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The TTIP will lead to 600 000 job losses in the EU

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Publico | 7 March 2015

Freely translated by Anoosha Boralessa in April 2015. Not reviewed or revised by or any other organization or person

The TTIP will lead to 600 000 job losses in the EU

Manuel Ruiz Rico

A study presented in the European Parliament predicted that the controversial agreement that Brussels and Washington are negotiating behind closed doors would bring about losses in jobs, economic capacity, salaries as well as exports.

The TTIP will lead to the destruction of 600, 000 jobs in a decade in Europe. 90,000 of these will be in countries of the South. Northern Europe will also see its GDP drop by up to 2% and families losing their purchasing power. In France, which is often the country most badly affected, each worker will lose 5,500 euro which will result in a fall in state revenues of up to 0.64% GDP.

This is the data that emerges from an impact study on the trade and finance agreement between the EU and the US. An economist, Jeronim Capaldo, Tufts University, Boston and the International Labor Organization (the ILO) carried out the study. The study was presented this Thursday during a series of lectures on the controversial TTIP (Transatlantic Trade and Investment Partnership) organized by a group of the Izquierda Unitaria Europa (GUE/NGL) on the premises of the European Parliament in Brussels.

Capaldo: “It will decrease the economic capacity of families which will have a knock-on-effect on consumption and government revenues. This may increase debt.” This data sharply contrasts with those presented in the principal study carried out by the European Commission. The latter forecast all types of positive effects including “a 28% increase in EU exports which will bring about an additional 187 000 million euro for member states’ economy.”

Yesterday Capaldo showed that he was skeptical abut the forecasts in the official study that is staunchly defended by liberals, conservatives and social democrats, the drivers of the TTIP in the Eurocamara. The Centre for Research on Economic Policies in London produced the study in 2013, criticized by various organizations and parties critical of the TTIP and financed, mainly by central banks of different countries.

A decrease in purchasing power

According to the North American economist, the study uses a framework that assumes that economic performance was going to be ideal. Capaldo had difficulty with this. He reasons: “this is highly problematic because there is persistent unemployment in Europe and workers have lost purchasing power as their salaries have tended to be low.”

Capaldo also criticized EU studies and others that have produced similar results for adopting the same approach. He pointed out “but what is worrying is also this: while they forecast some important increases in exports outside the EU, they make minimal projections for intra – European trade. This should startle if the objective of the EU is integration and not European disintegration.”

The economist added that one of the effects forecast for the TTIP was that competitive pressure will be increased. This increase in competition for the EU will have negative consequences on the division of work and labor costs. These will tend to decrease in Europe. He elaborated: “This will reduce the economic capacity of families and therefore consumption and government revenues. Finally, it may lead to an expansion of the debt which will increase our reliance on creditors.”

To respond to these arguments, Lucien Cernat, the chief economists of the Directorate-General for Trade of the European Commission which is negotiating the TTIP, brought to the table ideology rather than arguments or studies. He said: “Until we [do not] know the final comma of the TTIP, we cannot have reliable data on its economic repercussions.”

To discredit the Capaldo report he added: the balance between trade and employment is highly complex and Capaldo’s model is not fit to analyze any trade agreement much less the most important one that it is going to be signed in the world.” However he stopped there, with only his words to back his arguments — not a single statistic.

At least Joseph Francois, author of the Commission’s study, pointed out that NAFTA, the trade agreement that has already been signed between the United States and Canada “created 250,000 jobs in the US.” He used this as a basis for predicting that a similar agreement could lead to the same thing happening in Europe. Of course it is true that Francois failed to mention that NAFTA also brought about the destruction of almost a million jobs in Mexico, a figure that neither the official authorities nor the defendors of the TTIP are accustomed to emphasizing.

More speculation

Then Alex Izurieta, an UNCTAD (the United Nations Conference on Trade and Development) economist also seized the occasion to weigh in against the TTIP. Izurieta assured that what worried him the most was not eliminating customs between both shores of the Atlantic “for these are already near to zero” and nor even the trade aspects of the treaty.

“What concerns me the most is the liberalization of capital it will bring about. It is already liberalized in the EU and the US but the trend is for even more liberalization. This is very worrying because if the tendency is to reduce household demand due to pressure on low salaries, the majority of investments will seek out more speculative sectors.

Before this overview, Lola Sanchez Caldentey, a Euro MP of Podemos, one of the parties organizing this event, pointed out that the TTIP “will convert big business into co-legislators through a mechanism called the Regulatory Cooperation Council. That is nothing but an inquiry that will keep a watchful eye to ensure laws are 100% of the neo liberal market school.”

 source: No al TTIP