For lower wages, higher inequality and more austerity – vote TTIP
Date: 7 November 2014
A new report on the EU-US trade deal – known as TTIP – has made some dire predictions about the long-term impact of the deal. The peer-reviewed paper from Tufts University (Massachusetts, USA) predicts that over 10 years the average working Britain would be over £3,300 worse off as a result of the lower wages which TTIP will fuel.
The paper also predicts that Europe will lose nearly 600,000 jobs as a result of the deal – that’s more than job losses in the crisis years of 2010 and 2011 – and that it will mean lower growth and, incredibly, would even mean lower net exports for Europe.
Report author Jeronim Capaldo suggests greater exposure to fluctuations in the US economy, together with losses in jobs and lower tax take, will lead to higher government deficits, the greater use of austerity policies and the exacerbation of social tensions.
So, what’s to like? Well the Tufts report shows that not everyone will lose out. The most telling prediction is that TTIP will shift even more of the economy from labour towards capital. That’s to say, the amount of an economy’s wealth going to ordinary workers in wages will fall proportionally to the share accounted for by profits, rents, interest and dividends. The shift in the UK is predicted to be a whopping 7% over 10 years.
No wonder TTIP has been called a trade deal of the 1%. No wonder, also, that in spite of scant media coverage 850,000 European citizens have signed a petition against TTIP in just 3 weeks.
What’s interesting is that serious proponents of free markets are also coming out against TTIP. The Economist has decried the ISDS mechanism which allows foreign corporations to sue national governments for damaging their profits. Meanwhile, newly elected UKIP MP Douglas Carswell has said “TTIP is not about free trade. It is crony corporatism at its worst.”
The leadership of the three main parties remain wedded to TTIP just as they do to our desperately unequal, undemocratic and crisis-prone economic model. While Labour has softened its line on ISDS, the Government sent a letter to EU Commission President Juncker two weeks ago to dissuade him from dropping ISDS in the face of public disquiet. But there are also politicians from all parties who are increasingly uneasy and more and more pressure is being applied inside and outside parliament.
If we needed confirmation that we are right to oppose TTIP, the Tufts report is it.