MAI Shell Game - The TransAtlantic Economic Partnership (TEP)

Another Venue for Investment Deregulation?

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The U.S. Continues to Push the MAI Agenda

Perhaps this cozy relationship explains why the U.S. government continues to push the MAI agenda. It clings to this agenda even as a large part of the world is in the throes of a financial crisis caused by the very policies that MAI would accelerate and prominent economists and officials from the World Bank now suggest that governments consider measures to stem the flow of capital across borders.

A venue to further MAI's deregulatory agenda is a newly proposed TransAtlantic Economic Partnership (TEP). In 1995, the U.S. and E.U. launched the "New TransAtlantic Agenda (NTA,)" which was to further discussion on diverse issues of common interest such as terrorism, education, health and also economic issues such as trade and investment liberalization. Simultaneously, a formal "TransAtlantic Business Dialogue (TABD)" was launched, largely through the coordination of the U.S. Department of Commerce and then U.S. Commerce Secretary Mr. Ron Brown, to advise the government process. Three years later, in late 1998, the U.S. and E.U. announced negotiations would be launched to establish a "TransAltantic Economic Partnership." The TEP, envisioned to be a binding trade and investment agreement, shows the enormous influence of the TABD on the governments' agenda; only the trade and investment aspects of the once broad NTA agenda are being pursued in formal negotiations.


The TransAtlantic Business Dialogue (often called "TAB-D" ) is a forum for industry from both sides of the Atlantic to develop policies of mutual interest that they would then present as fait accompli to the US and EU governments for implementation. The TABD has been labeled the "new paradigm for trade liberalization," by its proponents because it eliminates the "middle man" from trade policy-making. That middle man is the U.S. and E.U. governments, and by extension, U.S. and E.U. citizens and consumer, labor and environmental NGOs. Despite its end run around normal policy-making procedures, the TABD has made proposals which the governments have put into place on auto safety and pharmaceutical testing standards. Indeed, the Clinton Administration has established an entire inter-agency working group just to work on the TABD's demands. Headed by the Commerce Department, this group of government officials receives a list of TABD demands each year and presents a score card at years end to show what demands have been implemented. Cabinet level Clinton Administration officials attend the TABD's Summit meetings. This year, the Clinton Administration -- was presented 117 demands at the TABD's Charlotte, North Carolina Summit meeting.

Not surprisingly, the proposed TEP mimics the business agenda, dropping all other issues proposed in the NTA in favor of two years of intensive liberalization and deregulation negotiations. The legitimacy of the narrow TEP agenda is brought into question by the lack of democratic process under which it was arrived. Yet, starting with a December 18, 1998 Washington D.C. Ministerial, the TEP talks will ramp up. One goal is development of a TransAtlantic Free Trade Area (TAFTA) along the lines of its forbearer, NAFTA.


Like NAFTA, the TEP is planned to include deregulation in broad areas of domestic policy ­ services, so-called non-tariff barriers to trade, government procurement, intellectual property, electronic commerce, and investment. The TEP work plan also lists issues on which the powerful US and E.U. will develop a consensus in advance of the fall 1999 WTO Ministerial meeting which will determine the WTO's work plan for the coming years.

The TEP's agenda is perhaps the most significant outcome of the TABD process. According to the Undersecretary for International Trade of the Department of Commerce, David L. Aaron, "We are ensuring that relevant TABD recommendations are considered in the draft work plans for the TEP" (1)


Another forum to push the MAI Agenda

Indeed, the TEP is a likely place for the E.U. and the U.S. to resolve outstanding differences on investment rules. In a communication from Sir Leon Brittan, head trade negotiator for the E.U., to the European Parliament dated March 11, 1998, Brittan urges that "an evaluation should be made of what has been achieved and of what more might be done with the U.S." when OECD MAI talks end. The Brittan document then enumerates the heart of the MAI agenda as issues that could be addressed under the auspices of the TEP: strong investor-to-state and state-to-state dispute settlement procedures; national treatment; temporary entry, stay and work of investors and personnel; limits on performance requirements; and privatization. The TEP Action Plan also lists the question of moving the MAI to the WTO as an agenda item.

Consumer, Environmental, and Labor Camouflage?

Three years after the creation of the TABD, with public opposition to further investment or trade liberalization growing and no U.S. congressional authority to negotiate TEP, the U.S. and E.U. governments suddenly decided it was important to establish TransAtlantic consumer, environmental and labor dialogues. Ironically, an item which was ignored until recently from the original NTA agenda was to further NGO dialogue across the Atlantic. Thus, it is under a cloud of suspicion and controversy about the governments' roles and intentions in promoting such fora, that environmental and consumer groups from the U.S. and Europe have recently strengthened their cooperation. Although elements of these recent exchanges have been funded by the governments, to date the consumer and environmental meetings have focussed on challenging the government' TEP agenda. It is unclear how this situation will play out. European and U.S. NGOs have already been working together on these issues for years. And, to date attempts to actually impact the TEP process have been unsuccessful. For instance, a long list of TransAtlantic environmental groups demanded a halt to TEP negotiations and the reconsideration of the narrow economic liberalization/deregulation agenda. This demand was rejected. High level Commerce Department officials have characterized the consumer groups role as being allowed to "comment" on the TABD's demand list to the governments. The consumer groups rejected this insulting notion and demanded an end to the TABD's singular advisory role and special access. Only time will tell if these newly intensified groupings of U.S. and EU NGOs are intended to be anything other than an attempt to legitimize the deregulatory TEP agenda.

What you can do

1. Demand that your Member of the House and both Senators make the Administration STOP the unauthorized TEP negotiations. Make sure you Members of Congress know you oppose TEP or any other NAFTA-MAI expansion. Ask them to write you with their position on TEP and an explanation of why Congress has allowed the Administration to begin the negotiations even though Congress resoundingly denied negotiating authority with the defeat of Fast Track.

2. Call US negotiators and let them know you oppose the current TEP agenda. The coordinator of TEP negotiations for the U.S. is Cathy Novelli at the U.S. Trade Representative's office (202)395-3074.

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1. Testimony of David L. Aaron before the Subcommittee on Trade of the House Committee on Ways and Means, July 28, 1998.