The European Commission is everybody’s favourite whipping boy and it never seems to gather any plaudits. UK PM, David Cameron was trumpeting the value of a putative EU-USA trade deal at the G8 summit last year. At the same time, Cameron is still promising a crowd-pleasing “in/out” referendum on the UK’s continued membership of the EU if his Conservative party wins next year’s general election, promising to “renegotiate” the UK’s relationship with the EU in the interim.
The deal in question is predicted to boost GDP within the 28 member EU by 0.5% per annum and increase the US GDP by 0.4% being worth an extra €120 billion and €95 billion respectively. It would bring gains by reducing or even eliminating tariffs on trade between the two economic super-powers and by harmonizing trade standards on certain goods. US-EU trade accounts for approximately one third of global trade. It is also suggested that the deal would boost employment on both sides of the Atlantic.
So, with a rare piece of good news, why has the EU bridge signalled “all ahead, slow”? In short, concerns have been raised a clause within the putative agreement called the Investor-State dispute settlement (ISDS) which critics claim could be used by major corporations to subvert EU legislation. It has been suggested that new EU legislation on health or environmental issues could lead to lawsuits if corporations believed that it harmed their business interests, potentially exposing the EU to billions of Dollars in damages. Examples cited include a challenge by Monsanto on the EU ban on GM foods, or the tobacco industry suing over legislation barring branding on cigarette packets, for instance (both of these issues would probably be moot since the decisions were taken on the basis of existing legislation prior to the potential adoption of the US-EU trade deal).
The EU has announced a 3 month public consultation process on this aspect of the deal. Other discussions will move forward in the interim.