Potential boost to EU-USA free trade welcomed

September 7, 2014 9:11 PM

Last week the Labour Group on Newcastle City Council rammed through a motion on the transatlantic trade negotiations which was confused, fundamentally misguided, and made little or no economic sense. Debate was prevented by procedural means so we write to you to point out the very bad message it sent to the world in terms of Newcastle Council's view of business, regulation, and international law.

The proposed TTIP (Transatlantic Trade and Investment Partnership) is a very important opportunity to boost EU-US trade. It has the potential to benefit the EU's economy by 0.5% of GDP, or 120 billion Euros a year. The EU estimates that the benefit to each EU household is around £500 per year in terms of lower prices - an important contribution to combating the cost of living crisis that Labour are so concerned about. By supporting free trade and increasing exporting, it will help to support the rebalancing of the UK's economy to encourage export-led growth in jobs - something we certainly would like to see.

Many baseless claims were made which we were unable to refute publicly. It is alleged that the negotiations are behind closed doors (as of course all treaties in history have been) But it's not secret. The European Commission has published regular and transparent updates after each weekly round of negotiations, and the process has notably included regular stakeholder sessions which allow NGOs and others to contribute to the debate. It is all there in extensive detail in a special section on the Commission's website. We doubt that Labour Councillors who nodded the motion through knew this let alone took the time to read it.

This of course is not the first EU trade agreement - many previous agreements have been put in place to mutual benefit. It is normal for such agreements to include provision for investor-state dispute settlement (ISDS) in the event of a legal dispute between a government and a foreign company. Indeed, the UK has included such provision in the overwhelming majority of its agreements since it was introduced by the Labour Government in 1975 as part of a bilateral trade agreement with Egypt. The UK has never lost an ISDS tribunal - it is unfortunate that it has been portrayed as a bogeyman by people who lack understanding of what it means.

The EU's stated aim is not to weaken existing European regulation but to raise standards internationally. The UK and the EU have a long history of international co-operation to set appropriate international standards via the International Standards Organisation. The EU's REFIT programme has not diluted standards but has successfully reduced the excessive burden of red-tape on small businesses and helped to create a "clear stable and predictable regulatory framework supporting growth and jobs". Hundreds of positive measures have been taken to reduce trade barriers - for example, agreement of EU-wide electronic VAT invoicing, financial reporting, patent applications, and public procurement protocols. This is better regulation which we should be actively supporting, not carping about and scaremongering.

As is often the case, Labour trotted out unfounded fears for the National Health Service. The TTIP and all EU trade deals include three important guarantees for public services - on protection of public monopolies at national, regional, or local level, protection of "national treatment" - publicly funded health and social care, education, and water services - which can prevent foreign firms from investing in these services - and regulation of public services. Indeed, the only requirement within TTIP that affects the NHS is that it would allow ISDS to apply to any future changes to provision where foreign firms are already operating. It is worth reminding local people that the changes which allowed foreign firms to operate in the NHS were introduced by the Blair Government.

We invite anyone who is not prepared to take our word for it to read those of the European Commission's trade director. Senor Garcia Bercero replied at length to a letter from former Labour Treasury Minster John Healey MP making it very clear that the fears being peddled on the impact on the NHS are simply untrue. (It can be found at http://trade.ec.europa.eu/doclib/docs/2014/july/tradoc_152665.pdf) In detail, it demolishes the main plank of her motion's argument, concluding : "I hope this information clearly demonstrates that there is no reason to fear either for the NHS as it stands today, or for changes to the NHS in future, as a result of TTIP".

We Liberal Democrats believe that greater trade and investment between the EU and US is good for UK exports and economic growth and prosperity, and we welcome further negotiations to achieve this goal whilst protecting appropriate safeguards for the environment, health, and safety. We support the EU working to benefit citizens and business, and we support international co-operation on trade and the economy. We even support the principle that seems anathema to Labour today that the private sector has an important role to play in public procurement.

Instead, Labour in Newcastle appears to be opposed to increasing international trade and economic growth, reducing the cost of living, and taking sensible steps to reduce the burden of regulation. They seem happy to send out a message that this council is hostile to business and trade and is in favour of protectionism. We reject that entirely.

Even more damningly, the motion shows that the Labour group is not willing to think for themselves, and would rather put forward a loony left motion cooked up by trade union dinosaurs like their sponsors UNITE, regardless of whether it is good for Newcastle and the UK, and regardless of whether or not it is factually accurate.

We can only conclude that Labour would rather put forward silly, wrong-headed and damaging motions on international economic topics because it has nothing to say and certainly nothing to boast about when it comes to services delivered under the direct control of Newcastle City Council.

Councillor Greg Stone (proposer) and Councillor Robin Ashby (seconder) of a guillotined amendment.