Behind the Curtains: How The Corporatocracy Is Driving the US-EU Trade Agenda

By Don Quijones, Spain & Mexico, editor at WOLF STREET. His blog: Raging Bull-Shit.

Last week the United States and the European Union completed their sixth round of talks on a transatlantic trade deal, with both sides saying that they are on track for the “ambitious and comprehensive” trade pact that they have been seeking in the shadows for the last two years. Unlike the Trans Pacific Partnership whose progress has been temporarily stalled in the U.S. Congress and which apparently faces stiff resistance from a handful of Asian nations, the Transatlantic Trade and Investment Treaty appears to be set on a smooth course toward consummation.

But who’s actually driving the agenda of this highly secretive trade treaty that threatens to remake the market rules and regulations governing the world’s two biggest markets? According to a report by Corporate Europe Observatory (CEO), the answer is as predictable as it is depressing – corporate lobbyists:

Of the 560 lobby encounters that DG Trade [The European Commission’s Trade Department] held to prepare the negotiations, 520 (92%) were with business lobbyists, while only 26 (4%) were with public interest groups. So, for every encounter with a trade union or consumer group, there were 20 with companies and industry federations.

No sector has lobbied the European Commission more aggressively than the agribusiness sector. Food multinationals, agri-traders and seed producers have had more contacts with the Commission’s trade department (DG Trade) than lobbyists from the pharmaceutical, chemical, financial and car industry combined.

As with any bilateral trade deal, agribusiness behemoths such as Monsanto, Nestlé, Kraft Foods, and Syngenta, who already control a significant chunk of the global food chain, have a great deal to gain (or lose) from the eventual outcome of the negotiations. Here’s a little taster of what’s potentially up for grabs if they get their way:

  • Watered down European food safety standards. Both the pesticide and GMO industry have strongly pushed their agenda via the TTIP negotiations, with the aim of undermining current EU food regulations. Trade tools such as “mutual recognition” and “regulatory co-operation” are likely to lead to an erosion of food safety standards in the long run.
  • An end to the “precautionary principle.” US negotiators on behalf of industry are doing all in their power to undermine the precautionary principle, a cornerstone of EU policymaking, calling it “unscientific.” The precautionary principle is based on the idea that manufacturers need to be able to demonstrate that there is no risk before they can put something on the market. In the US, the opposite is true – you need to be able to prove that something is hazardous before it is taken off the shelf.
  • The end of “buy local” initiatives in the U.S. According to the European Commission, local preference legislation is discriminatory and acts as “localisation barriers to trade.” As such, it should be minimised, if not banned outright.
  • “Harmonised” regulatory standards. Harmonised is a nice-sounding word. After all, it’s the adjectival derivative of the word “harmony” and what could be nicer than a bit of harmony? Well, actually, quite a lot, at least when it comes to regulatory standards set in the exclusive interest of the world’s largest transnational corporations. As CEO warns, harmonisation is just the beginning; regulatory cooperation is the end goal – meaning the ongoing joint review of existing rules or standards that are seen as barriers to trade, and preventing any new ones in the future.

A Who’s Who of Corporate Europe

Taken together, the groups that have seemed to have enjoyed the most influence over EU trade negotiations reads like a who’s who of the Transatlantic Corporatocracy. They include:

  • Telecommunications and IT, including giant corporations such as Nokia and Ericsson as well as industry lobby groups like Digital Europe (whose members include all the big IT names, like Apple, Blackberry, IBM, and Microsoft).
  • Automotive lobbies, representing some of the most powerful car brands (Ford, Daimler, BMW…) and automotive suppliers.
  • Engineering and machinery, including manufacturing behemoths such as Siemens and Alstom as well as industry federations such as Orgalime (lobbying for the mechanical, electrical and metalworking sectors) and the German Engineering Federation VDMA.
  • Chemicals, including CEFIC, the EU’s biggest chemical industry lobby group (representing BASF, Bayer, Dow & Co), its US counterpart ACC (also lobbying for BASF, Bayer, Dow, and others) and the Germany industry federation (VCI).
  • Finance, with lobbying by some of the world’s largest banks and insurers (Morgan Stanley, Allianz, Citigroup…) and powerful financial sector lobby groups such as the Association of German Banks (BDB) and Insurance Europe (Europe’s main insurance lobby).

The list goes on and on, and includes lobbies for audiovisuals, media, healthcare and pharmaceuticals. Conspicuously absent from the meetings were groups representing the economies of Europe’s Southern and Eastern periphery. Indeed, CEO could not find a single lobby encounter between DG Trade and businesses from Greece and large parts of Eastern Europe (Poland, Bulgaria, Hungary, Czech Republic, Slovenia, Estonia, Lithuania, Latvia).

This revelation merely compounds fears that peripheral economies – especially those in the East – will bear the brunt of the social costs of TTIP. With US export interests targeting mainly those sectors where the European periphery has defensive interests – such as agriculture – the opening up of the EU to more transatlantic competition seems destined to exacerbate the divide between the EU’s economic core and its periphery.

A Lobbyist’s Paradise

That lobbies representing the world’s biggest businesses and finance institutions wield such influence over the trade agenda of the US and EU should hardly come as a surprise. Brussels is now home to roughly 3,000 powerful industry lobby structures (and 30,000 individual lobbyists), making the city the second biggest lobby industry in the world, just behind Washington.

And unlike Washington, which strengthened its lobbying laws after the Jack Abramoff scandal of 2005-6, Brussels does not even have a mandatory lobby register. Instead, it has a voluntary one whose members supposedly benefit from greater ease of access to Parliament – but apparently not to the EU’s executive branch, the Commission. To gain access to the Commission all you need is the right business card, as illustrated by the fact that more than 30% (94 out of 269) of the private sector interest groups that have lobbied DG Trade on TTIP are absent from the EU’s Transparency Register. They include companies such as Walmart, Walt Disney, General Motors, France Telecom and Maersk.

Given the acute lack of meaningful accountability, transparency or democratic legitimacy at the heart of its governance institutions, the EU makes the perfect paradise for lobbyists. Granted, in the U.S. lobbies have deeper roots and arguably a more pervasive influence, thanks largely to the fact that virtually all forms of political bribery are now effectively legal. But at least most of the racket is out in the open these days. What’s more, the government still has a few semi-functional democratic checks and balances in place – hence Obama’s difficulty (for now!) in fast-tracking the TPP through congress.

In contrast, the EU remains a democratic work in progress, and judging by recent revelations, rather than progressing, it’s regressing. The European Commission, wholly unelected and wholly unaccountable, is not so much in bed with the lobbyists; it’s making them breakfast too, croissants included. And that’s just how the Corporatocracy likes it! By Don Quijones, a Wolf Street exclusive.

European bankers have begun sweating, not because of the harsh heat, but fear – fear of what could happen as battalions of bank auditors take up temporary residence at the headquarters of the biggest banks. Read…. European Banks Begin to Sweat As ECB Promises Scalps

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  1 comment for “Behind the Curtains: How The Corporatocracy Is Driving the US-EU Trade Agenda

  1. AC
    Jul 22, 2014 at 8:14 pm

    Mafiocracy may be a more accurate term for what we are being subjected to, in lieu of legitimate government.

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