In a shock vote for President Obama yesterday, the Senate blocked a bill that would have allowed him to 'fast track' trade agreements like TTIP. Although only a procedural vote, the fact that Democrats in the Senate united to dismiss the motion makes it significantly less likely that Obama will succeed, with commentators saying Obama's trade strategy is now 'in tatters'.
Obama needs fast track authority in order to finish negotiations on US-EU trade deal (TTIP) and its sister agreement the Trans Pacific Partnership (TPP) with countries including Japan and Vietnam. Without it, he has to go back for proper Congressional discussion and amendments which, he argues, would make any deal impossible. But Obama's party are very reluctant to support him, opposed to the job losses and attacks on workers’ rights they believe would result for the trade agreements.
Lead opponent Senator Elizabeth Warren is particularly concerned about the 'corporate court' system which allows foreign corporations to sue governments in secret courts for enacting regulations that threaten corporate profits. Earlier this year she told the Washington Post that the system, known as Investor State Dispute Settlement (ISDS) “would allow foreign companies to challenge U.S. laws — and potentially to pick up huge payouts from taxpayers — without ever stepping foot in a U.S. Court”.
Campaigners had certainly hoped to defeat Obama's fast track bid in the lower House of Representatives. But to be defeated in the Senate makes fast track's chances of succeeding much smaller. And if fast track falls, TTIP and TPP are pushed back at least 18 months until after the election. Interestingly Presidential hopeful Hilary Clinton, normally a staunch supporter of free trade deals, is keeping quiet on fast track, aware of its unpopularity in her party.
The battle isn't over, but yesterday's vote should give campaigners everywhere real hope.
Meanwhile in Strasbourg the European Parliament is working towards a key vote of its own. On 10 June, the parliament will issue an opinion on TTIP. The vote isn't binding – we Europeans already have permanent ‘fast track’ as our parliament can only say yes or no to any trade agreement – but it could send a strong message to the Commission who are negotiating. The vote has already been put back, as committees deal with 900 amendments submitted by MEPs.
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The Commission are working frantically to pretend they're listening to public opinion. Last week Trade Commissioner Malmström, responsible for TTIP, produced a reform proposal for the ISDS system which has dogged the negotiations to date. In the Commission's most ‘popular’ consultation in history - nearly 150,000 Europeans wrote submissions – 97% firmly said they did not want any sort of ISDS. Unsure how to react, Malmström proposes removing some of the more egregious elements of the process, for example allowing an appeals mechanism for countries sued in these secret tribunals.
The hope is that such reforms will persuade MEPs to be more supportive of TTIP on 10 June. But Malmström's reforms would have done little to change the appalling ISDS cases cited by campaigners: Egypt sued for raising the minimum wage, Argentina sued for trying to prevent increases in the price of water during an economic crisis, Canada sued for placing a moratorium of fracking, Poland sued for renationalising health insurance, and on and on. Neither are the Americans likely to accept the proposals even if they did make a difference.
That's because Malmström's proposals don't and can't address the central problem; the whole point of ISDS is to create a parallel legal system which serves the interests of foreign capital.
Indeed Malmström's most ‘radical’ proposal is that ultimately we ditch ad hoc tribunals altogether and set up a permanent court for investment arbitration. This only serves to highlight the interests she really cares about. We have no international mechanism for protecting the rights of people or protecting the environment from the harm caused by big business, because governments like the UK and US routinely veto any such system at the United Nations. Yet the Commissioner believes that her most pressing issue is to push forward an international court to protect the 'rights' of global investment.
Malmström hopes this might convince wavering MEPs to water down their criticism of TTIP in the upcoming vote. Campaigners across Europe need to ensure that doesn’t happen. We have the chance to show the Commission that we don’t want TTIP, on the floor of the European Parliament. That means supporting calls to exempt public services and to exclude the so-called ‘regulatory cooperation council’ which would give big business a permanent say over our laws. But most important it means saying no to ISDS in any form at all. Such a vote would really send TTIP off the tracks.