Trade deals - is the mood turning?

Political sentiment on both sides of the Atlantic is turning against anti-democratic trade deals - but high geopolitical and financial stakes means we shouldn’t expect those pushing the deals to give in gracefully.

Gus Fagan
6 February 2014
tpp protest.jpg

Image: Flickr/Caelie Frampton

On 31 January, the 20-year anniversary of the North American Free Trade Agreement (NAFTA) between the US, Canada, and Mexico, thousands of people rallied in Mexico City and in 50 other cities across the US and Canada to protest against the proposed Trans-Pacific Partnership (TPP) and other free-trade deals.

Two days before, President Obama had delivered his State of the Union address in which he asked Congress to allow him to fast-track the Trans-Pacific Partnership into law without Congress involvement. He wanted Trade Promotion Authority, so he could just present the trade deal to Congress for a yes/no vote with no power of amendment.

Harry Reid, Democratic leader of the Senate, refused. Democratic senators are mindful of mid-term elections to Congress in November 2014, and the unpopularity of such deals with their core supporters including unions.

The rebuke was widely seen as a crisis for the US/Pacific deal (TPP). It remains to be seen to what extent this delays the negotiations or even derails them altogether.

For campaigners worried about the US/EU transatlantic trade deal (TTIP) it’s worth taking a look at what’s happening with TPP, which has been on the negotiating table now for four years. Why are people in North America protesting against the Pacific deal?

Because they have found out in practice what a free-trade deal means for them. They don’t believe Obama when he promises that TPP will create jobs and increase wealth for ordinary Americans.

NAFTA promised the same. But economists and commentators agree that US workers lost close to a million jobs as corporations outsourced production to Mexico where labour was cheaper. An Angus Reid Public Opinion poll in 2012 showed that more than half of Americans want the U.S. to withdraw or renegotiate NAFTA. Only 15 percent believe that the U.S. should continue its current participation in NAFTA.

Did Mexicans benefit? Low-paid insecure jobs increased for some. But poorer Mexicans suffered when US corporations began to dump cheaper corn, meat and agricultural products on the Mexican market. Today, over 25 per cent of all pork sold in Mexico comes from just one company, Smithfield Foods, headquarters in Virginia. The result - the agricultural economy of Mexico was destroyed and there was a massive influx of immigration into the United States because they couldn't make it in Mexico any longer.

NAFTA had devastating consequences for workers, small farmers, indigenous peoples, small business and the environment in all three countries. And independent economists have demonstrated that 90 per cent of Americans would see their income go down if TPP passes.

Why is everything about these trade deals so secret?

The former chief U.S. negotiator Ron Kirk was remarkably candid about why he opposed making the TPP text public. Doing so, he told Reuters, would raise such opposition that it could make the deal impossible to sign.

The protest movement against TPP was also given a boost when WikiLeaks revealed two chapters of the proposed deal, one on the environment and one on intellectual property rights.

The chapter on the environment shows that Obama’s TPP is even worse than earlier trade deals. Whereas Bush’s deals had at least contained environmental enforcement clauses, TPP contains only fine words and aspirations. Signatory countries only need to “affirm” their commitment to such measures - not to actually “commit” to abiding by them.

On intellectual property rights, US corporations are attempting to patent not just pharmaceuticals but even medical practices and medical devices. In fact anything that can be patented in order to commodify it and make profit for corporations.

Such patents are currently illegal in many of the countries involved.

These trade deal negotiations are secret to citizens and parliaments. But they are not secret to corporations. 600 corporations have been appointed by the U.S. trade representative to be advisers. They see it live on their computer screen. 

Maintaining US dominance

The US’s economic strategy is of course closely linked to its military-political strategy. The US state administration and its advisory and academic elite are wedded to the assumption that the US should remain the dominant power in the world.

With the collapse of Communism and the weakening and military encircling of Russia, the goal is to prevent China from offering a challenge to US dominance. The strategy is known as the ‘Asian pivot’. As well as the military alliance with Japan, it includes drawing in the other South East Asian countries and their economies into the American orbit. The TPP therefore includes not just Japan but also other Pacific Rim countries such as Vietnam, Singapore, New Zealand, Australia, and Malaysia and aims to include Taiwan and South Korea.

The free trade deal with Europe is part of this strategic goal, too.

The economy is not something separate but is a crucial part of power strategy. Thomas Barnet, who worked closely with Rumsfeld in the Bush administration, explained it well in his book, Great Powers: America and the World after Bush. Capitalism, says Barnet, is the real revolutionary force spawned by America. Democracy and parliaments are not essential. Nothing should get in the way of economic demands because that’s the way to capture the rest of the world.

But the strategic thinking of the Obama administration is best explained in a book by Richard Rosecrance who moved between Harvard and the policy staff at the US state department. In The Resurgence of the West, Rosecrance explains how a transatlantic union with Europe would create a market more than twice the size of the US, command over half of global GDP, and create an incomparable economic force in the world against which no emerging power could prevail.

It would ensure the strategic dominance of the US and the economic dominance of US corporations. This overbalance of power would not only deter others from challenging it but would attract others to join it.

Those who want to protect health from corporate greed need to understand the strategic agenda not just of the US administration and its corporate elite, but why Japanese and European corporate elites are so intent on being part of it.

Since the Second World War, both European and Japanese capitalism have benefited from their alliance with American power. Both want to be part of any new expansionist drive and both want protection from China. The EU political and corporate elite are strongly united on this and it will require a powerful unity from below to defeat it.

TTIP: The European Commission prepares to meet its enemies

The unity of trade unionists, environmentalists, small farmers, food activists and other movements in the US, Mexico and Canada to protest against the Trans-Pacific free-trade deal has set an interesting example.

They have scored an initial victory in pushing some Democratic senators to stop Obama from fast-tracking the deal. Democratic sentiment in Europe is strongly opposed to secret deals and opposition is growing to the EU/US Transatlantic agreement (TTIP).

The European citizenry is generally more aware of demands for transparency, more concerned about the environment, food safety and protection of public services than its American counterpart. This is why the European Commission is concerned about possible opposition from below. The Pacific Trade Deal, TPP, has been on the table for over four years. The Atlantic one, TTIP, has only just begun.

Faced with mounting pressure the European Commission issued the following press release on the eve of this January’s Davos meeting:

“EU Trade Commissioner Karel De Gucht today announced his decision to consult the public on the investment provisions of a future EU-US trade deal, known as the Transatlantic Trade and Investment Partnership (TTIP). The decision follows unprecedented public interest in the talks. It also reflects the Commissioner's determination to secure the right balance between protecting European investment interests and upholding governments ‟ right to regulate” in the public interest.

In early March, he will publish a proposed EU text for the investment part of the talks which will include sections on investment protection and on investor-to-state dispute settlement, or ISDS.

This draft text will be accompanied by clear explanations for the non-expert. People across the EU will then have three months to comment.‟

There is no question that this EU consultation is a first success for the anti-TTIP movement. But there is also no doubt that the Commission will do its utmost to preserve the corporate rights enshrined in the planned treaty.

The Commission talks of wanting to “clarify” investor rights and “improve” the investor-state dispute settlement system, rather than abandon it.

And this alleged rethink deals only with corporate investment rights, the controversial “investor state dispute settlement” where three corporate lawyers sit on a private panel to rule on corporate demands over democratically elected governments, before returning to their corporate jobs. There is no right of appeal.

This gross expansion of corporate power over national parliaments and judicial systems has provoked a lot of anger in the EU.

The Commission first tried to reassure us by claiming that in the recently concluded EU/Canada trade agreement (CETA), seen as a model for the Atlantic deal, the Europeans negotiated strong safeguards to protect the public. The actual text of that deal is still officially under wraps. But trade campaigners from the Seattle to Brussels Network (S2B) have published an eye-opening analysis of leaked text, showing that the Commission’s claims are designed “to rally support in parliaments and public opinion, but definitely not a complete and objective presentation of where the negotiation text really stands”.

Even in Britain, 27 MPs, led by Caroline Lucas, have proposed a motion expressing strong concern that “the TTIP could overturn years of laws and regulations agreed by democratic institutions” and calling for all talks to be frozen immediately “to allow for a full public debate and Parliamentary scrutiny”.

Instead, the Commission has announced a temporary freeze of negotiations only over controversial investor rights. They tell us that “no other part of the negotiations is affected” and that “the TTIP negotiations will continue as planned.”

So this ‘consultation’ will have no impact on all the other areas that people in Europe are concerned about, from workers’ rights to environmental protection, from food safety regulations and data protection to banking regulations.

Past experience also suggests its questions will be selective and such consultations tend to be dominated by lobby groups from the corporate sector.

While this consultation pause on ISDS is a first victory, there is even greater need now for strong united opposition across all movements that go beyond filling in Commission questionnaires.

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