#EUelections – New generation agreements : what challenges ?

#EUelections – New generation agreements : what challenges ?

“I think that’s a particularly bad agreement and let me say why… it’s not about trade : trade barriers  and  tariffs  between  Europe  and  America  are  already  come  down.  It’s  not  about  property rights. […] This is not about being attractive for foreign investment. It’s about stopping the European Parliament  and  the  US  Congress  from  passing  regulations  that  would  protect  our  economy,  our people, our health … this is an attempt to increase the power of corporations, to run our economies, our societies. To me, this is at the heart of democracy. It’s not a trade agreement [1] ”

Joseph Stiglitz

It is with these words, during an interview held in October 2015 for an association of scholars, that Joseph Stiglitz [2] describes the TTIP, one of the new generation treaties that have been negotiated in recent years. In fact, many bilateral treaties, with difficult acronyms, have begun to be negotiated over the years: TTIP, CETA, EUSFTA, ASEAN, JFTA [3]. The latter are free trade agreements that the European Union wants to conclude with certain countries of the world.

These « new generation » treaties are distinguished by traditional agreements signed between EU and third countries because they do not just aim to reduce tariffs, but they try to break down any barriers to trade. Thus, they allow the European Union to increase trade and compete with the world’s major economic powers, such as China and the United States.

The CETA (Comprehensive Economic and Trade Agreement) was one of the earliest treaties that the European Union has negotiated. It represents a new agreement model that aims to become universal. One of the causes of the creation of this agreement is the economic and financial crisis of 2008. People no longer had the same purchasing power, thus countries began to understand the importance of exports. The EU has understood the prominence of extending and strengthening trading relations in order to get out of the crisis.

However, it must be remembered that these agreements do not only take into account the commercial facet of relationships between countries, but also much more complex and delicate aspects. This type of treaty developed following the halting in 2008 of the Doha Round multilateral negotiations in the World Trade Organization, which aimed to intensify global trade.

What issues around these new generation agreements?

The first discontentment on these treaties concerns the lack of transparency of the negotiations, widely perceived as fundamentally undemocratic. Indeed, the text of these documents is negotiated in an absolute reserve. The article 218 of the Treaty on the Functioning of the European Union (TFEU) gives to the Commission the power to negotiate any commercial agreement “on behalf of the Members States”. Behind the scenes in the European Commission, business lobbyists have been dominating the preparation of the negotiations, at the expenses of trade unions, environmental and consumer groups [4].

New generation agreements also tend toward the harmonisation of national regulations in sanitary, social, technical and environmental matters. Regulatory cooperation under TTIP and CETA can perhaps be described as a process seeking to establish procedural frameworks on how governments can regulate. In many areas industries are no longer local and interest promoted at EU level will be similar to those in USA. It is clear that common regulatory process and requirement standards set under influence of multinational actors can be against public interest and the interest of citizens of European Union Members States and citizens of United States. For instance, the TTIP risks bringing in Europe food and substances (pesticides or GMO, for example) that are forbidden in the European Union but allowed in the United States [5].

The dispute settlement mechanism between investors and States (ISDS – Investor-State Dispute Settlement) represents another novelty of the new generation treaties. It is a system of supranational courts that judge controversies between states and companies when they consider themselves spoiled by a decision of the State [6]. Trade agreements aim to make it easier for enterprises to invest in the partner country and this mechanism allows companies to sue the foreign State if they feel cheated by changes in public policies. Strong criticisms have been made to the ISDS. Indeed, it is considered as an asymmetrical Court between investors and states, favouring companies and dissuading states from putting in place policies that could damage them or benefit citizens.

The fourth novelty (found in CETA, for instance) is the « principle of liberalization by negative lists »: rather than cite the sectors they want to liberalise, the States assume that all services are liberalized, except for the sectors they have protected. This reverse mechanism implies the need for the State to specify beforehand its strategy of privatization and liberalization and a danger for the future, because it will not be possible to determine which public services will not be subject to the market in a later time.

Flavio Mastrorillo

[1]   https://ged-project.de/topics/competitiveness/an-interview-with-nobel-laureate-joseph-stiglitz/

[2]    Joseph  Stiglitz  is  one  of  the  leading  American  economists  and  a  professor  at  Columbia  University.  He  is  chief economist of the World Bank. He was awarded the Nobel Prize for Economics in 2001.

[3]  TTIP: commercial treaty between EU-USA ; CETA: trade agreement between EU-Canada ; JFTA: commercial treaty between EU-Japan ; ASEAN: trade agreement between EU-Vietnam/Thailand/Malaysia ; EUSFTA: commercial treaty between EU-Singapore.

[4]  https://corporateeurope.org/international-trade/2014/07/who-lobbies-most-ttip

[5]  http://www.peah.it/2015/07/no-ordinary-free-trade-agreements-health-and-the-new-generation-trade-agreements/

[6]  http://www.europeanpapers.eu/en/europeanforum/investment-court-system-new-generation-eu-trade-and-investment-agreements


GED.       An        Interview       with       Nobel        Laureate       Joseph       Stiglitz        https://ged- project.de/topics/competitiveness/an-interview-with-nobel-laureate-joseph-stiglitz/

Corporate Europe Observatory.  TTIP  reloaded:  big business  calls the  shots on new  EU-US trade talks  https://corporateeurope.org/international-trade/2019/02/ttip-reloaded-big-business-calls-shots-new-eu-us-trade-talks

Corporate          Europe          Observatory.          Who          lobbies          most          on          TTIP? https://corporateeurope.org/international-trade/2014/07/who-lobbies-most-ttip

Toute  l’Europe.  CETA,  TAFTA,  JEFTA…Qu’est-ce  qu’un  accord  de  libre-échange  « nouvelle génération » ?        https://www.touteleurope.eu/actualite/ceta-tafta-jefta-qu-est-ce-qu-un-accord-de-libre-echange-nouvelle-generation.html

WTO. The Doha Round https://www.wto.org/english/tratop_e/dda_e/dda_e.htm

Peah. No ordinary Free  Trade Agreements  – Health and The New Generation Trade Agreements http://www.peah.it/2015/07/no-ordinary-free-trade-agreements-health-and-the-new-generation-trade-agreements/

European  Papers.  An  Investment  Court  System  for  the  New  Generation  of  EU  Trade  and Investment  Agreements:  A  Discussion  of  the  Free  Trade  Agreement  with  Vietnam  and  the Comprehensive           Economic           and  Trade           Agreement           with           Canada http://www.europeanpapers.eu/en/europeanforum/investment-court-system-new-generation-eu-trade-and-investment-agreements

Borta L., « CETA – Bilateral Trade Agreement between the EU and Canada », 2014, CES Working, Papers Volume 6 (n* 1), p. 17 – 31

Yencken E., « Lessons from CETA : Its implications for future EU Free Trade Agreements », 2016, OFSE Workshop Programme 1-B

Flavio Mastrorillo

Je suis né et j'ai grandi en Italie, où j'ai obtenu un bachelier en Relations Internationales et j'ai commencé à m'intéresser à la politique nationale. Déménagé à Bruxelles pour obtenir un Master, je m'occupe du Portefeuille "Lutte contre le populisme et actions citoyennes" au sein d'EU Logos Athéna.

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