Geraint Davies MP

Working hard for Swansea - yn gweithio dros Abertawe

Transatlantic Trade and Investment Partnership

Below is the official transcript of Geraint Davies' introduction to the debate in the House of Commons on Thursday 15th Jan 2015.



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Geraint Davies (Swansea West) (Lab/Co-op): I beg to move,

That this House believes that the Transatlantic Trade and Investment Partnership and any associated investor-state dispute settlement provisions should be subject to scrutiny in the European Parliament and the UK Parliament.

I thank the 60 or so MPs who supported this Backbench Business Committee debate, as well as the Committee’s Chair and those who supported the early-day motion and my International Trade Agreements (Scrutiny) Bill. This debate is supported by trade unions, business and environmental movements, and 38 Degrees has also got involved. Many people are encouraged and Members are glad that they are able to engage with hundreds of constituents on this important issue.

This issue is fundamental to the balance of power between democracy and multinational giants who want to impose their interests on our democratic rights. Our right to scrutinise this very important and strategic trade agreement, which will have global ramifications into the future, is imperative. If we end up with a situation where multinational companies are able to sue democratically elected Governments over laws they have passed to protect their citizens, we will be in the wrong place altogether.

Mrs Anne Main (St Albans) (Con): Hundreds of my constituents have contacted me about this issue, and there is concern about things being stitched up behind closed doors, such as the use of genetically modified crops and so on. It is welcome that the issue is debated and kept under scrutiny by this Parliament.

Geraint Davies: I very much welcome that intervention. The harsh reality is that this deal is being stitched up behind closed doors by negotiators, with the influence of big corporations and the dark arts of corporate lawyers. They are stitching up rules that would be outside contract law and common law, and outside the shining light of democracy, to give powers to multinationals to sue Governments over laws that were designed to protect their citizens.

Dr Julian Huppert (Cambridge) (LD): I congratulate the hon. Gentleman on securing this debate. Does he welcome, as I do, the suspension of the investor-state dispute settlement section of the negotiations, and does that hopefully mean that we can be in a better place, without some of the concerns to which he has correctly alluded?

Geraint Davies: I will move on to those issues and I do, of course, agree.

There is a current risk that the agreement struck behind closed doors is only subjected to yes or no—take it or leave it—in the European Parliament, and that 

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ratification in this House occurs after the implementation of the Transatlantic Trade and Investment Partnership. That is hardly democracy. Today I am calling—it is not much of a call—simply for parliamentarians here and in Europe to have the right to scrutiny. The mechanics for that would be to empower us to recommend amendments that could be made by other representatives in Europe.

Julian Smith (Skipton and Ripon) (Con): Will the hon. Gentleman confirm to the House who has access to the reading room in Brussels for the documents on this treaty? There is significant access, and I hope he will clarify how many people, and who, can look at those documents.

Geraint Davies: Until recently, it was just Lord Livingston from our point of view. He could go in without any photocopier or camera and try to memorise what was there, and move out. More recently, access has been enabled for some of our MEPs. However, this is a case of thousands of people—indeed, 1.2 million people have signed a petition because they are concerned about TTIP—banging on the door and wanting access, and realising belatedly the real risks in front of us.

Mr John Spellar (Warley) (Lab): Will my hon. Friend give way?

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. Sixteen people want to speak in the debate, as well as those on the Front Benches. Those who are intervening also want to speak, and they are in danger of dropping down the list. I am trying to keep the debate tight, so I hope Members will think about their interventions. It is up to Geraint Davies whether he gives way to Mr Spellar.

Geraint Davies indicated assent.

Mr Spellar: Briefly, does my hon. Friend think that this will be a mixed competence agreement?

Geraint Davies: I very much hope it will be, as I said, but I do not know, and that is the whole point. We do not know whether it will be mixed competence— in other words, we do not know whether it will be railroaded through without any ratification here before implementation, as was the case with the Peruvian and Colombian treaties. This has not been made up; this is the sort of lack of democracy that has already been railroaded through, and there is real fear that it will happen again. I say that because we face austerity in Europe in the aftermath of the banking crisis, and a Prime Minister who has naturally said that he can see the flashing red lights on the front of the global economy, and that he wants to put a rocket booster under TTIP. There is enormous pressure to have a quick deal.

I am in favour of trade. I think trade is good, and any one with a rudimentary knowledge of economics—I like to think that the Minister has that—will know that the law of comparative advantage will normally generate the fruits of trade. Those fruits are meant to be something in the order of £93 billion per year for Europe, and £74 billion to the United States. Cecilia Malmström, the negotiator and commissioner on this, has said that there 

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will be growth and jobs, although I realise that there is a lot of controversy and different figures are being thrown around. However, it is generally accepted that trade generates added value.

One question for us concerns where the fruits of trade go. Do they go to the many, or are they stockpiled offshore by multinational giants in untaxed profits? Fundamentally, we are talking about whether the trade deal will undermine our democracy, our public services, our rights, our health, our environment and so on.

Huw Irranca-Davies (Ogmore) (Lab): Will my hon. Friend give way?

Geraint Davies: Briefly. I am aware of the time constraints.

Huw Irranca-Davies (Ogmore) (Lab): I thank my hon. Friend for his generosity in giving way to so many interventions. The ripples of laughter from Government Members at somebody on the Opposition Benches supporting the free market are surprising. One area of TTIP is food and food production, the biggest manufacturing sector and employer in the UK. TTIP could have huge opportunities for the food sector, but only if it involves a race to the top in standards, protection of animal welfare and standards of food hygiene, and not a race to the bottom. Does my hon. Friend agree that we can support good competition and trade agreements, but we have to ensure that standards applied are good?

Geraint Davies (Swansea West) (Lab/Co-op): I completely agree. We certainly do not want to open the backdoor to genetically modified foods or cloned meat or “McClonie” burgers or whatever they happen to be. We want to keep standards up. This is part of getting all the detail right and having a proper level of scrutiny. I am not complaining about TTIP itself. It could be a vehicle to deliver prosperity and regulate globalisation. Globalisation is occurring and it needs regulation. Who better to engage with that than the most developed and civilised part of the world, which is of course Europe.

Mr George Howarth (Knowsley) (Lab): I want to return to the principle my hon. Friend enunciated a few moments ago. It is possible to be in favour of free trade, but not in favour of raising the potential for public services to be up for grabs for anyone who cares to bid for them. Does he agree that that is the essential principle?

Geraint Davies: That is very important indeed. I agree with my right hon. Friend. The thorn in the rose is the investor-state dispute settlement—the ISDS. As has been mentioned, this is an opportunity for deals to be struck behind closed doors to empower multinational companies, within a new system of law outside the law with which we govern ourselves, to sue democratically elected Governments for passing laws that protect people.

Mr Jim Cunningham (Coventry South) (Lab): Following on from the point made by my right hon. Friend the Member for Knowsley (Mr Howarth) about public services, is there not another issue we have to careful about: the erosion of employment rights?

Geraint Davies: My hon. Friend is completely right. There are people who say there is no risk from ISDS, but there is a lot of evidence and a track record of 

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multinationals using the powers at their disposal to extract money where laws are passed undermining future profit flows. Philip Morris is the obvious example: it is suing Uruguay and Australia for something like $100 million. Lone Pine is suing the Canadian Government for about $250 million, because Quebec wants a moratorium on fracking. Achmea, the Dutch insurer, is suing the Slovakian Government who tried to reverse some of their health privatisations. Argentina has paid more than $1 billion to US and EU energy giants, because it froze energy and water prices. If these powers are available, they will be used to fleece the taxpayer. In my view, they are unnecessary. I accept that some protection may be needed between developed economies and democracies and rogue states, but rogue states are certainly not the United States. Mature democracies and economies, namely the EU and the US, do not need anything more than contract law to protect investors.

Mr Robert Walter (North Dorset) (Con): The hon. Gentleman may be aware that the United Kingdom is a party to some 90 international trade deals that involve the investor-state dispute settlement mechanism. Does he know how many cases the United Kingdom has ever lost using the mechanism?

Geraint Davies: I do not have the numbers to hand.

Caroline Lucas (Brighton, Pavilion) (Green): I can tell the hon. Member for North Dorset (Mr Walter) that the Czech Republic, Slovakia and Poland, who are in trade agreements that include this kind of investor-state relationship, have been sued 127 times and have lost an amount of money that could have employed 300,000 nurses for a year. The idea that this is not a problem is patently wrong. This is about a corporate takeover and that is why it is right to oppose this particular mechanism.

Geraint Davies: I am grateful to the hon. Lady for that intervention, which underlines why, of the 155,000 people who contributed to the consultation by the Commission on TTIP and the ISDS, 97% were against the ISDS. As has been pointed out in other interventions, there are dangers to our procurement, food standards, rights at work and environmental protection. My personal view is that we should pull the teeth of corporate wolves scratching at the door of TTIP by scrapping the ISDS rules, so we can get on with the trade agreement without this threat over our shoulder.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): Is not one of the main concerns, which I am sure the hon. Gentleman shares as he is from Wales, that the UK has four different health services? There is no member state health service, so if one of those health services opens a certain door, the other health services could also be open and vulnerable.

Geraint Davies: All sorts of assurances have been given on health and social care but they are by no means watertight. We have not got a copper-bottomed agreement like, for example, Finland has with the United States and with Canada, which explicitly excludes all public and private social care and health. As case law has not been established in Britain, the NHS remains at risk. The opening door created by the endless privatisations from the coalition Government creates more scope and

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risk for intervention, which could lead to possibly billions of pounds-worth of legal action if a future Labour Government reversed a lot of the privatisation that has already occurred. Frankly, that would be in contrast to, and conflict with, the democratic wishes of the British people—if we get in.

Chi Onwurah (Newcastle upon Tyne Central) (Lab): I thank my hon. Friend for giving way and congratulate him on his remarks so far. Does he agree that the combination of opening up the NHS to competition law through the Health and Social Care Act, together with the refusal to exempt the NHS from TTIP, makes this effectively a privatisation of our NHS?

Geraint Davies: There have been various assurances about trying to close the door on the NHS but it is fundamentally at risk. Due to the lack of case law, at any point a judge could say “Here is an area where there is already private competition. We will allow TTIP; why shouldn’t we?” The more it goes forward, the more we are exposed, which is a real problem.

Dr Matthew Offord (Hendon) (Con): Will the hon. Gentleman give way?

Geraint Davies: I must continue as I will be told off by Mr Deputy Speaker if I do not. I will try to give way later.

MPs should have the right to scrutinise the TTIP Trojan horse and remove from it the ISDS weapons from the corporate lawyers inside.

Andrew Bingham (High Peak) (Con): Will the hon. Gentleman give way?

Geraint Davies: The hon. Gentleman has been waiting so I shall give way.

Andrew Bingham: The hon. Gentleman, like me, is a member of the European Scrutiny Committee and I am sure he is aware that Lord Livingston is coming to the Committee on 11 February, which gives the Committee a chance to conduct some scrutiny. I assume that he, like me, will be at that meeting, as will, I am sure, the hon. Member for Llanelli (Nia Griffith).

Geraint Davies: I will be at that meeting.

The Labour party is standing on a pledge of freezing energy prices; again there could be a risk of challenge. If we wanted a one-off tax on privatised utilities, such as the one introduced by my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), on, for instance, Royal Mail, we could be at risk. If there were a move to partial or actual renationalisation of the railways or whatever, it could be subject to fines. The point is not whether one agrees with these policies; it is whether one thinks that we have the democratic right here on behalf of the people to pass those laws and not face financial intimidation.

In conclusion, I know that much of what I have said is shared by the Green party. The difference is that it would like to abandon the trade talks altogether and to freeze what we are doing. I would say that we cannot pretend that globalisation is not there. There are risks that I have identified, but it is our duty and opportunity 

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to regulate globalisation with gold standards to protect democracy, public services and people’s rights. This is not just for Europe; it is for the world. What we do will be the benchmark for the future to protect ourselves and others from the possible crack of the whip of corporate giants.

I agree with fair trade. In 1945 Clement Attlee put forward the general agreement on tariffs and trade as the forerunner of the World Trade Organisation. We need to engage and regulate and not have the law of the jungle. As part of that process, I hope that all Members—whatever they think about the balance between public and private, or about the level of protection for the environment, health or workers’ rights—agree that these matters should be decided by democratically elected parliamentarians, and not by corporations with the whip hand of financial intimidation and that they will agree wholeheartedly with my call for scrutiny in this place and in the European Parliament.



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