Transatlantic Trade and Investment Partnership: A “Toxic Relationship”

In many ways, the Transatlantic Trade and Investment Partnership (TTIP) seems like a happy marriage of two leaders of the Western World. The figures are staggering: potential gains of billions in increased trade, widened access to markets, higher employment rates, and support to the growing investment relationship between the two superpowers. The trade barriers between the EU and the US have been traditionally low, and the TTIP seeks to formalize this relationship by negotiating this trade deal of unprecedented size. However, many activists are starting to get cold feet: leaked documents showing a darker side of the TTIP are raising concerns about the long-term implications of the agreement in lowering long-held standards of protection of human health, the environment, and the power of the public against big businesses.

Image courtesy of Timothy Allen © 2005, some rights reserved
Image courtesy of Timothy Allen © 2005, some rights reserved

At its core, the TTIP is about removing regulatory barriers to allow gains on both sides of the Atlantic. However, this “unnecessary red tape” that these actors are so insistent on removing represents important regulations that protect human health and the environment.  Negotiators on either side insist that cutting this red tape is limited to reducing conflicts of duplication, or to allow for cooperation on implementing regulation in practice, but in fact, they represent a great danger of compromising public protections in exchange for increased business. In particular, the chemicals industry stands to be the second biggest beneficiary of lowered standards in the TTIP agreement.

Chemicals legislation in the EU versus the US: incompatible philosophies

Though the negotiators of the TTIP insist that both powers represent the highest standards of protection globally, the reality is in fact quite different. The European Union is heralded as having one of the highest standards of chemical safety in the world; boasting a near-perfect legislation known as REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) that has been a standard for others around the world in keeping the chemicals industry accountable to safety. The overarching principle of REACH is “no data, no market” and the consumer right to know: manufacturers and importers are required to gather information on chemical properties in substances and register them with the European Chemicals Agency under a public database.

In contrast to the European precautionary approach, the United States’ chemical legislation is much more lenient. The Toxic Substances Control Act (TSCA), instigated in 1979 under the Environmental Protection Agency, grandfathered all existing chemicals at the time, so the EPA has only required testing of about 100 chemicals and has regulated only about 5 in the 35 years since the legislation was introduced. The regulating philosophy of ”approve now, apologise later” has led to only limited information about the health and environmental impacts of the 22,000 new chemicals introduced on the market since the TSCA was implemented. Moreover, a significant difference between the two systems is that the burden of proof of safety in the United States falls on the government rather than the industry as in Europe, which puts unneeded pressure on environmental funding and slows the regulatory process.

Since these two systems are clearly incompatible, regulatory convergence in the TTIP would inevitably compromise core European principles of governance and protection in exchange of welcoming new business into the continent. In cosmetics alone, the picture is not pretty: while the EU has forbidden 1, 328 chemicals and regulated over 250 cosmetic ingredients, the US has only banned 11 substances at the federal level. Regulatory convergence would mean many of these previously banned products would end up on European shelves. A great danger is that if the EU and the US as Western leaders are not showing a commitment to high chemicals standards, it could jeopardize other global efforts to create high standards for chemical safety and could stifle innovation for safer chemical alternatives.

Why is TTIP a danger to adequate chemicals regulation?

On both sides of the Atlantic, the greatest concern in the TTIP negotiations is a lack of transparency. The treaty has been negotiated in secret, with only leaked documents showing a darker side to the agreement. In these documents, we see a very different picture: one of reduced protections and big businesses taking precedence over public safety. In a leaked document showing a joint proposal by the American Chemistry Council (ACC) and the European Chemical Industry Council (CEFIC) in March 2014, negotiators’ plan to enhance regulatory cooperation was revealed to show a planned plethora of new bodies to take on this task.

At first glance, these demands seem reasonable, but upon closer examination, one can see that the proposed changes can actually slow or freeze the regulatory process: for example, the suggestion of a Trans-Atlantic Scientific Advisory Committee. This body would be tasked with coming to agreements on common regulatory definitions and standards before being able to implement safety regulations. The main concern of environmentalists is both that the precautionary principle may be abandoned in lieu of a more Americanized approach, and that the appointed scientists will come from industry ranks, but most fundamentally, that this body will serve to slow down the process of regulation and allow potentially dangerous chemicals to enter the market while the technical decisions are made.

The Trans-Atlantic Regulatory Cooperation Council (TRCC), the proposed overseeing body to minimize regulatory differences, threatens to limit the sovereignty and ability of EU member states and US states to develop more protective chemicals legislation within their own jurisdiction. For example, California has been a leader in chemical safety in actively implementing legislation to encourage innovation for safer alternatives. Under TTIP’s plan of regulatory convergence, states like California would no longer have the freedom to implement comparatively higher chemicals standards as compared to federal rules.

Another worrying aspect is the Investor-State Dispute Settlement (ISDS), a rule by which foreign investors can go to arbitration if new regulations have an adverse impact on them, allowing them to demand a revision or compensation of lost profits. This could jeopardize the implementation of stronger human health and environmental regulations. Of the TRCC and the ISDS elements of the agreement, David Azoulay, the Managing Attorney at the Centre for International Environmental Law (CIEL) says: “These two aspects have a potential for lowering the standards and creating a ‘regulatory chill.’”

The biggest threat in TTIP is the fact that under this negotiated agreement, trade and business interests would take precedence over public protection of human health and the environment. As for public action, Azoulay recommends seeking information on the agreement as a key way to understand its implications. Once informed, he recommends voicing concerns to your local government, whether that it the executive part of it or your MP or MEPs. “Once the agreement is adopted, it will have to be similarly adopted by both the European Parliament and all National Parliaments”, says Azoulay, emphasising the importance of taking concrete action to show any unease about the agreement. Though there is much to gain through this partnership, it is vital that citizens on both sides of the Atlantic make their leaders accountable to maintaining high standards of safety for human health and the environment while welcoming new business.

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