Transatlantic trade deal could weaken environmental regulations

10th March 2015

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Peter Jones

A trade treaty between the EU and the US could weaken European and UK environmental and health regulations, a cross-party group of MPs warns.

The latest report from the environmental audit committee (EAC) considers the impact on environmental regulations of the transatlantic trade and investment treaty (TTIP), which is currently being negotiated by the EU and US.

The TTIP has been under negotiation since 2011. Its stated aim is to “significantly reduce the cost of differences in regulations and standards by promoting greater compatibility, transparency, and cooperation, while maintaining our high levels of health, safety and environmental protection”.

The EAC’s report highlights the different ways the EU and US set environmental standards. The EU relies more on the precautionary principle, whereby if an action is suspected of causing harm and there is no scientific consensus that it will not, the burden of proving that it is not harmful falls on those taking the action, such as the manufacturer of a product. By contrast, costs and benefits are the main focus in the US when developing environmental standards, the report states.

Some participants in the EAC’s enquiry raised concerns that using mutual recognition to accept differing regulatory standards rather than revising them could lead to a “race to the bottom”, as it gives a competitive advantage to the trading bloc with the least expensive regulation. The committee recommends that where mutual recognition of regulations is used to smooth trade, it should only be applied where there has been a satisfactory test to determine if products are equally safe. Where it is not, existing regulation should be maintained, say the MPs.

One such example identified in the report is the regulation of chemicals. In the US, there are only 11 chemicals that are restricted for use in cosmetics, whereas restrictions are placed on more than 1,300 substances in the EU.

The TTIP may also allow US companies to sue European states for introducing new regulations that they believe will make it more difficult for them to sell their products, the EAC warns. A compelling case for including this measure, known as an investor-state dispute settlement (ISDS), has not yet been made, the committee says.

However, if ISDS is in the final treaty, it should be accompanied by a process showing where litigation could be initiated against policies to improve environmental or health protections, the committee recommends.

The EAC criticises the negotiations for not being sufficiently transparent for it to be able to reach a view on whether the risks it has identified will be addressed. EU member states, including the UK, need to be more closely involved in the negotiations, and engage with environmental groups and agencies to ensure that environmental issues are adequately considered, it says.

According to the report, the EU and US have agreed that negotiations on TTIP should be concluded by the end of the year. Parliament and the public need to be given full opportunity to scrutinise the draft terms of any TTIP settlement before it is a done deal, the MPs stress.

EAC chair Joan Walley said: “The focus in TTIP has been on its potential for boosting transatlantic trade, but that must not be at the expense of throwing away hard-won environmental and public-health protections. Europe must retain its right to regulate.”

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