Image: Theresa May dancing during her visit to Kenya this summer. Stefan Rousseau/PA Images, all rights reserved.
‘Free trade’ is really just the name given to the ideology that justifies global power imbalances.
“If we’re talking about trade deals, we’re not talking about people's interests, not talking about people’s lives – they’re only talking about the interests of the multinational corporations in order to facilitate their business activities, especially in developing countries.”
That was the warning earlier this month from Rachmi Hertani, director of Indonesia for Global Justice, about the push for the ‘free trade agenda’ in post Brexit trade deals. She was speaking at an event about trade deals and the global south after Brexit, organised by campaigning organisation Global Justice Now.
As Britain looks to make new trade deals, politicians are promoting a Brexit where multinationals rule over elected governments as well as over the people they are meant to represent.
International Trade Secretary Liam Fox, Theresa May and co. have been clear in their ambitions for the global south. “The thriving economies of south and east Asia and, increasingly, Africa, are, and will become, ever more important,” said Fox in July as he gave the Margaret Thatcher Freedom Lecture at the Heritage Foundation think tank in Washington. He spoke of the “golden economic opportunities” presented by “the rise of the collective wealth of developing countries.”
On Theresa May’s recent visit to Africa (the one where she indulged in awkward dancing with children for the press – like a good Western leader should), she promised “a radical expansion of the UK’s presence” there, with aid money being focused on economic and security concerns, instead of poverty reduction. She pledged a £4billion ($5.13 billion) investment strategy for the continent.
The Commonwealth has had particular attention in discussions about Brexit and trade, but, you only need to look at the Windrush scandal to see the disregard the British state has for its ‘friends’ in the Commonwealth – at least the black and brown ones.
The drive to boost trade links with African countries has been branded “empire 2.0”, reportedly by Whitehall officials themselves. This latest scramble to capitalise on the Commonwealth and other countries in the South is just an extension of what Britain has been doing for generations.
“A free trade area between Britain, a largely developed country and Africa, a poor continent, was always going to exacerbate inequalities, trade deficits, and the dependency of the latter on the former. ‘Free trade’ is really just the name given to the ideology that justifies this power imbalance,” wrote Africa Kiiza of the Southern and Eastern African Trade Information and Negotiations Institute (SEATINI) last year.
One of the most worrying aspects of new trade deals is the likely inclusion of an investor-state dispute settlement (ISDS) system, or similar provisions, that allow corporations to sue countries for alleged ‘discriminatory’ practices that hamper their activities or profits.
Last month an international tribunal in The Hague ruled in favour of the oil giant Chevron after it sued the Ecuadorian government. Chevron’s subsidiary Texaco have been accused of dumping billions of gallons of toxic wastewater in the Ecuadorean Amazon, polluting rivers and lakes, over the course of nearly 30 years. Campaigners told Latin American broadcaster Telesur that high rates of cancer and other disease were affecting indigenous people in the area, which they attributed to oil pollution of their watercourses. Chevron had previously been ordered to clean up extensive environmental damage, by a court in Ecuador, as well as pay £7.4billion ($9.5billion) compensation to local people.
This latest ruling by the Permanent Court of Arbitration found that Ecuador had violated its obligations under a bilateral investment treaty signed with the US and said that the previous judgment against Chevron had been gained through fraud and corruption. Ecuador must now pay compensation to Chevron.
“The decision hands well-heeled corporations a template for avoiding legal accountability anywhere in the world,” said Deepak Gupta, representative for US lawyer Steven Donziger, in a statement. Donziger has been battling Chevron for over 20 years.
At the Global Justice Now event, Hertani outlined experiences from other countries such as Indonesia, of big business suing the government. She said that around half of cases have come from the mining sector, known for human rights violations of indigenous people, land grabs and corruption.
“These mechanisms under free trade agreements will give more implications not only for the state policies in our countries, but also the sovereignty of the people themselves,” said Hertani. “The people cannot sue the investors. If there are human rights violations, there have been are several cases where the people lost. We never win against the multinational corporations.”
“They can sue the government because the law is not in line with their interests. They have a very strong instrument [the investor-state dispute settlement] to ensure that this system only works for them, not for us.”
The devastating impact of these trade deals has led countries like Ecuador, South Africa and Indonesia to terminate many of their agreements.
Countries like Indonesia, and many others in the global south, are rich in natural resources. Multinational companies have been plundering them to the detriment of people and the environment for generations and new trade deals could make it even easier for them to do this.
New post Brexit trade deals may be unlikely to have a big impact on the UK’s economy, but they are a way of maintaining, and deepening the power imbalance in the global economy. Inequality is getting worse, as highlighted in the recent United Nations Conference on Trade and Development Trade and Development report. They point at debt – which is more than three times the size of global output – as symbolic of this.
The prioritisation of free trade in the global economy has created vast inequality, as described by Global Justice Now Director, Nick Dearden: “Let’s remember that this country grew rich by trading people – that was our most lucrative commodity 300 years ago,” he said at London event.
“This mantra of free trade has been really central to the whole British empire, to the British imperial project, for a very long time now. It’s a very bloody history and I’m worried that the kind of Brexit envisaged by the likes of Boris Johnson, and indeed Liam Fox and Jacob Rees-Mogg, is precisely to replicate those kinds of relations which we’ve never completely got away from, but which could be made even worse after Brexit.”
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