November 30, 2016

A disappointing TTIP human rights assessment

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ECORYS published a final draft human rights assessment of the trade agreement with the US (TTIP). The official name is a Trade Sustainability Impact Assessment (TSIA). I provided feedback on an earlier draft, see here. In my opinion, the final draft is disappointing. I will give two examples.

Protection of personal data

Final draft report, page 157:

“However, trade in services may require a certain level of data sharing between the EU and the US which can eventally affect the right to protection of personal data (Art. 8 CFR). According to the negotiating mandate of TTIP, however, personal data sharing is not included. Were the provisions on the flow of personal data to be included in the agreement in the future, we could expect some positive and some negative effects. Given the current Mandate, however, we do not foresee any effect of TTIP on the right to protection of personal data.”

However, the mandate does not say that personal data sharing is not included. Cross-border services are included; they (indeed) require cross-border data flows, including personal data. The mandate merely states in Article 18:

“The Agreement will not preclude the enforcement of exceptions on the supply of services justifiable under the relevant WTO rules (Articles XIV and XIVbis GATS).”

According to the mandate, the EU will commit to cross-border services (and so to cross-border data flows, including personal data). The EU will reserve the right to regulate the cross-border services (an exception to the commitment). Measures the EU would take (“enforcement of exceptions”) will have to comply with trade rules (“justifiable …”). Relevant for our issue, measures to protect personal data will have to comply with trade rules. This is problematic unless the trade rules leave sufficient room.

That is not the case. In my feedback on the earlier draft I had noted that GATS article XIV is problematic, and a new study (published before the final draft TSIA) confirms this.

The TSIA misreads the mandate. It overlooks the data flows. If you take the data flows into account, the quality of the safeguards becomes essential, and needs scrutiny. For issues with safeguards, see here and here.

The conclusion – not foresee any effect of TTIP on the right to protection of personal data – is unfounded as the TSIA overlooks the data flows.

Investor-to-state dispute settlement

Regarding investor-to-state dispute settlement (ISDS/ICS) the final draft report notes concerns voiced by judges and consumer organisation BEUC (page 203), and concludes in section 5.4.2. Investment court system (ICS):

“Assessing whether the EU’s reformed approach to investment protection is ensuring e.g. a government’s right to regulate is hard to analyse at this moment in time as the ICS is new and exists only as a proposal, i.e. no cases have been brought forward and/or are assessed following the new set of guidelines. Based on a number of opinion papers and very recent articles, of which most are set-out above, we however note that having any dispute settlement mechanism could have an impact through the assumed but empirically unproven ‘regulatory chill’ effect as discussed by Tienhara (among others).” (page 203)

Despite this uncertain conclusion, in sections on specific human rights, the draft report uses much stronger language. For instance, page 134:

“One can for example look at tobacco policy, in which case Article 2 of the investment chapter states that governments can still draft and implement strong tobacco control legislation, without potential litigation by the tobacco industry.”

This conclusion is unfounded, as said Article 2 does not rule out litigation, and the draft final report itself notes (page 203):

“[BEUC states] that indeed a government has the right to regulate, but they nevertheless might be forced to pay compensation to investors.”

The main analysis of ISDS/ICS does not properly inform the specific human rights analyses. As a result these specific human rights analyses fail to convince.