The Transatlantic Trade and Investment Partnership (TTIP) – love or dread?
This post attempts to demystify, as objectively as possible, the main issues surrounding the TTIP and then looks at how it might specifically impinge on regulations applying to food and drink.
For more background and explanation about GIs follow this link.
There have been many shock headlines over recent years warning that Europeans will soon, unknowingly, be eating chicken washed in chlorine and hormone-treated beef. The message is not just being powerfully published via newspapers. Recently an email pinged directly into my inbox inviting me to campaign against this ‘dangerous deal’ which would ‘let more bee-killing pesticides onto our fields and many more banned chemicals into our food’.
On the other hand converse arguments are also being put made over such as that of John Peet who predicted last year in The Economist that one of David Cameron’s four main arguments for Britain remaining in the EU may well be the benefits brought by the TTIP. “It would be perverse” he writes, “for a free-trading country to leave the EU just as TTIP arrives”.
Who is right? Where to find the objective truth?
The obstacles to discovering what really is going on are two-fold.
On the one hand, much of the ‘anti’ publicity is based around unsubstantiated scaremongering. It makes the reader literally gasp and stretch their eyes.
Whereas on the other, the rare, hard to find, bureaucratically generated, ‘pro’ publicity pushes the TTIP squarely into the ‘boring but important’ category – it’s turgid in the extreme, and also, of course, equally biased.
Thankfully another ping to my inbox provided the solution. I was sent a press release about a new book on the agreement, written by academics Ferdi De Ville and Gabriel Siles-Brügge, encouragingly entitled, The Truth About TTIP.
And I had confidence in their objective even-handedness when I read their assessment of the controversies surrounding TTIP:
“On the one hand, the debate has been centred too much on ‘horror stories’ and too little on the economic, geopolitical and regulatory effects of TTIP. However, we have also waited in vain for TTIP’s proponents to come up with clear, convincing arguments about how this deal will lead to the promised economic and geopolitical gains they consistently proclaim”
This is a food blog so inevitably I come to the contentions with a focus on the effect on what we eat and drink – concerns in particular about chemicals and pesticides, as well as about protecting small, artisan producers.
In the normal course of events I admit to taking an apolitical and apathetic approach to politics. But the TTIP is a key element of wider developments which could affect democracy, liberty, and human rights – fundamentals which I’ve always taken for granted, but which, looking around now, seem less secure. Time then to gain a better, coolly balanced, understanding of what might be at stake.
So what are the main dangers of TTIP and what are the potential advantages? And what hard evidence is there for either?
Will we really all be better off?
On the European Commission website it states:
“If the treaty is signed, it will affect almost 40% of world GDP. The transatlantic market is already the most important in the world.
The deal could save companies millions of euros and create thousands of new jobs on both sides of the Atlantic. The average European household could save €545 per year and European GDP could increase by nearly 0.5%.”
But De Ville and Siles-Brügge say that there are now doubts about the EU’s methods of calculating these are now suspect, and conclude “it is thus clear that numbers and claims of economic gains remain a key arena in the battle for TTIP”.
In any case there is one group which seems certain to benefit. Large corporations stand to gain both financially (see ISDS below) as well as in terms of political and economic power. This isn’t necessarily a bad thing – large corporations, after all, employ large numbers of people. But as we know, power tends to corrupt, and…. See ISDS, below.
This partnership will enable the EU and US to stay ahead of the threat of competition from the Chinese. Really? Why and how?
The slowdown in the Chinese economy and the rise of the Chinese middle class may be taking some of the pressure away from this threat. But in any case, in view of the EU’s clear statement that harmonisation of standards is not achievable, it’s hard to see how realistic it is for standards agreed under TTIP to become internationally accepted, or at least to have serious influence.
The logic that the introduction of these standards would directly result in the halt of the rise of the Chinese economy also seems flawed.
However, something is probably better than nothing. As De Ville and Siles-Brügge relate, “it is not transatlantic regulatory cooperation but its absence that is something to fear”.
Threats to democracy – secrecy and the power of corporate tribunals over national governments
Colin Crouch has described the TTIP as ‘post-democracy in its purest form’ – political structures, such as parliaments, he foresees, will remain as shams, while real power will shift to small, private forums. The Guardian’s George Monbiot takes the same view, writing articles arguing that the TTIP ‘is a full-frontal assault on democracy’. What is their rationale?
Many people are concerned about the secrecy under which TTIP negotiations are taking place. MEPs are allowed to view the details, but only in secure reading rooms after having left their phones and notebooks outside. Why? What is there to hide? The concerns have led to greater transparency on the part of the EU and a number of negotiating texts have recently been released.
But is it enough?
Investor-to-state Dispute Settlement (ISDS)
Under ISDA, as Xavier Brenez in La Libre hypothesises, in a bid to fight obesity, a government might decide to tax fat and sugar. If the profits of a US multinational were hit as a result, under the ISDS, that corporation could sue the government for damages.
ISDS is not new, it has already been included in bilateral investment treaties since 1959 to protect enterprise against nationalisation. One very real example is the lawsuit of Swedish energy company Vattenfall against Germany for introducing environmental requirements for a coal fired power stations as well as the corporation’s case against Germany over the Atomausstieg.
Another example is that of the tobacco company Philip Morris which is currently suing Australia and Uruguay, under similar treaties to the ISDS, for their attempts to discourage smoking.
However, because the ISDS is proving so unpopular (most respondents in an EU public consultation were against it) that last year European Trade Commissioner, Cecilia Malmström, revealed plans for a new investor protection system, as an alternative to the highly controversial ISDS.
The new investment court system will have an initial tribunal followed by an appeal, led by publicly appointed judges. Investors would only be allowed to take governments to court under strict conditions, for example in case of gender or racial discrimination.
But who would set and control those conditions?
Reduction of standards or reduced red tape?
In Mark Shapiro’s Exposed: The Toxic Chemistry of Everyday Products and What’s At Stake For American Power (2007) – the author argues that the US is failing to protect its citizens from dangerous substances.
This isn’t always the case – sometimes it could be argued that the US authorities overprotect (see Mimolette or unpasteurised cheese in general). Perhaps I am being cynical when I note that this overprotection is usually to the detriment of European exporters?
In general, however, the EU regulations are tougher than the US ones, hence the concern among EU populations about chlorine-washed chicken, genetically modified vegetables and hormone-treated beef. Cognisant of public pressure the EU has made public assurances on its website that “harmonisation is not on the agenda”. Nevertheless, judging by the continued lobbying, public confidence remains unconvinced.
More constructively there remains a lot of regulation which is non-controversial and which is making life very difficult for exporters – that applying to car headlights, or toy scooter handlebars for example. Bearing in mind that the US is Britain’s largest export partner (12.8% of UK exports) might a total rejection of TTIP not be throwing out the baby with the bath water?
If contentious changes to regulations were removed, might not other standands be introduced to the benefit of all?
Focus on food – the effect on artisan producers or consortia, three different cases
A couple of years ago Giorgio Bocedi*, an intellectual property lawyer with a particular focus on Geographical Indications, made two presentations in Washington (text and powerpoint) on behalf of the Consorzio del Formaggio Parmigiano-Reggiano.
He outlined all the offical regulations and conditions with which Parmigiano-Reggiano cheese producers had to comply. The controls are stringent – use of preservatives, for example, is absolutely forbidden and the cheese has to be produced in a very specifically defined geographic area of Italy.
Then he commented that the US Dairy Export Council and Consortium for Common Food Names had said that Italian producers of Parmigiano-Reggiano need have no concerns about TTIP declaring, “Christopher Columbus’s relatives in the Old World can keep their Parmigiano-Reggiano”. Yet at the same time they claimed the right to make and market ‘Parmesan’, not just within the US but also worldwide.
Bocedi went on to further point out that, in the US, often cheese labelled ‘Parmesan’ is marketed in packaging together with words (‘Italian’ for example), symbols (Italian flag or colours), or landscapes, all giving a clear indication of a misleading Italian provenance.
Bocedi argued that one of the TTIP’s primary aims should be specifically to avoid the public being misled in this way, and that this kind of misrepresentation was also against the spirit of the Agreement of Trade Related Aspects of Intellectual Property Rights (TRIPS – an agreement administered by the World Trade Organisation with which all WTO members must comply). The TTIP ought to give the Italian name Parmigiano-Reggiano effective protection, stronger protection than that afforded by TRIPS. In the past the producers had had the foresight to have also registered the name as a registered trademark in the US. Unfortunately, in practice, the legal defence of this trademark has proved prohibitively costly.
Since 2008 the word ‘Parmesan’ – the English translation of Parmigiano, or Parmigiano-Reggiano – has been defined under EU legislation to be only genuine Parmigiano-Reggiano when made according to EU PDO regulations (follow this link for more information on these). Legally in Europe therefore ‘parmesan’ is not accepted as a generic term for any hard, grainy type of cheese. Bocedi points out that this EU regulation is entirely consistent with TRIPS.
But the US Dairy Export Council and Consortium for Common Food Names claims that under TTIP the name ‘Parmesan’ would not receive protection in the US, or other non-EU markets. Is this fair to the US consumers? Do they think of ‘Parmesan’ as simply any hard, grainy cheese typically sprinkled over spaghetti, or do they think of it as a specifically Italian cheese? If the latter, why should they be allowed to be duped into buying cheese made anywhere other than Italy?
The implications are significant. What of other European cheeses – Gorgonzola, Feta, and Gruyère? Under the EU agreement with Canada, the Comprehensive Economic and Trade Agreement (CETA), feta manufactured in Canada can only be marketed as ‘feta-like’ or ‘feta-style’ in combination with a clear indication of geographic origin in order to avoid the consumer being misled as to the source of the product.
Why can’t this approach be adopted by the TTIP?
Because, predictably and understandably, the idea of such conditions being accepted in the US is being opposed both by US dairy farmers as well as by large corporations such as Kraft. Basil Maglaris, a spokesman for Kraft argues that “such conditions could not only be costly to food makers, but also potentially confusing for consumers if the labels of their favorite products using these generic names were required to change”.
But isn’t it really the misleading packaging already in existence that is continuing to confuse consumers?
Trying to push the EU protectionist approach too far, however, may prove to be an ‘own goal’ . Nicola Persico and Nicola Scocchi, writing in Fortune magazine outline the intriguing case of Parrano cheese. According to these authors Italian producers and the Italian Ministry of the Economy argue that anything even merely Italian sounding is a form of counterfeiting. Parrano is a kind of soft, Parmesan-tasting cheese made in The Netherlands and marketed in the US. It’s easier to grate and, apparently, it tastes good. The idea is that the name, beginning as it does with ‘par’ and ending with ‘ano’ evokes in the mind of the consumer a helpful connection with parmesan. Is it reasonable to make the use of the name Parrano illegal?
In an interview with Der Spiegel, Christian Schmidt, Germany’s agriculture minister, commented, “if we want to seize the opportunity of free trade with the giant American market, we can no longer protect every sausage and every cheese as being a speciality”
This approach has given rise to all kinds of fears in Germany that Nuremberg rostbratwurst or Bavarian beer would lose their market advantage. The force of this concern was evidenced last autumn at one of the largest demonstrations seen in Berlin over the last decade. However Merkel was dismissive. “The Federal Government considers the reservations … to be unfounded,” said Steffen Seibert, a spokesman for Chancellor Angela Merkel. And Europe, he went on, has “a tremendous opportunity to set standards worldwide.” A rather dangerous approach bearing in mind that according to the survey Euro Barometer only 27% of Germans support TTIP.
In any case the producers of Nuremberg rostbratwurst themselves are not as concerned as the Parmigiano-Reggiano cheesemakers. Rainer Heimler, the chairman of the Nuremberg Rostbratwurst Protection Association is quoted in Tagesspiegel as saying “The EU regulation for the protection of Nuremberg rostbratwurst or Parma ham, for example, can’t just be wiped off the face of the earth…. As a matter of fact the protected name of the product is bound up with intellectual property rights”
And he is right to a certain extent. It’s worth remembering that the US also recognises geographic sources for certain products – for example ‘Florida oranges’ or ‘Idaho potatoes’.
Then there is another, more practical, way of looking at it. Scotch whisky has a protected geographical indication. Whisky as a term on its own does not. A GI does not give a blanket market advantage irrespective of quality. Last year the World’s Whiskies Award went to a distillery in Taiwan. Just how protective really is protectionism? A truly discriminating consumer will seek out the best quality product irrespective of source or traditional methods of production.
Last year for example British vegan chocolate bars were being sold in Germany, British seafood was going to Thailand, and Cornish tea was doing well in China. London dry gin (without a GI) was going down well in the US. None of these exports would have been impacted by TTIP.
But the branding is important. Perhaps exporters (and the EU’s GI system itself) should be concentrating as much on branding to differentiate their products as on legislation.
I asked Dr Siles-Brügge what effect he thought the TTIP might have on the protection afforded by Geographic Indications.
“As TTIP hasn’t been negotiated yet it’s hard to tell what the final effect will be but the EU is pushing hard to have these designations protected in the US market. The US, however, which relies on a trademark system of intellectual property rights in consumer products, is not very keen on this – especially as its own agribusiness sector is very much opposed (as it would interfere with the marketing of many food products in the US). I also really can’t see the EU give up its system of GIs in TTIP given how sensitive the issue is here. So at the moment the negotiations on this point are not really progressing.”
It might be good news…. and then again….
This post is dedicated to Ferdi de Ville and Gabriel Siles-Brügge; and to Ginny Graham for her help.
*My thanks also to Avvocato Giorgio Bocedi who kindly checked the section of this post relating to parmesan, and who made two presentations when in Washington, the first one to journalists and the second one at a TTIP 5th Round Negotiations – Stakeholder Forum, in WDC, George Mason University, hosted by the Office of the US Trade Representative, on May 21, 2014.