Monday, November 11, 2013

No investor-state litigation clause in EU-US trade agreement!

American and European negotiators have met for the second round of bilateral talks for the Transatlantic Trade and Investment Partnership (TTIP) on Monday. In different negotiating groups such as "market access", "public procurement" and "regulatory aspects", EU and US officials are working to simplify business rules for both sides of the Atlantic. 

In one of the groups, negotiators are trying to establish a mechanism for investor-state dispute settlement (ISDS). This would allow an American investor to claim damages from the EU in front of an international court if the EU was to modify its public policy in a way that would spoil the investor's profits. Canada is feeling the heat of such a dispute since a group of investors has sued the region of Quebec under NAFTA for its ban on fracking. Argentina had to pay US investors hundreds of million dollars for their losses after it had to devalue its currency in 2001.

If US and EU negotiators agree to put an ISDS clause into the TTIP, this could curb the EU's and the member states' regulatory powers. A British fracking ban could for example cost the EU millions of Euros if it spoils a planned investment by US investors. In the same way, if a European country was to introduce an eco-tax or a financial transactions tax (FTT), this could also lead to compensation for American investors. 

EU and US negotiations keep affirming that both entities have a well-developed legal system and the need for ISDS should never arise. But once the system is in place, it can be freely used by every investor who wants to. It is a system that can become very dangerous for the shaping of democratic politics.

For this reason, there should be no ISDS clause in the TTIP.

Thursday, October 17, 2013

MEPs ask for an end to Brussels-Strasbourg travelling circus

Members of the Constitutional Committee of the European Parliament on Monday took a first step to end the travelling circus of the Parliament between Brussels and Strasbourg.

In a report (see the draft report here) that was adopted by 20 to 4 votes, the committee urges to give the Parliament the say over its location, its calendar and the modalities of its meetings. 

"We want to have one seat, so that we can save money and carbon dioxide," commented the co-rapporteur of the resolution, British MEP Ashley Fox, in a press conference on Tuesday. At a time where European citizens are asked to make cuts, an estimated 200 million EUR is spent by taxpayers every year to fund the monthly travel of 766 MEPs, their assistants and Parliament staff from Brussels to Strasbourg and back. The MEPs of the Constitutional committee find this an unnecessary waste of money and carbon dioxide.

"This report is a small revolution, but it will be the beginning of a bigger revolution," the second co-rapporteur Gerald Häfner (Germany) added. "We want to take our own decision about where to have the Parliament's seat, but we are hostages of the European Council, the member states and their governments." The seat of the Parliament is written into the EU treaties, and a treaty change requires unanimity by all 28 EU member states. The French government has indicated many times that it will not agree to abolish the EP seat in Strasbourg.

Many people have tried to end the monthly travelling circus before, but always in vain. Fox and Häfner believe that this time will be different. "This is a new thing," said Häfner, "because the Parliament has never before asked for a treaty change that would allow it to decide itself where and when to hold its meetings." 

Fox and Häfner are certain that by now there is a majority in the European Parliament in favour of a single seat, a majority that runs through all the political groups. It appears that quite a few European governments are also in favour of putting an end to the travelling circus but they would not like to directly pronounce themselves in favour of either Strasbourg or Brussels. To bring the report through Parliament, the two rapporteurs have therefore decided not to mention either Brussels or Strasbourg. "We don't take a stance about where the single seat should be," said Fox. 

Nonetheless, there was a bit of opposition to the single seat report. When it was voted on Monday, a number of French MEPs not belonging to the Constitutional committee tried to highjack the decision. They had added 87 amendments to dilute the impact of the report (most of which were rejected) and attempted to cast votes in the committee even though they were not member of it. The committee had to pause several times until the final vote could take place.

The report will now be voted by the plenary on 11 November vote and Ashley Fox believes that only few MEPs will be brave enough to put down their name for a two-seat solution. If the report is adopted, the Parliament would wait until after the elections in May 2014 and then formally submit the report to Council. The Council would then be forced to debate the question of the single seat and take a vote on it.

The next European convention to review the EU treaties, probably in 2015, would then debate the Parliament's request to decide itself on its location, said Häfner. And an agreement would have to be found to compensate the country which would lose its European institutions, added Fox.

Saturday, October 12, 2013

The pope is right: Europe should be ashamed

Since the beginning of the Syrian civil war, 560,000 refugees (or about 9% of the Jordianian population) have crossed into Jordan and asked for asylum. The cost of providing shelter, food, water (Jordan is a desert state) and assistance for all these refugees has cost the government of this upper-middle income country 1.53 billion USD since the beginning of the refugee crisis. Commenting on the refugee situation, Jordan's interior minister said
Jordan is a safe haven; even if we have to share some of our livelihood we will not deprive anyone of the privilege to be here. This is the nature of Jordanians and their leadership, and I pray to God that we are never in a position where we would make a different decision. I want to emphasize Jordan’s moral, humanitarian and political commitment.
Meanwhile, 6,400 Syrian refugees have reached the European Union through Bulgaria. Others come into the EU through Greece or Italy. Two boats carrying African refugees capsized at Lampedusa this week, killing hundreds of them. At the Council meeting of Interior Ministers this week, some of these countries asked for help from their richer, northern European neighbours. They find that the 2003 Dublin II regulation – which obliges asylum seekers to file their asylum request in the EU country of arrival – does not respond to the challenges of today any more.

But the richer north European partners refused to move an inch away from the Dublin II regulation. A representative survey conducted in Germany last week revealed that a majority (52%) of the Germans believe the EU should accepted more refugees, but the same majority (51%) thinks that these refugees should go to a country other than Germany.

For a bloc of the most developed countries in the world, but especially for a union that prizes itself for being a value-community, this is completely unacceptable. The pope put it a bit more bluntly: This a shame.

The EU not only has the economic resources and cultural diversity to accept a far greater number of refugees, but it has also proclaimed to the world that it promotes humanitarian values and human rights.

But the picture that it gives of itself in the African and Syrian refugee crisis is a club of wealthy countries, busy with itself, ignoring the rest of the world.

Wednesday, May 9, 2012

Happy Europe Day!

Who would have thought that Europe would come this far, when Robert Schuman gave the Schuman Declaration.

Tuesday, May 8, 2012

Is Martin Schulz emerging as a new leftist leader in Europe?

On the morning after François Hollande was elected president of France, Martin Schulz sat in his office at 7h50 and gave an interview to Deutschlandradio. Then his press team sat down to write an opinion peace for Project Syndicate. Not only François Hollande wants to move away from austerity, Schulz said. The European Commission under Barroso is also convinced that more growth cannot come about by austerity alone. And the European Parliament, with Schulz, an (albeit impartial) social democrat at the top, is also coming out in favor of less austerity.

As a German commentator observed on Sunday, the word "super election day" several years ago meant elections in two or three large German states. Today, it means elections in France, Greece and Serbia (and Schleswig-Holstein). In an integrated European economy, national policies can no longer be shaped in isolation; policy-making has to shift from the national to the European level to remain efficient. Mathew suggested that we have seen the emergence of a truly European debate on economic policy in the last few months - more austerity against more growth programs instead of more Europe against less Europe. I think he is right. And now that Hollande's rise to power shifts European policy-making from austerity to growth, the president of the European Parliament appears well-placed to broker and negotiate this transition within the European institutions. He could emerge as new leftist leader in European policy-making, if not in front of the cameras then at least in the hallways of the institutions.

The next European Council will have growth programs on its agenda. And Martin Schulz has been fighting for the inclusion of the EP president in the negotiations of the fiscal pact. It will be interesting to see how much he will use his position and his intra-party networks to help broker a growth program in Europe.

And then? National elections in Germany are next year and if the European mood, inspired by Hollande's election, turns toward growth programs, then the German elections might sweep the former social democrat finance minister Peer Steinbrück, an efficient pro-European, to power. Might be a very interesting constellation for social democrat governance in Europe: Hollande - Steinbrück - Schulz.

Saturday, April 7, 2012

What must be said

With his poem "What must be said", to be found here [DE], German nobel prize laureat Günter Grass stirred up a heated discussion in Germany. At the core of it: Can Germany, the country that bears responsibility for the Holocaust, criticize Israel? 

Public opinion in Germany seems to answer this question with a yes. Although I cannot find the figures, the majority of Germans looks at Israel's aggressive foreign policy with unease (and shows empathy with Palestinian citizens in the West Bank and the Gaza strip). When Günter Grass now writes that the "atomic power Israel endangers a world peace that is already crumbling" and criticizes the German shipment of a nuclear submarine to Israel, he speaks out what many German citizens have thought for a long time.

In other countries, this would not be a problem. But in Germany, where chancellor Merkel has declared Israel's security a piece of Germany's raison d'état and where a recent study has found "a banalization of antisemitist practices and rants that reaches far into the middle of the society", such a piece of criticism cannot be uttered without being called an antisemitist. German criticism of the state of Israel and of its government is always understood as criticism of the Israeli electorate, the Jewish nation. 

And yet, the state of Israel is evidently in breach of several UN resolutions that deal with Israeli settlements in the West Bank and has repeatedly expressed its desire for a preemptive strike on Iran which would defy the intentions of the UN Charter. You could conveniently argue that every world citizen with an interest in peace should have the right to criticize Israel for its policy, regardless of their nationality.

What Günter Grass therefore advocates in his capacity as a global citizen is to put both the Iranian and the Israeli nuclear programs under the scrutiny of an international authority. If you look at the situation without a Western bias, the question is justified: Why subject the Irani nuclear program to external control and make an exception for Israel, although its attack could endanger Iranian citizens just as much as an Iranian attack would endanger Israelis?

As a German or non-German, what do you think of the question?

Thursday, February 16, 2012

EU-China summit: Advance on Market Economy Status, retreat on Economic Partnership

At the EU-China summit in Tianjin, José Manuel Barroso, Herman van Rompuy and Chinese Premier Wen Jiabao agreed
that a rich in substance EU-China investment agreement would promote and facilitate investment in both directions. Negotiations towards this agreement would include all issues of interest to either side, without prejudice to the final outcome. [Both sides] agreed to work towards the start of the negotiation as soon as possible.
One the one hand, this is an interesting development. In the past, bilateral investment agreements have allowed European enterprises additional security in their overseas investments, given that they could directly seek arbitration with an international tribunal.

One the other hand, opening new investment negotiations suggests that the 2007 Partnership and Cooperation Agreement (PCA) talks are all but dead. At the time, the EU wanted to update the 1985 agreement that governs Sino-European economic relations, and adapt the partnership to the changed trade patterns of the 21st century (increased trade in services, increased volume of foreign direct investment, questions of intellectual property, China's entry into the WTO in 2001 etc.). The 2010 EU-China summit still referred to the PCA, but this year it was not mentioned a single time. Are economic relations between the EU and China running smoothly if a comprehensive economic agreement is silently scrapped and replaced with the promise of a potential investment agreement? I don't think so. 

Another import point at the summit was Market Economy Status (MES) for China. Despite China's WTO membership since 2001 (analysis: here), the EU has long withheld MES for China and used it as a bargaining chip. Now, it appears that Van Rompuy and Barroso are ready to scrap their opposition if China steps up its help in the Eurozone crisis in return. Granting MES to China would inter alia strengthen Chinese enterprises in anti-dumping cases. The ALDE group is particularly unhappy to see the EU's bargaining chip vanish, but it would soon disappear anyway, given that under China's WTO accession agreement, the EU agreed to grant MES automatically in 2016 (even though this is contested).

Overall, I do not have the impression that this summit was a great advance in EU-China relations. But then, good relations across different cultures are not created overnight. Instead, many small initiatives such as dialogues in climate change, energy, urbanization etc. continue to bring the two partners closer together. In the long run, I would hope that the EU and China, two of the biggest trading blocks in the world, can use the summits to give their voice to global trade and global sustainable development. But in the short run, I believe that bilateral cooperation will continue to take place on the micro-level.