Corporate Europe Observatory

Exposing the power of corporate lobbying in the EU

Regulation - none of our business?

A leaked EU negotiating proposal for the far-reaching free trade agreement with the US reveals the European Commission’s plans to fundamentally change the way regulations to protect consumers, labour and the environment will be adopted in the future. The proposal follows a persistent campaign by business lobby groups on both sides of the Atlantic to use the proposed transatlantic trade deal to maximise the deregulation of food and product safety standards. If they have it their way, future decision-making will go underground, escape democratic scrutiny and be wide open to business lobbying.

Read the press release here.

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How will the trade negotiators for the US government and the European Commission resolve the big differences between the two regulatory systems? That question is crucial to the ongoing negotiations on a free trade agreement between the US and the European Union, the so called “Transatlantic Trade and Investment Partnership” (TTIP). The issue of regulation is where they see the biggest opportunities, for example, by rewriting rules in the financial sector, food labelling requirements or environmental standards to be more compatible with industry interests.

But here too are the biggest hurdles. Citizens' groups on both sides of the Atlantic have repeatedly pointed out that on many issues such as health, food safety, consumer, environmental and data protection, the public interest is at risk of being sidelined, and concerns are spreading like bush fire. For that reason, revealing a massive all-in-one package of deregulation, with protection levels driven down to meet the other party's requirements, could be politically dangerous for the negotiators as it could lead to a rejection of the whole deal by citizens and even parliaments.

A business solution

The business lobbies on both sides of the Atlantic have been painfully aware of the political complications, so for more than a year now, they have lobbied to convince negotiators about the need for long-term “regulatory cooperation” with new institutions and procedures that will allow them to capture regulatory decision-making more effectively and discreetly in the future.

While the US trade authorities have negotiated very ambitious agreements on regulatory cooperation in the past, the position of the EU in general and the Commission in particular has not been clear, including because of some  initial reservations to the proposals from business groups. However, a leaked document now shows that it has been won over completely. The document portrays a complicated system which will enable decisions to be made with no real public oversight or engagement, and with all doors wide open to business lobbying. Business will be involved from the beginning of the process, well before any public and democratic debate takes place, and will have excellent opportunities to ditch important initiatives to improve our food standards or protect consumers. Essentially, the proposal would allow business lobbyists to “co-write legislation”.

The stakes

In the course of the negotiations, many concerns have been voiced by citizens' groups on both sides of the ocean concerning the deal’s impact on democracy and on the ability of governments in the future to adopt regulation to protect public health, consumer rights and the environment. Statements by business lobby groups and negotiators have done little to allay fears.

“TTIP is only worth doing if the regulatory side is covered, such as getting rid of the precautionary principle”1.   Those were the words of Shaun Donnelly, formerly a US trade official, now a lobbyist for the US Council for International Business, one of many lobby groups involved in TTIP lobbying. (The precautionary principle is sometimes used as a principle in EU policy and means that a product,  production method or crop should be banned if there are doubts as to its effects on human health or the environment.) Speaking to an audience of predominantly business representatives in Copenhagen on 7. October 2013, Shaun Donnelly made it abundantly clear that without a solution to a series of longstanding disagreements on regulation, including on genetically modified organisms (GMOs) and food standards, TTIP would not have real support from the US business community. 

He was supported by Markus Beyrer of BusinessEurope, the European employers' federation and one of the most powerful corporate lobby groups in Brussels: “Regulatory differences must be eliminated. And not just the existing ones. We must prevent new ones from emerging,” he said2.

Solving differences - squaring the circle

But given how serious some of these differences are, is there really an easy solution? How will BusinessEurope “prevent new ones from emerging”?

On the European side, there are fears that negotiators will simply cave in, change the rules, and open the door to US products of various kinds that have created fear and anxiety for public health and the environment. A set of high-profile cases are gaining prominence, including GMOs and chlorine chickens, certain chemicals which are approved in the US but banned in the EU. But governments as well as negotiators have taken care to stress there is no danger as they will not give in on the fundamentals. Protection levels are not on the table, and will not be negotiated away, they say. Such assurances have even come from the EU's top negotiator,  Commissioner Karel de Gucht, who stated recently that “nothing under this agreement will lower standards of protection. Removing regulatory barriers is not a race to the bottom.”

But de Gucht has a real problem. On one hand the EU badly wants to conclude an agreement with the US. On the other hand, the agreement would have to be approved by the European Parliament, and an agreement with significant concessions to US business on issues such as GMOs, the labelling of GMO products and food standards (which would allow, for example, raw chicken cleansed with chlorine to enter the EU market) would cause a stir, and ultimately be defeated politically. That dilemma has no doubt been thought- through carefully already. And the answer is “regulatory cooperation”.

No precautions

 

If you ask US negotiators or the US business community, and indeed parts of the European corporate lobby as well, big changes should be made to accommodate US demands.

Citizens in the US also have good reason to fear for some parts of the US regulatory system during the negotiations as the EU has ambitions to use TTIP to water down US rules on financial services, including the regulation of banks, where the EU rules are weaker. This interesting alliance between Wall Street, the EU financial sector and the EU negotiators seems to have developed its own strategy for “regulatory cooperation”, with a proposal for a separate body to handle regulatory differences.
In other areas, the concerns are mostly on the European side. And through a large number of cases, there is a pattern with a name: the precautionary principle.  The principle is not used systematically, but it plays an important role in some areas in the EU, whereas in the US, what is sometimes called the “sound science principle” is applied. According to that principle, there has to be irrefutable evidence before a ban can be considered.

US politicians and business representatives alike are pretty clear about this. An unmistakable contempt for “the so called precautionary principle” is uttered again and again in documents, comments and speeches on TTIP, and their intention to weaken standards and regulation is undeniable as is their clout with the US government.

If European negotiators would openly cede ground in negotiations on this hot issue, they would risk political defeat back home. But if they do not, negotiations with the US could be in jeopardy. That dilemma has no doubt been thought through carefully already. And the answer is “regulatory cooperation”.

Regulatory Council: Transatlantic business for “co-writing legislation”

Business interests on both sides of the Atlantic are pushing hard to get an institutional structure, an “oversight body”, into the agreement, mostly referred to as an EU-US “Regulatory Council”. This would be based on a set of rules for regulatory cooperation that would enable the parties to deal with their differences in a more long-term fashion, through procedures that will give business the upper hand. It might very well be that the final TTIP text will not include immediate concessions on public health and environmental regulation. But it could include an approach for the future, giving the basic message to citizens that regulation is none of their business, but first and foremost the business of business. 

Regulatory cooperation is a long term project. It is meant to deal with differences that could not be settled at the negotiating table at the highest level and also to respond to new regulations as they occur. In the course of the negotiations, the parties will see to what extent they can agree on common standards, or recognise each others' standards as basically similar. But in those areas where this is not possible in the short term, they will set up procedures to deal with them in the future. The idea is to make TTIP a “living agreement”, not confined to what they can agree on in the first place, but a continuous process of ever deeper integration . That raises the prospect of the parties reaching a conclusion on even the most difficult issues, such as food safety. For corporations  from the EU and US, it raises hopes for better access to each other's markets including in sectors that meet obstacles today, and for that reason it is being promoted vigorously by the business lobbies on both sides of the Atlantic.

That formula has been pushed systematically by the business lobby since 2012; in particular, a proposal on “regulatory cooperation” from BusinessEurope and the US Chamber of Commerce is at the center of the debate (see box below on the two lobby groups).

In their joint paper from October 2012, the two corporate lobby groups present a model which  they characterise as a hybrid between the EU’s “long-standing policy to promote regulatory cooperation” and the US approach called “regulatory negotiation”3, which puts the business community at the table with regulators “to essentially co-write legislation”4.

The business proposal: a living agreement

What they propose is the establishment of a permanent EU-US dialogue to work towards mutually acceptable standards, and a procedure where a comprehensive system of consultation would be triggered if new regulation is proposed, or if regulation already in place has a “significant” impact on trade.  The proposal by the two corporate lobby groups contains the following main elements:

  • Business should have the right to be involved in the first stage when new regulation is prepared. And let us remember that when we are talking about regulation we mean rules intended to prevent the food industry from marketing foodstuffs which include dangerous substances, or to keep energy companies from destroying the climate, or regulations to combat pollution and to protect consumers..
  • New regulations should be investigated via a “regulatory compatibility analysis” (RCA).  During this investigation, seven questions would have to be answered. The questions are clearly tilted towards the interests of business, as they are mainly about the impact on business and on trade, including what the costs or savings would be to the private sector, how much regulatory authorities would “save” by down-scaling measures, and whether measures are outdated and should thus be eliminated or modernised5. In other words, a business-friendly agenda is to constitute the backbone of regulatory assessments, if the business lobby has it its way. 
  • Regulatory cooperation should address not only new regulation, but existing regulation as well. Certain circumstances should trigger a formal procedure to deal with inconsistencies' (significant impact on trade, impact on an existing agreement on regulation, regulation in an area with a great potential).
  • Regulatory agencies should have a key role. With the close cooperation established between business and regulatory agencies on both sides, this would help ensure stronger business impact.
  • The overall responsibility for regulatory cooperation is to be trusted to an “oversight group” (sometimes called a Regulatory Cooperation Council) whose obligations are spelled out in the proposal, and which include to work “with stakeholders to ensure they are engaged at regular intervals during a RCA”6. Also, provisions on “transparency” and “stakeholder engagement guidelines” would make sure the business community can stay involved in all relevant procedures7.

BusinessEurope and the US Chamber of Commerce take care to stress that this system of regulatory cooperation cannot “undermine the sovereign right to regulate or force the hand of regulators”. But the authority of regulators is to be confined to a “veto authority” to reject an individual product from the scope of an equivalence/cooperation agreement, indicating the lobby groups' high ambitions for regulatory cooperation. It is to be a largely autonomous process, removed from parliamentary oversight and open democratic debate.

Business united

The proposal is clearly not just any proposal.  On both sides, many other cross-sector business groups explicitly support the proposal or suggest a similar approach in their contributions to the official consultations on TTIP, including BDI (German Industry Association), Confederation of British Industry, Coalitions of Services Industries, British American Business, National Foreign Trade Council, Roundtable on Trade and Competition, Transatlantic Business Council, National Association of Manufacturers, Eurometaux and the United States Council for International Business. Some, notably the Competitive Enterprise Institute, take a step further and demand that businesses are able to choose freely which set of standards and regulations they will apply8.

On top of this, 30 business associations, including most of the aforementioned, have written a common letter to the US Trade Representative and to Commissioner de Gucht's department to stress the importance of a system of “regulatory cooperation”. They include sectoral lobby groups from the chemicals industry, car industry, the financial sector, biotechnology, pharmaceutical industry and many more. They point to the existing structures on regulatory dialogue, the High Level Regulatory Cooperation Forum9, and assert that they “can be made much more effective and should include enhanced opportunities for dialogue with stakeholders”.

Their vision is long term: “In addition, the agreement should work to limit future unwanted regulatory divergence by promoting a better understanding of the impact significant regulations may have on the transatlantic market and facilitate information sharing, which will ensure regulatory decisions when appropriate, reflect the marketplace, are fact based, grounded in sound science, and undergo thorough regulatory and cost-benefit analysis.”10

A developed formula

The question is how this resonates with the negotiators. In the US case, regulatory cooperation is already being used with other trading partners, including Canada and Australia and in  both cases, the business community has a privileged position.

The most developed agreement is between Australia and the US, where regulatory cooperation is an integral part of the free trade agreement, and with the procedures described in detail in the trade agreement itself. Strikingly, the agreement allows the other party, including business groups from the other side, to “participate in the development of standards, technical regulations, and conformity assessment procedures on terms no less favourable than those accorded to its own persons”11. This means that the US could demand that Australia allows the US business community to be directly involved in the work to develop particular standards (and vice versa)12.  Should a disagreement arise on a standard or a technical regulation, it is to be settled through three or four stages, giving business groups ample space to influence the proceedings. In the final phase, both parties must elect a “chapter coordinator” to chair a negotiating group, and these coordinators are obliged to coordinate with “interested persons in the Party’s territory”, which is likely to be primarily the business community.13

Regulatory cooperation between the US and Canada has not gone quite so far. In 2011 an agreement on cooperation was signed by the two governments, paving the way for extensive dialogue on regulation. Twenty nine working groups have been formed on issues ranging from food standards to “unmanned aircraft systems”, and in each working group, the regulatory agencies on both sides are working towards common standards or mutual recognition14. Here too, the role of the business community is substantial. The US Chamber of Commerce points out that it includes “dialogue with departments and agencies”, “involvement in Work Plan development and implementation” and “opportunity for deeper and more frequent engagement”15.

Positive response from the EU

But what about the European side, then? Is the Commission favourable to this kind of proposal?

At the outset, when the EU negotiation mandate for TTIP was discussed by EU member states, regulatory cooperation was indeed mentioned, but not in any detail. Point 25 of the mandate reads: “The Agreement shall also include a framework for identifying opportunities and for guiding further work on regulatory issues, including provisions that provide an institutional basis for harnessing the outcome of subsequent regulatory discussions into the overall Agreement16.”This seems to imply that regulatory cooperation was not dealt with thoroughly by EU governments, but was left to the EU Commission to elaborate further.

But actually, the Commission had already had discussions on the specifics with business lobby groups, most prominently with BusinessEurope and the US Chamber of Commerce. The minutes from a meeting in November 2012 between BusinessEurope and three different departments of the Commission are instructive17.

At the meeting, BusinessEurope and the US Chamber of Commerce explain that they see TTIP as a “potential game changer”, if their model would get support. While the Commission was generally positive, some reservations emerged, including on the specific design of the “regulatory compatibility analysis” and on the privileged access of business groups to decision-makers at a very early stage.

The atmosphere at the meeting was clearly friendly. The Commission stressed its desire  to work closely with BusinessEurope to refine the proposal.  Commenting on a BusinessEurope demand to have preferential access to decision-makers, the Commission voiced scepticism about discriminating against other stakeholders (eg. consumer organisations), but ceded ground. The two agreed that such a “formal and preferential consultative role” would be “easier to establish if sector-wise”, so, for example, on chemicals, cars or pharmaceuticals. BusinessEurope announced it would submit further details on what a separate consultation would look like. Furthermore, the Commission's concerns over the nature of the “regulatory compatibility analysis” (RCA) resulted in an invitation to “BE and Chamber” to do further work on the guidelines.

Whose proposal?

This desire to work closely with business to find a model that suits business and both parties is now showing. And the enthusiasm for institutions to support “regulatory cooperation” seems to have grown rather quickly. On 10th October, Trade Commissioner Karel de Gucht made a sweeping announcement on regulation and institutions:

“Here again we have learned from the past: If we want regulators to work together in the future we need to make sure that they are equipped to do so. I therefore propose that the TTIP establishes a new Regulatory Cooperation Council that brings together the heads of the most important EU and US regulatory agencies.”18

This was hardly a brilliant new idea which the commissioner had developed in-house, but instead a clear sign that the Commission is aligning itself with business lobby groups. That goes too for his follow-up remarks: “The council would monitor the implementation of commitments made and consider new priorities for regulatory cooperation – also in response to proposals from stakeholders. In some cases it could also ask regulators or standards bodies to develop regulations jointly that could then have a good chance of becoming international standards. Strong institutions like this will be key to making the TTIP a living agreement that promotes greater compatibility of our regimes and accelerates the development of global approaches.”

Leak shows Commission in sync with BusinessEurope

The details of the Commission's proposal have not yet made it into the public domain, but with the leaked EU negotiation document, there is now no doubt that the demands of business lobby groups in general, and the US Chamber of Commerce and BusinessEurope in particular, have, so far, been accommodated. In the document, dated 2 December  and already sent to US-negotiators, the Commission spells out its proposals for “Cross-cutting disciplines and institutional provisions”, and as far as BusinessEurope is concerned, it leaves little left to wish for Christmas.

The main mechanisms are:

1. Permanent negotiations

The paper suggests that the two parties establish permanent cooperation and set up a “Regulatory Cooperation Council” to promote “regulatory compatibility” on both “future and existing regulatory measures”. When assessing regulation, the impact on international trade “in particular transatlantic trade”, should be at the core “informed by appropriate input from stakeholders concerned” ie. primarily business groups. While stakeholders would also cover  consumer groups, in practice the standard result would likely be the overwhelming dominance by business groups.  This comes close to the US tradition of “regulatory negotiation”, described by the business lobby groups as a procedure that basically allows them to “co-write regulation”.

In this regard, the parties are obliged to take into account specific proposals from the other party. Business is promised a key role in this structure as the Council has to consider “substantive joint submissions from EU and US stakeholders”.

2. Regulatory authorities directly involved

Regulatory cooperation is not to be a high-level endeavour only, but must see regulators directly involved “in bilateral and international regulatory cooperation as part of fulfilling their domestic objectives” in order to promote “regulatory compatibility”. It has to be possible for the other party to establish direct relations and a direct dialogue with the regulatory authorities “without unnecessary restrictions”. The regulatory authorities have an obligation to “assess impacts of their regulatory initiatives” on transatlantic trade, and to “take into account written comments from the other side”. This key role for regulatory authorities is what BusinessEurope and the US Chamber of Commerce see as an important “game changer”.

3. Early warning mechanism

Before any new initiative on regulation is taken, the other side must be informed thoroughly and be allowed to comment.  Structures have to be set-up to enable a dialogue that would provide the other party with “information on legislative proposals pending before their co-legislators”.

In fact, the provisions on early warning could not be stronger, as information has to be provided to “interested persons” on any existing or proposed measure, “regardless of whether it was notified”. This will allow business lobby groups to react proactively even to mere rumours that new regulation might be in the pipeline.
This seems to go even further than what was suggested by the two lobby groups in their initial proposal.

4. Impact assessments

In the future, impact assessments on regulation have to include assessments on the impacts on trade. While this is not described in much detail, the emphasis in the document on trade impacts appears likely to become a cornerstone in the template for future impact assessments, as with the “regulatory compatibility analysis” suggested by the two lobby groups.

5. Dialogues

While the paper routinely stresses that the parties retain their sovereign right to regulate, the proposal suggests a rather circumstantial and lengthy procedure before anything that might bother the other party can make its way to the political level. All information has to be provided to the other party, and responses to questions have to be given, after which the parties “shall explore possible concrete means to get to compatible outcomes or coordinated approaches”.

An important part of the set-up is to be sectoral dialogues. While it is hardly a surprise that they will go about it sector-wise, this does raise the issue of the preferential access for business demanded by BusinessEurope, which according to the agreement with Commission officials at the meeting in November 2012, would be feasible in the framework of sectoral dialogues. .

6. Surveillance of member states (and states in the US)

In order to maintain discipline, the Commission also suggests that the central level, be it the US federal government or the Commission, is obliged to do surveillance of regulatory developments at lower levels of government, and intervene if a conflict could arise with the objectives of TTIP. The Commission (or the US government) would then make sure a dialogue is established and a solution found.

7. Rights for lobbyists to intervene in regulation

Finally, the proposal contains a suggestion to establish “contact points for interested persons of the other party with the task of seeking to effectively resolve problems for them” that may arise in the area of regulation.

Deregulation in the EU

 

The proposal of the Commission seems to meet all the demands of BusinessEurope and the US Chamber of Commerce. Business will be awarded all kinds of rights to demand information, dialogue and negotiation on regulatory measures. If this proposal is adopted, a firm and effective “right for lobbyists to intervene and block” will be enshrined in an international agreement and in EU law.

Another advantage for the business lobby groups is the opaque nature of all the dialogues and procedures, many of which are set to take place well before any real public or democratic debate can take place. In the EU this will boost the power of the regulatory agencies as well as the Commission, which in itself is an important message, as the Commission has pursued an agenda of weakening regulation for many years. Some of its recent initiatives include “the Better Regulation agenda”, now renamed “Smart Regulation”.19

Under these slogans, the Commission is already conducting a witch hunt for what it considers obsolete regulation, or regulation that is considered too “burdensome” or an obstacle to “competitiveness”. Initiatives under consideration include a blanket exemption for small and medium businesses on key pieces of regulation, including safety-at-work legislation.20

If we add to this the fact that the Commission is the only EU body allowed to table legislative proposals, we have a recipe for disaster: the Commission would presumably be easily persuaded by US authorities or the US business lobby to refrain from tabling a proposal if it would cause a stir in the EU-US trade relationship.

Unelected bodies already powerful

A system such as the one proposed could have a major negative impact on decision-making processes in the EU, not because all decisions on new regulations already take place in an open and  democratic way, but because EU decision-making is already complicated and opaque.

Decisions on new standards or regulations on specific products are not typically made through an open political debate on possible risks, but instead take place in a rather closed environment of committees consisting of civil servants from member states, who base their decisions on recommendations from the EUs agencies. Often, there needs to be a  'qualified majority'21 against a proposal from the Commission if it is to be rejected, which gives the Commission tremendous power. A simple majority is not enough to defeat a proposal from the Commission. If there is no qualified majority against the Commission, nor in favour of the Commission's proposal, then the Commission can make the decision on its own. If US power is inserted as a factor in the early phase of decision-making, the result could easily be that new regulatory proposals from the Commission either never see the light of day or are only proposed in a weakened version after a screening of impacts on US businesses.

How the EU dealt with a request from the US to allow the sale of beef cleansed with lactic acid is a good example of this.  The story started with an application from the US Department of Agriculture to have the EU lift a ban and allow for the use of lactic acid on beef shipped to the EU22. In the committee, civil servants were presented with a report from the European Food Safety Authority, an agency often accused of allowing experts with conflicts of interest due to their relationship with industry, to play a major role in its assessments, including the very panel that assessed the use of lactic acid23. In this case the agency judged the risk to be minor. This, however, did not resonate with EU member states, many of whom voted against a lifting of the ban, meaning that the committee was unable to make a final decision. Instead, it was left to the Commission to decide and it proceeded to lift the ban.24

In a comment on the beef case, Monique Goyens from the European consumers association BEUC, said: "Evidence shows that consumers are against the chemical treatment of meat. They want and expect the meat they eat to be safe. The foremost concern of decision makers must be to maintain Europe’s strict food safety standards regardless of trade pressures.”25

The voice of US business

 

The decision of the Commission to allow EU sales of US treated beef was seen as an important gesture by the US. In Congress, the news was seen as an amicable concession. In a key letter to the US Trade Representative, politicians from both the Democrats and Republicans wrote: “While we recognize the positive steps the EU has recently taken with respect to imports of beef washed with lactic acid and with respect to swine, there is still much work to be done. We urge you to resolve these and other unwarranted agricultural barriers as part of the FTA negotiations on both an individual and a systemic basis.”26

This small example is an illustration of three things: the complicated nature of EU decision-making processes on regulation, the power of the Commission and the massive importance of US pressure. If a system of “regulatory cooperation”, such as the one proposed by BusinessEurope and the US Chamber of Commerce, is adopted, then it i's likely that an even more opaque system will arise, with US pressure playing an even more significant role, and this would be impenetrable to any real influence from consumer groups or environmental movements, let alone citizens.

The prospects

Clearly, there will be in-depth negotiations on some sort of system of regulatory cooperation in the TTIP framework. And if the positions of the two parties are compared, it is not unreasonable to predict that concessions will be made to business on their access to proceedings under the new system. It remains unclear what kinds of competences will be delegated to the Regulatory Council, but the fact that the EU would have to negotiate in detail with representatives of the US government as well as the corporate lobby on both sides of the ocean, bodes ill for any kind of progressive regulation already in place. This would also go for positive regulations in the US on topics where the EU is very aggressive in wishing to see them dismantled, such as financial services.

In this way, regulatory cooperation means that existing and future EU regulation will have to go through a series of investigations, dialogues and negotiations which is likely to mean that a decision will be made outside the framework of public scrutiny and democratic decision-making. And the odds are that it will end in a major offensive for deregulation, for an annulment of existing protection measures and for a firm brake on new regulation. And if other parts of the TTIP negotiations are taken into account, the prospects are outright scary. If, for instance, TTIP will include an “investor-state dispute settlement mechanism”, US firms will be allowed to sue the EU or member state governments on regulations which they feel unfairly impact upon their profits. With a Regulatory Cooperation Council in place, there is a risk that threats to start law suits will be effective and will prevent regulations aimed at improving health or social protection.

Not just about chlorinated chickens

In conclusion, strong regulation to defend the public interest is hardly compatible with the institutional set-up being promoted by business in TTIP. And as for the ongoing negotiations, it will not be enough to stave off the most obvious challenges in the short term. It may be that the negotiators will not be able to brush off the public’s concern over GMOs, chlorinated chickens or hormone beef, and it might be that the precautionary principle is not completely sidelined, at least in the initial TTIP agreement. Any deal would have to be approved by the European Parliament, and obvious concessions of this nature could spell political disaster and a no vote for TTIP. But even if concessions of this kind are not made in the negotiating phase, they could turn out to be pyrrhic victories as they could be revisited in the long term via the system of EU-US regulatory cooperation.

For that reason, far more attention must be paid to this part of the negotiations, and, not least, the close cooperation between business lobby groups and the Commission on this issue must be brought to an end.

Why is the Commission teaming up with Obama-hating deregulation fanatics?

Who are the two lobby groups with which the European Commission has had closed-door meetings about a future EU-US regulatory process? BusinessEurope (a federation of employers' organisations and individual corporations) is a powerful lobby group that campaigns for weaker social and environmental standards in virtually every piece of new EU legislation under discussion. While claiming to speak on behalf of business in Europe, BusinessEurope, as a Green MEP puts it, represents "the lowest common denominator, the most conservative companies, not those companies that want to move forward", for instance on reducing carbon dioxide emissions.

The US Chamber of Commerce is the most well-funded of all US industry lobby groups and has, over the last decade, spent more than one billion dollars on lobbying. The chamber spent millions of dollars on lobbying and advertising campaigns to block Obama's proposals for  regulating Wall Street banks after the financial crisis. It also invested tens of millions of dollars in getting right-wing candidates elected to Congress in recent elections, funding thousands of TV adverts supporting Republican candidates. Critics argue that the chamber, under the leadership of Thomas J. Donohue, "has become a fully functional part of the partisan Republican machine".

This autumn the Chamber declared war on what it describes as the "vast regulatory state" which they claim has emerged under President  Obama. "We at the Chamber are going to use every resource at our disposal to stem this unprecedented flow of regulations," Donohue announced, arguing that "Obamacare is a prime example of regulation amok." "And when all else fails: Sue 'em." Donohue said. "The chamber will not hesitate to take the fight to the courts."
How will the trade negotiators for the US government and the European Commission resolve the big differences between the two regulatory systems? That question is crucial to the ongoing negotiations on a free trade agreement between the US and the European Union, the so called “Transatlantic Trade and Investment Partnership” (TTIP). The issue of regulation is where they see the biggest opportunities, for example, by rewriting rules in the financial sector, food labelling requirements or environmental standards to be more compatible with industry interests.But here too are the biggest hurdles. Citizens' groups on both sides of the Atlantic have repeatedly pointed out that on many issues such as health, food safety, consumer, environmental and data protection, the public interest is at risk of being sidelined, and concerns are spreading like bush fire. For that reason, revealing a massive all-in-one package of deregulation, with protection levels driven down to meet the other party's requirements, could be politically dangerous for the negotiators as it could lead to a rejection of the whole deal by citizens and even parliaments.A business solutionThe business lobbies on both sides of the Atlantic have been painfully aware of the political complications, so for more than a year now, they have lobbied to convince negotiators about the need for long-term “regulatory cooperation” with new institutions and procedures that will allow them to capture regulatory decision-making more effectively and discreetly in the future.While the US trade authorities have negotiated very ambitious agreements on regulatory cooperation in the past, the position of the EU in general and the Commission in particular has not been clear, including because of some  initial reservations to the proposals from business groups. However, a leaked document now shows that it has been won over completely. The document portrays a complicated system which will enable decisions to be made with no real public oversight or engagement, and with all doors wide open to business lobbying. Business will be involved from the beginning of the process, well before any public and democratic debate takes place, and will have excellent opportunities to ditch important initiatives to improve our food standards or protect consumers. Essentially, the proposal would allow business lobbyists to “co-write legislation”.The stakesIn the course of the negotiations, many concerns have been voiced by citizens' groups on both sides of the ocean concerning the deal’s impact on democracy and on the ability of governments in the future to adopt regulation to protect public health, consumer rights and the environment. Statements by business lobby groups and negotiators have done little to allay fears.“TTIP is only worth doing if the regulatory side is covered, such as getting rid of the precautionary principle”1.   Those were the words of Shaun Donnelly, formerly a US trade official, now a lobbyist for the US Council for International Business, one of many lobby groups involved in TTIP lobbying. (The precautionary principle is sometimes used as a principle in EU policy and means that a product,  production method or crop should be banned if there are doubts as to its effects on human health or the environment.) Speaking to an audience of predominantly business representatives in Copenhagen on 7. October 2013, Shaun Donnelly made it abundantly clear that without a solution to a series of longstanding disagreements on regulation, including on genetically modified organisms (GMOs) and food standards, TTIP would not have real support from the US business community. He was supported by Markus Beyrer of BusinessEurope, the European employers' federation and one of the most powerful corporate lobby groups in Brussels: “Regulatory differences must be eliminated. And not just the existing ones. We must prevent new ones from emerging,” he said2.Solving differences - squaring the circleBut given how serious some of these differences are, is there really an easy solution? How will BusinessEurope “prevent new ones from emerging”?On the European side, there are fears that negotiators will simply cave in, change the rules, and open the door to US products of various kinds that have created fear and anxiety for public health and the environment. A set of high-profile cases are gaining prominence, including GMOs and chlorine chickens, certain chemicals which are approved in the US but banned in the EU. But governments as well as negotiators have taken care to stress there is no danger as they will not give in on the fundamentals. Protection levels are not on the table, and will not be negotiated away, they say. Such assurances have even come from the EU's top negotiator,  Commissioner Karel de Gucht, who stated recently that “nothing under this agreement will lower standards of protection. Removing regulatory barriers is not a race to the bottom.”But de Gucht has a real problem. On one hand the EU badly wants to conclude an agreement with the US. On the other hand, the agreement would have to be approved by the European Parliament, and an agreement with significant concessions to US business on issues such as GMOs, the labelling of GMO products and food standards (which would allow, for example, raw chicken cleansed with chlorine to enter the EU market) would cause a stir, and ultimately be defeated politically. That dilemma has no doubt been thought- through carefully already. And the answer is “regulatory cooperation”.No precautions If you ask US negotiators or the US business community, and indeed parts of the European corporate lobby as well, big changes should be made to accommodate US demands.Citizens in the US also have good reason to fear for some parts of the US regulatory system during the negotiations as the EU has ambitions to use TTIP to water down US rules on financial services, including the regulation of banks, where the EU rules are weaker. This interesting alliance between Wall Street, the EU financial sector and the EU negotiators seems to have developed its own strategy for “regulatory cooperation”, with a proposal for a separate body to handle regulatory differences.In other areas, the concerns are mostly on the European side. And through a large number of cases, there is a pattern with a name: the precautionary principle.  The principle is not used systematically, but it plays an important role in some areas in the EU, whereas in the US, what is sometimes called the “sound science principle” is applied. According to that principle, there has to be irrefutable evidence before a ban can be considered.US politicians and business representatives alike are pretty clear about this. An unmistakable contempt for “the so called precautionary principle” is uttered again and again in documents, comments and speeches on TTIP, and their intention to weaken standards and regulation is undeniable as is their clout with the US government.If European negotiators would openly cede ground in negotiations on this hot issue, they would risk political defeat back home. But if they do not, negotiations with the US could be in jeopardy. That dilemma has no doubt been thought through carefully already. And the answer is “regulatory cooperation”.Regulatory Council: Transatlantic business for “co-writing legislation”Business interests on both sides of the Atlantic are pushing hard to get an institutional structure, an “oversight body”, into the agreement, mostly referred to as an EU-US “Regulatory Council”. This would be based on a set of rules for regulatory cooperation that would enable the parties to deal with their differences in a more long-term fashion, through procedures that will give business the upper hand. It might very well be that the final TTIP text will not include immediate concessions on public health and environmental regulation. But it could include an approach for the future, giving the basic message to citizens that regulation is none of their business, but first and foremost the business of business. Regulatory cooperation is a long term project. It is meant to deal with differences that could not be settled at the negotiating table at the highest level and also to respond to new regulations as they occur. In the course of the negotiations, the parties will see to what extent they can agree on common standards, or recognise each others' standards as basically similar. But in those areas where this is not possible in the short term, they will set up procedures to deal with them in the future. The idea is to make TTIP a “living agreement”, not confined to what they can agree on in the first place, but a continuous process of ever deeper integration . That raises the prospect of the parties reaching a conclusion on even the most difficult issues, such as food safety. For corporations  from the EU and US, it raises hopes for better access to each other's markets including in sectors that meet obstacles today, and for that reason it is being promoted vigorously by the business lobbies on both sides of the Atlantic.That formula has been pushed systematically by the business lobby since 2012; in particular, a proposal on “regulatory cooperation” from BusinessEurope and the US Chamber of Commerce is at the center of the debate (see box below on the two lobby groups).In their joint paper from October 2012, the two corporate lobby groups present a model which  they characterise as a hybrid between the EU’s “long-standing policy to promote regulatory cooperation” and the US approach called “regulatory negotiation”3, which puts the business community at the table with regulators “to essentially co-write legislation”4.The business proposal: a living agreementWhat they propose is the establishment of a permanent EU-US dialogue to work towards mutually acceptable standards, and a procedure where a comprehensive system of consultation would be triggered if new regulation is proposed, or if regulation already in place has a “significant” impact on trade.  The proposal by the two corporate lobby groups contains the following main elements:Business should have the right to be involved in the first stage when new regulation is prepared. And let us remember that when we are talking about regulation we mean rules intended to prevent the food industry from marketing foodstuffs which include dangerous substances, or to keep energy companies from destroying the climate, or regulations to combat pollution and to protect consumers..New regulations should be investigated via a “regulatory compatibility analysis” (RCA).  During this investigation, seven questions would have to be answered. The questions are clearly tilted towards the interests of business, as they are mainly about the impact on business and on trade, including what the costs or savings would be to the private sector, how much regulatory authorities would “save” by down-scaling measures, and whether measures are outdated and should thus be eliminated or modernised5. In other words, a business-friendly agenda is to constitute the backbone of regulatory assessments, if the business lobby has it its way. Regulatory cooperation should address not only new regulation, but existing regulation as well. Certain circumstances should trigger a formal procedure to deal with inconsistencies' (significant impact on trade, impact on an existing agreement on regulation, regulation in an area with a great potential).Regulatory agencies should have a key role. With the close cooperation established between business and regulatory agencies on both sides, this would help ensure stronger business impact.The overall responsibility for regulatory cooperation is to be trusted to an “oversight group” (sometimes called a Regulatory Cooperation Council) whose obligations are spelled out in the proposal, and which include to work “with stakeholders to ensure they are engaged at regular intervals during a RCA”6. Also, provisions on “transparency” and “stakeholder engagement guidelines” would make sure the business community can stay involved in all relevant procedures7.BusinessEurope and the US Chamber of Commerce take care to stress that this system of regulatory cooperation cannot “undermine the sovereign right to regulate or force the hand of regulators”. But the authority of regulators is to be confined to a “veto authority” to reject an individual product from the scope of an equivalence/cooperation agreement, indicating the lobby groups' high ambitions for regulatory cooperation. It is to be a largely autonomous process, removed from parliamentary oversight and open democratic debate.Business unitedThe proposal is clearly not just any proposal.  On both sides, many other cross-sector business groups explicitly support the proposal or suggest a similar approach in their contributions to the official consultations on TTIP, including BDI (German Industry Association), Confederation of British Industry, Coalitions of Services Industries, British American Business, National Foreign Trade Council, Roundtable on Trade and Competition, Transatlantic Business Council, National Association of Manufacturers, Eurometaux and the United States Council for International Business. Some, notably the Competitive Enterprise Institute, take a step further and demand that businesses are able to choose freely which set of standards and regulations they will apply8.On top of this, 30 business associations, including most of the aforementioned, have written a common letter to the US Trade Representative and to Commissioner de Gucht's department to stress the importance of a system of “regulatory cooperation”. They include sectoral lobby groups from the chemicals industry, car industry, the financial sector, biotechnology, pharmaceutical industry and many more. They point to the existing structures on regulatory dialogue, the High Level Regulatory Cooperation Forum9, and assert that they “can be made much more effective and should include enhanced opportunities for dialogue with stakeholders”.Their vision is long term: “In addition, the agreement should work to limit future unwanted regulatory divergence by promoting a better understanding of the impact significant regulations may have on the transatlantic market and facilitate information sharing, which will ensure regulatory decisions when appropriate, reflect the marketplace, are fact based, grounded in sound science, and undergo thorough regulatory and cost-benefit analysis.”10A developed formulaThe question is how this resonates with the negotiators. In the US case, regulatory cooperation is already being used with other trading partners, including Canada and Australia and in  both cases, the business community has a privileged position.The most developed agreement is between Australia and the US, where regulatory cooperation is an integral part of the free trade agreement, and with the procedures described in detail in the trade agreement itself. Strikingly, the agreement allows the other party, including business groups from the other side, to “participate in the development of standards, technical regulations, and conformity assessment procedures on terms no less favourable than those accorded to its own persons”11. This means that the US could demand that Australia allows the US business community to be directly involved in the work to develop particular standards (and vice versa)12.  Should a disagreement arise on a standard or a technical regulation, it is to be settled through three or four stages, giving business groups ample space to influence the proceedings. In the final phase, both parties must elect a “chapter coordinator” to chair a negotiating group, and these coordinators are obliged to coordinate with “interested persons in the Party’s territory”, which is likely to be primarily the business community.13Regulatory cooperation between the US and Canada has not gone quite so far. In 2011 an agreement on cooperation was signed by the two governments, paving the way for extensive dialogue on regulation. Twenty nine working groups have been formed on issues ranging from food standards to “unmanned aircraft systems”, and in each working group, the regulatory agencies on both sides are working towards common standards or mutual recognition14. Here too, the role of the business community is substantial. The US Chamber of Commerce points out that it includes “dialogue with departments and agencies”, “involvement in Work Plan development and implementation” and “opportunity for deeper and more frequent engagement”15.Positive response from the EUBut what about the European side, then? Is the Commission favourable to this kind of proposal?At the outset, when the EU negotiation mandate for TTIP was discussed by EU member states, regulatory cooperation was indeed mentioned, but not in any detail. Point 25 of the mandate reads: “The Agreement shall also include a framework for identifying opportunities and for guiding further work on regulatory issues, including provisions that provide an institutional basis for harnessing the outcome of subsequent regulatory discussions into the overall Agreement16.”This seems to imply that regulatory cooperation was not dealt with thoroughly by EU governments, but was left to the EU Commission to elaborate further.But actually, the Commission had already had discussions on the specifics with business lobby groups, most prominently with BusinessEurope and the US Chamber of Commerce. The minutes from a meeting in November 2012 between BusinessEurope and three different departments of the Commission are instructive17.At the meeting, BusinessEurope and the US Chamber of Commerce explain that they see TTIP as a “potential game changer”, if their model would get support. While the Commission was generally positive, some reservations emerged, including on the specific design of the “regulatory compatibility analysis” and on the privileged access of business groups to decision-makers at a very early stage.The atmosphere at the meeting was clearly friendly. The Commission stressed its desire  to work closely with BusinessEurope to refine the proposal.  Commenting on a BusinessEurope demand to have preferential access to decision-makers, the Commission voiced scepticism about discriminating against other stakeholders (eg. consumer organisations), but ceded ground. The two agreed that such a “formal and preferential consultative role” would be “easier to establish if sector-wise”, so, for example, on chemicals, cars or pharmaceuticals. BusinessEurope announced it would submit further details on what a separate consultation would look like. Furthermore, the Commission's concerns over the nature of the “regulatory compatibility analysis” (RCA) resulted in an invitation to “BE and Chamber” to do further work on the guidelines.Whose proposal?This desire to work closely with business to find a model that suits business and both parties is now showing. And the enthusiasm for institutions to support “regulatory cooperation” seems to have grown rather quickly. On 10th October, Trade Commissioner Karel de Gucht made a sweeping announcement on regulation and institutions:“Here again we have learned from the past: If we want regulators to work together in the future we need to make sure that they are equipped to do so. I therefore propose that the TTIP establishes a new Regulatory Cooperation Council that brings together the heads of the most important EU and US regulatory agencies.”18This was hardly a brilliant new idea which the commissioner had developed in-house, but instead a clear sign that the Commission is aligning itself with business lobby groups. That goes too for his follow-up remarks: “The council would monitor the implementation of commitments made and consider new priorities for regulatory cooperation – also in response to proposals from stakeholders. In some cases it could also ask regulators or standards bodies to develop regulations jointly that could then have a good chance of becoming international standards. Strong institutions like this will be key to making the TTIP a living agreement that promotes greater compatibility of our regimes and accelerates the development of global approaches.”Leak shows Commission in sync with BusinessEuropeThe details of the Commission's proposal have not yet made it into the public domain, but with the leaked EU negotiation document, there is now no doubt that the demands of business lobby groups in general, and the US Chamber of Commerce and BusinessEurope in particular, have, so far, been accommodated. In the document, dated 2 December  and already sent to US-negotiators, the Commission spells out its proposals for “Cross-cutting disciplines and institutional provisions”, and as far as BusinessEurope is concerned, it leaves little left to wish for Christmas.The main mechanisms are:1. Permanent negotiationsThe paper suggests that the two parties establish permanent cooperation and set up a “Regulatory Cooperation Council” to promote “regulatory compatibility” on both “future and existing regulatory measures”. When assessing regulation, the impact on international trade “in particular transatlantic trade”, should be at the core “informed by appropriate input from stakeholders concerned” ie. primarily business groups. While stakeholders would also cover  consumer groups, in practice the standard result would likely be the overwhelming dominance by business groups.  This comes close to the US tradition of “regulatory negotiation”, described by the business lobby groups as a procedure that basically allows them to “co-write regulation”.In this regard, the parties are obliged to take into account specific proposals from the other party. Business is promised a key role in this structure as the Council has to consider “substantive joint submissions from EU and US stakeholders”.2. Regulatory authorities directly involvedRegulatory cooperation is not to be a high-level endeavour only, but must see regulators directly involved “in bilateral and international regulatory cooperation as part of fulfilling their domestic objectives” in order to promote “regulatory compatibility”. It has to be possible for the other party to establish direct relations and a direct dialogue with the regulatory authorities “without unnecessary restrictions”. The regulatory authorities have an obligation to “assess impacts of their regulatory initiatives” on transatlantic trade, and to “take into account written comments from the other side”. This key role for regulatory authorities is what BusinessEurope and the US Chamber of Commerce see as an important “game changer”.3. Early warning mechanismBefore any new initiative on regulation is taken, the other side must be informed thoroughly and be allowed to comment.  Structures have to be set-up to enable a dialogue that would provide the other party with “information on legislative proposals pending before their co-legislators”.In fact, the provisions on early warning could not be stronger, as information has to be provided to “interested persons” on any existing or proposed measure, “regardless of whether it was notified”. This will allow business lobby groups to react proactively even to mere rumours that new regulation might be in the pipeline.This seems to go even further than what was suggested by the two lobby groups in their initial proposal.4. Impact assessmentsIn the future, impact assessments on regulation have to include assessments on the impacts on trade. While this is not described in much detail, the emphasis in the document on trade impacts appears likely to become a cornerstone in the template for future impact assessments, as with the “regulatory compatibility analysis” suggested by the two lobby groups.5. DialoguesWhile the paper routinely stresses that the parties retain their sovereign right to regulate, the proposal suggests a rather circumstantial and lengthy procedure before anything that might bother the other party can make its way to the political level. All information has to be provided to the other party, and responses to questions have to be given, after which the parties “shall explore possible concrete means to get to compatible outcomes or coordinated approaches”.An important part of the set-up is to be sectoral dialogues. While it is hardly a surprise that they will go about it sector-wise, this does raise the issue of the preferential access for business demanded by BusinessEurope, which according to the agreement with Commission officials at the meeting in November 2012, would be feasible in the framework of sectoral dialogues. .6. Surveillance of member states (and states in the US)In order to maintain discipline, the Commission also suggests that the central level, be it the US federal government or the Commission, is obliged to do surveillance of regulatory developments at lower levels of government, and intervene if a conflict could arise with the objectives of TTIP. The Commission (or the US government) would then make sure a dialogue is established and a solution found.7. Rights for lobbyists to intervene in regulationFinally, the proposal contains a suggestion to establish “contact points for interested persons of the other party with the task of seeking to effectively resolve problems for them” that may arise in the area of regulation.Deregulation in the EU The proposal of the Commission seems to meet all the demands of BusinessEurope and the US Chamber of Commerce. Business will be awarded all kinds of rights to demand information, dialogue and negotiation on regulatory measures. If this proposal is adopted, a firm and effective “right for lobbyists to intervene and block” will be enshrined in an international agreement and in EU law.Another advantage for the business lobby groups is the opaque nature of all the dialogues and procedures, many of which are set to take place well before any real public or democratic debate can take place. In the EU this will boost the power of the regulatory agencies as well as the Commission, which in itself is an important message, as the Commission has pursued an agenda of weakening regulation for many years. Some of its recent initiatives include “the Better Regulation agenda”, now renamed “Smart Regulation”.19Under these slogans, the Commission is already conducting a witch hunt for what it considers obsolete regulation, or regulation that is considered too “burdensome” or an obstacle to “competitiveness”. Initiatives under consideration include a blanket exemption for small and medium businesses on key pieces of regulation, including safety-at-work legislation.20If we add to this the fact that the Commission is the only EU body allowed to table legislative proposals, we have a recipe for disaster: the Commission would presumably be easily persuaded by US authorities or the US business lobby to refrain from tabling a proposal if it would cause a stir in the EU-US trade relationship.Unelected bodies already powerfulA system such as the one proposed could have a major negative impact on decision-making processes in the EU, not because all decisions on new regulations already take place in an open and  democratic way, but because EU decision-making is already complicated and opaque.Decisions on new standards or regulations on specific products are not typically made through an open political debate on possible risks, but instead take place in a rather closed environment of committees consisting of civil servants from member states, who base their decisions on recommendations from the EUs agencies. Often, there needs to be a  'qualified majority'21 against a proposal from the Commission if it is to be rejected, which gives the Commission tremendous power. A simple majority is not enough to defeat a proposal from the Commission. If there is no qualified majority against the Commission, nor in favour of the Commission's proposal, then the Commission can make the decision on its own. If US power is inserted as a factor in the early phase of decision-making, the result could easily be that new regulatory proposals from the Commission either never see the light of day or are only proposed in a weakened version after a screening of impacts on US businesses.How the EU dealt with a request from the US to allow the sale of beef cleansed with lactic acid is a good example of this.  The story started with an application from the US Department of Agriculture to have the EU lift a ban and allow for the use of lactic acid on beef shipped to the EU22. In the committee, civil servants were presented with a report from the European Food Safety Authority, an agency often accused of allowing experts with conflicts of interest due to their relationship with industry, to play a major role in its assessments, including the very panel that assessed the use of lactic acid23. In this case the agency judged the risk to be minor. This, however, did not resonate with EU member states, many of whom voted against a lifting of the ban, meaning that the committee was unable to make a final decision. Instead, it was left to the Commission to decide and it proceeded to lift the ban.24In a comment on the beef case, Monique Goyens from the European consumers association BEUC, said: "Evidence shows that consumers are against the chemical treatment of meat. They want and expect the meat they eat to be safe. The foremost concern of decision makers must be to maintain Europe’s strict food safety standards regardless of trade pressures.”25The voice of US business The decision of the Commission to allow EU sales of US treated beef was seen as an important gesture by the US. In Congress, the news was seen as an amicable concession. In a key letter to the US Trade Representative, politicians from both the Democrats and Republicans wrote: “While we recognize the positive steps the EU has recently taken with respect to imports of beef washed with lactic acid and with respect to swine, there is still much work to be done. We urge you to resolve these and other unwarranted agricultural barriers as part of the FTA negotiations on both an individual and a systemic basis.”26This small example is an illustration of three things: the complicated nature of EU decision-making processes on regulation, the power of the Commission and the massive importance of US pressure. If a system of “regulatory cooperation”, such as the one proposed by BusinessEurope and the US Chamber of Commerce, is adopted, then it i's likely that an even more opaque system will arise, with US pressure playing an even more significant role, and this would be impenetrable to any real influence from consumer groups or environmental movements, let alone citizens.The prospectsClearly, there will be in-depth negotiations on some sort of system of regulatory cooperation in the TTIP framework. And if the positions of the two parties are compared, it is not unreasonable to predict that concessions will be made to business on their access to proceedings under the new system. It remains unclear what kinds of competences will be delegated to the Regulatory Council, but the fact that the EU would have to negotiate in detail with representatives of the US government as well as the corporate lobby on both sides of the ocean, bodes ill for any kind of progressive regulation already in place. This would also go for positive regulations in the US on topics where the EU is very aggressive in wishing to see them dismantled, such as financial services.In this way, regulatory cooperation means that existing and future EU regulation will have to go through a series of investigations, dialogues and negotiations which is likely to mean that a decision will be made outside the framework of public scrutiny and democratic decision-making. And the odds are that it will end in a major offensive for deregulation, for an annulment of existing protection measures and for a firm brake on new regulation. And if other parts of the TTIP negotiations are taken into account, the prospects are outright scary. If, for instance, TTIP will include an “investor-state dispute settlement mechanism”, US firms will be allowed to sue the EU or member state governments on regulations which they feel unfairly impact upon their profits. With a Regulatory Cooperation Council in place, there is a risk that threats to start law suits will be effective and will prevent regulations aimed at improving health or social protection.Not just about chlorinated chickensIn conclusion, strong regulation to defend the public interest is hardly compatible with the institutional set-up being promoted by business in TTIP. And as for the ongoing negotiations, it will not be enough to stave off the most obvious challenges in the short term. It may be that the negotiators will not be able to brush off the public’s concern over GMOs, chlorinated chickens or hormone beef, and it might be that the precautionary principle is not completely sidelined, at least in the initial TTIP agreement. Any deal would have to be approved by the European Parliament, and obvious concessions of this nature could spell political disaster and a no vote for TTIP. But even if concessions of this kind are not made in the negotiating phase, they could turn out to be pyrrhic victories as they could be revisited in the long term via the system of EU-US regulatory cooperation.For that reason, far more attention must be paid to this part of the negotiations, and, not least, the close cooperation between business lobby groups and the Commission on this issue must be brought to an end.Why is the Commission teaming up with Obama-hating deregulation fanatics?Who are the two lobby groups with which the European Commission has had closed-door meetings about a future EU-US regulatory process? BusinessEurope (a federation of employers' organisations and individual corporations) is a powerful lobby group that campaigns for weaker social and environmental standards in virtually every piece of new EU legislation under discussion. While claiming to speak on behalf of business in Europe, BusinessEurope, as a Green MEP puts it, represents "the lowest common denominator, the most conservative companies, not those companies that want to move forward", for instance on reducing carbon dioxide emissions.The US Chamber of Commerce is the most well-funded of all US industry lobby groups and has, over the last decade, spent more than one billion dollars on lobbying. The chamber spent millions of dollars on lobbying and advertising campaigns to block Obama's proposals for  regulating Wall Street banks after the financial crisis. It also invested tens of millions of dollars in getting right-wing candidates elected to Congress in recent elections, funding thousands of TV adverts supporting Republican candidates. Critics argue that the chamber, under the leadership of Thomas J. Donohue, "has become a fully functional part of the partisan Republican machine".This autumn the Chamber declared war on what it describes as the "vast regulatory state" which they claim has emerged under President  Obama. "We at the Chamber are going to use every resource at our disposal to stem this unprecedented flow of regulations," Donohue announced, arguing that "Obamacare is a prime example of regulation amok." "And when all else fails: Sue 'em." Donohue said. "The chamber will not hesitate to take the fight to the courts." 1. Quote from NOTAT (DK), issue 1266, December 2013. 2. Karel de Gucht; ”Solving the regulatory puzzle”, speech in Prague, 10. October 2013. http://europa.eu/rapid/press-release_SPEECH-13-801_en.htm 3. On “regulatory negotiation”, see the website of the Administrative Conference of the United States: http://www.acus.gov/tags/regulatory-negotiation 4. BusinessEurope and US Chamber of Commerce; "Regulatory Cooperation in the EU-US Economic Agreement", October 2012, page 4. http://corporateeurope.org/sites/default/files/businesseurope-uschamber-... 5. BE and USCoC, page 5. 6. BE and USCoC, page 6. 7. BE and USCoC, page 5. 8. Documents from the consultation procedure in the US: http://www.regulations.gov/#!docketBrowser;rpp=25;po=0;dct=PS;D=USTR-201... Documents from the common consultation procedure received by the Commission: http://ec.europa.eu/enterprise/policies/international/cooperating-govern... 9. The High Level Regulatory Cooperation Forum has been in place since 2008. It lacks the teeth, the business lobbies would like to see introduced in a future model of regulatory cooperation. http://ec.europa.eu/enterprise/policies/international/cooperating-govern... 10. Transatlantic Industry, collective contribution to consultation, 24. October 2012. http://ec.europa.eu/enterprise/policies/international/cooperating-govern... 11. AUSFTA, article 8.7, paragraph 1. http://www.ustr.gov/sites/default/files/uploads/agreements/fta/australia... 12. Ibid, article 8.8, para 2. 13. Ibid. article 8.9, para 1. 14. For the list of working groups: http://www.trade.gov/rcc/ 15. See a presentation of US-Canadian regulatory cooperation bu the US Chamber of Commerceon the website of the US trade authorities: http://www.trade.gov/rcc/documents/Chamber-RCC-slides-final.pdf 16. See the leaked mandate at http://www.s2bnetwork.org/fileadmin/dateien/downloads/EU-TTIP-Mandate-fr... 17. See the minutes of the meeting with DG Enterprise, DG Trade and the General Secretariat of the Commission here: http://corporateeurope.org/sites/default/files/minutes-commission-be-cha... 18. Karel de Gucht; ”Solving the regulatory puzzle”, speech in Prague, 10. October 2013. http://europa.eu/rapid/press-release_SPEECH-13-801_en.htm 19. See the Commission's website: http://ec.europa.eu/smart-regulation/ 20. European Commission; ”Smart regulation – Responding to the needs of small and medium sized enterprises”, COM (2013) 122 final, March 2013, page 10. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2013:0122:FIN:... 21. The voting system in the Council is complicated. Qualified majority means both that a certain number of countries and a number of votes assigned to each country according to size. 22. The Poultry Site, 2. December 2012, http://www.thepoultrysite.com/poultrynews/27467/ministers-discuss-cap-re... 23. Of the 21 members of the ”biohazard panel”, 12 have problematic links to industry: http://corporateeurope.org/sites/default/files/attachments/2-biohaz_biol... 24. Last stop before the Commission's decision was a meeting of the Council on Agriculture and Fisheries, where again, no conclusion could be made. See the minutes here: http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/agricul... 25. The Meat Site, 30. November 2012, http://www.themeatsite.com/meatnews/19616/eu-gives-goahead-to-lactic-aci... 26. Baucus and Hatch, letter to the USTR, 13. February 2012, http://www.finance.senate.gov/newsroom/chairman/release/?id=17b2fd73-067...
 

The EU's Comprehensive Economic and Trade Agreement (CETA) with Canada could unleash a wave of corporate lawsuits against Canada, the EU and its member states – including through the Canadian subsidiaries of US multinational corporations. This is the result of an in-depth analysis of CETA’s investor rights by Corporate Europe Observatory and 14 other environmental NGOs, citizens’ groups and workers unions from both sides of the Atlantic published today.
Comment

(mis)Communicating TTIP

An internal document shows the Commission and Council have initiated a coordinated “information campaign” on TTIP. But one thing is missing.
CEO just responded to the European Ombudsman’s public consultation on transparency in the negotiations over the Transatlantic Trade and Investment Partnership (TTIP), outlining suggestions for ending the secrecy in the EU-US trade talks.
Answer the call from the D19-20 Alliance in Belgium to take to the streets against TTIP and austerity on Friday 19th December 2014, as the second day of the European Council Summit unfolds
An analysis of the revised independence policy of the European Food Safety Authority (EFSA). More reworded than revised, actually.
The EU's Comprehensive Economic and Trade Agreement (CETA) with Canada could unleash a wave of corporate lawsuits against Canada, the EU and its member states – including through the Canadian subsidiaries of US multinational corporations. This is the result of an in-depth analysis of CETA’s investor rights by Corporate Europe Observatory and 14 other environmental NGOs, citizens’ groups and workers unions from both sides of the Atlantic published today.
The position of Chief Scientific Adviser to the President of the European Commission has been discontinued, and the Juncker Commission says it is now reflecting on how to organise independent scientific advice. This is a crucial issue and, together with many other NGOs, we sent a list of principles to the Commission on how to, in our opinion, try to best do this.
This 10-minute video exposes the role corporate lobbies have in EU decision-making, how they manage to get what they want and how their activities affect citizens all over Europe.

Corporate Europe Forum