Race to the bottom

NEF has been been working with the European Environmental Bureau on a campaign to stop big business interests from undermining the standards that protect citizens and consumers, in areas from food and pharmaceuticals to chemicals and new technologies. The Trade Justice Movement campaigns on behalf of 70 civil society organisations for trade rules that work for people and planet. Together we are hugely concerned about the influence of big business, with little regard for the public interest, which is lobbying to strip back the regulations which keep us and our environment safe.

This deregulation process is especially insidious because it is executed through policies that are given purposefully benign names like ​‘Better Regulation’. Another innocent-sounding term is ​‘regulatory cooperation’: it too sounds quite harmless, if not benign. But when it comes to trade deals, it’s actually shorthand for forcing down whichever of two trading partners has the higher regulatory standards, in the service of increasing trade. These concepts share more than just slipperiness. They both describe political projects which basically want to make it easier for businesses to make profits by undermining of the protections and standards developed to protect our health, rights, and the environment.

‘Regulatory cooperation’ first arose in the infamous Transatlantic Trade and Investment Partnership (TTIP) negotiations. TTIP was supposed to be a massive trade deal between the EU and the US, but was never agreed – in part because of a massive mobilisation of European citizens. As part of this deal, ​‘regulatory cooperation’ aimed to create a level playing field by aligning different countries’ regulations in order to enable trade. Regulatory cooperation provided a forum in which these differences would be resolved, through European and American regulators meeting to come up with new, shared regulations – crucially, with input from business interests. Other agreements such as CETA (EU-Canada) and the Trans-Pacific Partnership follow a similar model to TTIP.

“This deregulation process is especially insidious because it is executed through policies that are given purposefully benign names”

However, there are a number of big problems with the TTIP-style approach to regulatory cooperation. First, and perhaps most importantly, it means all regulation is assessed in relation to how well it achieves trade aims. But this isn’t the point of regulations, which are built around objectives like public health or environmental protection. But TTIP regulatory cooperation councils would have primarily been made up of people who lacked expertise beyond the world of trade and who would prioritise removing barriers to trade above concerns about the public or environmental interest. Regulatory cooperation therefore has a deregulatory bias.

Second, having different regulations between countries is not necessarily a bad thing. It is often a reflection of cultural differences, as well as different values and principles. For example, the UK tends to have higher animal welfare standards than other countries. These standards mean that certain farming practices – like chlorine-washing chicken — are not allowed in the UK, to great public support. This should not be seen as anti-business red tape, but a reflection of certain moral viewpoints held by consumers and policymakers. Equally, the EU tends to have stringent environmental and health regulation where states have powers to ban products if there is a risk of harm (although the principle this is based on is itself under attack as part of the broader deregulatory agenda). The US and Canada do not adopt these principles in the same way, but instead allow risky products to be sold until the harm has been proven, often via negative impacts on consumers. But the view of trade negotiators is often that these differences ought to be scrapped for the supposed greater good of freer, increased trade.

Third, in deals like TTIP, regulations are decided behind closed doors without the oversight of elected representatives. This means citizens lose the ability to influence regulation through the ballot box. (De)regulation becomes a depoliticised process, carried out by trade specialists that cannot be held to account. In the absence of a proper political and democratic process for influencing these important decisions, there is a significant risk that businesses with greater resources are able to influence regulation in their interests – to the detriment of public and environmental protections.

This is increasingly the dominant approach to trade deals – and it raises obvious questions about how Britain will develop trade links post-Brexit. US agricultural businesses hope that ​‘regulatory cooperation’ will mean that British consumers will learn to love hormone-plied beef, and have made their ambition for lower standards in a future trade deal clear. At an age when trust in politics and institutions appears at an all-time low, it is vital that the threat to democracy that is deregulation is stopped in its tracks.

NEF are working with partners across Europe to halt the EU’s deregulation drive, and ensure that effective regulations are enforced in protection of the public interest. To find out more about the project see here.

The Trade Justice Movement campaigns on behalf of 70 civil society organisations for trade rules that work for people and planet.

Image: Pexels