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This treaty isn't about 'trade' - it's a fight for public services everywhere

Defeated in Seattle and Doha, US and EU corporations are once more trying to stitch up the global economy in the name of 'trade' - with our public services the biggest prize.

Ruth Bergan
7 February 2014
wto protest.jpg

Image: Flickr/Steve Kaiser

The 1999 Battle for Seattle was a moment of triumph for trade campaigning. Activists from across the world came together with developing country governments and stopped the World Trade Organisation (WTO) from agreeing damaging trade rules. Through the 2000s campaigners continued to mobilise against the WTO and Europe’s unfair trade deals with the world’s poorest countries (Economic Partnership Agreements and Free Trade Agreements).

Many of those campaigns were framed in terms of preventing rich Northern countries from imposing damaging, ‘one-size-fits-all’ neoliberal policies on the South. This was logical: as the colonial powers were forced to relinquish their formal political control over colonies, they had sought to establish other means of ensuring they maintained their global dominance. Unfair trade deals were one of these tools.

But the campaigns also recognised that this wasn’t just about North and South, this was about the dominance of global elites, protecting the interests of big business which wanted ever more access to cheap raw materials, to exploited labour and to new markets.

For nearly fifty years, trade rules (the General Agreement on Trade in Tariffs – GATT) dealt only with goods. In 1995, when the WTO was formed, we saw the manifestation of business hunger not just for bigger markets but for the creation of different kinds of markets.

The world’s elites began to use “trade” as a euphemism for the commodification and financialisation of everything – from public services to the environment and agriculture. The bogeyman of ‘protectionism’ is cited but the real agenda is locking-in of deregulation and privatisation.

At stake during the campaigns was the ability of countries to decide their own economic policy: how much, if any, of their economy did they want to privatise? How much did they want to allow foreign investors to enter markets for both goods and services? And, crucially, who gets to decide: democratically elected government or big business?

Fast forward to 2014, and we need to revisit and refresh that thinking.

The Transatlantic Trade and Investment Partnership (TTIP) is a trade deal currently being negotiated between the US and the EU. If successfully agreed, it would be the biggest trade agreement ever signed.

The question ‘who decides?’ is crucial, but it is now people in the North who are firmly in the spotlight.

The EU might be relatively equal to the US. Indeed this is an aspect the US is keen to stress, keen to get away from the old arguments around the more powerful bloc imposing damaging policies on the other are less immediate. But the deal is clearly about global elites looking to create and open up new markets, lock in privatisation and reduce regulation.

In the UK the key concern is our public services, particularly the impact on the NHS. The 2012 Health and Social Care Act establishes Commissioning Groups obliged to open services up to competition. If the TTIP is agreed, any reversal of this legislation could see the UK government challenged by the mighty US health industry. An ‘investor-states dispute mechanism’ would create secretive tribunals where companies could sue countries for any changes to policy that damage their investments.

Such ‘trade’ mechanisms already threaten the independence of goverments elsewhere. It is what Swiss tobacco giant Philip Morris is using to challenge Australia and Uruguay’s decisions to introduce plain packaging for cigarettes. It is what UK-Dutch company Biwater Gauff used to challenge Tanzania’s decision to end their contract for water services.

If we want to be able to decide who runs our services, we need to resist TTIP.

But we must not assume that this deal is only about the US and the EU. A report commissioned by the UK government demonstrates that the changes envisaged in the deal will have a direct impact on the economies of other countries. The EU and the US are in the top ten destinations for all of the 43 Low Income Countries (LIC) selected for the report. According to the report, thirty of them are likely to be directly impacted by the TTIP: key sectors like textiles, clothing, footwear, fish and bananas will be impacted. Pakistan, Bangladesh, Cambodia and Ghana will be hardest hit as it becomes more difficult to export their goods. In essence: these countries have negotiated hard to get preferential treatment from the EU and (to a lesser extent) the US. Once the EU and the US grant each other similar levels of treatment, these countries lose even this small advantage.

A report commissioned by the UK government acknowledges that the deal would hit the majority of Lower Income Countries they studied who rely on EU and US markets for their key sectors. Pakistan, Bangladesh, Cambodia and Ghana will be hardest hit as it becomes more difficult to export their goods. Key sectors like textiles, clothing, footwear, fish and bananas will be impacted.

But the report is seriously flawed.

It doesn’t even mention what might happen if poorer countries seek to move away from exporting lower-value raw materials and garments into higher value new sectors (you can make more money from selling ground, packaged coffee, than you can from selling raw coffee beans).

It only discusses goods: there is nothing about services or the “harmonisation” of standards – the very things that the deal is all about.

Crucially, the EU/US deal will make it far harder for other countries to shape multinational rules and therefore to maintain the ability to choose how they structure their economies.

The EU and US are the world’s biggest trading blocs. What they stitch up in this deal is explicitly intended to be a blueprint for the future of global trade.

‘Liberalisation’ (in other words, privatisation) of services has been high on their agenda for more than a decade.

In 2003 they put huge pressure on countries to deepen their commitments in the General Agreement on Trade in Services (GATS). During the Cancun round of negotiations, the EU requested that 72 countries open up their water services and the US made requests for countries to open their adult education and health services.

Having failed to get what they wanted through the WTO, they are using TTIP to get it by the back door. This isn’t just a fight for the NHS, it’s a fight for services everywhere.

Given the enormous ramifications of this deal, it is time that trade campaigners revived their sense of global solidarity: the deal will be bad for us and bad for those we have campaigned with in the past.

The Trade Justice Movement will be working with others in the coming months to campaign against it. In the lead-in to the European election, we will be focusing on raising awareness of the dangers of the investor-state dispute mechanism and calling for MEPs to insist that the EU does not pursue it in TTIP or any other deal. We will be promoting ways to take action via our website – please get in touch if you want to join us.

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