The EU draft mandate for trade negotiations with the United States contains serious flaws and should rejected, according to the Vrijschrift Foundation. Vrijschrift writes this in a letter to the Chairman of the Dutch House Committee for Foreign Trade and Development Cooperation, Mr de Roon.
The EU Member States are expected to grant the European Commission a mandate for trade negotiations with the United States in June. On Thursday, June 6th, the Dutch House Committee for Foreign Trade and Development Cooperation will formulate its opinion.
Vrijschrift notes that the draft mandate allows the European Commission to refuse citizens, civil society organizations, EU member states governments and national parliaments access to draft texts. This will result in (foreign) companies having better access to information about the negotiations. This creates a significant risk that the negotiations will lead to a substandard and unbalanced result, according to Vrijschrift.
The draft mandate proposes to include a reference to human rights in the non-binding preamble of the trade agreement. This offers insufficient protection for human rights, according Vrijschrift.
The draft mandate also includes international “investor-to-state” arbitration. This means that (foreign) companies can demand from the EU and Dutch taxpayers high damages if changes in laws may lead to lower profits than expected. These arbitration panels are placed above the supreme courts of the Netherlands, the EU and the U.S. Multinationals can use billion euro claims to stop law changes in order to protect old or even harmful business models. This threatens the sovereignty of our constitutional democracy and the primacy of the parliament. For instance when pharmaceutical companies disagree with health policies. Or when the tobacco industry suffers damage from a successful anti-smoking policy. Thus, companies acquire state powers.
The draft mandate notes that the trade agreement should be without prejudice to the right of the EU and the Member States to adopt and enforce measures necessary to pursue legitimate public policy objectives. But the draft mandate proposes to leave the decision whether laws are lawful to external arbitration tribunals, whose composition in practice is incomparable to that of a judiciary as we know it. This is a fundamental design flaw, according to Vrijschrift.
Vrijschrift notes: “The decision whether legislation is lawful, is a constitutional decision. Granting private interests constitutional powers undermines our democracy. The euro currency contains design flaws, this puts the EU at risk. The desire to boost the EU with a trade agreement with the US is perfectly understandable. We understand the urgency. But a trade agreement with fundamental design flaws will limit policy space too much – a price we can not afford to pay, especially not in times of crisis.”
Vrijschrift considers that the draft mandate needs major improvements regarding openness and human rights, and that there is no room for investor-to-state arbitration in a democratic society.
Vrijschrift letter to the Chairman of the Dutch House Committee for Foreign Trade and Development Cooperation, Mr de Roon (in Dutch)
Draft mandate, Presidency compromise proposal, 21 May 2013,
Democracy Center, 2013, Unfair, Unsustainable, and Under the Radar – How Corporations use Global Investment Rules to Undermine A Sustainable Future,
Kelsey and Wallach, 2012, “Investor-State” Disputes in Trade Pacts Threaten Fundamental Principles of National Judicial Systems,
NGOs, 2013, European, Canadian and Quebec organizations, Transatlantic Statement Opposing Excessive Corporate Rights (Investor – State Dispute Settlement) in the EU – Canada Comprehensive Economic and Trade Agreement (CETA),
Vrijschrift, 2013, CETA-verdrag bedreigt internet, gezondheid en democratie,