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Trade betrayal

The undemocratic assault from a global trade agenda is bearing poisonous fruit in the form of EU trade and procurement law argues Linda Kaucher.

The main business of the EU is its external trade agreement agenda, yet this agenda and its importance are almost entirely hidden from the public. It also dominates internal EU and member states' policy-making. It contradicts the faux ‘social Europe' concept to which many on the left continue to cling whilst democracy is eradicated and corporate rights entrenched in international trade law.

Its purpose is to permanently fix corporate-driven neo-liberalism, within the EU and internationally, via trade agreements. Any reassertion of democracy within the EU structure or member states is prevented by legally binding international trade law. This agenda is driven and effectively controlled by transnational corporations, especially transnational financial services corporations.

Internal EU policy, mirroring external trade policy, is formulated to fit and facilitate that wider agenda. Member states' national policies are similarly formulated to fit to this model, especially that of the UK which hosts the major transnational financial services centre and takes the neo-liberal lead in the EU.

In this liberalisation agenda, states' powers are subordinated to transnational corporate power. Democracy, states' abilities to control corporations and connections between people and place are overcome, as are workers' rights. Real women's rights have no place except where profitable, so e.g. a sector may be ‘feminised', to reduce labour costs, until cheaper male labour is brought in from overseas, or work sent overseas.

This bigger picture is successfully kept from the public by means of secrecy, spin and seeming trade ‘technicality'. The result is that the left continues to swirl around in a mush of wishful thinking from old ‘Social Europe' promises and ideological fragments that fail to address present realities, thus effectively castrating itself. Dissemination of information on this agenda is urgently needed to overcome secrecy and inform debate.

In 2005 the EU's trade agreement focus shifted from the stalled multilateral World Trade Organisation Doha Round to bilateral and regional trade agreements. The EU has now completed, is negotiating, has launched, or is considering trade agreements with most of the world.

The EU now includes ‘investor protection' or Investor State Dispute Settlement (ISDS) in its trade deals. In addition to state-to-state trade dispute mechanisms, corporations will be able to sue governments directly for any EU, member state or even local government level action that negatively affects their future profits. ISDS is a major factor in making trade deals irreversible, inevitably chilling the legislative process.

David Cameron's reneging on legislation for plain cigarette packaging is indicative even before ISDS kicks in, though the UK press failed to identify the international trade context. In Australia, the High Court ruled against tobacco companies' legal challenge to the government's plain packaging legislation. Immediately, the Ukraine, hosting a Phillip Morris subsidiary, raised a World Trade Organisation (WTO) dispute against Australia in relation to the WTO Trade Related Intellectual Property (TRIPS) agreement. WTO trade disputes have to be state-to-state.

The UK, unrelentingly ‘free trade', could hardly enact ‘anti-free trade' legislation, and effectively support Australia in this globally significant dispute, especially while pursuing the massive US/EU trade deal. Who reminded Cameron of this and their financial interests are important questions, but more significant is the chilling effect of the international trade agenda on this and all future UK legislation.

Because the Gillard Australian government excluded ISDS from Australian trade agreements, challenges have been only national and in the state-to-state WTO. With ISDS included in all new EU trade deals, the UK will be financially vulnerable to legal action by any corporation, in the international trade jurisdiction the corporation chooses, adjudicated only on ‘free-trade' values. Secrecy allows the Trade Commission to be increasingly ambitious. Now we face the newly-launched (1) but long planned US/EU Transatlantic Trade and Investment Partnership (TTIP) (2).

It is part of the secrecy and spin to misleadingly emphasise potential trade-in-goods tariff reductions when US/EU trade-in-goods tariffs are already minimal and most of the EU's trade is now in services. Trade-in-services liberalisation gives corporations rights to: operate in a country while reducing the state's rights to control how they operate; be treated as well as domestic firms, including access to subsidies (3); while prohibiting the state from limiting the number of providers and the range of services they offer (4).

The US/EU trade deal however goes beyond the liberalisation of trade-in-services, central to most trade deals, prioritising ‘regulatory harmonisation' between the US and the EU. Insofar as a country is defined by its legislation and regulation, the US and the EU will become more similar, with regulations and standards ‘harmonised' to the lowest levels to benefit transnational corporations that can utilise trade agreements. (Solely domestic firms cannot).

Preliminary TTIP documentation, including the Commission's leaked mandate, recognises that ‘harmonisation' is most effective with new regulation, ensuring that it is corporate-friendly as it's being formulated.

An example is provided by the UK Health and Social Care Act and its regulations that will define the future of the NHS. It effectively enforces competitive tendering, and thus privatisation and liberalisation i.e. opening to transnational bidders - a shift to US-style profit-prioritised health provision. Even if outcomes of the NHS changes are disastrous, ISDS will effectively disallow any attempts by any future UK government, to reverse the changes.

The WTO Doha Round stalled because, in that context, developing countries jointly resisted demands of corporations made via Western governments. Further stated TTIP objectives are for other countries to be brought, singularly, into this ‘transatlantic' trade deal as they agree to abide by its corporate-benefit rules, and for trade ‘rules' to be established that can then be incorporated into the multilateral WTO. Thus, this trade deal is intended to achieve the global neo-liberalism that the WTO Doha Round has not.

There are concurrent negotiations, for the same overall aims, on a Transpacific Partnership (TPP) and an international Trade-in-Services Agreement (TISA)(5).

Corporate rights to access public procurement, that is all government spending at all levels, is now a top ‘trade' priority, providing on-going 'rent', as with NHS contracts, when other forms of investment are less reliable. The Global Procurement Agreement (GPA) (6) is another means to achieve this, in addition to bilateral trade deals. So this juggernaut of corporate power is applying pressure at all levels for irreversible corporate rights, and the EU is a main mechanism for this.

Transnational corporate power in Brussels is not particularly ‘European'. The UK government, acting for London-based transnational financial services, financial services lobbying via the European Services Forum, and the US Chamber of Commerce all have major roles in the EU trade agenda. Firms gain from both sides' concessions in trade deals while people on both sides lose. Proposed reforms to EU procurement regulations will force member states' into global bidding procurement processes so transnational firms, via the EU mechanism and trade deals, can access government spending elsewhere, quid pro quo.

The EU single market prepares the way for external trade commitments made on behalf of European people in the EU, albeit without their knowledge. Abusing democracy, the EU now implements trade agreements subsequent to European Parliamentary assent but before member state governments' ratification.

Supposedly ‘Social Europe' is systematically destroying labour rights. Labour rights have always rested on limited labour supply. Moving workers across borders from lower to higher wage countries destroys labour power but is highly profitable. The EU does provide free movement both of workers and services, but this has been used by firms to transfer workers to undercut wages, a development underlined by European Court of Justice(7) interpretations of EU directives in favour of corporations, overriding workers' rights.

EU internal provision is mirrored in secretive Mode 4 provisions in all EU trade deals, allowing firms, both transnational and from the partner state, to move numerically unlimited, skilled, temporary labour into the EU. These effectively permanent provisions discriminate against host country firms but mostly host country workers, disregarding displacement or unemployment. Movement of labour is a major capitalist strategy hitherto unrecognised and unaddressed by much of the UK left. The unanimous 2011 Trade Union Congress vote to publicise and oppose the EU/India free trade agreement, which is largely about cheap labour movement, was not implemented.

The EU is not a fixed entity and it continually expands to include low wage countries. The TTIP will be similarly amorphous. Its framework will allow it to change, its provisions deepen, and non-‘transatlantic' countries to join, even after it is signed. These are urgently needed: public information on the international trade agenda: exemption for the NHS from the TTIP; and recognition that the EU, rather than being ‘social', is a mechanism for global corporate takeover.

Linda Kaucher has reaserched the EU's international trade agenda for 14 years and has a broad background as an educator. She campaigns to take the lid off trade secrecy

Links

1. Launched at the G8 (17 June 2013)

2. Called the Transatlantic Free Trade Agreement (TAFTA) in the US

3. National Treatment rule

4. Market Access rule

5. Between willing countries within the WTO, aiming to gradually pull more in, towards an eventual multilateral agreement.

7. Another plurilateral of willing countries within the WTO, aimed at eventual multilateral coverage.

8. Especially Viking, Laval, Rüffert, Luxembourg decisions of the European Court of Justice