How are the V4 countries negotiating the TTIP?

When it comes to the Transatlantic Trade and Investment Partnership, or TTIP, the the V4 countries’ local peculiarities will define what benefits and drawbacks the trade agreement might bring them.

Photo: Global Justice Now CC


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While over 150,000 people rallied 1 last year to stop the TTIP 2 in Germany, and in the Netherlands tens of thousands call for a referendum 3 on the treaty’s ratification, the TTIP has not become part of the V4 countries’ mainstream public discourse. The agreement, however, will impact all member states, as all EU countries will be bound by it. It will influence not only the extent to which corporations will be able to sue governments, but also issues as wide-ranging as the quality of medicine and food available in V4 markets in the very near future.

With some environmental and consumer NGOs in the V4 increasingly engaged on this subject, support for the TTIP in these countries has visibly declined. The Eurobarometer survey 4 published in December 2015 shows that public support for the TTIP languished in the V4 states, dropping considerably in the Czech Republic from 62% in the spring of 2015 to 49% in the autumn of the same year. Similarly, in autumn 2015 only 50% of Hungarians supported the TTIP – down 10% from the data reported just six months prior. In the other V4 countries, support for the trade agreement has dropped somewhat, but still remains solid with 50% public support in Slovakia and 66% in Poland.

Conversely, the V4 governments are openly supporting the TTIP.  The new conservative Polish leadership,  stated that they are in favor of an ambitioned version of the partnership:  “We believe in liberal trade rules,” so “TTIP light is not an option for us,” said Agriculture Minister Mateusz Morawiecki. 5 The latest leaks from Greenpeace, however, opened the way to more criticism from the Polish Ministry of Agriculture and the Minister of Environment Jan Szyszko. In an interview with Radio Poland, he said that GMOs pose a huge threat to Poland and that the Polish agricultural sector’s fears are reasonable. 6

The principles of the governing PiS party, similar to Hungary´s Fidesz, support economic policies that protect domestic businesses by increasing corporate taxes for foreign investors, which then create a disadvantageous climate for foreign capital.

In a March 2014 meeting, 7 Hungary, skeptical that such an ambitious trade agreement be framed in such a short period of time, suggested that EU interests should be reviewed and defended before an agreement is concluded too quickly. Hungary fears that under increasing time pressures important European interests might get lost.

The Hungarian delegation also think the practical benefits of existing free trade agreements and their abilities to fulfill expectations should also be assessed. In a March 2015 internal report 8 Hungary asked the European Commission for impact assessments in order to better estimate the economic benefits of the TTIP.

Slovakia is chairing the EU for the second half of 2016, and the nation claims to actively support the negotiations. Foreign Minister Miroslav Lajčák confirmed Slovakia desire to see a rapid conclusion to the TTIP negotiations. 9

Similarly, the Czech government hopes to conclude the agreement with the US, but PM Bohuslav Sobotka made clear in a 2015 statement 10 that the Czech government will not sign a “bianco cheque.” He feels that sections raising doubt in the treaty should be cleared, and that consumer protections, as well as social standards be included. 11

Nevertheless, V4 countries have different negotiating strategies, and the Commission’s  internal meeting-minutes and documents reveal just how they are trying to defend their interests.

Common concerns, differing economies

As with some other major political issues, the V4 countries express a will to represent their combined regional interests, but a July 2015 joint statement 12 doesn´t go beyond mentioning geopolitical concerns and hopes that the TTIP will boost their economies. The member states don´t actually sit at the table but regularly exchange ideas with the EC, which negotiates for them behind closed doors. One of the reasons the TTIP has become such a controversial issue is because it lacks transparency: little is known about what the EU aims to achieve, and to what extent it will give in to US demands.

The Berlin-based non-profit investigative newsroom, Correctiv.org, 13 got ahold of over 100 internal EU documents and published them, and the #openTTIP  14 leaks offer a sneak peak behind the curtain. 15 While all four countries support the conclusion of a free trade agreement with the US, they each address specific sensitivities when briefing the Commission.

Like Hungary and the Czech Republic, Slovakia rejected the proposal to publish the EC’s negotiation mandate, nevertheless, the mandate was later published by the Commission, itself, making the public aware of the planned trade agreement’s scope, and the EC’s ability to negotiate on behalf of the EU member states.

Some countries, like Hungary, feared that publishing the TTIP mandate would set a precedent for all future trade agreements, however others like Slovakia, recognized the need to better inform the public on the negotiations, and at later stages of the talks even proposed that national governments should have better access to the consolidated texts. 16

Transparency is an issue regularly addressed by the V4 in internal meetings with the EC – referring primarily to governments getting better access to negotiation content – not necessarily the wider public. Poland, together with other member states, mentioned the lack of resources needed to regularly access the Commission´s reading room in Brussels, and Slovakia has argued for the establishment of national reading rooms, which has since been implemented in Germany and in the Netherlands.

TTIP: a hope for greater mobility for V4 citizens

The V4 states, like most eastern and southern European countries, such as Romania or Croatia, see an opportunity in the TTIP to facilitate their citizens’ job mobility in the US. The US Trade Representative (USTR), the organization leading the negotiations on behalf of the US, clarified that job mobility concerns are a migration issue, and as such, are not trade-related. 17 Nevertheless, many EU Member States, including the V4 countries, have expressed their interests in clearing the way for the issuance of professional US work visas. An internal EU-document, verified by Correctiv.org, shows that Poland and Slovakia particularly, are expecting to obtain a reciprocal offer for US work visas from the EC.  Currently the US has a 65,000 cap on H1B visas, which are granted worldwide to professionals who want to work there for a defined period of time. 18

V4 governments sued most often by investors

Because most lawsuits brought against state governments in the EU were filed by foreign investors in the Czech Republic, Slovakia, Poland and Hungary under the Investor-to-State Dispute Settlement (ISDS) system, 19 V4 countries’ largest common concern with the TTIP is the investment protection systems anchored in the trade agreement. The TTIP will come with such a clause, so a realistic goal for the V4 (and for several other member states) is to ensure a more transparent, independent court and the inclusion of stronger rights and regulations. The latest EU proposal for the Investment Court System (ICS) points in that direction: publicly appointed judges and an appeals tribunal have been included to dissolve the fears of those states undergoing unpredictable lawsuits.

However, in the October 2015 internal comments 20 to the Commission on the proposed ICS, the Slovak government stated that it, “regrets that the Commission did not accept the Slovak proposal of a more precise definition of investor and investment.“ Having faced numerous ISDS cases, Slovakia fears what they call “speculative investments”. The Slovaks asked if the US would accept the new ICS proposal as a replacement for the member states’ existing bilateral investment treaties.

As for now, there has been no US commitment to the European proposal to reform the investment protection system.

Poland, the Czech Republic and Slovakia have already signed bilateral investment treaties with the US, which has offered them their first experiences opening their markets to transatlantic trade, to US corporations and to the claims they can file against these states.  In the TTIP they see a chance 21 to replace the investment protection system with a new one offering more room for states to regulate, without fearing immediate lawsuits from corporations. Shortly after signing, Poland announced the cancelation 22 of its Bilateral Investment Treaties (BITs) with the US to prevent further risky investment arbitrations.

Energy concerns and geopolitics

As a direct neighbor of Ukraine, Poland is very much in favor of invigorating ties with the US, also arguing for permanent US military presence in the country. The country’s expectations toward the TTIP are more political in nature: since Russia’s intervention in Ukraine, resulting in the Crimean conflict, Poland feels the US plays a crucial role maintaining the region’s security. So the country hopes that strengthening economic ties with the US will safeguard European unity and Polish security.

An important step into this direction would be the inclusion of an energy chapter in the TTIP. These are the interests Poland and the Czech Republic’s representatives are pushing the Commission for. In a closed May 2015 meeting, 23 Poland spoke about “a separate chapter for energy and raw materials (…) as it is important, that the USA bans energy export limitations.”

This demand appears repeatedly in the documents and originates in Poland’s effort to put an end to their Russian oil and gas dependency. They hope American oil businesses will diversify the EU’s energy market, securing new energy supplies and lowering prices. The US has not confirmed that it is willing to engage in a separate energy chapter, but the 40-year ban on US oil exports was lifted at the end of 2015.

As the Foreign Affairs Council’s meeting minutes 24 report, Slovakia has also shown interest in a separate energy chapter that will grant the liberalization of US energy and oil exports in the region. The Slovaks, like the Poles, are concerned about the liberalization of energy-intensive products, like chemicals, because US companies producing with lower energy costs, have a clear competitive advantage over European producers.

When asked to comment on the services chapter, Poland made clear they wished to exclude market liberalization from the TTIP: in an internal July 2015 EU document (seen and verified by Correctiv.org) the country said that for reasons of national energy security, only 100% Polish state-owned companies may operate gas and electricity transmission and distribution systems.  If this disclosure is accepted, the Polish market will remain closed for American gas and electricity distribution companies.

From public procurement to GMO

An internal document quoted 25 a Czech government representative’s statement that said, “the USA should be convinced that opening their public procurement market is for their own benefit.” The Czechs, together with many other member states, hope that the TTIP will finally open the doors so that European companies and small and medium-sized enterprises can participate in public procurement tenders. This way Czech or Slovak companies could compete in the provision of goods and services to US public institutions.

Although, the US has not put forth a satisfying offer for European companies’ public procurement referrals thus far, the EC has been promoting this as a prospect. Poland, skeptical about the US keeping this promise, asked the Commission in a February 2015 internal document to refrain from presenting a tariff offer until the US commits to European interests, such as public procurement. 26 However, the EC presented the offer in October 2015, with the question of European companies’ participation in government procurements far from resolved.

Undoubtedly the TTIP’s biggest challenge for the Hungarian government is the GMO (genetically modified organisms) issue: The incumbent government included a “GMO-free,” clause in the constitution, which bans the import of GMO products. Together with Austria, Hungary calls for the exclusion 27 of GMO products from the regulatory cooperation with the US. The Commission responded, saying that GMOs did not pose a threat to EU member states. However, the Hungarian government fears that the very competitive US GMO products might come into the European market through a backdoor in the TTIP. 28

Efforts have been made on both sides to conclude a TTIP framework with the Obama Administration, which means this year is a crucial one for negotiations. Even if the political will to speed up negotiations is there, negotiators found it increasingly unrealistic to finalize the deal, but hope to do so by the end of 2016.

Notes:

  1. “Hundreds of thousands protest in Berlin against EU-US trade deal,” Reuters.com, October 10, 2015, http://reut.rs/1NTdpGc.
  2. V4 governments have given a mandate to the European Commission to negotiate the TTIP (Transatlantic Trade and Investment Partnership), a free trade agreement to facilitate trade between the European and US economies, creating one of the biggest free trade zone in the world; in some western European countries it has become a very controversial issue.
  3. Platform TTIP CETA Referendum, website for the Dutch referendum on TTIP, https://ttip-referendum.nl/.
  4. The European Commission, “Standard Eurobarometer 84,” ec.europa.eu, December 2015, p. 39, http://bit.ly/1rjm5v5.
  5. “Morawiecki: Polska popiera TTIP,” bankier.pl, March 2, 2016, http://bit.ly/1TjGuXo.
  6. Radio Poland, “Polish Agriculture Ministry says NO to TTIP,” May 9, 2016, http://bit.ly/1s7p4aU.
  7. #openTTIP Leaks, correctiv.org, http://bit.ly/24w4Cye.
  8. Ibid.
  9. Miroslav LAJČÁK: Investing and doing business in Slovakia: What can be done better? January 1, 2016, http://bit.ly/26Q0ivS.
  10. ČTK, “Sobotka: Bianco šek ke smlouvě mezi EU a USA nedáváme,” Aktualne.cz, January 22, 2015, http://bit.ly/1Y64eCP. 
  11. “Premiér Bohuslav Sobotka jednal na zasedání Evropské rady o podobě energetické unie,” Vláda České Republiky, March 20, 2015, http://bit.ly/1SLwqae.
  12. “TTIP Statement by Visegrad members of the European Parliament, 8 July 2015,” Luděk Niedermayer, http://bit.ly/1VIUH6F.
  13. The author is a journalist working with correctiv.org.
  14. #openTTIP leaks, http://bit.ly/1UwwkrC.
  15. It is important to note that Corporate Europe Observatory also published a number of documents, and since the first files were leaked, the EC has improved the negotiation’s transparency considerably. The EU’s negotiating mandate is now basically public.
  16. #openTTIP Leaks, correctiv.org, http://bit.ly/1UwxiEs.
  17. “Mehr Fachkräfte? Nein, danke!” correctiv.org, July 31, 2015, http://bit.ly/1TJkRTn.
  18. US Citizenship and Immigration Services, “H1-B Fiscal Year (FY) 2017 Cap Season,” uscis.gov, http://1.usa.gov/1Y66ZnC.
  19. Data from the European Commission Study on ISDS cases: http://bit.ly/1QRPIZn.
  20. An internal EU document seen and verified by correctiv.org.
  21. #openTTIP leaks, correctiv.org, http://bit.ly/1WGhtLD.
  22. Agence France-Presse, “Poland says to cancel bilateral investment treaties,” globalpost.com, February 25, 2016, http://bit.ly/1Tt9KLP.
  23. #openTTIP Leaks, correctiv.org, http://bit.ly/24nZkbo.
  24. Ibid.
  25. An internal EU document seen and verified by correctiv.org.
  26. The Trade Policy Committee’s meeting minutes from February 20, 2015 published by correctiv.org: http://bit.ly/1VIW7hJ.
  27. #openTTIP Leaks correctiv.org, http://bit.ly/1Od9cYP.
  28. Orosz Márta, “A külügy sincs elszállva a szupermegállapodástól,” hvg.hu, http://bit.ly/24w8uiD.
Márta Orosz

Márta Orosz

has been working on a long-term investigation on TTIP for the Berlin-based investigative newsroom Correctiv.org. As a Germany correspondent for Hungarian media, her other focus is politics and economy in Eastern Europe, mainly in Hungary and Romania. She has been engaged in investigations on the far-right group Pegida and on Eastern-European workforce in Germany.