Thu, Jun 26, 2014 - Page 15 News List

EU, US deny trade deal will enable a corporate takeover

Reuters, LONDON

Multinational companies will not be given too much power by a trade agreement between the EU and the US, the EU’s trade chief said on Tuesday, seeking to reassure consumer and environmental groups opposed to the pact.

Washington and Brussels are negotiating the accord, the world’s biggest, which would create a market of 800 million people. However, popular opposition to a deal is growing.

“Our choice is not between a world where each does as he pleases and a nightmare where we are ruled directly by multinational corporations,” EU Trade Commissioner Karel De Gucht told businesses, trade unions and diplomats at Thomson Reuters in London.

Protest parties from across Europe’s political spectrum have rallied against the proposed US-EU deal, known as the Transatlantic Trade and Investment Partnership. They performed well in last month’s elections for the European Parliament, warning voters of dire consequences if an accord is sealed.

European consumer and environmental groups say the biggest threat comes from a mechanism that would allow companies to bring claims against a country if it breaches the trade treaty.

They say the mechanism for settling disputes would allow multinationals to bully the EU’s 28 governments into doing their bidding regardless of environmental, labor and food laws.

The US and the EU deny that. They say dispute settlement has been an important part of trade accords since the North American Free Trade Agreement 20 years ago.

“There is nothing shocking here... I am not seeking to destroy anyone’s soul,” De Gucht said.

De Gucht has the option of removing a dispute mechanism from the agreement, although he said Washington will not accept that.

For businesses, protecting their interests, ranging from power grids to new factories, is crucial. Almost US$3 billion in goods and services are already traded each day between the US and Europe. Annual turnover of all foreign companies in the EU is about 3 trillion euros (US$4 trillion).

An EU-US deal alone could add US$100 billion a year to economic output on both sides of the Atlantic.

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