An Imperial Transatlantic Market
by Jean-Claude Paye
Jean-Claude Paye is a Belgian sociologist. He is author of Global War on Liberty (New York: TELOS Press, 2007). Translation by James H. Membrez.
The process of establishing a transatlantic free trade area is the inverse of the process that led to the construction of the European Union. While the European common market is an economic structure based first on the liberalization of trade and then on the creation of a common currency, the transatlantic free trade area is above all a political construction. The exercise of sovereignty by US authorities over European populations and the legitimation of this authority by European institutions are the conditions for establishing new property and trade relations. This could be considered the end of self ownership, i.e., the transformation of personal data into commodities and the elimination of all barriers for this free trade area.
It took thirteen years of negotiations between the European Commission and the US Secretary of Commerce to accomplish this. In May 2008, a resolution in the European Parliament1 provided a new legitimation for the project to create a transatlantic free trade area. It envisages the elimination of trade barriers, be they customs, technical, or regulatory, as well as the liberalization of public, intellectual property, and investment markets. The agreement anticipates the elimination of all non-tariff barriers thanks to the gradual standardization of regulations and, above all, the mutual recognition of regulations in force on both sides of the Atlantic. In reality, this means that the European Union countries are going to integrate American standards and that law in the Old World is going to be adapted to this change.
The first stage in the establishment of this free trade area occurred when the “Open Sky Agreement” came into effect on March 30, 2008. The aim of this agreement is to open up transatlantic air transport business between the two continents.2 As for financial services, an unfettered market is expected to come into effect in 2010.
The two areas that are supposed to be liberalized before 2015, air traffic and financial markets, are those over which the US authorities already exercise tight control, due to the existence of cooperation agreements between the European Union and the USA: the agreement on the transfer of air passenger PNR data and the agreement on “Swift” financial data.
The Transfer of Air Passenger PNR Data
Following a provisional agreement with the Commission of the European Union, US Customs has, since March 5, 2003, access to the reservation systems of airline companies located in the European Union. As a result, it is possible for Customs agents to inspect data linked to the conduct of ordinary passengers, those not listed as dangerous or criminal, in order to verify whether or not a particular passenger could constitute a potential threat in relation to a theoretical pattern. The objective is to establish “risk profiles.”
This temporary agreement became permanent with a 2004 agreement. On July 23, 2007,3 the European Union and the United States signed a new agreement that authorizes the transfer of PNR information, which includes last and first names, address, telephone number, nationality, passport number, sex, addresses during the passenger’s stay, the complete travel itinerary, contact persons in case of accident, medical data, credit card number, and special meal requirements that can reveal the passenger’s religion.
The 2007 agreements strengthen the 2004 measures. According to the principle of availability, all of the data may be consulted by any US agencies involved with the anti-terrorist struggle, while, on paper at least, the old agreements reserved this privilege only to customs offices.
There is a fifteen-year retention period for the information. Moreover, this data could be placed into “active analytical databases” for seven years, thereby allowing a massive profiling.
American officials have supported the legitimacy of transmitting this information to third countries. The latter would have access to the data under security conditions established by the US Department of Homeland Security. Companies are obliged to handle the PNR data stored in their computer reservation systems in accordance with the demands of American officials “in compliance with American legislation.”
The administration of the United States reserves the right to make its own interpretation of the agreement concluded between the two parties. This interpretation is contained in a letter found in the appendix. This has a twofold advantage for the Department of Homeland Security. On the one hand, it can define the content of the agreement unilaterally (conditions for handling, transferring, destroying, and expanding the scope of the data). On the other hand, the commitments to protect the data and defend the rights of European passengers have no binding force and can be modified unilaterally.
Information concerning racial origin, political opinions, and sexuality can be used in “exceptional cases” and it is the Department of Homeland Security itself that determines what constitutes an exceptional case.
Michael Chertoff, Secretary of the Department of Homeland Security, declared during his appearance before the Committee on Civil Liberties of the European Parliament on May 14, 20074 that “the PNR data were protected by the US Privacy Act and the Freedom of Information Act and that these laws provided for substantial recourse to the courts.” However, these “guarantees” are in reality only window-dressing. On the one hand, what is conceded are not rights but a favor granted by the American Administration. The privilege of having recourse to US courts granted by the Administration to passengers from the European Union, which was included in the letter placed in the appendix and not in the text of the agreement itself, can be called into question at any time. On the other hand, the right of American citizens to have recourse to the courts is purely formal. Since the PNR agreement and its domestic provisions have not been ratified by Congress, American citizens cannot assert their rights before the courts. Hence a possibility of litigation that is granted, in practice, does not exist.
The Transfer of Financial Data
On June 23, 2006, the New York Times revealed the existence of a CIA surveillance program for international financial transactions. The newspaper revealed that the Belgian company Swift has, since the September 11 attacks, transmitted several million items of confidential data concerning the activities of its clients to the US Treasury Department.
Swift, an American company incorporated under Belgian Law, manages the international exchanges of some eight thousand financial institutions located in 208 countries. It undertakes the transfer of data in connection with payments or securities, including international currency transactions, but does not actually transfer money. All of the data are stored on two servers. One is located in Europe, the other in the United States. Inter-bank messages exchanged on the Swift network contain personal data, protected by Belgian and European law.
This company is also subject to US law because its second server is located in US territory. The company has chosen to violate European law so as to submit to the injunctions of the executive branch of the US government. Despite recognition of multiple violations of Belgian and European Community law, the Belgian authorities have always refused to prosecute this company.
Recall that the Echelon system and the NSA surveillance program allow for the seizing of electronic information, including Swift data, in real time. The interpretation of that data is all the easier since the encryption systems for data connected with worldwide inter-bank transactions are American standards patented in the USA. In other words, what the US executive branch has handed over to itself is the data that it already possesses or can easily obtain on its own. The detour, above all, is for the purpose of legitimizing its operations.
The cessation of transfers to US Customs has never been considered. In order to conform formally to the European directive concerning data protection, in 2007 Swift adhered to the principles of Safe Harbor, which “guarantees” that the data stored in the American server are protected by regulations similar to those in force in the European Union. Adherence is carried out by the self-certification of the company in question. Safe Harbor leaves an individual affected by Swift powerless.5 It is up to the affected individual to verify that the US agency handling the data is in compliance with regulations. It is also up to the same affected individual to find and notify an independent regulatory authority capable of handling his or her case. If, against all odds, the affected individual or company gets a chance of pointing out breaches and initiating legal proceedings, the US Administration can still claim that the information in question is a “state secret” in order to prevent such proceedings.
As for the section of the June 2007 “agreement”6 that authorizes the seizure of data by the US, it amounts to a unilateral American undertaking. Therefore, this is not a bilateral agreement, as the European Parliament had hoped, but a text the content of which can be modified without needing the consent of both parties. The US Administration can, without consulting the other party, change its commitments.
In the letter referred to above, the Treasury Department gives purely formal guarantees concerning the use of the data. As a guarantee of respect for the confidentiality of information, the American side emphasizes the existence of several independent levels of control. The text mentions “other independent official agencies” as well as an “independent audit office.” That one agency can be considered to be independent from another agency of the same state says a lot about the formality of this autonomy. The same observation can be made concerning the independence of the auditor. Thus, when news of the Swift affair broke in June 2006, the US government had already declared that there had been no abuse in the use of the data, since access to the latter was controlled by an “outside” private company, the Booz Allen Hamilton group, one of the most important companies under contract with the US government. Here, the interpenetration between public and private is systematic.
The Widespread Handover of Personal Data
Through these agreements on the transfer of financial information and PNR data, the Council of the European Union has involved its citizens in a system that grants American authorities the possibility of making changes to the transfer procedures in their own interests. The European Union is gradually abandoning its own legality in order to allow American law to be applied directly over Union territory. We are thus witnessing the establishment of an imperial political structure in which the US executive branch gives the orders and European institutions simply legitimize those orders to their populations.
These texts do not admit two sovereign powers. There is only one party, the US Administration, which reaffirms its right to access the personal data of Europeans. In a unilateral step, it concedes formal “guarantees” that it can also unilaterally change or abolish. The US executive branch thus directly exercises sovereignty over European populations.
These agreements are only the first step. The United States wants to force a general transfer of personal data. An internal report written jointly by negotiators from the Attorney General’s Office and the Department of Homeland Security, on the American side, and from the Committee of Permanent Representatives (COREPER)7, from the European Union side, anticipates an agreement in this respect in 2009.
Here it is a question of authorizing the handing over of a whole set of administrative and legal data, including data pertaining to “defense of the territory.”The framework is no longer limited to the “fight against terrorism” but concerns “the prevention, detection, suppression, investigation, or prosecution of any criminal offense or violation of law related to border enforcement, public security, and national security, as well as for non-criminal judicial or administrative proceedings related directly to such offenses or violations.”8 Any offense, no matter how minor, is involved. The negotiators are already in agreement on twelve main points. In fact, it involves regularly handing over to the US authorities private information such as credit card numbers, details of bank accounts, investments made, travel itineraries, and internet connections as well as personal information such as race, political opinions, customs, or religion. As far as the former German Presidency of the EU is concerned, DNA and biometric data are also transferable information.
A Free Trade Area for Personal Data
For Washington, an agreement ensuring the widespread transfer of personal data that is no longer limited to specific items would be a significant advance. The EU has stricter rules concerning the states’ and private companies’ access, collection, and transfer of the private data of EU citizens. This problem had already come up during the earlier agreements on financial and PNR data. This contradiction was “resolved” by the formal guarantees granted by the American authorities, which the Europeans wanted to believe in. In the end, it is a matter of the real alignment of the European Union with US procedures.
For the American negotiators, such an agreement could transform international law concerning access to data connected with private life. The Americans incorporate their demands into the economic context. For them, “the reason it’s a big deal is that it is going to lower the whole transaction cost for the U.S. government to get information from Europe.”9
Thus, the issue is not about the ability to transfer such data to American authorities, which is already widely carried out, but how to hand the data over to the private sector legally or, rather, how the American authorities can openly transfer it to the companies of their choice as well as to foreign governments. The purpose is to eliminate any legal obstacle to the dissemination of information and guaranteeing the lowest possible costs. Above all, it is necessary to maintain the profitability of the market.
In the agreement on the transfer of financial information, any use of information for commercial or industrial purposes was formally excluded. This commitment reveals the virtual character of the guarantees granted by the US Administration because the “Freedom of Information Act”10 requires federal agencies, in the name of freedom of trade, to transfer certain information to private American companies upon request. A clause like this is a veritable disavowal of the informal, but legal, possibilities already offered to American companies to obtain access to data stored by customs offices or any other institution.
If this proposed general transfer of personal data ever occurs, a new step will have been taken in the European recognition of American legislation in this area and thus in the integration of the Old World into this free trade area for personal data initiated by the American authorities.
Alignment with American Law
The main legal obstacle that has come up results from the fact that the European countries have formally independent agencies responsible for verifying that personal data are used legally, while in the United States such procedures do not exist. However, the European negotiators have abandoned their own legality and accepted the American criteria. They assume that the executive branch will monitor itself, thinking that the internal monitoring system of the US government offered sufficient guarantees. The Europeans have accepted that the data concerning “race,” religion, political opinions, health, and sexuality may be used by a government so long as “the domestic laws provide appropriate protections.” But this agreement does not clearly define what “appropriate protection” may be, thus suggesting that each government could decide for itself whether or not it would respect this obligation.11
The only problems that remain concern the possibilities for European citizens to have recourse to American courts, to which only American citizens and permanent residents have recourse, via the Privacy Act of 1974. The Bush Administration refused to make this concession, arguing that it is possible to correct false information through administrative procedures.
For the US executive branch, the issue is not refusing to Europeans the rights granted to residents of the US. In fact, the possibilities for legal recourse are almost nonexistent for the latter. Again, the real issue is to force Europeans to abandon their own regulations and adopt American procedures, thereby undertaking a unilateral unification of law on both sides of the Atlantic.
Alignment with American procedures also comes down to having to accept control by machines, as in the surveillance of air passengers in the United States. A machine evaluation can prevent an individual’s departure. The report accepts the use of such techniques, indicating that these “automatic decisions” can work well so long as there are “appropriate protections” that include the possibility of human intervention a posteriori. Here also, the alignment with American procedures is total.
A Transatlantic Zone of “Liberty, Security, and Justice”
The transfer of personal data is not the only factor in the overall negotiations between the USA and the European Union. A secret report, drawn up by the experts of six member states, proposed the creation between now and 2014 of a zone of transatlantic cooperation concerning “liberty, security, and justice.” This proposed zone of cooperation coincides perfectly with the establishment of the transatlantic free trade area. It is a matter of reorganizing the internal affairs and law of the member states “in line with the foreign relations of the European Union,” that is, essentially as a function of the relations with the United States.12
The report, initiated by the German Presidency in 2007, argues for more cooperation between police and intelligence services concerning the fight against terrorism, organized crime, and illegal immigration. It also recommends ensuring more inter-operability between the two continents concerning video surveillance, the Internet, and mobile telephony.
Even more than in the transfer of personal data, a process already largely carried out, what is at stake in the creation of such a space is the ultimate possibility of handing over EU citizens to US authorities. Recall that the European arrest warrant,13 which resulted from the creation of a “space of liberty, security, and justice” among the member states, eliminates all the guarantees that were offered by the extradition procedure. The arrest warrant is based on the principle of mutual recognition. It considers that all the legal arrangements of the requesting state14 automatically conform to the principles of the rule of law. The establishment of a zone of transatlantic cooperation would result in the entire US legal order being recognized by the European countries and American demands for extradition would be, after simple monitoring procedures, automatically satisfied.
Now, in the United States, the Military Commissions Act of 200615 allows the prosecution or indefinite imprisonment of any person designated as an “illegal enemy combatant” by the executive branch. This law gives the President of the United States the power to designate as enemies US citizens as well as citizens of countries with which the United States is not at war. An individual is prosecuted not on the basis of evidence but simply because the executive branch designates that individual as an enemy. While Americans accused of being illegal enemy combatants must be referred to civilian courts, this is not the case for foreigners. The latter must be tried before “military commissions,” special courts which grant no rights to the defense and eliminate any separation of powers.16
This law, which has international scope, has not been contested by any foreign government. Nothing in the extradition agreements signed in 2003 between the European Union and the United States17 prevents persons who are handed over from being tried before these military commissions.18 The creation of an arrest warrant within the framework of a “space of security, liberty, and justice” between the member countries of the European Union and the USA would make the surrender of citizens on the basis of this law almost automatic.
The extradition treaty signed in 2003 between the USA and Great Britain19 is an intermediate step between the agreements signed with the European Union and a future arrest warrant that might be executed between the USA and the member countries of the Union.
The treaty establishes a total asymmetry between the two parties. An extradition request coming from Great Britain must always provide evidence establishing a “probable cause,”20 that is, be based on a reasonable presumption that the person demanded has committed the crime. As for the United States, it can dispense with providing such information. The word of the American authorities suffices.
A Free Trade Area and Control over Populations: One and the Same Process
There is a constant parallel between the discussions that would lead to the liberalization of economic exchanges between the two continents and those that aim at ensuring American control of European populations. The two projects are organically linked.
Already on December 3, 1995, at the Madrid Summit, the President of the United States, Bill Clinton, and Felipe González, President of the European Union, signed the “New Transatlantic Agenda” (NTA), aimed at promoting a transatlantic free trade area, as well as a joint action plan (Joint EU-US Action Plan)21 concerning police and judicial cooperation.
The New Transatlantic Agenda announces the establishment of a free trade area. This proposal, presented without preliminary consultations, was accepted without discussion by the member states of the Union. As for the Joint Action Plan of 1995, it seeks to develop mutual cooperation in matters of the deportation of illegal immigrants as well as extradition.
While the negotiations concerning police cooperation continued, the discussions aiming at the creation of a free trade area came to an end. The negotiations concerning the “New Transatlantic Market” (NTM) were abandoned in 1998. This setback did not prevent the United States and the European Union from signing a “Transatlantic Economic Partnership” in May 1998, which takes up the essential parts of the proposals contained in the NTM, but without clearly calling for the creation of a free trade zone.
The project made no headway until 2005. The discussion process was restarted by the economic declaration adopted during the US-EU Summit of June 2005.
The European Parliament adopted two resolutions on June 1, 2006 that brought both sides to a semi-agreement. The first concerns “transatlantic economic relations.” It originated from the European Socialist Party group, which chose Erika Mann, a German Social-Democrat who presides over the “Transatlantic Policy Network” (TPN),to draft it. The second concerns a “transatlantic partnership agreement.” It originated from the European People’s Party group. It was written by Elmar Brok, a German Christian-Democrat, with the support of the Bertelsmann Foundation.22
A Public-Private Merger
Progress in the creation of a transatlantic market is due to the decisive action of a Euro-American institute, the aforementioned Transatlantic Policy Network. Founded in 1992, it brings together European members of parliament, in fact, German deputies Erika Mann and Elmar Brok, who was President of the Foreign Affairs Committee of the European Parliament until January 2007, members of the US Congress and representatives from private companies.The TPN is supported by numerous think tanks, such as the Aspen Institute, the European-American Business Council, the Council on Foreign Relations, the German Marshall Fund, and the Brookings Institution. It is supported financially by American and European multinationals such as Boeing, Ford, Michelin, IBM, Microsoft, Daimler Chrysler, Pechiney, Siemens, BASF, Deutsche Bank, and Bertelsmann.23
The launching of the NTA in 1995 owes itself mainly to a TPN report: “A European Strategy to the US.”24 As for the resolutions of the European Parliament, they completely incorporate the content of the December 4, 2003 TPN report entitled “A Strategy to Strengthen Transatlantic Partnership,” which calls for the complete realization of a Euro-Atlantic bloc by 2015 in economic, military, and institutional areas.25
The overlap of American and European policies with think tanks and the business world is total. However, the project goes beyond the creation of a simple G-2. Rather, it is a question of setting up a joint political entity to manage the two parts, Europe and America. The issue is ultimately the establishment of a Transatlantic Assembly that will legitimize this political process, carried out without consulting the populations concerned. The European Commission expressed the intention of creating such a transatlantic parliamentary institution in a May 2005 statement “A Stronger EU/USA Partnership and a More Open Market for the 21st Century.”26
An Imperial Structure
The agreements between the United States and the European Union concerning the transfer of PNR data and financial information are an important step in the construction of an integrated political structure under American command.
The procedure of the appended letter already shows the unilateral American approach in the legal area. By means of this text, the US authorities assert their right to make use of data on European citizens. They grant fictional rights and formal guarantees which they can, at any moment, renege without consulting the “other party.” The US executive branch thus directly exercises sovereignty over European populations. These texts are the acknowledgement of an unconditional authority, since they include the possibility for the US executive branch to shirk any obligation that it has seen fit to concede. The text of the agreement is an empty form that serves only to record the total power of the US executive branch.
The latest project that aims at ensuring widespread access to the personal data of European citizens is a standardization of the various already existing agreements. This involves limiting the costs of such data retrievals and legitimizing the transfer of retrieved data to the private sector. The formation of a free trade area for such data requires that these operations be economically profitable and that any obstacle to the transfers be eliminated. That is why it is important for the populations concerned to accept the seizure of their data. By signing this agreement, the European Union thus legitimizes the constitutive elements of this new economic and political structure.
The creation of a “space of liberty, security, and justice” between the two entities would give to the US executive branch new prerogatives in the exercise of its sovereignty over European populations, specifically the possibility of forcing the surrender of persons who have merely been designated as enemies without any oversight procedure. With the Military Commissions Act as the basis of the new legal organization between the two continents, Habeas Corpus, the right to dispose of one’s physical person, will no longer exist for European populations. This is the main issue of these negotiations. The report initiated by the German Presidency is only the visible tip of the iceberg.
European and American governments share the same point of view. The sovereignty exercised by the United States over European populations and the organization of legal procedures according to the canons of US law are the necessary conditions for the establishment of a transatlantic market for personal data and the introduction of new property relations in which the attributes of the person belong to state power and private companies.
1 European Parliament, “Resolution of the European Parliament on Transatlantic Relations,” B6-0280/2008, May 28, 2008.
2 Adrien Potocnjak et Martin Pierre, “Préparation du sommet Union Européenne/Etats-Unis” [Preparation for the European Union/United States Summit], Université Robert Shuman, Strasbourg, MCSinfo March 2008.
3 “Processing and Transfer of Passenger Name Record Data by Air Carriers to the United States Department of Homeland Security — ‘PNR’,” Council of the European Union, 11304/07, Brussels, June 18, 2007.
5 Yves Poullet, “Les Safe Harbor Principles-Une protection adéquate?” [The Safe Harbor Principles — An Adequate Protection?], in Actes du colloque de l’International Federation of Computer Law Associations, Paris, June 17, 2000.
6 EU-USA Swift Agreement: 10741/2/07 REV 2, declassified text: <www.statewatch.org/news/2008/jan/eu-usa-swift-rev2-10741-7.pdf>.
7 COREPER is made up of the permanent representatives of the member states to the EU and their deputies.It is divided into two working groups or committees of officials whose task is the preparation of the meetings of the European Council. — Trans.
8 Council of the European Union, “Note from Presidency to COREPER, Final Report by EU-US High Level Contact Group on Information Sharing and Privacy and Personal Protection,” 9831/08, Brussels 28 May 2008, p. 4.
10 US Department of State Freedom of Information Act (FIOA).
11 Note from Presidency to COREPER, op. cit.
12 Report of the Informal, High Level Advisory Group on the Future European Affairs Policy (Future Group), “Freedom, Security, Privacy — European Home Affairs in an Open World,” June 2008, p.10, paragraph 50.
13 Council Framework Decision of 13 June 2002 on the European arrest warrant and the surrender procedures between Member States, Official Journal of the European Communities, 18 July 2002, L 190.
17 Agreement on extradition between the European Union and the United States of America, Official Journal of the European Communities, 19 July 2003, L 181, p. 27; Agreement on mutual legal assistance between the European Union and the United States of America, Official Journal of the European Communities, 19 July 2003, L 181, p. 34.
18 Global War on Liberty, pp. 204-208.
21 “The New Transatlantic Agenda and the Joint UE-US Action Plan,” EU-US Madrid Summit, December 3, 1995.
22 The Bertelsmann Foundation is a German think tank that supports an enlarged Europe as well as stronger links with the United States.
26 Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee, “A Stronger EU-US Partnership and a More Open Market for the 21st Century,” COM(2005) 196/F of 18/05/2005.