By Don Quijones of Spain and Mexico, editor at Wolf Street. Originally published at Wolf Street
A new survey conducted by YouGov for the Bertelsmann Foundation showed that only 17% of Germans believe the Transatlantic Trade and Investment Partnership (TTIP) is a good thing, down from 55% two years ago.
In the United States, only 18% support the deal compared to 53% in 2014.
Such low popularity ratings are an incredible feat for a trade agreement that until last year the public had barely even heard of, purposefully, even as it had been on the negotiation table for years, while the governments associated with it had expected to pass it with flying colors.
During his visit to Germany at the weekend, President Barack Obama tried to breathe life back into the deal, insisting that “the majority of people still favor trade” and “still recognize, on balance, that it’s a good idea.” While that may be so, TTIP, like the other alphabet-soup trade agreements, is not really about promoting trade; it’s about reconfiguring the legal apparatus and superstructures that govern national, regional, and global commerce, business and society, for the benefit of the world’s largest multinational corporations.
Obama could not have chosen a worse possible location to plug his sacred trade deal. Offering a quite visible contradiction to his rose-tinted interpretation of corporate-sponsored trade deals, tens of thousands marched against TTIP in the streets of Hanover on Saturday. Opposition to the trade agreement is also fierce among Germany’s Mittelstand (small and medium-size companies), which represent over 90% of firms in the country. A 2014 Commerzbank study found that only 15% of Mittlestand companies believe TTIP would be a good thing for their business.
Germany’s not alone. Across the old continent, public opposition to TTIP is swelling. Just in the past week three vital developments took place that spell even more trouble for the transatlantic corporatocracy.
1. “Incompatible with Democracy.”
The first blow came from UN human rights expert Alfred de Zayas, who in a hearing with the Council of Europe’s legal affairs and human rights committee on April 19 warned that the “private or semi-private settlement of disputes between investors and states,” at the core of these trade agreements, “is incompatible with democracy, the rule of law and human rights.”
De Zayas’ pronouncement comes hot on the heels of a hammer-blow ruling last February by Germany’s Association of Judges that not only is there no legal basis for an international investment court, but it would have no jurisdiction in any European country. As we reported at the time, the growing opposition to the idea of an Investment Court System (ICS) leaves the Commission’s trade representatives stuck in no man’s land:
Having as good as abandoned the deeply unpopular Investor-State Dispute Settlement (ISDS) and bet all its horses on ICS, it now has to find a third way that not only placates European policy makers who oppose ISDS but also appeases the demands of its negotiating partners and the corporate behemoths that have been pushing for this deal. And that is not going to be easy.
To make matters worse, a Freedom of Information request in the UK just led to the release of a 2013 risk assessment report commissioned by the Department for Business Innovation and Skills that shows that a TTIP agreement would pose “lots of risk and no benefit” to the British economy. “Ultimately, we conclude that an EU-US investment treaty that does contain ISDS is likely to have few or no benefits to the UK, while having meaningful economic and political costs,” the report said.2. A Thousand-city Resistance.
This weekend the city of Barcelona played host to the first summit of European Cities Against TTIP. The event was attended by representatives of over 40 major European cities opposed to the trade agreement, including Vienna, Seville, Birmingham, Cologne and (irony of ironies) Brussels itself.
In the last year, more than 1,300 European municipalities have declared themselves “TTIP-free zones”. On the other side of the Atlantic, over 100 U.S. cities have declared their opposition to TTIP’s sister agreement for the Pacific region, the TPP, including New York, Seattle, and Miami.
In Europe, resistance to TTIP is not just growing at the municipal and regional level. The next month could see the election of the continent’s first openly anti-TTIP national government. In Austria, the EU Member State that was already most opposed to TTIP (according to the latest Eurobarometer survey, December 2015), voters just put into the presidential runoff vote two candidates who vehemently oppose the deal.3. A $50 Billion Judicial Reversal.
The biggest blow to the transatlantic corporatocracy took place last Wednesday, when a Dutch district court overturned an award of more than $50 billion to former shareholders of the defunct oil company Yukos that Moscow was ordered to pay by a Hague-based arbitration panel in 2014. It was by far the largest award damages in the history of investment treaty arbitration.
The irony is that the original Yukos trial was an open-and-shut case of shareholder expropriation, albeit one with serious geopolitical connotations. In 2003, the Russian authorities arrested Yukos’s chairman, Mikhail B. Khodorkovsky, on charges of embezzlement, tax evasion, and money laundering and sold off his company piece by piece over the next several years. Much of it ended up as part of Rosneft, now the world’s largest publicly traded oil company.
The court in the appeals trial said that the panel of arbiters that had made the original award had “lacked jurisdiction” to do so, since although Russia had signed the international Energy Charter Treaty, it had not ratified it and so was not bound by it. According to Jeff Sullivan, a partner and expert on energy arbitration at the law firm Allen & Overy in London, Wednesday’s ruling was “a significant victory for Russia.’’
“Certainly the decision of the Dutch court will impact on the ability of Yukos shareholders to enforce the arbitration award in various countries around the world,’’ Mr. Sullivan said. The ruling also raises further questions about the role and jurisdiction of investor arbitrators in international trade law. Given that it is they who would be the front-line enforcers of trade agreements, this could be very bad news for TTIP’s architects whose dreams appear to be in the process of unraveling.
You know things are bad when even the firmest believers begin questioning their faith. That’s what’s happening in the EU, which faces a constellation of threats and challenges. Now even the staunchest Eurocrats are beginning to express doubts – amid fears of “further escape referendums.” Read… It’s Gotten So Bad in Europe, Even Eurocrats Begin to Worry