Critics of trade talks warn of reckless deregulation

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Lowering those barriers too far could give foreign interests new powers to sue the U.S. government and enable an explosion of unchecked “fracking,” while at the same time, locking in lax food and chemical regulations, the critics say.

More than 60 pro-regulation groups from the United States and Europe urged strong public protections in a letter to President Obama, European Commission President José Manuel Barroso and European Council President Herman Van Rompuy.

In it, they say business interests have dominated the process leading up to the talks and claim they are intent on undermining regulations designed to protect consumers.

“Their agenda is to use these negotiations as a means to pursue deregulation efforts that have been unsuccessful to date,” the groups wrote.

Of particular concern, they said, is the likelihood that negotiators will include in the agreement an investor-state dispute settlement provision, which would allow foreign investors to challenge U.S. government decisions under international law.

“Investor-state rules could erase vital public health and safety standards simply because foreign corporations argue that they would lower their profits,” said Ilana Solomon, Sierra Club’s trade representative.

Solomon also said the negotiations could lead to significantly increased U.S. hydraulic fracturing or fracking activity, a drilling method that has resulted in a U.S. oil and gas production boom but has also raised fears of water and air pollution.

The EU is eager to step up imports of U.S. natural gas, in part because its own member states do not allow fracking, she said. Solomon said the agreement must contain language giving the U.S. government the ability to maintain control over gas exports.

“We cannot afford unchecked exports of fracked gas,” she said.

The groups said they fear the talks would yield “harmonized” regulations that defer to whichever of the trading partners has the lowest standards. In some areas, U.S. standards are weaker than European ones, and the groups said deferring to them would be tantamount to blocking ongoing efforts to improve certain rules.

For example, regulations involving the slaughter of livestock, as well as the use of hormones and genetically engineering in food, are far more stringent in Europe, said Lori Wallach, director of Public Citizen's Global Trade Watch.

Harmonizing regulations to American standards would not do enough to protect consumers across North America and Europe, she said.

Similarly, the EU boasts stronger rules to protect public health and the environment from hazardous chemicals, said William Waren, trade policy analyst for the group Friends of the Earth.

Thus, the agreement could give multinational chemical companies “an effective weapon, to roll back progress in the EU over recent years.

“It could result in dangerous deregulation,” he said.

It remains to be seen whether the groups' concerns will be addressed in the months ahead. But at the outset of the talks, U.S. Trade Representative Michael Froman signaled a willingness to smooth over regulatory differences in an effort to ease the flow of commerce between across the Atlantic. 

“We have the opportunity to work together to establish and enforce international norms and standards that will help inform and strengthen the multilateral, rules-based trading system,” Froman said Monday, according to prepared remarks.

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