Greece Challenges Transatlantic Trade and Investment Partnership
By Mike Andrew
“We won a battle, but not the war,” Greek Prime Minister Alexis Tsipras told his country after his government won a short-term debt extension from its European creditors. “The difficulties lie ahead of us.”
The biggest difficulty will be to get the European Central Bank and the IMF to back down from their demands that Greece continue the crushing austerity measures that have devastated the national economy.
But that’s not all. The new government led by SYRIZA – the Coalition of the Radical Left – is also challenging the projected trade agreement between the US and EU known as TTIP (the Transatlantic Trade and Investment Partnership).
The US government sees TTIP as a companion treaty to TPP (the TransPacific Partnership), a trade and corporate protection treaty it is negotiating with countries in the Pacific Rim. Like TPP, TTIP would protect trans-national corporations from regulation by the governments of countries where they do business.
The stakes are even higher than with the TPP, however. The US and European Union together represent 60% of global GDP, 33% of world trade in goods, and 42% of world trade in services. A trade treaty linking the US and Europe would potentially be the largest trade agreement in history, covering 46% of world GDP.
SYRIZA, which is fighting to take back control of its own economy from the European Central Bank and IMF and has no desire to surrender control to foreign corporations, has already rejected the draft TTIP treaty published on January 7.
“I can assure you that a Parliament where SYRIZA holds the majority will never ratify the deal,” Greece’s deputy administrative reform minister Georgios Katrougkalos told the press on February 3. “And this will be a big gift not only to the Greek people but to all the European people.”
Katrougkalos raised serious concerns about the Investor State Dispute Settlement mechanism, or ISDS, contained in the pact.
The mechanism is designed to protect corporate investments from laws or court rulings in the countries where investors do business. Under the ISDS mechanism, trans-national corporations can take legal action when a country’s laws negatively impact their economic activity.
Greece is currently trying to reverse the privatization of public assets forced on it by European banks. The new SYRIZA government recently halted negotiations to sell the port of Piraeus – the country’s largest – to foreign investors.
TTIP, however, would outlaw that kind of interference in corporate acquisitions, and the ISDS mechanism would allow foreign corporations to sue the Greek government if it tried to assert control over the country’s ports, power plants, TV stations, or other national assets.
Workplace health and safety regulations and even the minimum wage could also be at risk, since all these protections “negatively impact” the profit margin of foreign investors.
The Greek government is not the only one concerned with ISDS. In December 2013, some 200 environmentalists, labor unions, and consumer advocacy organizations on both sides of the Atlantic sent a letter to the European Commission demanding that ISDS be dropped from the draft treaty.”
Investor-state dispute settlement is a one-way street by which corporations can challenge government policies, but neither governments nor individuals are granted any comparable rights to hold corporations accountable,” the letter said.
Another problem comes from the fact that Europe has more stringent environmental, health, and safety protections than the US does.
“For example we [the EU] don’t permit GMOs, [and] data protection is significantly more important as well as the protection of national health systems,” Katrougkalos explained, adding that new rules established by TTIP “will undermine the way the welfare state is organized in the EU.”
Banks and brokerage firms, which may benefit the most from reduced regulation, are also subject to much less supervision in the US than in Europe.
Finally, Katrougkalos charged that the EU’s executive, the European Commission, was not conducting negotiations in an open and aboveboard manner. Their precise mandate to craft such a comprehensive treaty was unclear, he said.
“An undemocratic practice of lack of transparency has prevailed from the very beginning of the negotiations,” Katrougkalos said.
Under EU rules, treaties are negotiated by the European Commission but have to be ratified by all 28 countries that make up the union. The treaty will also have to be ratified by the European Parliament.
France has already gotten provisions that might harm its film industry dropped from the draft treaty, and Bulgaria has said it will also veto the project unless the US lifts visa requirements for Bulgarian citizens. Greek objections go much deeper, however, and only time will tell whether a draft acceptable to the SYRIZA government will be forthcoming.