How TTIP could create a red tape labyrinth

As negotiators reconvene for talks in New York today (Monday April 20), a freshly leaked version of the European Commission’s proposal on a chapter known as ‘regulatory cooperation’ shows that the deal could put barriers in the way of all legislation.

Existing and future legislation from the Commission and the US government, as well as from the 28 EU member states and the 50 US states, could all become subject to unlimited challenges and red tape.

The objective of regulatory cooperation is to align existing and future rules in the EU and the US to "reduce unnecessarily burdensome, duplicative or divergent regulatory requirements affecting trade or investment".

While striving for regulatory cooperation might seem sensible and uncontroversial, a careful reading of the proposal rings loud alarm bells. Such a system would create endless red tape for governments and weaken, slow down or completely stop the agreement of new standards – and the revision of existing ones – to protect the public interest.

To achieve the desired alignment, the Commission proposes a regulatory cooperation body, composed of civil servants from both sides, tasked to assess whether legislative acts from the EU and US are compatible with each other and "trade and investment proof".

If they’re not, this body has the power to erect more barriers by proposing measures to increase harmonisation or reduce impacts on, and costs for, business – which governments are obliged to consider. It could, for instance, propose that joint EU-US or even international legislation is pursued first.

All of these measures are likely to result in weakening, slowing down or completely stopping the acts.

And worse, these recommendations can be made at any stage of the legislative process, thereby providing continuous opportunities to weaken and delay regulatory acts, even while those acts are under consideration by elected representatives.

Regulatory cooperation asks regulators to follow procedures likely to result in many years of delay, and obliges them to give serious consideration to every possible concern raised. It creates an enormous bureaucracy of civil servants who will have to evaluate every possible national and EU law for how they relate to similar laws in the US, and vice versa.

These processes will lead to new layers of red tape for governments resulting in high costs (to tax payers).

They are also likely to result in increasing unwillingness of EU and member state regulators to even attempt to introduce new laws to protect the public interest. The biggest impact of regulatory cooperation might be its preventative effect. If regulators are aware that at any stage of the process their work can be challenged, it will give them less appetite to strive for new, higher standards from the start.

The current EU proposal provides particularly promising opportunities for business to weaken or delay legislation that it considers a ‘trade irritant’, so basically any standard that creates extra costs for companies. The proposal prescribes that the EU needs to include in each regulatory process a stakeholder consultation and that it shall take into account the contributions received. This provides business groups with a strong tool by which to object to any new standards that can result in higher costs.

Last but not least, regulatory cooperation as it is proposed in TTIP will undermine the democratic functioning of the EU and member states by allowing a foreign country to scrutinise legislative proposals and push for their reconsideration even before democratically elected bodies, like the European Parliament, national parliaments and member states, have the possibility to judge them.

This gives enormous power to a small group of people, who are not accountable to the European public, to prioritise trade and investment concerns over all other interests.

Regulatory cooperation is a system that intentionally introduces hurdles and barriers to regulation-making.

It will undoubtedly lead to endless, often fruitless, negotiations between legislators on harmonising the rules. This labyrinth of red tape would create an effective blockade of every new environmental, health or labour standard in the EU.

Paul de Clerck works for Friends of the Earth Europe; Lora Verheecke for Corporate Europe Observatory and Max Bank for LobbyControl