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9 Jul, 2015 05:07

EU Parliament backs TTIP resolution

EU Parliament backs TTIP resolution

Despite vocal criticism, the EU Parliament has approved a non-binding resolution on the controversial Transatlantic Trade and Investment Partnership, bridging a gap in protracted negotiations on the secretive trade pact between the EU and the US.

The resolution was approved by the majority of the parliament with 436 'Yes' votes coming up against 241 'No' votes in Strasbourg on Wednesday in hopes of influencing the TTIP negotiations between European Commissioner for Trade Cecilia Malmstrom and the USA. Washington insists that for negotiations to be successful a dispute body must be incorporated into the final agreement.

READ MORE: Secretive trans-Atlantic trade pact faces global day of action (PHOTOS, VIDEO)

The resolution, introduced by European Parliament President Martin Schulz, seeks to replace the Investor State Dispute Settlement (ISDS) mechanism a new “more transparent” system of dispute resolution instead of using private arbitration panels to challenge government in a trade disagreements.

The vote signals “that the old system of investor-state dispute settlement should not and cannot be reproduced in TTIP,” Malmstrom said in a statement.

This system should be “subject to democratic principles and scrutiny”, in which disputes are processed “in a transparent manner”, by “publicly appointed, independent professional judges” and “in public hearings”. It should include “an appellate mechanism,” respect the jurisdiction of EU and member state courts and ensure that private interests “cannot undermine public policy objectives”, says the text.

But after months of bitter debate, while the centre-right parliamentarians see the trade deal with US as good for business, the Greens and far-left and far-right politicians see it as a threat to EU laws. Critics say it would allow US companies to challenge European food and environmental regulations on the grounds that they restrict trade.

Proponents of the deal say that it will boost GDP in the EU by €100 billion ($110 billion) and in the US by more than $100 billion, as well as create over 700,000 jobs in America. More free trade would increase investment, and widening export industries would add jobs.

But opponents of TTIP warn that these figures are not realistic and that cheaper goods and services would hurt the EU and help the US. One of the most contentious issues is also whether TTIP will weaken Europe’s rules over genetically modified organisms (GMOs).

READ MORE: Obama signs bill giving himself fast-track powers for trade deals

“Parliament’s call today for a 'new system' must be heard, and it will be,” Malmstrom said. “I will now press ahead to flesh these out, and transform them into legal proposals, so that these further reforms can be incorporated into Europe’s proposals for TTIP.”

Boosting trade with the US may also come at a cost for European countries that may need to compromise on health, safety and environmental regulations. Following the passage in parliament the UK Independence Party (UKIP) criticized the decision.

“The people interested in the protection of the NHS, in consumer rights and a legal system fair to small businesses will be angry with this decision of the European Parliament to pass TTIP,” said UKIP trade spokesman William Dartmouth MEP. “This is a very damaging vote by MEPs which will hurt free trade and the financial well-being of patients, consumers and workers.”

While TTIP between the US and Europe would create the world's largest free trade zone many Europeans believe that the agreement will elevate corporate interest above national interest. As a result demonstrators have taken place all across Europe, including in France, Germany, Italy, Spain, Greece, Netherlands, Poland, the Czech Republic, and Scandinavia.

The next round of TTIP negotiations is scheduled for July 13-17 in Brussels