Tuesday

16th Aug 2022

Opinion

Going south? EU and Australia/New Zealand deal

  • Trade commissioner Cecilia Malmstrom's promises of more jobs and prosperity for EU are vague - the reality is large agri-businesses in Australia and New Zealand eyeing a new market (Photo: ec.europa.eu)

In recent years the EU's international trade policy has provoked considerable controversy and intense public debate across the continent.

After launching trade talks with various degrees of progress, with the US on TTIP (Transatlantic Trade and Investment Partnership), Canada on CETA (Comprehensive Economic and Trade Agreement), Japan on JEFTA (Japan-EU Free Trade Agreement), the Commission is currently gearing up to begin negotiating separate deals with Australia and New Zealand.

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There is no acronym yet for this southern hemisphere deal so it doesn't have the notoriety of the aforementioned cases, but recently both came on the agenda of the European Parliament so now is the time to take a close look at what they mean for citizens in both hemispheres.

Big business first

The Commission's justifications for the need to open free trade talks generally involve a vague mantra of promises including economic growth, jobs, and competitiveness. However, the reality we've seen from the previous experiences as well as other EU trade talks, such as Singapore and Vietnam, is that big business interests stand to gain the most. The case of Australia and New Zealand is no exception.

A key reason for this is something called regulatory cooperation, a cornerstone of most EU trade deals.

These days, trade agreements are no longer about reducing tariffs. They aim to reduce what trade negotiators and big business likes to call 'barriers to trade' which basically means differences in laws, regulations or standards.

These standards are very often in place for good reasons such as the protection of public health, workers, food safety, or the environment. But now deemed to be a barrier to trade, governments are urged to harmonise them through regulatory cooperation, essentially tearing up the laws and putting corporate profit over people's needs.

On top of all this is the fact that under the regulatory cooperation system, new corporate-friendly (lower) standards are generally established early on in the legislative process, away from the scrutiny of citizens.

Those privy to the process tend to be trade bureaucrats and experts from multinationals, offering enormous power to the private sector to decide on public interest legislation.

Indeed, regulatory cooperation means big corporations get advance notice on new legislation, helping them to step in and wield crucial early influence. As we all know, a business's first goal is to maximise profit so we cannot expect such a corporate-captured process to facilitate the development of adequate rules on labour rights, the environment or agriculture.

Indeed, it is this last point that has raised serious concerns on the European side.

Both Australia and New Zealand have an aggressive, export-focused agricultural sector, largely because of extensive, large-scale holdings.

Removal or lowering of tariff and non-tariff barriers and full access to the large EU market will most probably be of great advantage to them over smaller EU farmers. Meanwhile, access to the relatively small markets of New Zealand (4.5 million consumers) and Australia (23 million consumers) offers little in terms of benefits for most EU producers.

All of this points to more general problems with the free trade agreements being negotiated by the EU right now. Putting corporate before public interests seems to be the Commission's default position and we can see from the negotiating mandate for talks with Australia and New Zealand that industrial scale agriculture and the corporate sector in general will once again be in the driving seat.

The Commission is largely continuing business as usual with the dangerous ideological notion that: what is good for big business is good for society. Standards will come under pressure.

At this early stage of course, we don't have the full picture but decades of experience of trade negotiations providing industry with the means to chip away at progressive policies does not signal that better standards are on the way.

It all started with a cigarette...

Nevertheless, if the outcry over TTIP taught us anything, it's that we are not powerless. Campaigners exposed investor state dispute settlement (ISDS) - a system through which investors can sue governments over policies that impact their profits in private courts - for the pernicious, anti-democratic concept that it is.

Indeed, Australia was a major part of that story.

In 2011, Canberra introduced its trailblazing health laws to remove branding from cigarette boxes. Global tobacco company Philip Morris was able to take the Australian government to an international court of arbitration using the ISDS mechanism, and demand compensation for future profits lost due to reduced cigarette sales.

This case placed the ISDS system front and centre in the debate on TTIP and CETA, leaving the European Commission struggling to deal with a public outcry. ISDS became "the most toxic acronym in Europe", according to EU trade chief Cecilia Malmstrom but rather than jettison the loathsome idea, the Commission basically rebranded it. ISDS became ICS, the Investment Court System. A new acronym to disguise an almost identical underlying attack by corporate interests on public interest policymaking.

We need to learn the lessons from the successes and failures of previous battles on trade and raise levels of awareness of the ongoing threat posed by new deals like those with Australia and New Zealand.

We know how this works: the dangers don't go away, they often just involve a different country, a new focus, or another acronym.

Anne-Marie Mineur is an MEP for the European United Left–Nordic Green Left and the Dutch Socialist Party, and sits on the European Parliament's committee on international trade

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

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