Transatlantic Trade and Investment Partnership

David Mowat Excerpts

Tuesday 25th February 2014 Commons Chamber

[Mark Field]

If the hon. Lady will allow me, I will not comment on that but will leave it to the Minister. I wanted to speak about financial services, and I appreciate that time is tight.

[David Mowat (Warrington South) (Con)]

Briefly, my hon. Friend mentions the need for an EU-US regulatory framework for financial services, which I have not heard of before. How does he square that with what, for example, the Basel agreements try to do globally at the moment? Is that really the way forward?

[Mark Field]

I say simply to my hon. Friend that given the potential huge benefits of the TTIP, it seems odd that important industries such as the financial and professional services are not included in it. Clearly we are in a state of flux about a lot of international and national regulation of financial services, but it seems that this would be a good place for us to make a robust case for open markets, particularly in an industry that will clearly develop in many other parts of the globe beyond the EU and US.

It is important that those who are proposing the TTIP show just what it can add to people’s lives in terms of trading opportunities, jobs and a better variety of consumer products. If there is a perception that the deal is being engineered in an opaque way, it is likely to fall apart and we shall lose an enormous opportunity. Crucially, the United States must do the same. In that nation, protectionist sentiment and economic nationalism are now fast replacing the wave of enthusiasm on which the TTIP initially rode.

Needless to say, progress in this field of influence will resonate strongly in the UK Government’s negotiations for reforms within the European Union. It was, of course, the wily German statesman Bismarck who observed that

“politics is the art of the possible.”

Although I believe it is sensible that the UK Government do not raise excessive expectations as to what might be achieved in negotiations with our EU fellow members, it is at least worth observing that in the aftermath of last autumn’s EU budget settlement there appears to be a new mood towards some level of reform. One hopes that some of the UK’s traditional European allies such as Poland, Finland and the Czech Republic, will not feel encumbered by a resurgent Russia from making the case for some fundamental institutional reform in the EU. Time will tell, I think.

Thank you, Madam Deputy Speaker, for allowing me to say a few words. This debate on the TTIP shows once again that the UK Government’s goal should be that we remain the most outward-looking trading nation. We have every reason to have been proud of that in centuries gone by, and hopefully we will be in the years and decades to come.

--- Later in debate ---

[Jonathan Edwards]

I fully concur with the views of my hon. Friend. I will go on to talk on that specific issue in the remaining parts of my speech.

Concerns over data protection have been completely overshadowed by the US Prism spying programme. The US is much better organised in economic and industrial policy and will have no qualms about defending its narrow interests, making the need for transparency in the negotiations imperative. Most worrying about the TTIP as it stands are the proposals for investor-state dispute settlement. This would weigh law in favour of big business, allowing them to sue Governments that attempt to defend their citizens. Secretive panels of corporate lawyers could circumvent legal protections and override the will of Parliaments.

[David Mowat]

What proposals does the hon. Gentleman have to protect British investments overseas if he is so passionately against the current structure he mentions?

[Jonathan Edwards]

I am extremely interested in that point. I was going on to say that this is a deal between two advanced trading blocs with advanced legal systems. The hon. Gentleman’s argument would stand up only if he believes that the United States is a banana republic, and I am sure that that is not what he genuinely feels.

Clauses written into trade treaties are often used when dealing with developing countries with weak legal infrastructure, so that companies can protect their investments. However, they should not be necessary in developed economies with some of the best and most highly functioning legal systems anywhere in the world. The hearings are held in secret and would undoubtedly undermine the ability of societies, citizens and communities to contest decisions that affect them. The Democracy Centre has called it

“a privatised justice system for global corporations.”

Plaid Cymru completely opposes any proposals for investor-state dispute settlements within the TTIP, and believes that they are an affront to democracy and should be removed immediately.

Concerns over free trade agreements and the potential for an unequal relationship are not unfounded. The North American Free Trade Agreement between the USA, Canada and Mexico has undoubtedly been of greater benefit to the US and the larger corporations located within it, while US jobs are being outsourced to Mexico for lower wages. On the whole, this has been to the detriment of Mexican home-grown industry, as US corporations have moved in. It has also been detrimental to manufacturing and industrial blue collar jobs in the US, which have been outsourced, and to the small businesses in local communities that such jobs supported.

When out in the States in the summer, during a meeting between the all-party group on European Union-United States trade and investment and a member of President Obama’s inner circle, we were informed that future US economic strategy will be based on three pillars. One is to make the most of the fracking boom in the States, which means that it is now a net exporter of energy. The idea is to offer energy subsidies for heavy industry and manufacturing companies to reverse the flight to the Asia Pacific rim. This will mean that US companies will be at a huge advantage in being more competitive in any TTIP deal.

[David Mowat]

The hon. Gentleman makes the point that the Mexico-US agreement was principally of benefit to the US and multinationals within the US. My understanding, however, is that since that agreement was signed the Mexican economy has grown by an average of 8% or 9%—far more than it had been growing previously. How do those factors stack up?

[Jonathan Edwards]

I think the hon. Gentleman is trying to distract me from the point I was trying to make. I would go as far as to say that the TTIP advantage available to the US could lead to the stripping of my country’s manufacturing base.

To mitigate that potential threat, Wales must have control over its natural resources and energy production infrastructure, so that we can ensure that our manufacturing base is competitive and is not put at a disadvantage. We are a net exporter of electricity, which is why my party has called for the establishment of a not-for-profit Welsh energy company to build up an asset portfolio to protect domestic consumers and our economic base.

You, Madam Speaker, will appreciate that I, the son of a trade union shop steward, am concerned that the TTIP will not include the movement of labour, hence my Marxist critique of the current proposals. As Gary Younge wrote in The Guardian in 2001:

“Our governments are trapped in a morally warped and ideologically unsustainable paradigm. They applaud the free movement of capital; they abhor the free movement of labour.”