US-EU “Free-Trade” Pact Protects Big Business. SMEs Shafted

TTIP, a Big Business enhancement and protection act.

By Don Quijones: As political branding exercises go, the marketing of the Transatlantic Trade and Investment Partnership (TTIP) has been a disaster from day one, particularly in Europe. In the space of less than two years, the negotiators of the trade deal between the US and the EU have managed to alienate just about every European citizen who is aware of the trade agreement, which, unfortunately, is to say not many.

Despite its extensive implications, TTIP has generated relatively little coverage, not least because negotiations are shrouded in secrecy and conducted almost exclusively with corporate lobbyists. Indeed, so clandestine are the talks that the few Members of the European Parliament that are granted access can only view the plans in their original documentation, in a secure location, with the threat of espionage charges hanging over them if they are caught making copies or sharing the details with the public.

The Art of Not Listening
In the face of growing pubic opposition, the European Commission last summer embarked on what can only be described as a half-hearted, half-baked attempt at damage control. It promised to offer a little more transparency around the talks, now in their ninth round, as well as run a public consultation on the highly controversial issue of Investor State Dispute Settlements (ISDS).
As I reported last June in Global Corporatocracy is Just a Pen Stroke Away from Completion, ISDS would allow businesses to bypass national court systems and sue governments in private arbitration panels.
Nearly 150,000 people responded to the survey – the highest number of responses ever for an EU consultation – with the overwhelming majority (more than 97%) rejecting the inclusion of ISDS in TTIP.
It was, unfortunately, the wrong answer – as the word “no” so often tends to be in Brussels these days. With the European Trade Commissioner Cecilia Malmström reminding participants that the exercise had been a consultation, not a “referendum” (the most dangerous word you can utter in eurocratic circles), the negotiations have plodded on regardless. The Commission has announced that it will not drop the ISDS provisions from the negotiations but will instead continue with its pre-consultation agenda of “reforming” the system – that is, tinkering around the edges while leaving the core perfectly intact.
As the Commission digs in its heels, playing deaf to the concerns of non-corporate interests, public opposition and resistance continue to grow. TTIP opponents now include MEPs, elected representatives and governments (in particular in Germany, France and Austria), academics, public interest groups, trade unions and even some of the Commission’s own advisors.
As for European businesses, they stand deeply divided on the issue. TTIP has an obvious appeal for the world’s biggest corporations, especially those with seats around the negotiating table. SMEs, however, are far less represented in the talks and are this far less convinced by the agreement’s supposed benefits, despite the Commission’s every effort to paint TTIP as SME-friendly.
Growing Resistance
In countries with the highest concentration of small and family-owned businesses, such as Italy and France, people are “absolutely petrified,” says John Hilary, the director of War on Want and one of the most outspoken critics of TTIP. Meanwhile the German Mittelstand (the country’s mostly family-run SME sector), which represents 99% of firms in the country, is adamantly opposed to the plans. In a recent survey 94% of business owners felt they had not received sufficient information, while another 50% felt their interests were being endangered.
The German Association for Small and Medium-sized Businesses (Bundesverband mittelständische Wirtschaft) considers ISDS in TTIP to be “unnecessary” and “strictly rejects” it on the grounds that the proposed provisions “discriminate against small and medium-sized businesses, undermine the rule of law and are therefore at the expense of the EU member states.”
“Germany works in certain development countries with compulsory protection of investment,” says Mario Ohoven, the association’s president. “In the USA and Canada it all goes through a democratic legal system with independent courts… [The proposed new system] would pitch small German SMEs against US giants… There could only be one winner.”
Protectionism of a Different Kind
The arbitration process can set litigants back millions – sometimes even tens of millions – of euros, pricing out all but the biggest businesses from benefiting from the easy spoils. Meanwhile, local governments in Europe and the U.S. would suddenly find themselves bound by corporate law from providing support to small, local businesses, as reports SME Insider:

In the UK, many local councils have implemented schemes that aim to strengthen communities and support small businesses by prioritizing relationships with local suppliers. The UK government recently pledged support to smaller businesses by setting a target for 25% of its supplier contracts to be fulfilled by SMEs by May 2015. From the information available at present, it seems that both of these arrangements would be deemed illegal under TTIP, which would prevent organizations from adopting a prejudicial stance against global corporations.

Despite all the bluff and bluster emanating from corporate and government HQs across Europe and North America – as typified by this soft-propaganda piece by Cindy Miller, the president of UPS Europe – TTIP, like most other new-generation trade agreements (TTIP, CETA and TiSA), has absolutely nothing to do with free trade. As Oheven says, the purpose of free trade should be to get rid of barriers obstructing trade, for the benefit of all comers. With TTIP the exact opposite would occur: barriers would be erected across Europe and the U.S., but not to protect national industries, economies or local jobs, but rather the world’s largest multinational corporations from the dual threat of economic competition and national democracy.
By bowing at every turn to the demands of big business, the TTIP negotiators risk turning a very important ally into a very powerful adversary. In total there are 20 million SMEs in the EU and 28 million in the US. In the EU, 99% of businesses are SMEs, and they account for two-thirds of all private sector jobs – including 85% of net new jobs between 2002 and 2010. Hence the Commission’s renewed charm offensive. If the current mood is anything to go by, however, most of Europe’s SMEs are unlikely to be swayed by the usual litany of empty promises, dodgy statistics and exaggerated claims.

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