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AK EUROPA: Regulatory cooperation in CETA and TTIP

Last week, AK EUROPA, the Brussels Office of the Austrian Federal Chamber of Labour and ÖGB Europabüro, the Brussels Office of the Austrian Federation of Trade Unions hosted a high calibre panel discussion on the issue of regulatory cooperation in TTIP. Subject of the debate were the so-called non-tariff barriers to trade, which are to be reduced in the “novel” trade agreements TTIP and CETA by intensive cooperation of the legislators. Whilst the EU Commission claims that this would only concern technical regulations such as the colour of power cables, the AK is warning against a fall in standards with regard to employee and consumer protection. Theoretically, these “trade barriers“, which benefit the general public, have a significantly greater “savings potential” than the often quoted regulations for cables.

Peter-Tobias STOLL, University of Göttingen, presented the legal opinion on behalf of the AK, in the preparation of which he was involved. To begin with, he explained the concept of the so-called “regulatory cooperation” as a core element of the EU Free Trade Agreements with Canada (CETA) and the USA (TTIP). Apart from reducing customs duties, the agreements shall also cut non-tariff barriers to trade, resulting from a wide range of regulations. Professor Stoll expressed a number of reasonable grounds for concern regarding the plans of the Commission:

  • The draft texts of CETA and TTIP would emphasise the aim to guarantee maximum standards of protection. Unfortunately, regulatory sovereignty and standards of protection had only been incorporated in the agreement texts with restrictions and as weak formulations respectively;
  • It is also of concern that there is hardly any mention of the precautionary principle (authorisation of chemicals, medical drugs etc. only if their innocuousness has been scientifically proven), which prevails in Europe, as a core element of European regulatory policy in CETA and in so far known parts of TTIP. Instead, reference is made to WTO Law, which leaves significantly less room for precautionary regulation in cases, where harmfulness has not yet been proven beyond doubt;
  • Another deficit lies in the fact that according to current EU legislation, the EU Parliament has to first and only once approve of the ratification of the agreements, but subsequently will only be informed of the work within the agreements - hence, in particular of the regulatory cooperation. The EU should therefore create an internal mechanism to achieve greater participation of the EU Parliament;
  • CETA and TTIP remain rather vague in respect of the participation of the civil society. It must be ensured that civil society groups are involved in activities and committees, which are relevant to their work.

Éva DESSEWFFY, AK Vienna, pointed out three core concerns of the employee representation: to begin with, she criticised the non-involvement of the European Parliament, which was questionable in terms of democracy. She also commented that even though TTIP as “project of the highest standards” would have been desirable; however, as it currently looked as if the opposite was the case, one would have to take sensitive areas such as healthcare out of the agreement. She regarded the plans of the Commission, to lower pesticide limits in food to international minimum requirements as a bad omen. She finally pointed out that – as is often the case in the environment of the Commission - business and industry lobbies were also overrepresented in the trade policy sector and that employment representatives would hardly have any chance of influencing the contents of the agreement. She expressly warned against any watering down of the so-called precautionary principles in Europe - it had to remain guaranteed that for example chemicals would only be approved if there was absolutely no doubt regarding their safety. The proposal by the Commission to state this in a footnote would be too weak.

Ursula PACHL, deputy director-general of the European consumer group BEUC, used her comments to draw attention to the conceptual parallels between regulatory cooperation in trade agreements and the concepts of “Better Regulation” and “REFIT”, both of which were currently very much in vogue at EU level. Any planned legislative proposals had to be scrutinised and legitimised for umpteen times to make sure that under no circumstances companies would be hindered in their activities. Subsequently it had become more and more difficult to pass new laws. Consequence: “paralysis through analysis”, said the legal expert of BEUC. However, before the legislator would go through this kind of trouble, it would rather prophylactically forego new rules, even if they were in the interest of employees, consumers or the environment.

Fernando PERREAU DE PINNINCK, Head of Unit, DG Trade of the European Commission paraphrased a well-known quotation when he said that “nobody has the intention” to use TTIP to lower any European standards through the backdoor. On the contrary, he would work on the assumption that TTIP and regulatory cooperation would rather raise many standards. According to him, regulatory cooperation was already normal as regulatory authorities from all over the world would coordinate issues. In his opinion, the precautionary principle would enjoy “watertight” protection through the current negotiation proposal of the Commission, as this would provide for a “Right to Regulation”, which would also include the way medical drugs, chemicals etc. were approved.

Overall, the agreement would bring many advantages for SMEs. He rejected the proposal to forego regulatory cooperation (“TTIP light”) with the argument that in this case TTIP would benefit the USA far more than Europe: then, only tariff barriers to trade - i.e. customs duties - would be affected, where Europe would be able to enjoy significantly higher yields within the scope of transatlantic trade. In the case of “TTIP light” the EU had to forego these without being compensated by other advantages, which would be created by regulatory cooperation.

The event was hosted by Petra PINZLER of DIE ZEIT.

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Photo: Gauthier FABRI