Finland pushing for the Transatlantic Trade and Investment Partnership: a topic for the next elections?

toivakka--10_8990_3Finland has a Minister with a strange title, quite a singularity in the EU: Ms. Lenita Toivakka, who is  Minister for European Affairs and Foreign Trade. Ms Toivakka presents herself on her website as an member of Parliament, since 2007, where she has been member of the Grand Committee in charge of EU matters, and as an entrepreneur, even if her CV refers more to public office activities. So she goes to Brussels’ EU meetings to represent Finland on general affairs, and she travels a lot to support the development of Finnish foreign trade.

However, there is one point where these two activities merge: she is in charge for Finland of the negociations of the  Transatlantic Trade and Investment Partnership between the EU and the US, better known by the acronym TTIP. If you look at the official advantages of this partnership as presented by the US and the Commission, it is a wonderful tool, designed to drive growth and create jobs, and as stated by its promoters, “Independent research shows that TTIP could boost, the EU’s economy by €120 billion, the US economy by €90 billion,the rest of the world by €100 billion. And as stated by Minister Toivakka’s recent address at the Kungliga Vetenskapsakademien breakfast in Stockholm: “Finland is a strong supporter of the TTIP agreement…We see it a great opportunity also for Finnish businesses, big and small.”.

Curiously, there does not seem to be a public debate in the country on this major agreement, which is going to change some things in our lives. And there are some worrying points which could lead Finland to seriously discuss the matter.

A serious concern is the figures produced by the US and the European Commission to justify this new treaty. They come from “an independent report”, as stated by the European Commission,  “Reducing Transatlantic Barriers to Trade and Investment -An Economic Assessment” prepared by the Centre for Economic Policy Research (CEPR), a British Fundation. The CEPR Director is Richard Baldwin, professor of international economics at the Graduate Institute of International Studies in Geneva. He was trained in MIT and has been a Senior Staff Economist for the President’s Council of Economic Advisors in the Bush Administration.

This “independent report” considers that 80 % of the benefits of the TTIP comes from reducing non-tariff barriers, which means “from cutting costs imposed by bureaucracy and regulations, as well as from liberalising trade in services and public procurement”.

What are bureaucracy and regulations? For the US, it means in particular the EU restrictions which aims at protecting public health, environment, or keeping some strategic activities under national control. The gains come from diminishing the costs of exporting products and services to each others market, by considering that a product authorised in the US for example would not need any additional control in the EU. This would lead to more competition, reduce the price and thus allowing for an increase of consumption. And following the classical economic theory which has been dominating the world of politics in the seventies and eighties, it would mean at the end more growth and more jobs.

In fact, the crisis we have encountered is proving that more competition may moderate inflation, but is not necessarily creating jobs. More precisely, the EU having more stringent rules to protect jobs, health and environment than the US, the TTIP will be more beneficial to the USA, even if some big European  companies may benefit from it, in particular the ones which have transferred the majority of their production in low-cost countries. So other specialists are considering that such an agreement will in the short-term be detrimental for our economy and our jobs.

Another concern is the fact that once the TTIP is signed by the EU and the US, it will be possible for any company to sue the governments if they changed the rules in one sector, for whatever reason. So if Finland for safety reason or just for defense reason wants to impose new rules on its territory, US companies will be able to go to independent courts (meaning not Finnish courts) to get compensations, and the example of the US Canadian trade treaty is totally frightening from this point of view, as in fact it has been a new step to withdraw the Canadian national powers in favor of big companies and specific courts. The costs for Canada are high.

In a number of areas, in particular for consumers’ protection, Europe has more to lose from transatlantic free trade than the U.S. or Canada. In particular, national and EU regulations concerning food labeling, bans on genetically modified organisms, chemicals management policies, and an EU Fuel Quality Directive that will block US exports of carbon-intensive tar sands oil are all targets for deregulation: do Finland want that? Should it be accepted that Finnish consumers get beef with hormones, which increase the quantity of water in the meat in order to artificially increase its weight? Is it serious to accept that before transportation chicken meat is put in chlorine, in order to be able to preserve it 7 additional days?

Other countries are already chosen their fights during the discussions of the TTIP: France has obtained the exclusion of certain cultural products and activities, which are protected in France to keep a strong national culture. Germany is fighting to avoid the US system of private courts to judge countries on private companies’ requests. UK is extremely worried that the TTIP will oblige to privatise their National Health System, as it is also a bareer to free trade from the US point of view. All these objections are valid also for Finland.

Last but not least, once the TTIP will be signed, there is no way for a single country to avoid it, except by leaving the European Union. It is not clear even whether a majority vote would allow the EU to denounce the Treaty if the Commission wants to keep it…

All this points to a lack of democracy in the decision-making, as happens often in the EU system and brings it to its ruin. DG Trade, the directorate of the EU Commission in charge of the dossier, has been obliged by some governments to organise a public consultation, to which 150 000 organisations and people have replied. 60 millions European citizens have recently delivered to M. Juncker  a petition against the TTIP.

Are Finnish political parties going to position themselves on this topic, which may be one of the major decisions EU governments will have to take in the decade? More than 27 000 Finnish citizens have signed against the TTIP, which makes Finland’s population the main opponent to the TTIP after the Germans…

The next meeting for Ms Toivakka is in February, but she is at the same time campaigning for the Parliament, so it may be a problem to handle this difficult topic.

Categories: Economy, Environment

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