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TTIP: UK Government found secret courts in trade deal have 'lots of risk and no benefit' in its only assessment

Stark warning against agreement disclosed in response to a Freedom of Information request

Hazel Sheffield
Wednesday 27 April 2016 13:17 BST
Obama's trip to Europe has been seen as an effort to drum up support for TTIP before the end of his time in the White House
Obama's trip to Europe has been seen as an effort to drum up support for TTIP before the end of his time in the White House (GETTY)

Secret courts to be introduced under the Transatlantic Trade and Investment Partnership will have "few or no benefits to the UK", according to the only official assessment of the deal commissioned by the UK Government.

The warning was disclosed in response to a Freedom of Information request by anti-TTIP campaigners Global Justice Now.

The group filed a request to the Department for Business Innovation and Skills to ask what risk assessments had been made about the introduction of secret courts known as the Investor-State Dispute Settlement.

The BIS said it had carried out only one such review in 2013, when the London School of Economics was commissioned to conduct a study.

The study found this provision under TTIP would have limited political and economic benefits and may result in "meaningful economic costs in the UK".

"All in all, it is doubtful UK investors will find additional protections from an EU-US investment protection treaty beyond those currently provided, and enforced, under US law," the study found.

What is TTIP?

Supporters of TTIP say it could boost the European and US economies by hundreds of billions of dollars by making it easier for companies on either side of the Atlantic to trade with one another.

Opponents say the deal could give corporations the power to sue governments when they pass regulation that could hit firms' profits through these secret courts of ISDS.

United Nations figures show US companies have made billions of dollars by suing other governments nearly 130 times in the past 15 years under similar free-trade agreements.

Details of the cases are often secret, but notorious precedents include tobacco giant Philip Morris suing Australia and Uruguay for putting health warnings on cigarette packets.

"Ultimately, we conclude that an EU-US investment treaty that does contain ISDS is likely to have few or no benefits to the UK, while having meaningful economic and political costs," the report said.

Nick Dearden, director of Global Justice Now, said the findings show the treaty could have harmful consequences for ordinary people.

"Introducing a system of secret corporate courts under TTIP would be a fundamental shift in trade and legal policies, so it’s staggering that the government is pushing us into it with almost no assessment of what the risks are for our policy makers or the tax payer," he said.

The revelations come as UK Prime Minister David Cameron travels to join US President Barack Obama, German Chancellor Angela Merkel, French President Francois Hollande and Italian Prime Minister Matteo Renzi to discuss TTIP in Germany.

Mr Obama's trip to Europe has been seen as an effort to drum up support for TTIP before the end of his time in the White House.

He has been pushing for its completition since parties were scheduled to sign in 2014, promising the treaty would remove “regulatory and bureaucratic irritants and blockages to trade".

“If we don’t complete negotiations this year, then upcoming political transitions — in the United States and Europe — could mean this agreement won’t be finished for quite some time," he said.

A BIS spokeswoman said the TTIP agreement was an opportunity to create the largest free trade area in the world with the potential to boost the UK economy by as much as £10 billion each year.

"Since 2013, the investment protection provisions in TTIP have been significantly reformed," she said.

"The government has engaged closely with stakeholders and the European Commission as negotiations have progressed."

War on Want campaign director John Hilary told Morning Star that the Global Justice Now findings confirmed David Cameron had been misleading British citizens when talking up the benefits of TTIP.

“We have challenged the UK government time and again to show us any evidence that TTIP will be good for ordinary people," he said.

"Now we know why it has failed to provide that evidence — because they have none."

This article has been amended to make clear that assessment carried out by LSE looked at the likely costs and benefits for the United Kingdom (UK) of an investment protection chapter or ISDS in a proposed free trade agreement between the European Union (EU) and the United States (US), rather than the proposed agreement as a whole

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