europe has been relatively sheltered from these effects. Public opposition is strong, GMOs are hardly grown in the EU, and their release into the food chain is governed by safety regulations (which are far from perfect). US biotech multinationals are the major supporters of a TTIP treaty.