Cameron's indulgence of Tory fantasies is weakening his hand in Europe

The PM's Ukip-style positioning on immigration is viewed as weakness or blackmail by the rest of the EU.

The best part of a year has passed since David Cameron’s speech promising to renegotiate the terms of Britain’s European Union membership and to put the ensuing deal to the country in a referendum. Since then, there hasn’t been much clarity about the kind of reforms that would persuade the Prime Minister to campaign for the "in" side.

We have learned something about what he doesn’t like. Or rather, we know that he has located the feature of current EU membership that seems most to inflame public hostility – free movement of workers between member states – and wants to be seen to be doing something about it.

On 1 January 2014, transitional controls that have limited the rights of Romanians and Bulgarians to live and work in the UK will be lifted. Nigel Farage is terribly excited by this prospect since it effectively launches Ukip’s campaign for May’s European parliamentary elections without him having to lift a finger. The Tories are putting in all the groundwork, ramping up the issue, reinforcing the impression that a horde of welfare-snaffling foreigners is massing on the border. Voters who are most animated by fear of a migrant tsunami will not believe the Conservatives can hold back the tide.

And they can’t. Cameron understands that free movement is an integral part of the single market. He has given private assurances to the European Commission that Britain will do nothing unilaterally that would breach existing rules. What he hopes to do is persuade other member states that those rules can, in time, be amended. In all likelihood that would mean adjustments to the accession arrangements for any future candidates for EU membership. Retrospectively clawing back rights from existing members or rewriting the very basis on which workers move around the bloc would require treaty revision on a scale that no other country wants to consider.

In other words, when Cameron says he is getting tough over the arrival of Bulgarians and Romanians in two weeks time, what he actually means is that he intends to start a conversation about a possible negotiation about what might theoretically happen with some Croatians at an unspecified point in the future.

Making announcements that sound like Ukip propaganda but without the policy of EU exit to support them is ultimately just an incitement to vote Ukip. Meanwhile, briefings from the Home Office that something drastic will be done serve only to nurture in Tory eurosceptic hardliners the hope that, if they push hard enough, Conservative policy will merge with Farage’s. (The government’s Immigration Bill has already been blown off course by a Tory backbench amendment calling for Britain to renege on its treaty obligations to Romania and Bulgaria.)

This situation is a source of bafflement and rising alarm in other European capitals. Most EU leaders and Brussels officials are prepared to engage with Cameron’s renegotiation ambitions to some extent because, by and large, they want Britain to stay in and they recognise that institutional reform is needed. It helps that the Prime Minister now talks more about pan-European changes than about unilateral "repatriation" of powers. When Cameron goes to Brussels, the carving out of custom-made exceptions for the UK – enjoying all the trading perks of open borders without any of the accompanying social and employment protections – is not seriously on the agenda. Yet that is the only kind of deal that many Tory sceptics would consider acceptable.

When Cameron allows his party to dwell on fantasies of a bespoke British EU package, the rest of Europe starts to lose patience. It is seen as either weakness – a failure to confront the Tory party with a realistic account of what is available in "renegotiation" – or it is viewed as a cynical game, ramping up euroscepticism, making the threat of exit seem ever more likely in the (mistaken) belief that this strengthens Britain’s hand. "We don’t like to use the word blackmail, but sometimes it is the word that comes naturally to your lips," one Commission official tells me.

Perhaps the most surprising element in all this is the Tory party’s willingness to indulge the pretence that Cameron has even embarked on a process of giving them what they want. There is really no evidence that he has. There will be a referendum in 2017, if the Tories form a government after the next election – and that is far from certain. Meanwhile, it remains the Prime Minister’s stated policy to support continued EU membership in that vote. When does he suppose he will fit in the negotiations to secure a deal that doesn’t tear his party in half? He shows no intention of starting soon. Is such a deal even possible? The rest of Europe – led by Germany – is eager to find some accommodation, but they can’t help if they don’t really know what it is that Cameron wants. (And there are divergent views between the parties in Germany’s ruling coalition and within them of how far Berlin should go to accommodate Britain.)

Cameron’s European strategy as it currently stands is to ramp up domestic expectations of a deal that fundamentally changes the basic principles on which the EU operates, while doing none of the diplomacy abroad to make such an outcome even remotely plausible. It is the approach a Prime Minister would take if he didn’t really care one way or the other if Britain stayed in the EU or drifted towards the exit. It is the course that might be expected from a Prime Minister who would rather not engage with the arguments if doing so conflicts with the task of appeasing habitually disloyal backbenchers and fomenting Ukip-friendly, anti-EU hysteria in the process. As a plan for leading the Conservative party that is short-sighted enough. As a way to lead the country it is desperately irresponsible.

David Cameron speaks during a press conference at an EU Council meeting on October 25, 2013. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Is TTIP a threat or an opportunity?

TTIP offers potentially huge opportunities to both Europe and the US - we should keep an open mind on what the final agreement will mean.

Barack Obama made it abundantly clear during his visit to the UK that if Britain left the European Union then it would be quite some time before we would be able to negotiate a trade deal with the United States. All the more reason to examine carefully what the Transatlantic Trade and Investment Partnership (TTIP) will mean for the UK. For Labour this is especially important because a number of trade unionists and Party members have expressed concerns about what TTIP could mean.

The economic worth of such a partnership between the European Union and the US has been questioned and it has been frequently stated that TTIP could give multinational companies unprecedented influence and undermine the British NHS.

With regard to the economic benefits of TTIP there are few that would argue that there are no economic gains to be achieved through the partnership. The question is to what extent economic growth will be stimulated. On the positive side the European Commission has argued that an agreement could bring economic gains of between €68 billion to €119 billion per year to the EU (0.3% to 0.5% of GDP) and €50 billion to €95 billion (0.2% to 0.4% of GDP) to the US. For Britain, this means that an agreement could add up to £10 billion annually to the UK economy.

On the negative side, a study commissioned by the European United Left/Nordic Green Left Group in the European Parliament has maintained that TTIP would bring only “limited economic gains”. These gains have to be weighed, it was argued, against the “downside risks”. Those risks have been identified as coming from the alignment of standards in areas such as consumer safety, environmental protection and public health.

These are important concerns and they should not be quickly dismissed. They are made all the more important because the existence of already low tariffs between the EU and the US make the negotiations to reduce non-tariff barriers to trade all the more significant.

There are a number of areas of concern. These include food standards and the regulation of GM crops and the worry that the EU’s focus on applying the environmental precautionary principle might be weakened. The European Commission, which has a responsibility for negotiating TTIP on behalf of the EU, is however acutely aware of these concerns and is mindful of its legal responsibility to uphold, and not to in any way weaken, the agreed legal standards to which the EU adheres. A concern has been expressed that irrespective of what European law may say, TTIP could undermine those standards. This I find difficult to accept because the ‘rule of law’ is absolutely central to the negotiations and the adoption of the final agreement.

But the EU is mindful of this concern and has brought forward measures which have sought to address these fears. The latest proposals from the Commission clearly set out that it is the right of individual governments to take measures to achieve public policy objectives on the level that they deem appropriate. As the Commission’s proposal states, the Agreement shall not affect the right of the parties to regulate within their own territories in order to achieve policy objectives including “the protection of public health, safety, environmental or public morals, social or consumer protection or promotion and protection of cultural diversity”.

Of course, this is not to suggest that there should not be vigilance, but equally I believe it would be wrong to assume the theoretical problems would inevitably become reality.

The main area of concern which has been expressed in Britain about TTIP relates to the NHS and the role of the private sector. Under the Investor-State Dispute Settlement (ISDS) provisions investors would be able to bring proceedings against a foreign government that is party to the treaty. This would be done in tribunals outside the domestic legal system. If a Government is found to be in breach of its treaty obligations the investor who has been harmed could receive monetary compensation or other forms of redress.

The concern is that the ISDS arrangements will undermine the ability of democratically elected governments to act on behalf of their citizens. Some have maintained that measures to open up the NHS to competition could be made irreversible if US companies had to be compensated when there is a change of policy from a future Labour Government.

In response to these concerns the European Commission has proposed an Investor Court System. This would be based on judgements being made by publicly appointed and experienced judges and that cases would only be brought forward if they were precisely defined. Specifically, it is proposed that cases would be limited to targeted discrimination on the basis of gender, race or religion, or nationality, expropriation without compensation or the denial of justice.

Why, you might ask, is there a need at all for a trans-national Investor Court System? The reason in part lies in the parlous state of the judicial systems in some of the relatively recent EU accession countries in Eastern Europe. To be frank, it is sadly the case that there are significant shortcomings in the judiciary of some countries and the rule of law is, in these cases, more apparent than real. It is therefore not unreasonable for investors to have an international framework and structure which will give them confidence to invest. It should also be noted that there is nothing proposed in TTIP which contradicts anything which is already in UK law.

We need to remember too that this is not only about US investment in Europe, it is also about European investment in the US. No US-wide law prohibits discrimination against foreign investors, and international law, such as free trade and investment agreements like TTIP, cannot be invoked in US courts. The Investor Court System would therefore benefit European companies, especially Small and Medium Sized Enterprises. 

It is of course impossible to come to a definitive conclusion about these provisions because the negotiations are ongoing. But it would surely be unwise to assume that the final agreement would inevitably be problematic.

This is especially true regarding the NHS. Last year Unite the Union commissioned Michael Bowsher QC to provide an opinion. His opinion was that “TTIP does pose a threat to a future government wishing to take back control of health services”. The opinion does not express a view on whether TTIP will “force” the privatisation of the health service (as some have claimed) and Bowsher admits that much of the debate is “conducted at a rather speculative level” and he has been unable to produce any tangible evidence to support his contention about future problems. On the other hand, it is the case that there is nothing in the proposed agreement which would alter existing arrangements for compensation. There are of course many legal opinions which underpin the view that existing legal arrangements would continue. While I accept that it is theoretically possible for the Bowsher scenario to occur, it is nevertheless extremely improbable. That is not to say that there ought not to be watertight safeguards in the agreement, but let us not elevate the extremely improbable to the highly likely.

A frequently heard criticism of TTIP is that the negotiations between the US and the EU are being conducted in ‘secret’.  Greenpeace, for example, has strongly sought to make this a central part of their campaign.  Although the Commission publishes EU position papers and negotiating proposals soon after they are tabled, it is impossible to see how complex negotiations of this kind can be practically conducted in public.  However, I believe that the draft agreement should be made public well before the final decisions are taken.

Once the negotiations have been concluded, the draft agreement will be presented to the European Council and the European Parliament, both of which have to agree the text. The European Council is, of course, made up of representatives of the governments of the EU and the European Parliament is democratically elected. Both Houses of the British Parliament will also debate the draft and there will need to be parliamentary approval of the agreement.

Transparency and democratic scrutiny are two things which there cannot be too much of. But, in practical terms, it is difficult to see how there could be more of either without making it nigh on impossible to secure such a complex agreement. Unite, of which I am a member, and others are quite right to express their concerns about TTIP, but let’s not exaggerate the potential difficulties and let’s not assume that the worst case scenario will always come about. TTIP offers potentially huge opportunities to both Europe and the US, and we should therefore at least keep an open mind on what the final agreement will mean.

Wayne David is the Labour MP for Caerphilly and is Shadow Minister for Political Reform and Justice. He is a former Shadow Europe Minister and was a junior minister in the last Labour government.