* Businesses worried resistance to EU-U.S. talks will water
* Pact could be agreed by 2015, generate billions for both
By Robin Emmott
LONDON, June 24 Multinational companies will not
be given too much power by a trade agreement between the
European Union and the United States, the EU's trade chief said
on Tuesday, seeking to reassure consumer and environmental
groups opposed to the pact.
Washington and Brussels are negotiating the accord, the
world' biggest, which would create a market of 800 million
people. But popular opposition to a deal is growing.
EU leaders and U.S. President Barack Obama face the complex
task of showing they can juggle the demands of industry and
those of people worried about food safety and the environment.
"Our choice is not between a world where each does as he
pleases and a nightmare where we are ruled directly by
multinational corporations," EU Trade Commissioner Karel De
Gucht told businesses, trade unions and diplomats at Thomson
Reuters in London.
Protest parties from across Europe's political spectrum have
rallied against the proposed U.S.-EU deal, known as the
Transatlantic Trade and Investment Partnership. They performed
well in May elections for the European Parliament, warning
voters of dire consequences if an accord is sealed.
European consumer and environmental groups say the biggest
threat comes from a mechanism that would allow companies to
bring claims against a country if it breaches the trade treaty.
They say the mechanism for settling disputes would allow
multinationals to bully the EU's 28 governments into doing their
bidding regardless of environmental, labour and food laws.
The United States and the European Union deny that. They say
dispute settlement has been an important part of trade accords
since the North American Free Trade Agreement 20 years ago.
"There is nothing shocking here," De Gucht said. A mechanism
for settling investor-state disputes provides protection,
guarding companies against expropriation without compensation.
"I am not seeking to destroy anyone's soul," he said.
De Gucht has the option of removing a dispute mechanism from
the agreement, although he says Washington will not accept that.
For businesses, protecting their interests, ranging from
power grids to new factories, is crucial. Almost $3 billion in
goods and services are already traded each day between the
United States and Europe. Annual turnover of all foreign
companies in the European Union is around 3 trillion euros.
An EU-U.S. deal alone could add $100 billion a year to
economic output on both sides of the Atlantic.
But the issue of dispute settlement proved so contentious
that Australia rejected it in a trade deal with the United
States that came into force in 2005, arguing that its legal
system was robust enough to resolve problems.
Protests in Germany and France have led the European
Commission, the executive arm of the European Union, to open a
public consultation on the issue. Some 30,000 submissions have
been made to the consultation's website.
One way to keep both business and consumers happy would be
to safeguard the rule of law through the dispute-settlement
mechanism, De Gucht said. He would also like more transparency
in arbitration tribunals, which would help quieten the frequent
cry at anti-trade rallies that all disputes are resolved behind
the backs of ordinary citizens.
(Reporting by Robin Emmott; Editing by Larry King)