Background: by coincidence I spotted this session listed on screen whilst killing time in central lobby, Westminster. Therefore I was unprepared and sadly I missed the first few minutes of public sitting (there had been 30mins of scheduled private sitting beforehand). I appear to have been the only public observer. I understand that a transcript, and possibly a video recording, will be available in due course. The chair of the committee, William Cash MP, had invited Lord Livingston to face questions concerning the governments position on TTIP. Lord Livingstons background, as revealed in the session, includes being CEO of British Telecom post-privatisation. His current role appears to be the preparation and presentation of legislation and representation of the government in the TTIP negotiations; he was present at the recent negotiating round. Overall, he knew everything bar the specifics. The committee itself was entirely male, with 3 Labour and 5 Government members in attendance, plus the chair, whos affiliation I dont know. No documentary substantiation of any claim by Lord Livingston was given. His bias is evidently towards what British businesses can get, and in particular the City of London. It was noted that the Lords will next debate TTIP on Tuesday. The final agreement is now not likely until after the General Election in 2015 but well before the 2016 US Presidential Election. The government is demanding that all 28 states be asked to ratify the decision. Although they are asking for very different reasons, I feel strongly we should demand that Parliament gets the ultimate vote on whether the UK signs. This is a principle in its own right, as well as a veto-seeking strategy; making it a legislative, rather than executive matter in the UK sets a tone across Europe, and some European government might lose those votes. The big areas of concern for the scrutineers were ISDS and loss of sovereignty, whilst impacts on effectiveness of taxation, safety and workers rights legislation were raised by Labour. The government are focusing on liberalising financial services. The European Commission has very recently released more details of the proposed ISDS process. Apparently this differs to previous clauses, but how substantially? The ISDS mechanism only specifies how the rest of the agreement is implemented, so I think we need to be looking at the whole text. However, its still clear that US government wants to interfere with future European governments rights to legislate for nationalisation. With regards to future nationalisation of industry, it is the issue of compensation for loss of earnings, not compensation for seized assets, that are under dispute. One of several ways the pro-agreement side are muddying the waters is by claiming that lower standards benefit less developed nations who might struggle to meet standards. Another was that spurious ISDS claims will always happen and have no lasting effect. Lord Livingston all but accepted that any figures for overall financial benefit are fictional, in part because of how little substantive discussion has taken place. The idea that an agreement is “bound to bring benefits” says to me that they dont want this area probed too hard! It was Labours Kelvin Hopkins who raised the problem of a totally one-sided debate, without consideration of evidence that past agreements havent worked. Potential ally? On public health issues, the view was that companies would have to prove their products were being restricted on account of nationality, not safety. Can still affect coca-cola if Irn-Bru also affected. A further scrutiny session on TTIP will follow in about November. Question regarding dilution of safety standards in products (Labour, as I took my seat). Lord Livingston assured the committee that no attempt was being made to drop health and safety standards, and no actual documentary proof had been provided of dilution of workplace rights. Creating common standards didnt necessarily mean changes in standards, as the issue for smaller companies is often cost of multiple testing regimes with identical criteria tested in slightly different ways. A single test for a single set of standards is being sought. Question: can TTIP force the US to sign up to the International Labour Organisation standards? (Labour) The fact that the US are unusual in not subscribing to the ILOs standards was acknowledged, and that it would be good if they did. However, no specific proposal had been made to that extent as yet. Question: Andrew Busham, Labour: is the government sufficiently informed by commissioners? More information is available now than before, with substantial documentation (meaning?) coming through. The most recent round of negotiations contained more detail. The US papers arent being circulated, however. Question: Jacob Rees-Mogg (Conservative): what voting will be required? What is up to parliament or states to ratify, and what will be signed by commissioners on our behalf? Each member will need to agree. The European Council needs to come to consensus before passing the agreement. The UK parliament must then ratify the treaty – both houses will be required to debate the treaty, though its possible the decision could be handled as an Order In Council. Lord Livingston said it was too early to say whether the agreement would be sufficiently ground breaking for a full act of ratification was unclear, but it was possible. Potentially the US Senate might demand a “clause by clause” debate on the treaty, thus cherry-picking, but this is being opposed by Europe, who think both sides should have a “take it or leave it” vote. The UK government is also pushing to ensure that individual EU governments get to ratify separately. Potentially this could result in vetos. Question: who will have a say in future amendments to the agreement? Is the EU taking on new powers to negotiate and agree on our behalf? (A lot of discussion about competency in this section, which has a very specific meaning in EU decision making). By ensuring we ratify and sign the agreement as separate states, we avoid giving away competence in any of the areas the final agreement covers to the Commissioners. If we agree now, we cant renegotiate, and a whole new agreement would be needed, with both sides agreeing. This means that the US cant add or remove anything, either, nor can the EU sign anything new on our behalf as a result of this one. Another issue was raised in the answer: would references to immigration (for business travel) mean that the commission now took those decisions? This is one reason that the government are so keen to have individual EU states signing separately. Further questioning on amendments to the living agreement led to further assurances that separate signatures meant separate parties that needed to be consulted in future if edits were to be made. Question: will you specify which competencies we might hand over? Eventually a written list was offered. The chair drew attention to Simon Hicks votes watch project, which concludes that proposals are going through the EU council purely because the EU commission presents them as inevitabilities. Question (Henry Smith): what were the outcomes of the 19 to 23 May round of discussions? There was a lot of progress and signs that were reaching the crunchier end of negotiations. On tarrifs, the US were felt to have made a poor offer, and said this was a starting point to be improved. They also produced a tariff offer on services, having said they wouldnt until the next round (subtext: the US are playing dirty). Current aim is for 91% of all trade tariffs to be removed. Some progress on vehicles and medication under regulatory coherence, but none on financial services – a big area of concern for Britain. The official line overall was of upbeat negotiations so far. Supplementary question: will the mid-terms and 2016 presidential election affect signing of the deal? The intent is for a late 2015 agreement – a total of 2 years from start to finish. Early 2015 still possible, but most likely after the general election. US congressmen glad that this wont be an election issue (but will be General Election issue?). It doesnt even look like the appointment of a new chair of the European Commission will have much effect, as everyone is generally in favour of an agreement. Question from Geraint Davis: is the process hurtling ahead without proper scrutiny? Its not really free trade if its behind closed doors. Lord Livingstone gave a series of points: that there would be no transfer of power, that the EU has just released the explanation of the ISDS (arbitration) proposals, that this is a new generation of ISDS proposal and finally that the government is pushing for “appropriate but not excessive” powers. Geraint Davis asked if this was a one-way direction of travel for privatisation? The response was that ISDS doesnt forbid anything, it only provides a way for companies who are affected by nationalisation to seek compensation. If sufficient compensation is offered by said government, no case would be needed. The UK already has 90 agreements that feature ISDS-style arbitrage, and only 2 cases have ever been brought, both unsuccessfully. The government wants ISDS as a protection for our companies from future nationalisations without compensation, and believes that companies could already get their due payment through UK courts anyway. Spurious claims are a fact of life, but just because one is brought doesnt automatically mean the court rules against the government. Examples from Latin America were raised, but not addressed particularly well. Question: will the dissolution of parliament for the General Election 2015 have an affect on the legislative timetable? As Lord Livingston sits in the Lords, his work continues during the dissolution and he will continue to correspond with committee chairs as appropriate. He will be able to draft the legislation ready for a new government to take forwards. Geraint Davis asked for specifics on financial benefits: the response hinged around the term “ambitious agreement” with far reaching implications. This would be “bound to bring benefits”, in particular from a single product testing and acceptance regime. Such an agreeement would be worth £10billion (timescale unclear). In the case of our agreement with South Korea, trade has risen 48% since the agreement, leaving a trade surplus. Geraint Davis asked about the effect on total tax income for the UK. Lord Livingston reported that there was no section on taxation in the agreement, and refused to rule out a £10billion increase in trade having no positive result (or even a negative effect) on tax gathering whatsoever. Question from Michael Connarty (Labour) – Will the deal look seriously at tax evasion through Switzerland? Again, Lord Livingston refused to concede that it was even an issue for TTIP to address in the first place. The chair asked for something more detailed in writing. (Labour clearly see protection of tax revenue as important to overall impact of deal). Question on potential that deal with US/Canada would harm trade with least developed countries, and asking what liaison had taken place with DFID. TTIP would not solve any problems in this area, but neither would it have harmful impacts, such as tilting access to our markets away from other supplier countries. Lord Livingston reported that there was also a view that lowering standards could give poorer countries better access to European markets! Kelvin Hopkins (Labour) had to leave early, so briefly outlined his position: many issues are being missed in the current negotiations, and that the view that world trade lowers wages and causes overall losses is totally missing from the debate. (He seemed a useful ally, I may write to him). Returning to ISDS, Rees-Mogg made a valiant effort to claim that no new powers were being provided for companies to use against Britain, because due process already exists, and that this was about British companies having a right to sue elsewhere. The government would agree to an ISDS clause that gives our companies more power, but not one that empowers investors. (This seems to assume that a future government must automatically consider compensation for nationalisation a priority!). Question from Michael Connarty, raising the case brought by Philip Morris against the Australian government for implementing health warnings. Lord Livingston replied that this was why a new style of ISDS clause is needed. We can never guarantee that a corporation wont go treaty shopping and sue under an older agreement (Philip Morris had managed to use an Australia – Hong Kong deal). No one in the EU thinks power should be lost, and without a public health exception, support for the whole process will be lost. Geraint Davis raised his desire for a 20% vat on fizzy drinks. Such companies also make money from premature death. What defences would there be to guard public safety? Lord Livingston said he doesnt think the government is trying to do anything that would prevent future governments from implementing such a tax, as long as it is discriminatory against dangerous foods as a whole, rather than American brands in particular. If Irn-Bru and Coca Cola are equally affected, its not a trade barrier. In fact, Philip Morris wants to pursue a case against plain packaging under the free speech clauses of the human rights act, not the ISDS agreements. Speculative claims will happen. Further to this, both sides of the negotiations believe the other has the weaker public safety laws. There was a point raised that if we have sufficient legal process, why include an ISDS clause at all? The reasons for inclusion are the fear of US companies that a future British government will break the rules and the fear of British companies that other states dont have sufficient legal process for their comfort. The chair closed with a general question regarding sticking points in the immediate future. Financial services was likely to be contentious, as Britain wants to include as much as possible. Public procurement at US state government level will be a big sticking point. The next round of negotiations will be in either July or September, and Lord Livingston is prepared to accept an invite by the committee in late Autumn.
Posted on: Thu, 10 Jul 2014 06:33:44 +0000
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