Project #Governance, Publication §4: Issues within the the Transatlantic Trade and Investment Partnership and the European Neighbourhood Policy

Issues within the the Transatlantic Trade and Investment Partnership and the European Neighbourhood Policy, Teodor Kalpakchiev, the-enpi.org

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Introduction

The following paper is a result of ad-hoc think-tank on the mandate for the Transatlantic Trade and Investment Partnership and the promulgation of the European Instrument, deployedthrough the structured dialogue of the Erasmus+ Programme of the EU in 2014. The views are based on the author’s observations and personal input as a project leader.

Democratization

The lack of established democratic fundaments in the neighbouring countries has been interpreted as the inexistence of efficient cooperation among them and the European Union.

Reasons can be found inter alia in the historical background of the countries, the inefficient and corrupt judicial systems, lack of rule of law, the plummeting economy, increased risks of impoverishment, the lack of respect for fundamental human rights. There is also a cause-effect relation due to the different values created by different religions as a system of principles, norm and beliefs and consequently a different structure of the legal order in the neighbouring countries leading to corruption, frequent violations of human rights, low government transparency (election rigging) and ultimately widely spread poverty.

The policy actions should first of all, focus on the improvement of the educational standards through provision of additional funding as a step towards the creation of a generation of critically aware individuals. For that to happen, their values system should be enriched with the instigation of European values, created through a reform of the educational system, catered for through external expertise. Subsequently, the individuals should be presented with an appropriate degree of information pluralism through a deregulation of the media, increased financial support to independent media, protection of independent journalists’ networks, organization of information campaigns on topics that are not covered by traditional media, as well as civic empowerment by means of trainings on important interpretative, entrepreneurial and analytical skills. Thirdly, investment in human capital through bilateral and multilateral exchange and research and advisory missions of consultants that provide know-how, expertise and distribute best practices should take place. Thus the EU will be able to provide for the creation of a rule of law based system, a better functioning of the judiciary and prosecution and the organization of democratic elections.

The prospective actors identified in the policy creation and implementation are to be financed by the new ENI, the European Endowment for Democracy and other funds and include NGOs, mass media, local governments and the civil society.

Within the cost-benefit analysis the negative trends of lack of social support, no guarantee for reform adoption, unsafe working environment for the experts and societal costs of the proposed actions have been identified. On the beneficial side of the analysis stands a probability for an increase of cooperation, know-how, establishment of direct contacts with the decision-makers, improvement of critical civic thinking and the development of active social groups.

Security

The issue of security has been addressed following the numerous security challenges the neighbourhood countries are currently facing, including human security, personal security, economic security, etc. The issue has become especially relevant deeming the polarization of antagonistic sentiments in Ukraine and Syria.

The main problem is to be defined as the ineffectiveness of the European Security measures towards the Neighbourhood. The identified causes are the lack of coherence and coordination, as well as the member states’ unwillingness to lose part of their national sovereignty by creating an European Army or obliging all member states to participate in CFSP missions.

The focus groups reviewed the following dimensions of security during their talks – Health Security, Personal Security, Economic Security, Political Security and Cultural Security.

Specific instances of problems within these areas such as drugs smuggling, food quality, disease prevention, medicines quality, illegal migration, human trafficking, minimum living standards, equal market access, terrorism, uncooperative border control, smuggling of cultural goods, illegal trade of antiques, the existence of an illegal market of organs were identified. Furthermore, the participants differentiated different types of smuggling such as weapons, drugs and cultural goods, while as types of human trafficking they identified organs trade, prostitution and slaving.

The solutions proposed by the focus groups are the organization of public consultations between NGOs, experts and the civil society, assessed through the degree of public support they receive as well as (if any) the increase of the level of political participation. The EU should send more civilian

and military peacekeeping missions, as well as post-conflict operations to ensure stability, democracy and rule of law. Governments should be advised to instigate minimum income policies, a non-discriminatory market entry, intergovernmental cooperation and exchange of good practices / know-how, food standards for imports and exports, healthcare standards, more education funding, common border monitoring. With its diplomatic instruments the EU should aim the disarmament of the region, the improvement of the the coordination of FRONTEX and border control units and the

creation of stronger guarantees for the respect of the fundamental human rights. The strengthening of the border control infrastructure has been seen as vital measure towards the non-proliferation of insecurity within the confines of EU.

The measurements for these solutions can be the number of promulgated laws, the instances of conviction of unlawful practices, improvements of literacy rates, lower number of cases of human rights disrespect and the public awareness of EU’s missions on the ground.

Migration

The migration working group decided to address the problematic in a chronological manner in terms of prevention, control on the border and integration.

The reasons for the increased influx of emigrants have been identified as instability in the countries as result of the ongoing civil wars, the economic downturn and the changing of regime. Already on the border the individuals driven by lack of economic stability in the emigrant country face lack of appropriate control due to corruption. Already in the EU the problems that migrants are facing are the bureaucratic weight, instances of racism, as well as lack of integration incentives with appropriate focus.

Structured in another way, the reasons for the increased migration flows can be distributed into economic ones, such as poverty, underdevelopment, instability, inappropriate allocation of funds; social ones, such as violations of human rights and fundamental freedoms, low standard of living and inappropriate public services, as well as political ones, such as lack of democracy, instances of conflicts, violence, abuse of power, corruption and geopolitical interests in the region.

Among the possible solutions prevention was viewed as a first step towards a better treatment of migrants. It should begin with the creation of flexible ad-hoc observation groups that can move when the situation at a certain geographical point deteriorates, strengthening of border control and political pressure on unstable regimes. The following proposals for resolving problems on the border have been put forward – refugee camps on the borders, special financing for border regions and a regulation on the conditions upon which one receives a certain status. Already in the EU the situation of the migrants can be increased through education incentives (e.g. soft labour market skills and languages), the adoption of an EU-wide legal framework for migration, as well as definitions for those, who intend to stay in the host country. Ultimately, specific initiatives, such as media campaigns should strengthen the capability of the host country to show solidarity towards the victims of displacement. In a more general sense measures should include the adaption and coherent implementation of the “more for more” principle, sharing of “know-how” and balance between security and democracy, improvement of developments, standards of living and public services through allocation of funds and provision of expertise.

Appropriate measures for assessing these could be sociological surveys of the host country population and the immigrants themselves checking on the level of integration, as well as drilling for new focuses of the integration initiatives, the number of instances of migrants crossing the borders versus compared to those who have registered themselves and those who have been successfully integrated, as well as those who have decided to come back.

Transparency of Lobbyism

The issue of transparency and lobbying has been addressed following the numerous doubts over corporate influencing the EU agenda. Negotiations for concluding the TTIP have been influenced also as a crisis response method for showing strength over the Eurasian Union project complementary to the international sanctions mechanisms.

The main problem lies within the Non-transparent lobbying technique during the negotiations process, no lobbying regulations and consequently lack of trust in EU institutions.

The causes have been inter alia the lack of political will to regulate the international corporate interests, lack of necessary regulation arrangements or theirs being incomplete, such as the non-mandatory lobbyist register. Moreover, information about the different interests, intentions and capital positions has been not available to wider public, especially when we speak of the transparency of meetings between lobbyists and parliamentarians / bureaucrats. Lobbyists continue to have strategic positions when we speak of formulation of documents, positions and mandates.

Possible solutions for overcoming this situation are the creation of a mandatory register for lobbyists, the expulsion of false feeders, widely accessible recordings of meetings with lobbyists, transparency of negotiators’ elections and ultimately monitoring by the Court of the EU. In case lobbyists are exerting their activity without being enlisted in the mandatory register they should become judicially liable for their actions. In order to increase the public understanding of the agreement awareness campaigns and public discussions with interested stakeholders should be organized. They can take the form of round tables, press conferences or social media discussions and polls.

The actors involved in the negotiations are seen as the negotiators themselves, national, European and international NGOs, the lobbyists, media, civil society, etc.

The cost-benefit analysis has seen as negative sides the existence of a “grey” sector of lobbying, the untraceable expenses of lobbyists actions’, the existence of myth campaigns, while on the beneficial side it saw the improvement of transparency of and trust in public institutions, awareness of the ongoing processes stemming from the EU institutions, increased public involvement in EU affairs.

Protection of Local Production

The participants have identified the existing trends, which are expected to become more tangible. Among the positive ones can be read an increased competence over market dynamics, better conditions for consumers and better protection for small producers. However, they come at the expense of failures for small businesses, more competition and monopolization of the market.

As possible solutions and policy proposals they have proposed the training and education of local producers, governmental cooperation with local producers for protection of their interests, promotion of the increase of the revenue reinvestments in the hosting country, greater transparency of financial flows, negotiations and cooperation between local producers and local investors, the establishment of economic balance through attracting investments to underdeveloped sectors.

The actors within these processes have been identified as local producers, NGOs, domestic companies (investing in other countries), labour unions, foreign companies (investors), as well as other organizations (such as governmental agencies etc.)

The cost-benefit analysis of the situation names as costs the creation of cartels and consequently oligopoly, lower product quality, less revenues to the country of origin, higher cost of transparency, production becoming more time consuming, whilst as benefits the high rates of success of risky undertakings in case of informed choice, increased protection of the local producers’ rights, capital flowing into developing countries with plummeting economies, the taking of more informed decisions, increase of public support towards a better distribution of production means, the higher quality of end products and a more balanced economy.

The assessment of the proposed actions should happen through standard macroeconomic indicators such as unemployment rates, higher consumption and GDP growth, but also through diversification of the standard products basket, targeted market surveys and independent product comparisons.

Environment

The negotiations involving the formulation of new standards for mutually enhanced protection of the environment can be viewed through the prism of three tendencies – EU to regulate and maximize environmental protection, of US to liberalize markets and as the rise of public concern in both parties due to the misconception of the TTIP’s scope and mandate.

The problem lies in the discrepancy between EU’s and US’s environmental (and consumer) standards concerning the use of GMO, shale gas extraction, toxic products, the different structure of their markets, the lack of a common legal framework, different commitments to international standards, as well as the public ignorance towards certain issue complemented by disproportionate information.

The policy alternatives would be either the downshifting of EU’s standards, the increase of US’s standards or the finding of a common regulatory denominator. To this end two potential outcomes can be foreseen – harmonization, with its main advantage being the increase of health and environmental protection and its main disadvantage the lowering of consumer protecting, whilst if minimal standards are set the effects would be respectively simplified negotiations, but inequality of outcome.

The policy proposal is to therefore differentiate among criteria for each individual sector as a most plausible policy action, which would be assessed through an evaluation report by an unbiased expertise committee.

Conclusions

The EU is currently facing a challenge where it needs to flex its economic machinery in order to expand its area of influence. The Neighbourhood relations grew dramatically in influence in the last year due to the emergence of significant security challenges threatening to shake off the very foundation of this meta-state. While the new leadership in the EU brought new innovations in banking and finance, e-governance and started off with a focus on dialogue with the citizens and development aid, its foreign policy instrument is still based on a neoliberal paradigm. The lack of alternative of the Enlargement, but even more he falling absorption capacity for new members brought gradually the member states in the East into a power vacuum and concessions in terms of Association Agreements were to be signed. The following Russian aggression triggered Germany’s readiness to forego its temporary economic growth in order to sustain the sanctions instrument. It revealed the power of the economic rationale, but also led to the disruption of the EU-Russia dialogue and an economic cool-off, which is expected to be reinvigorated with the TTIP.

However, Ukraine remained a country in flux with a need of major reform towards good governance, effectuation of the international anti-corruption benchmark legislation and the formalization of the financial sector and the taxation as an only possible mean to fuel up the economy. The shadow economy has been detracting both from the ability of the Ukrainian government to empower its reforms without external funding or to increase its lending capacity without impoverishing future generations. The divorcement of the EU-Russia relations due the commonality in the perception of imminent treat has brought destruction and destabilization to the Ukrainian territorial periphery. Currently the cities of Odessa and Sevastopol have turned into major hubs for smuggling and illicit trade and with the AAs they menace the stability of the countries sharing the shared Black Sea locality. At the same time the Black Sea Synergy did not complement,but supplemented a policy, fueled by the Enlargement, but without clear medium term prospects of such. At this time, to turn the security vacuum and the reform leeway into a window of opportunity the EU needs to undermine the isolationism of Russia through concessions, as this could also subdue the secessionist sentiments in the frozen conflicts space. While strengthening the rule of law and the reform of the police and national security forces through its advisory mission, the EU should temporary abandon the rhetoric of the unlawfulness of Crimean takeover and re-engage with the Eurasian Union, where it could use the chance to instigate dialogue based on the same rationales, logic and instrumentarium.

In the South the Neighbourhood relations are much more fragmented and marked by insecurity on a wider scale. There the EU should very carefully assess the possibilities for sidelining with the traditional state actors, as they are becoming increasingly unpopular and are marked by divisionism and fragmentation of their security forces, as in Libya and Yemen. The democratization efforts should indeed be centered around non-state actors, but those with best outreach and free of interventions on behalf of power wielders. While traditionally education is perceived as a best mean for civic empowerment, the matter of job creation and mobility is becoming especially important in Egypt, Lebanon and other countries stricken by instability. The EU should potentially increase its cooperation with OSCE / EDIHR in election observations and strengthen the mandates of its border assistance missions in Palestine. Vis-à-vis ISIS EU should be very careful when siding with the existing counter-terrorism rhetoric of the United States and complement it with political measures and intelligence. EU should be cautious in its commitments for support of regimes that threaten to change the Shi’a vs. Sunni balance such as Maliki’s in Iran. While the deployment 1500-strong Battle Groups is a potential option, the EU should rather utilize the possibility to side with Saudi and Yemen in the battle against terror. The EU’s strategic aim should remain the closure of the black oil markets in southern Turkey, directly financing the Islamic insurgency.

Instead of speaking of TTIP solely as the biggest free trade agreement, one should think of the adverse effects of trade liberalization as it concerns those who are unable to stand up to the expectations of the global market. Small and medium producers and enterprises are especially vulnerable to such adjustments, as their existence is largely an effect of monetary redistributions, as seen from the prism of the Common Agricultural Policy, but also of investment into the tiny reactors of the economy through the European and national budgets. Whilst the TTIP in that sense will provide a significant exposure to capital to the European Market the EC’s innovative SME investment facility might still result in adverse effects for the entrepreneurs in the periphery, who are unable to confront the long-standing tradition in EU’s core. Furthermore, the deal is creating a wide gap between the citizens’ understanding of the fast-paced alteration of their comparative advantages and the logic of the European institutional public order. The growth-based paradigm continues to be decisive for the implementation of this agreement, as it results in net gains on a personal level in most cases, when the educational and professional census is satisfactory.

Potentially, the common economic space can lead to wealth concentration in the West and increase in the peripheral distortions and subsequently their further segregation within the Union. The shift towards the further West, in terms of the Anglo-Saxon World would certainly lead to intense labour mobility in that direction and deepening of the problems with reintegration seen alongside the EU Member States.

Therefore, the Council and the Commission should uncover the comparative competitive advantages of each Member State, as to create well-working machinery out of the puzzle.

Strengthening ethno-cultural, historical and economic ties and cross regionalization could only play a good role in the prospective arrangement. Had the TTIP been concluded as planned, the EU would have to review the role of its security architecture and either specialize in conflict prevention and stabilization and strengthen its border and advisory missions through strengthening of their mandate or include them within NATO. The second option remains hardly desirable, especially deeming the

dossier of the US and the many side effects of its hard-line foreign policy in the Middle East and South East Asia. Whilst the EU is losing ground to the ethically bereft Chinese economic expansion in terms of visibility due to its own restraints, it still provides a more sustainable alternative due to the ability to reflect from a longer-term vision perspective. For the EU it should remain crucial to collect inputs from the wider population through different forums, dialogues with citizens and research projects and communicate all the effects of dissolution of the transatlantic trade barriers.

The EU’s ability for self-reflection and criticism goes beyond the current state of affairs and since this paper is with a view towards the future, we cannot help recommending the acquis of the development as a next possibility for simulating the EU’s institutional ecosystem. Had it not been the most lavish donator of development aid, it would have been difficult to conclude that this is not a strategic attempt at gaining influence. But more importantly, it is an expression of responsibility towards human beings as such. The truth is that while economic growth is inextricably connectedwith the extraction of resources and unequal use of human capital, there would be an unsustainable balance between the growth of the population and the economic boom. While the focus of development should be towards providing choices on how to satisfy the needs of the population, its growth could be controlled only by satisfying basic needs, which will enable the people to think beyond the need for self-reproduction as a mean for survival. Therefore, the vigorous interpretations of trade as a pathway towards welfare should be equally complemented with initiatives for creating non-traditional sources of energy. Solidarity – EU’s most powerful driving force – should gradually turn into a global humanitarian instrument for provision of equal footings for capacity development.

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