Next week negotiators from the European Union and the Obama administration will converge in Washington, D.C. for a third round of talks on the Trans-Atlantic Free Trade Agreement (TAFTA). How might this immense deal impact you and your community? To answer, we've dug through hundreds of pages of corporations' formal requests for the deal (which reads like a candid deregulatory wishlist) and decoded months of opaque government statements about the pact's controversial content. Here we present a TAFTA 101 overview, including TAFTA's top 10 threats to U.S. consumers, to be followed by deeper looks at the particular financial, environmental, and consumer safeguards that TAFTA threatens.
A “trade” deal only in name, TAFTA, which corporate proponents have tried to rebrand as the Transatlantic Trade and Investment Partnership (TTIP), would require the United States and EU to conform domestic food and product safety standards, financial regulations, climate policies, data privacy protections and other non-trade policies to TAFTA rules – rules being negotiated in secret.
TAFTA negotiations focus on demands by large corporations on both sides of the Atlantic to remove consumer and environmental safeguards that they dub as “trade irritants.” TAFTA rules are being negotiated behind closed doors. About 600 official U.S. corporate trade advisors are being provided access to documents and decision-makers, while the public and press are locked out.
Some products and services that do not meet U.S. health and safety standards could be allowed into our markets. Other provisions could require U.S. regulations to conform to new trans-Atlantic standards negotiated to be more convenient to business, instead of standards developed by state and national laws over decades.
These constraints on U.S. domestic policy would be binding. Once TAFTA took effect, even if public opinion came out strongly against the weakening of safeguards or if the federal government changed, TAFTA’s terms could only be altered if all signatory nations agreed. Failure to comply with the new rules could result in trade sanctions against the United States or orders to compensate firms that claimed their newly established rights were violated. TAFTA negotiators have stated a goal of finishing the sweeping deal by the end of 2014.
TAFTA's Top 10 Threats to U.S. Consumers
1. Attacks by foreign corporations on our local, state, and federal policies: European-based corporations that own more than 24,000 subsidiaries in the United States would be empowered to bypass U.S. courts and directly challenge the U.S. government before foreign tribunals. Comprised of three private attorneys, the extrajudicial tribunals would be authorized to order taxpayer compensation for public interest policies that European corporations claim undermine their TAFTA investor rights. Foreign companies have used such privileges in past “trade” deals to attack renewable energy policies, bans on toxins, medicine patent standards, financial regulations and land-use and other non-trade policies, extracting $3.5 billion so far from taxpayers under U.S. deals.
2. Rollback of financial reforms: EU negotiators have explicitly called for TAFTA to roll back Wall Street reforms with new “disciplines” that would limit the regulation of banking, securities and insurance. They have explicitly targeted the Volcker Rule (a ban on hedge-fund-style trading by commercial banks), the Federal Reserve’s proposed rules for foreign banks, and state-level regulation of insurance. U.S. negotiators, advised by Wall Street banks, have also proposed TAFTA rules that conflict with proposals to ban toxic derivatives, limit the size of too-big-to-fail banks, enact financial transaction taxes and reinstate the Glass-Steagall Act.
3. Tainted milk: European agribusiness corporations have listed U.S. safety standards for Grade A milk as an “obstacle” that they hope can be removed via TAFTA. The European Association of Dairy Trade acknowledges that the standards “were devised as a means of addressing the risk of food borne illnesses,” but the industry group hopes the standards can be weakened because the process for complying with them “is both highly cumbersome and expensive.”
4. Dirty fuel: BusinessEurope, representing European oil corporations such as BP, has asked that TAFTA ban tax credits for alternative, more climate-friendly fuels like algae–based and other emerging fuels that reduce carbon emissions. The corporations openly state, “US fuel tax credits and Cellulosic Biofuel Producer Credit should become impossible in the future.”
5. Unsafe medicines: European pharmaceutical manufacturers have called for the U.S. Food and Drug Administration to relinquish its current responsibility to independently approve the safety of medicines sold in the United States. They propose that the U.S. government automatically accept a European determination that a drug produced in Europe is safe for U.S. consumers.
6. Invasion of data privacy: U.S. technology and communications corporations have bluntly asked that TAFTA make it easier for them to gather our personal information – mobile, location, social, PC and offline – and data mine it to create ongoing tracking and targeting profiles of consumers. Firms do not want meaningful privacy safeguards that would put consumers’ information off limits. The U.S. Council for International Business, which includes corporations like Verizon that have handed U.S. citizens’ personal data to the National Security Agency en masse, has stated that TAFTA “should include commitments that data can flow unimpeded across borders except for limited and well-defined public policy exceptions. The agreement should seek to circumscribe exceptions, such as security and privacy, to ensure they are not used as disguised barriers to trade.”
7. Loss of local job creation through “Buy Local” rules: The EU intends to use the deal to ban popular Buy American and Buy Local policies that ensure that U.S. government projects are used to create U.S. jobs. While past “trade” deals have restricted some Buy American policies, the EU hopes that TAFTA can be used to go further and eliminate Buy Local policies used by state and local governments to reinvest tax dollars to create jobs at home. In a leaked position paper, the EU explicitly names 13 U.S. states and 23 U.S. cities it is targeting for rollback of Buy Local policies.
8. Unlabeled genetically-modified food: About half of U.S. states now have legislation to label food containing genetically-modified organisms (GMOs). Unable to stop this trend domestically, GMO-producing firms like Monsanto are pushing for TAFTA to quash GMO labels. The National Confectioners Association bluntly states, “US industry also would like to see the US-EU FTA achieve progress in removing mandatory GMO labeling and traceability requirements.” The TAFTA rules advocated by U.S. firms to roll back EU regulation of GMOs could be used to counter the increasing moves by U.S. state legislatures and federal regulators to label genetically-modified food.
9. Expensive medicines: The Pharmaceutical Research and Manufacturers of America (PhRMA), the powerful lobby group for U.S. pharmaceutical corporations like Pfizer, is pushing to limit the ability of the U.S. and EU governments to negotiate lower health care costs for taxpayer-funded health care programs through TAFTA. The U.S. government uses such measures to lower medicine costs for veterans and others. The Obama administration has proposed to do the same to limit rising Medicare costs.
10. Dangerous toys: European toy corporations (represented by the Toy Industries of Europe) have recognized that there are differences between EU and U.S. toy safety regulations, including “flammability, chemical and microbiological hazards.” However, their stated goal is for U.S. parents to trust the safety of toys inspected abroad. The corporations hope to use TAFTA to overcome what they “expect” to be consumers’ “strong reluctance to accept the methods and requirements applying in [sic] the other side of the Atlantic.”