Transatlantic Trade and Investment Partnership

Debate between Geraint Davies and Andrew Percy

Thursday 10th December 2015 Commons Chamber

[Geraint Davies]

The issue is already being scrutinised by the European Scrutiny Committee, and the Environmental Audit Committee, on which I sit. The Business, Innovation and Skills Committee is also interested in it, and the provision will clearly have a widespread impact, so it should be brought before the House. I would like recommendations to be made by this House in an advisory way to the European Parliament, so that it can table amendments. At the moment, everything is being decided by negotiators behind closed doors. That is completely unacceptable, and it will just be a yes/no decision with ratification. CETA was agreed in September 2014, and it sounds as if it is having some sort of legal washing. It will be brought before Members of the European Parliament next spring.

I want to mention regulatory chill because of the pressure and threat of that sort of action. Already, the EU has withdrawn its demands for transparency and clinical data in trials. That means that if a big drugs company does 10 trials and three go wrong—thalidomide, for example—and seven go right, it only has to publish details of the seven that go right. That is worrying, as are the bits and pieces about trade secrets, which clearly undermine and inhibit democracy. There are issues of rights at work, and the problem of CETA being agreed, because that is a Trojan horse that allows all the powers created in the investor-state dispute settlement to come in through the back door and bite our democracy, public services and public finances.

[Andrew Percy (Brigg and Goole) (Con)]

Will the hon. Gentleman give way?

[Geraint Davies]

No, I will not. I want to dwell on the fact that as we sit here, 20 million people in Beijing are crying because of the environmental damage of trade and the unregulated economic activity that supports it. Meanwhile, in Cumbria, people are flooded because of the impact of climate change, and no one seems to be asking why. We should ensure that future trade agreements for the EU, Canada and the US have enforceable environmental imperatives that constrain corporations from making the situation worse, and that that spreads to China and elsewhere. However, nobody seems to be speaking about elsewhere.

We need trade laws to be trumped by what comes out of Paris in a legally binding and enforceable way, but that is not happening at the moment. I spoke with the Secretary General of the OECD, who was making a speech in Paris when I was there at the conference. He said that a £200 billion subsidy is currently given to fossil fuels and that he was not happy about that. I said, “What about getting the environmental imperatives from Paris as minimum standards into TTIP?” He scratched his head and said, “We haven’t thought about that, but it might be a good idea.” That is where we are, but the EU is asking for an oil and gas pipeline from the US to get shale gas and all sorts of oil over here. What will that do for our carbon footprint?

This is a case of trade on the one hand and the environment on the other, and we need an integrated approach to global sustainable development. I think that the ISDS should be stripped out of TTIP. People say, “What about the investors? They should be protected,” but investors have judicial review and breach of contract, and they already use those rights in public courts. The only difference is that in public courts the public interest is weighed against the commercial interest; on an arbitration panel, it is all about private interest, and public interest and public health issues are not really weighted.

Let me give an example. Tecmed is a waste disposal plant in Mexico that breached new regulations. The Mexican Government decided not to renew the contract because of that breach. Tecmed went to an arbitration panel and Mexico lost the case and had to pay £5 million, plus £8 million court costs. My point is that if the UK requires stronger emissions standards to live up to our promises regarding a 1.5° or 2° increase in temperature, the ISDS could come along and sue us for obliging companies to move forward with those requirements from Paris. Tribunals, as opposed to public law, are more heavily in favour of investor protection than public protection. That is the wrong way around.

Lord Maude said to me, in response to questioning by the European Scrutiny Committee, that companies deserve a bit of compensation if Governments intervene, and that there was nothing wrong with that. The point I am trying to make, however, is not that there should not be compensation. The Minister will be aware of the case in which the Costa Rican Government took back land with natural value—endangered species and habitats—and provided compensation of $1.9 million. The owners of the land took them to an arbitration tribunal, which did not factor in public interest or public value—that had nothing to do with it. It was all about commercial issues and it was decided to fine the Government $16 million. The ISDS favours the private sector, not public interest or natural habitat, so we need to strip it out of TTIP.

Another issue with ISDS is that it can trump national law and previous national law. In the case of Deutsche Bank v. Sri Lanka, the Supreme Court in Sri Lanka brought forward existing laws to stop payment to Deutsche Bank. Deutsche Bank went off to an arbitration panel, an international court, and, even though its arrangements had been made after the national law had been passed, it won the case. This implies for Britain that, if TTIP goes through in its current state, the Climate Change Act 2008 will be trumped by ISDS. That is unbelievable in terms of sovereignty and democracy.

A lot of Conservative Back Benchers are up to speed, but there are a lot of turkeys voting for Christmas on the Government Front Bench. We will not have protection for our famous products, such as pasties, Welsh lamb, Cumbrian sausages and so on. The headline in The Sun was lyrical: “Pasties get a pasting.” We could have Welsh lamb produced in Nebraska.

The TTIP environmental chapter makes reference to Rio and Copenhagen, but it contains nothing that would not allow investors to trump enforcement. There is no binding enforceability. None of the pledges in the environment chapter are carved in stone, and they could be overturned by arbitration panels. Those pledges need to be legally binding, with an enforcement mechanism that goes through national courts.

In a nutshell, I am suggesting that ISDS be removed from TTIP. Article 1 of CETA should say that the provisions in TTIP will be, without reservation, subject to the 2015 Paris conference and subsequent treaty agreements, that TTIP should be consistent and contribute to the targets agreed in Paris and subsequent COP meetings, and that we do not go down the route of harmonising by means of the proposed regulatory co-operative body. Harmonisation of standards is a good thing in principle, but it would all be decided behind closed doors by civil servants subject to lobbying from industry. That is not something we want.

Finally, there are a lot of things wrong with TTIP that we need to change, but the motion relates simply to scrutiny. I am not for abandoning TTIP. We need a blueprint for future global trade. We need to integrate environmental imperatives. We need to make sure legal rights and human rights are enforceable, and show leadership on global trade that provides a sustainable, fair and equitable world.

--- Later in debate ---

[Andrew Percy]

No, I will not give way. I have changed my mind.

I just want to talk about CETA for a moment. What the hon. Member for Swansea West (Geraint Davies) said about it being a Trojan horse is slightly offensive to the Canadian Government.

[Geraint Davies]

rose—

[Andrew Percy]

The hon. Gentleman did not give way to me, so I will not give way to him.

[Geraint Davies]

On that point—

[Andrew Percy]

Perhaps the hon. Gentleman wants to say that it was not an insult. To use the term “Trojan horse” suggests that the Canadians are in some way being used as a battering ram for the Americans, which is quite offensive. CETA in Canada has the support of the new Government, just as it did of the previous Government.

Much has been said about transparency. The theories on that have been well and truly demolished by my hon. Friend the Member for Aberconwy (Guto Bebb) who quite rightly pointed out that the text of what is being debated is available, and that, at the end of this process, there will be a mechanism for approval in all 28 national Parliaments. One could argue that few things that affect us are subjected to quite so much scrutiny. I am not sure that I can subscribe to the argument of the hon. Member for City of Chester (Christian Matheson), which seems to be that the process of agreeing TTIP could be some sort of conspiracy with regard to leaving the European Union. I did not follow that argument, as it made little sense to me.

Debate on the Address

Debate between Geraint Davies and Andrew Percy

Wednesday 9th May 2012 Commons Chamber

[Geraint Davies (Swansea West) (Lab/Co-op)]

I was interested to listen to the hon. Member for Brigg and Goole (Andrew Percy), whose speech was remarkable for one thing, as has been the case with so many speeches. We are currently seeing a fundamental clash in Europe between democracy and austerity that has been reflected in the polls in France and Greece, and indeed in Britain in the local government elections, with a choice between growth and making cuts to get down the deficit. There seems to be no acknowledgement of the fact that we are hurtling towards a fundamental change that will mean the end of the euro and perhaps the end of Europe as we know it. We need to focus on the need for proactive growth to invest in the capacity for productivity across Europe and to change course while we see the emergence of the far-right-wing parties that have been mentioned by my colleagues. Instead, however, the main preoccupation is still with the House of Lords.

I am sure that people like to talk about the intricacies of the House of Lords—about whether having someone elected for 15 years without re-election is really democracy, whether there will be a clash of democracies between the different Chambers and so on—but I think we all know that this is a very difficult issue, and that this is not the time to confront it when we are facing such severe economic issues on our doorsteps and such fundamental changes in the nature of Europe and our exporting prospects.

[Andrew Percy]

I am not sure whether my accent was the problem, but I think I made it very clear that House of Lords reform was a completely marginal issue of absolutely no interest to my constituents. As I said time and again, my constituents expect that the economy and growth should be the priority.

[Geraint Davies]

I am not talking about whether the hon. Gentleman and others referenced growth, but whether they took any notice at all of the fact that across Europe we are seeing these fundamental changes. The economic orthodoxy wants to ignore the wishes of people who are being downtrodden by these austerity measures, and we are facing a real challenge as regards the future of democracy in parts of Europe, the future of the euro, and the future of the European Community. In this year of her diamond jubilee, the Queen should have been given the opportunity to demonstrate that the Government are showing greater leadership by example in developing a proper, coherent strategy for delivering growth instead of cuts to get the deficit down. Instead, we have had the same old medicine with the familiar side effects of less money being spent in the public sector, leading to less money in the private sector and a downward spiral of unemployment and poverty. We have seen that across Europe.

What we need in the UK and Europe is a combination of fiscal stimulus and co-ordinated investment. The party with the best record on growth is of course the Labour party. Between 1997 and 2008 there was unprecedented and continuous growth that we had not seen since the war. In 2008, of course, we faced the financial tsunami, and to the credit of my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) and Barack Obama, the introduction of the fiscal stimulus enabled the world to avoid depression and deliver shallow growth into 2010. Then the Conservatives took over a deficit that was two-thirds caused by financial institutions and one-third caused by the Labour party investing beyond earnings to continue growth. Their immediate response was to announce half a million job cuts, which deflated consumer demand and led to negative growth. Indeed, the deficit projection is up by £150 billion.