A Trans-Atlantic Free Trade Area (TAFTA) is a proposal to create a trans-atlantic free-trade area covering Europe and North America.
Such proposals have been made since the 1990s and since 2013 an agreement between the United States (US) and European Union (EU) has been under negotiation: the Trans-Atlantic Trade and Investment Partnership (TTIP).
TTIP is a far-reaching proposed free-trade agreement currently being negotiated between the European Commission (EC, authorised by EU Member States) and the USA government, supposedly about trade but mostly about corporate rights, investment guarantees and deregulation.
Talks began in July 2013 and reached the third round of negotiations by the end of that year. This free trade agreement may be finalized by the end of 2014.
The deal is estimated to boost the EU’s economy by €120 billion, the US economy by €90 billion and the rest of the world by €100 billion.
Once complete, if combined with free trade agreements with Canada, Mexico and the European Free Trade Association (EFTA) it could form a free trade area covering the whole of both continents.
Economic barriers between the EU and the US are relatively low, not just due to long-standing membership in the World Trade Organisation (WTO), but recent agreements such as the EU–US Open Skies Agreement and work by the Trans-Atlantic Economic Council.
Economic gains of TTIP were predicted in the joint report issued by the White House and the EC. It claims that passage of a trans-Atlantic trade pact could boost overall trade between the respective blocs by as much as 50%.
However, economic relations are tense and there are frequent trade disputes between the two economies, many of which end up before the WTO.
In a The Guardian article of 15 July 2013, Dean Baker of the Center for Economic and Policy Research in the US observed that with conventional trade barriers between the US and the EU already low, the deal would focus on non-conventional barriers such as freeing up regulations regarding fracking, GMOs and finance and tightening laws on copyright.
He goes on to assert that with less ambitious projections the economic benefits per household are mediocre “If we apply the projected income gain of 0.21% to the projected median personal income in 2027, it comes to a bit more than $50 a year. That’s a little less than 15 cents a day. Don’t spend it all in one place.”
ISDS means an investor can bring a case directly against the country hosting its investment, without the intervention of the government of the investor’s country of origin.
In December 2013, a coalition of over 200 environmentalists, labor unions and consumer advocacy organizations on both sides of the Atlantic sent a letter to the USTR and EC demanding the investor-state dispute settlement be dropped from the trade talks and stating:
“Investor-state dispute settlement is a one-way street by which corporations can challenge government policies, but neither governments nor individuals are granted any comparable rights to hold corporations accountable.”
In December 2013, Britain’s The Guardian newspaper claimed that ISDS is a “mechanism [that] could threaten almost any means by which governments might seek to defend their citizens or protect the natural world”
Member of European Parliament Yannick Jadot described the negotiations as happening “in an absolutely undemocratic way”.
Despite being appointed to oversee the trade negotiations as a parliamentary rapporteur, he said he felt “excluded”, going on to say “even when we have one document, we are forbidden to release this document to the public, so citizens are totally excluded from the negotiations which deal with health issues, environmental issues, social rights and public services”.
Some proposals for a transatlantic free trade area include on the American side, the other members of NAFTA (Canada and Mexico) and on the European side, the members of the EFTA (Iceland, Norway, Switzerland and Liechtenstein).
Mexico already has a free trade agreement with EFTA and the EU while Canada has one with EFTA and is negotiating one with the EU. These agreements may need to be harmonised with the EU-US agreement and could potentially form a wider free trade area.
Canadian media observers have speculated that the launch of US-EU talks puts pressure on Canada to conclude its own three-year long FTA negotiations with the EU by the close of 2013.
Countries with customs agreements with the EU, such as Turkey, could face the prospect of opening their markets to American goods, without access for their own goods without a separate agreement with the USA.
The proposed TTIP ostensibly aims at achieving “regulatory convergence”, facilitating direct investment and improving “intellectual property rights”, and combatting bureaucratic hurdles to market access for corporations from both sides of the Atlantic.
However, this disguises deregulation, unfair and undemocratic investor protection and intellectual property monopolies, and harmful competition. While the promised but unsubstantiated and disputed economic benefits are marginal even in the best case scenarios, these goals threaten important rights and interests of the public in the EU, US, or the rest of the world.
Negotiations are happening behind closed doors, without true public consultation – even national parliaments are not even informed about the details of the Commission’s negotiating mandate – but the rare snippets of information that have been released — or leaked — raise considerable concerns.
We should be committed to challenging the ongoing negotiations for the TTIP, CETA, and other similar Free Trade Agreements – on national and European level – to ensure transparent and democratic policy debate and agreements that serve the public interest.
A previous proposed treaty was Multilateral Agreement on Investment (MAI), a draft agreement negotiated between members of the Organisation for Economic Co-operation and Development (OECD) in 1995–1998 with the ostensible purpose to develop multilateral rules that would ensure international investment was governed in a more systematic and uniform way between states.
When its draft became public in 1997, it drew widespread criticism from civil society groups and developing countries, particularly over the possibility that the agreement would make it difficult to regulate foreign investors.
After an intense global campaign was waged against the MAI by the treaty’s critics, the host nation France announced in October 1998 that it would not support the agreement, effectively preventing its adoption due to the OECD’s consensus procedures.
Transatlantic Free Trade Area (TAFTA)
Transatlantic Trade and Investment Partnership (TATIP)
Multilateral Agreement on Investment (MAI)
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