At the heart of every political decision is the question “will this get me re-elected?”  Politicians work in four or five year cycles, and whether or not we like it, the question of re-election will be central to their thinking.  In order to get re-elected, he will always attempt to get a positive financial gain for his electorate, and any ‘hard’ decisions will always be accompanied by some form of bung.

A good example of this is the Miners’ Strike.  The Thatcher Government looked at the size of the subsidies being paid to the mines to keep them in business (world coal was roughly £30 a tonne, yet the UK mines were getting guaranteed £45 a tonne) costing the consumers around one and a half billion pounds annually, and decided action was required.  The mines shut, jobs were lost.

This was a rational decision, and a good example of how free trade works.  What followed was not.  In the name of helping the mining communities, Government pumped billions into the region.  Billions, of course, that came from the richer South.  This stimulus, like all stimuli packages, was doomed to failure and Mrs Thatcher knew it. It was simply a very expensive Public Relations exercise in the name of national self-interest.

So this brings me to the on-going EU/US Transatlantic Trade and Investment Partnership (TTIP). What is the TTIP? According to the European Commissions’s website,

“The Transatlantic Trade and Investment Partnership (TTIP) is a trade agreement that is presently being negotiated between the European Union and the United States.  It aims at removing trade barriers in a wide range of economic sectors to make it easier to buy and sell goods and services between the EU and the US.  On top of cutting tariffs across all sectors, the EU and the US want to tackle barriers behind the customs border – such as differences in technical regulations, standards and approval procedures.”

Something, then, that potentially benefits the whole of the EU – even if all the talks are held in secret.

Der Spiegel notes that:

“The manner in which TTIP is being negotiated is also not exactly increasing faith in the process. Everything related to the talks is being kept highly classified. Even though the deal will affect the futures and interests of 500 million EU citizens, member states agreed to keep them in the dark about TTIP negotiations. All papers, documents, emails and negotiating minutes have been marked secret. Only the senior-most party members in the European Parliament’s International Trade Committee are allowed to see documentation relating to the negotiations and they are forbidden from discussing what they see.”

Hardly something that makes me, a libertarian, comfortable.  Nevertheless.

The talks began last July, and are expected to conclude later this year (they won’t, of course).  From a free trade perspective it is hard for me to object to something that proposes “regulatory coherence”, although this does tend to generate a higher bureaucratic cost. Nor can I oppose anything that proposes an end to “technical barriers to trade”, something that Europe and the US have been up to for years and years. But I am incredibly sceptical of anything that promotes “sectoral approaches” as TTIP does, as a transfer of technology reduces entrepreneurial incentive.

As the negotiations have progressed, there have been some casualties to free trade; France has successfully claimed a special case for its film industry and is allowed to carry on subsidies there, and there have been claims that the TTIP would allow the US to enjoy a trade advantage in the foods sector by being able to export genetically modified (GM) crops into the EU, worrying both NGOs and farmers.  There have also been suggestions from UK unions that TTIP could force some privatisation of the NHS.  By the way, all these fears are all based upon hypothesis given the secretive nature of the talks.

However, this week, the talks took an alarming turn for the worse, and were suspended for three months to allow for a public consultation.  European Commissioner Karel de Gucht halted the talks to secure what he considered to be the right balance between protecting European investment interests and upholding governments’ right to regulate in the public interest.  In other words, the EC is balking at the prospect of the European Way of Doing Things being undermined.  This is typically phrased as the European Social Model, but really means that, in order to buy votes, the governments reserve the right to plough money into poor areas away from rich and successful areas, just like Mrs Thatcher did after the Miners’ Strike.

So where does that leave UKIP?  Given that this would be the world’s largest ever free trade agreement, we really should have an opinion.  After all, we keep banging on about getting bilateral agreements in place once we leave the EU.  Is TTIP a good blueprint because it brings down barriers to trade and hopes to speed up transaction rates? or is it a bad one because it would prevent the UK from ‘regenerating’ a region once the mill has closed?  This type of question is timely, as right now UKIP are seeking the Labour vote, one that, on the face of it, would be more suited to the European Way of Doing Things.

 

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