Small Businesses in Europe Fear Getting Trampled by TTIP

The powers behind it are multinationals.

By Don Quijones, Spain & Mexico, editor at WOLF STREET.

At this moment, 3,382,680 people have signed a European Citizens’ Initiative calling for an immediate end to the negotiations of the Transatlantic Trade and Investment Partnership (TTIP). “Stop these sinister trade deals,” is the site’s motto. It’s by far and away the highest number of signatures ever achieved by such a petition. Mass demonstrations, meetings, and rallies have been held in towns and cities across the continent as well as coordinated international days of action against TTIP.

While protests from anti-globalization groups and labor unions have hogged what little limelight there has been, the depth of European skepticism goes much deeper. Thousands of local councils and municipalities have preemptively declared themselves to be TTIP-free zones, including Spain’s second biggest city, Barcelona.

Now, despite the European Commission’s increasingly desperate efforts to paint TTIP as SME-friendly, growing ranks of small businesses are beginning to question the wisdom of signing the so-called free trade agreement, which has little to do with actual “trade,” and everything to do with expanding the rights and powers of large corporations.

A new Business Against TTIP platform has just been launched in Britain, fronted by UK Entrepreneur of the Year Titus Sharpe. “The small and medium-sized enterprise (SME) sector is critical to the UK economy,” Sharpe writes in the UK Independent. “We account for more than 99% of the private sector and we provide jobs for more than 15 million people. Our gross value add to the British economy is £339 billion.”

The European Commissioner for Trade, Cecilia Malmström, argues that “Europe’s smaller firms and the communities they operate in stand to be among the biggest winners” from TTIP. A bizarre claim given that only 0.5% of SMEs in the UK and 0.7% of businesses across Europe actually engage in trade with the U.S., and the value of those exported goods and services is less than 2% of the added value produced by European SMEs as a whole.

For most of Europe’s small businesses, the vast bulk of their exports go to other European countries. However, a number of studies predict that TTIP will see a considerable drop in trade between EU countries as a result of trade diversion to the USA, with one warning of “European disintegration, unemployment and instability” as a direct result of TTIP.

The fact that growing ranks of time-pressed small businesses are starting to actively campaign against TTIP is no minor matter. By bowing at every turn to the demands of big business, the TTIP negotiators risk turning a very important ally into a very powerful adversary, and not just on the European side: in total there are 20 million SMEs in the EU and 28 million in the US.

Thousands of businesses in Austria and Germany have already signed an ‘SMEs Against TTIP’ petition calling for an immediate end to the EU-US negotiations. The German Association for Small and Medium-sized Businesses (BVMW) has expressed the strongest reservations about TTIP, as WOLF STREET reported last year.

A 2014 Commerzbank study found that only 15% of Mittlestand companies, which represent over 90% of firms in the country, believe TTIP would be a good thing for their business. A separate survey by the BVMW showed that more than 80% of its members believe the government is not doing enough to represent their interests in the negotiations.

Their biggest gripe is the proposed inclusion of an Investor State Dispute Settlement clause which would allow multinationals to bypass national courts and jostle governments into doing their bidding. The arbitration process can set litigants back millions – sometimes even tens of millions – of euros, pricing out all but the biggest businesses from benefiting from the low-hanging spoils. Meanwhile, local governments in Europe and the U.S. would suddenly find themselves prohibited by corporate law from providing support to small, local businesses.

A new study by Osgoode Law School’s Gus Van Harten has shown that even for the smaller companies and investors that have used the arbitration process, any winnings they receive are normally wiped out by legal costs. In essence, corporate courts act to redistribute income from the public purse to the largest and richest entities in the world, with almost 95% of the $6.7 billion awarded in the 48 cases studied by Van Harten going to “really big corporations” (over $1 billion in annual revenue) and “super rich individuals” (over $100 million in wealth).

In public, many big business lobby groups, such as the Confederation of Business Industry (CBI) and the French-based MEDEF, champion the “significant benefits” that SMEs can expect to enjoy from TTIP. But what they say in private is a whole different matter. In a meeting with senior officials of the European Commission, the CBI conceded that there is no evidence that SMEs will benefit from TTIP.

In a similar vein, the French big business lobby group MEDEF asked the European Commission how it can “reassure the 19 million European SMEs which do not export and which will face increased competition” that everything will be okay once the trade agreement comes into effect. Unfortunately we do not have an answer to that question.

Since work on TTIP commenced five years ago, no study has analyzed the potential costs or benefits for SMEs. But it’s no secret that big businesses on both sides of the Atlantic stand firmly behind the trade agreement, and that the largest among them will be the biggest beneficiaries from the deal. After all, they’re the ones who wrote it, as Maltese MEP Alfred Sant warns:

The powers behind it are the multinationals… and where can it go? We’re moving towards a global economy with a few oligarchs at its helm. I don’t see how it’s going to help SMEs.

But it isn’t meant to help SMEs. It’s meant to help multinationals. And if SMEs get trampled, so be it. By Don Quijones, Raging Bull-Shit.

Things are likely to get a whole lot uglier in Spain. Read…  “Everything Has Come to a Standstill”: Political Fallout Hits Business in Spain

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  11 comments for “Small Businesses in Europe Fear Getting Trampled by TTIP

  1. Vespa P200E says:

    Trade agreements are boon for the large multi nationals and plague to small businesses.

    Wally mart and other bing retailers literally BK’ed small biz shops thru out US like dead downtown stores ruining lives of many. It surprised me that EU is not quite in that boat yet without as many big retailers with huge parking lots and many towns have bunch of smaller specialty local retailers. It struck me how a small town in Germany I was passing thru had its own hat store and how the owner can make a living selling hats.

  2. LG says:

    The American way! Big fish eat small fish.
    Corporatocracy is killing the middle class the small businesses and farmers.
    We either become slave sheep or rise up!

    • Guest says:

      Sharks eat guppies!

    • JayTe says:

      Spot on! And that’s why there is so little job creation in the US. Because the laws and regulation are heavily weighted towards large corporations. If TTIP passes expect the European Commission starting to produce similar statistics as in the US where despite the fact that close to 100 million people have given up looking for work, the gleefully tell everyone the unemployment rate is 6% and the economy has recovered!

  3. BradK says:

    In all the bluster and inane chatter that is the U.S. Presidential election charade — let alone the performance art known as “debates” — I can’t recall a single mention of either TPP or TTIP by any candidate on either side of the imaginary red/blue divide.

    Give the people what they want, I suppose.

    • TheDona says:

      Gruber’s statement of: “The stupidity of the American voter” seems to sum it up nicely, don’t ya think.

    • Petunia says:

      I don’t think Mrs. NAFTA is going to bring it up.

  4. Yoshua says:

    In this global economic environment I think that we Europeans should be proud that American TNC’s still believe that Europe has something left of value to be exploited.

    • d says:

      The Western TNC’s are getting severely beaten on, for exploiting in Africa, as only china is allowed to do that now.

      So where are they to find meat, any meat, even, old stringy bony European meat, will do. As they are hungry.

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