Monday

24th Sep 2018

Feature

Roasting the messenger: How US sees critics of EU free trade

  • White House: Support for TTIP 'goes all the way to the president' (Photo: Tracy Russo)

Support for the EU free trade pact, TTIP, goes right to the Oval Office, US diplomats say, with critics, such as Melinda St. Louis, made fun of in Washington and brushed aside.

St. Louis works on international issues for Public Citizen, an NGO located on the edge of the government district in the US capital. She greets visitors, three floors up an old stairwell with no elevator, next to a bucket of badges which say “Corporations are not people”.

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  • Port of New York: TTIP is predicted to add €120bn to the EU economy and $1tn to the US (Photo: Niklas-B)

It’s a long way, culturally, from the multi-storey glass towers which house prestigious, pro-TTIP Washington think tanks, like Stimson, or from the monumental HQ of the State Department.

But St. Louis says her criticism of free trade is “not ideological, it’s based on facts”.

The US recently marked the 20th anniversary of Nafta, its trade pact with Canada and Mexico. It’s in the final stages of TPP, a similar accord with Asian states, excluding China, and it's in advanced talks on TTIP with the European Union.

For St. Louis, free trade has been good for CEOs, but bad for average Americans.

“Nearly 5 million US manufacturing jobs - one out of every four - have been lost since implementation of Nafta and joining the WTO [the World Trade Organisation]”, she told EUobserver in a recent interview.

“US trade policy, broadly speaking, has contributed to greater inequality: depression of wages, erosion of negotiating power of labour unions, and transfer of more wealth to the elites”.

Like some EU campaigners, she’s concerned about the cozy relations between business lobbies and officials and about lack of transparency in the trade talks.

TTIP advocates say it'll remove tariffs, lowering costs for business, and align standards with best practice, for instance, on health and safety, in what they call “harmonising upward”.

But St. Louis pointed to a recent TPP leak, a wishlist by the US pharmaceuticals lobby, which, for her, had nothing to do with best practice and everything to do with “protecting monopolies”.

“While one could hope that negotiations could lead to upwards harmonisation … given the structure of the negotiations, that’s simply not a realistic outcome”, she said.

“Issues which affect our daily lives: medicine prices, food safety, financial stability, internet freedom… should be discussed in the framework of a robust public debate - not behind closed doors”.

She believes that ISDS, a TTIP mechanism which lets corporations sue states in international tribunals if national laws threaten their interests, will see even more cases than those arising fom Nafta by extending ISDS rights to 75,000 extra firms.

She also notes the Nafta precedent has caused “a lot of opposition” to TPP among both Republican Party and Democratic Party voters, prompting delays on its conclusion.

There’s little opposition to TTIP.

But for St. Louis, if people knew more about it, there would be, making it harder for US officials to fast-track it through Congress down the line.

“It’s off the radar. There’s very little mainstream [media] coverage, and that’s how the administration wants it”, she said.

Roasting

Her ideas meet with denials or jokes in policy circles.

At a recent TTIP meeting organised by the Stimson think tank, Jeff Weiss, a senior US trade official specialising in standards, said he’s “not worried whatsoever” the US public could turn against EU free trade.

“There’s no race to the bottom in what we’re doing - that’s a very important principle for us”, he told this website.

Maria Luisa Boyce, a trade official at the US Customs and Border Protection agency, noted: “I can tell you from my contacts that all of our stakeholders are always in support of the [TTIP] negotiations”.

Most of the jokes came from Tim Bennett, the head of the Trans-Atlantic Business Council, which represents some of the EU and US' biggest companies, including Deutsche Bank, Ford, the KPMG audit firm, and cigarette maker Philip Morris.

He said most Americans think TTIP, pronounced “T-tip”, like "cue-tip", is “some kind of cotton swab for your ears”.

He added: “They [Public Citizen] are calling it ‘Tafta’, because it rhymes with Nafta, and they think that’ll bring it down. It’s simplistic and it’s not working”.

He agreed that Nafta caused job losses in the US furniture and textile industries, but he said it helped US car makers and fostered growth in Canada and Mexico, which “rebounded” positively on the US economy.

“Public Citizen has put out all these press releases about how baaaaad Nafta’s been, and all that … it’s a gross exaggeration”, he said.

Susan Finston, a consultant in the biotech sector, noted: “Just because they have ‘citizen’ in their name, doesn’t mean they represent US citizens”.

Speaking on condition of anonymity, some US officials are equally caustic.

One contact described Public Citizen as “extreme left”.

He said it, and other free trade critics, complain about the business lobby, but don’t take part in consultations because “they want to remain in perpetual opposition - they’re afraid that if they agree to anything, it’ll somehow destroy their identity”.

A second US contact made fun of EU sensitivities.

He noted that in the US, officials and legislators listen to advocacy groups, then pass duly amended laws. But in Europe, “everything comes to a screeching halt” if someone complains.

Revolving doors

If US officials and lobbyists sound the same, it’s because, in several cases, they are the same.

In a practice called “revolving doors”, at least 12 senior US trade officials have, in the past 15 years, taken jobs with the same firms which lobby them.

One is Stan McCoy, the lead US negotiator on intellectual property for TPP, who stepped down to work for the Motion Picture Association of America.

Another is Kira Alvarez, who started out as a US trade official, went to work for pharmaceutical firm Eli Lilly, returned to US trade, then stepped down to join AbbVie, another pharmaceutical company.

More recent examples are Michael Froman, Steven Selig, and Anthony Gardner.

Froman, the US Trade Representative, joined the current administration after leaving Citibank. Selig, the under secretary for international commerce, came from Bank of America. Gardner, an ardent advocate of TTIP and the current US ambassador to the EU, was previously director of Palamon Capital Partners, a venture capitalist firm.

It might be innocent.

But The Washington Post, a leading US daily, has reported that “many large corporations with a strong incentive to influence public policy award bonuses and other incentive pay to executives if they take jobs within government”.

Trade debate

It would be unfair to say that only Washington favours free trade.

Laura Mayo, who works on international trade for the state of New Hampshire, is also a fan.

“Nafta is huge for us because of the proximity of Canada, of having our products go there duty free”, she told EUobserver.

New Hampshire, formerly home to textile mills, does well for itself exporting components for the arms industry and the aerospace sector.

It’s one of the smallest states, with just a handful of people in Mayo’s office, and it's home to lots of SMEs.

“If you take a small business, a family business with, say, three people, if they ship $1,000 of goods [to Canada], they still have to pay 5 percent Canadian Provincial Tax, but if they don’t qualify for Nafta, they might have to pay another 14 percent in tariffs”, Mayo noted.

She's hopeful TTIP will increase New Hampshire exports to Europe and vice versa.

“CE [an EU health and safety badge] is an important mark if you want to sell products here. It’s seen as a mark of quality”, she noted.

But it would be equally unfair to say, as one of the US officials claimed, that “all of our stakeholders are always in support” of TTIP.

Pat Long, a former construction and iron sector worker, who now sits on the city council in New Hampshire's largest town, Manchester, echoed Public Citizen.

“Nafta hasn’t been good for the workforce”, he told EUobserver.

He said it opened construction projects to low-paid Mexican workers, leading to “wage dumping”, and he disagreed, on principle, with ISDS, saying: “What you have is an entity, that’s not American, that’s making the rules for Americans”.

“In my opinion, free trade is demolishing the middle class. We’re creating a two-tier system - you’re either rich, or you’re poor, and there’s nothing left in the middle”.

It’s geopolitics, stupid

It remains to be seen to what extent Mayo, Long, Public Citizen's St. Louis, or the Trans-Atlantic Business Council’s Bennett will shape TTIP.

But given the level of support in the US administration, the cards appear to be stacked in Bennett’s favour.

The State Department has assigned around 25 staff to TTIP alone, on top of Froman’s US Trade Representative bureau and Selig’s Department of Commerce, which are handling the nitty-gritty of the talks.

“There’s a very high level of interest and it goes all the way to the president”, one US diplomat said.

On TPP, the line used to be that it’ll bring jobs and growth.

But St. Louis noted that studies by the US Department of Agriculture and by the Petersen Institute, another leading think tank, have indicated the net benefit will be almost nil, so the administration has changed its message.

“They can’t sell it [the Asia trade pact] on its economic benefits … So they’re using the geopolitical argument on China containment: ‘We need to set global trade standards or China will’.”

TTIP advocates still cite figures it'll add €120 billion to the European economy and $1 trillion to the US.

But they also say Russia’s resurgence means Western allies should stick together.

“In light of the extremely aggressive Russian foreign policy, when we take this to Congress and explain its impact on … the geostrategic relationship between the US and Europe, when that’s explained, you’re going to find very few votes in Congress against TTIP”, Bennett said.

A US diplomat added: “[Russian leader] Putin’s actions have highlighted the importance of the trans-Atlantic partnership and TTIP is a big chunk of that”.

Another US diplomat recently invited media to investigate if anti-TTIP groups receive Russian funds.

For her part, St. Louis laughed when asked the question.

She denied that she shuns contact with US officials because of concern over Public Citizen’s left-leaning reputation.

“We meet regularly with USTR [the US Trade Representative bureau] and share with them when we agree with their positions, such as their current position to exclude financial services from regulatory coherence in TTIP”, she said.

“I certainly wouldn’t consider Public Citizen an ‘extreme left’ group - we have no political affiliation”.

EU firms still face barriers despite free trade drive

Many European firms are still subject to discrimination by the bloc’s main trading partners despite a recent drive to liberalise markets, according to an new report by the European Commission.

Merkel downplays speculation on third Greek bailout

German chancellor Angela Merkel on Wednesday downplayed talk of a third bailout package for Greece and said that an EU-US trade deal can still be completed this year if there is enough political will.

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