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Since November 2011 the European Commission and US Government have been negotiating a Transatlantic Trade & Investment Partnership (TTIP), intended to "identify policies and measures to increase EU-US trade and investment to support mutually beneficial job creation, economic growth, and international competitiveness." Both sides now appear to have determined that the negotiations should reach a conclusion by the end of 2015 to avoid the start of significant campaigning in the next US Presidential Election. Many aspects of a prospective TTIP agreement are yet to be settled and as a result there remains much uncertainty about the potential impacts on environmental regulation—the focus of our inquiry, which is accordingly intended to identify the issues which will have to be addressed later this year.
The EU and US have some environmental standards which deliver similar safeguards, but there are others which differ, partly as a result of different approaches to standard-setting. The EU's stronger focus on applying the precautionary principle in setting regulations should not be weakened as a result of efforts under TTIP to align the regulatory standards of the EU and US. Where 'mutual recognition' of environmental standards is used to smooth trade between the EU and US, this must be applied only in cases where the regulations are genuinely already providing 'equivalent' safeguards. Failing to keep to such a course risks an unacceptable 'race to the bottom' in environmental regulations.
The Government should work with other EU states to push for environmental groups and agencies to be represented on the proposed EU/US Regulatory Co-operation Council, to bolster its ability to fully weigh environmental issues alongside the economic and trade considerations that might otherwise take precedence in considering future areas for regulatory alignment. EU states must retain their 'right to regulate' in a way that prevents the prospect of litigation under the proposed Investor-State Dispute Settlement (ISDS) placing 'a chill' on future regulation-setting. A compelling case for the inclusion of an ISDS in TTIP has not yet been made, and there are unresolved doubts about how well international ISDS arbitration courts would operate. If there is to be an ISDS, the parties will need to agree a robustly framed one which prevents unwarranted litigation, adopting the lessons from the recently negotiated EU/Canada trade treaty, to circumscribe the terms on which litigation could be initiated against policies to improve environmental or health protections.
Developing countries should be invited to take part in the TTIP negotiations now, to allow their concerns about a potential loss of markets in the EU to be fully addressed. UK and EU Aid will need to be targeted in supporting those countries to be able to continue to compete for their existing export markets.
The extent to which TTIP potentially presents risks for environmental safeguards depends on the detail of the deal that is struck, but there is not currently the transparency needed around the negotiations to be able to reach a view on whether such risks will be dealt with. EU member states, including the UK, will need to be more closely involved in the negotiations from now on, and engage in turn with environmental groups and agencies, to ensure that environmental issues are adequately considered. The next Government after the Election should ensure that the public and the House are given a full and timely opportunity to scrutinise the draft terms of any TTIP settlement before it is a done deal.
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