Stop comparing the Canadian Ceta deal to Brexit – we are going to suffer much more in our trade negotiations

James Moore in The Independent


Those Brexiteers who fondly believe that Britain will be able to have its cake and eat it too as regards trade with the EU often used to like to point to Canada as a potential model for our future relationship with our former partners.

Canada, you see, was in the process of negotiating a trade deal that would have eliminated nearly all the tariffs between the two sides.

It would have thus facilitated access to the European single market for the country without it being a member and having to accept lots of Europeans turning up and looking for work in Toronto.

Everything was going swimmingly until, that is, the Walloons of Belgium kicked up a fuss and threatened to derail the deal, the future of which is now hanging on a knife edge.

To get agreements like the Comprehensive Economic and Trade Agreement (Ceta) up and running requires the assent of all of the EU’s 28 member states. Unfortunately, before Belgium can add its name to the list it first has to secure the assent of six regional assemblies. The Wallonian one is worried about the impact of the deal on its farmers.

Cue a blizzard of statements, and counter statements, and threats and counter threats, as both sides face up to the fact that they may have wasted seven years of complex and painstaking work.

Critics of the EU in Britain have used the debacle to bolster the case for leaving.

But critics within the EU have tabled a rather different argument. They suggest that the problem lies with Brussels having ceded too much control over trade to national Parliaments. There is a rich irony in the fact that Britain and its Eurosceptics are part of the reason for that.

For years they preached the virtue of national vetoes and subsidiarity. No handing power to Brussels Bureaucrats!

That may now come back to bite them because it might just scupper hopes of securing a favourable trade deal with Europe.

But, but, but we buy lots from the Wallonian farmers so they won’t have a problem with us!

That was the knuckle-headed response of Brexit supporting minister Chris Grayling. We’ve heard many variants on that sort of theme in recent months.

It’s true that Grayling’s flimsy argument was given something of a boost when the entirely more substantial figure of Germany’s Angela Merkel said she didn’t necessarily see parallels between this debacle and the upcoming talks between the UK and the EU.

But what if someone does kick up a fuss when the outcome of those talks becomes known? Germany might not, despite the childish insults lobbed its way by some right wing politicians and some right wing newspapers. Germany, however, doesn’t speak for the entire EU.

Perhaps the Spanish will decide to throw a spanner into the works unless there’s some movement on the question of Gibraltar. You could hardly blame the Poles for digging their heels in given the way Britain has treated the citizens of that country who live here. Maybe the French will decide it’s time for some payback for past British obstructionism.

Hang on, I hear you say, they’re grown ups. They surely wouldn’t stoop to such tactics. They’ll want a deal that works for both sides too.

Perhaps that’s so. But would you really be confident in ruling out the risk of a repeat performance when it’s Britain’s turn?

The Canadians will manage without this deal. They’re already part of the North American Free Trade Agreement, and they have trade deals in place with other countries besides.

Britain shorn of the EU has nothing of the sort. And it has a very different international image to the one that Canada has.

You couldn’t imagine its Prime Minister Justin Trudeau not guaranteeing the rights of Europeans living in his country if the issue cropped up, or of tolerating calls for child refugees to submit to dental testing.

Goodwill and good PR are powerful currencies, and Trudeau has lots of both, in stark contrast to Theresa May’s nasty and inward looking Tory administration.

An administration that doesn’t appear to have anything resembling a strategy beyond waving its fists, stomping its feet and threatening to go home and sulk if its former European friends won’t play the game by its rules.

Soon the reality of that will start to bite. The sort of problems Canada is having with Europe may ultimately pale by comparison to the ones faced by Britain.

We’ll know who to blame when they emerge. Clue: it won’t be the Wallonian farmers or their surrogates.

People power is ending TTIP and other unpopular EU free-trade deals

Molly Scott Cato in The Guardian


The corporations and political elites that have been steering free-trade deals for many years are finding they are losing control. Strong public resistance and opposition from national and regional governments in Europe are throwing the controversial TTIP and CETA trade deals off track.
The Transatlantic Trade and Investment Partnership (TTIP) between the US and the EU has proved deeply unpopular. Across Europe, campaigns to stop it have had a huge impact. Almost three and a half million Europeans have signed the“Stop TTIP”’ European Citizens’ Initiative petition against the deal.

But it’s not just citizens, unions and NGOs who are concerned about the way trade deals seize control from democratic governments and put it into the hands of private corporations. The member states themselves are getting cold feet. A few weeks ago, only 12 of the 28 EU countries were prepared to sign a letter in support of the deal. In the summer, France cast serious doubt on TTIP when its trade minister called for a suspension of talks and the German economy minister declared TTIP “de facto failed”. All this led the EU director-general for trade, Jean-Luc Demarty, to warn that the EU’s trade policy was “close to death”.

Meanwhile, the Comprehensive Economic and Trade Agreement (CETA), a similar free-trade deal between Canada and the EU, is also in deep trouble. On Tuesday, EU trade ministers decided to postpone the decision to approve CETA, leaving the deal in limbo.

European Green MEP and anti-globalisation activist José Bové in Montreal, where he was detained and prevented from speaking against CETA. Photograph: Clement Sabourin/AFP/Getty Images

You can tell the designers of this project are worried. Last week French Green MEP and renowned anti-globalisation activist José Bové was detained by Canadian border officials when he arrived in Montreal to speak against CETA. He was eventually allowed into the country, but his detention prevented him speaking at the event. It seems that for the architects of trade deals freedom of movement for goods and services comes ahead of freedom of expression.

The politicians and corporations might feel they can silence voices but it is harder to ignore votes. And on this, a regional Belgian parliament has delivered a potentially fatal blow. The federation of Wallonia-Brussels parliament, which focuses on the cultural and educational concerns of 4.5 million French-speakers in Belgium, recently voted to reject CETA because of worries about public services and agriculture. Under Belgium’s constitution, all five regional governments must approve the trade deal before the federal government can give consent. And for CETA to be agreed, unanimous support is needed from all 28 EU countries.

The centrist, grey politicians who have mindlessly repeated the mantra of growth-and-trade for decades have become aware that those whose votes they periodically require no longer see these deals as working for them. With tens of thousands of European citizens once again taking to the streets in protest against these trade deals, European negotiators are fighting a losing battle.

All those who have campaigned against TTIP and CETA should take great credit. Despite the power of the corporations that were set to gain massively from the deals, the grassroots movement of people from across the EU, US and Canada have used their democratic rights to protest and to lobby to challenge their might.

While we should celebrate a victory for people power, we must also recognise that this is just the start of the fight. For the UK, either inside or outside the EU, the potential for these damaging trade deals to proliferate remains. Some argued, particularly those “leavers” on the left, that exiting the EU would free us from having to sign up to damaging trade agreements. But actually, it looks as though it is Europe that could save us from these dodgy deals, while the Conservative government, fearing the risk of isolation and desperate for trade deals at any price, will lead us in a race to the bottom. The risk of isolation following the Brexit vote may encourage them to sign us up to even more damaging bilateral agreements than those on offer to the EU.

Globalisation has brought us marvels including the internet and ease of international travel, but the power in this new paradigm has so far been held by corporations that exploit their ability to transcend national boundaries. Perhaps the rejection of the global trade treaties that we Greens have always dismissed as corporate power grabs might mark the beginning of the popular fight to unshackle ourselves from the chains of corporate power. With so much of the energy of the anti-TTIP fight coming from the UK, what a tragic irony it would be if we found ourselves leaping out of the TTIP and CETA frying-pan and into the fire of whatever pro-corporate trade deals Liam Fox has in mind for us.

I hate Trump and Farage. But on free trade they have a point

Aditya Chakrabortty in The Guardian

Globalisation, as can be seen from the TTIP and Ceta deals, is about protecting big business – against the public. No wonder voters in the US and Europe are turning to populists.

 

Illustration by Andrzej Krauze





How they frown. How they fulminate. How they threaten. For decades, presidents and prime ministers, policymakers and pundits have told voters there is only one direction of travel: free trade. Now comes Brexit and Donald Trump – and the horrible suspicion that the public won’t buy it any more. This is how an elite project falls apart. And the elites don’t know what to do, apart from keep insisting the public listen.

In Washington last month, you could barely move for wagging fingers as the heads of the IMF, the World Bank and the World Trade Organisation warned that free trade was in mortal danger. In Ottawa last week, Canadian prime minister Justin Trudeau surveyed the hundreds of thousands of Europeans demonstrating against the continent’s treaty with his country and said: “If… Europe is unable to sign a progressive trade agreement with a country like Canada, well, then with whom will Europe think that it can do business in the years to come?”

Their outriders in the press have dropped the pretence of liberal politesse for red-cheeked self-righteousness. The hairy-palmed hordes are coming for our internationalism! As if internationalism were little more than business-class flights and the freedom to structure derivatives across several time zones. The Economist slaps an image of anti-globalisation demonstrators on its cover with the headline: “Why they’re wrong”. Note that use of “they”, with its shadow of the drawbridge being hastily pulled up. Coming soon, perhaps: “Why can’t we get the 99% we deserve?”

I heartily agree that Nigel Farage and Trump are grotesques. But the free-traders peddle their own untruths. They have insisted that black is white, even as the voters beg to differ. In their seminar rooms, their TV studios and their Geneva offices, they have perpetrated the ideological sleight of hand that equates internationalism with free trade, and globalisation with untrammelled corporate power. The result has been misery for workers from Bolton to Baltimore to Bangladesh. But it has also left the six-figure technocrats who supervise our economic system pushing a zombie idea. Because that is what free trade has become: an idea leached of life and meaning but stumbling on for want of any replacement. We have a globalisation for bankers, but not for children fleeing the bombs of Syria. Security for investors but not for workers.

To see how debased the notion of free trade has become, look at the deal between Canada and the EU that is currently being voted through Europe’s parliaments. It’s called the Comprehensive Economic and Trade Agreement (Ceta), and the fact that you can see it at all is largely down to leaks of the documents, which forced the European commission to publish,. That is after the negotiations were conducted for five years in secret, with even the directives kept hidden from the hundreds of millions of citizens affected.

This is no minor technical work. Provided it is passed in time, Ceta will apply to Britain too – and parts of it will affect Britons’ lives even after we’ve “taken back control”. It has been billed as “a backdoor for TTIP”, the Transatlantic Trade and Investment Partnership, which collapsed this summer amid public opposition both in Europe and the US. Like TTIP, Ceta includes the investor-state dispute settlement system – which hands big business the power to sue governments, including for profits they haven’t made yet. A US multinational with an office in Canada (nearly all of them) will be able to sue Britons for bringing in laws that lose them money. This was the mechanism tobacco giant Philip Morris used to sue Australia’s government for bringing in plain packaging. On that occasion, Big Tobacco was unsuccessful – but it took four years of expensive legal battle.

Free trade used to be about tackling protectionism; now it’s about protecting big business – against the public. If populists take a complex situation, offer a simple answer and warn any dissenters of gruesome consequences, then the free-traders are guilty of populism too. With Ceta or TTIP, it goes like this: if this deal goes through, then economies will grow, jobs will appear, and a rising tide will lift all boats, from super-yacht to rubber dinghy. That is pretty much what mainstream politicians of Europe – both left and right – and their officials are saying about the deal with Canada.

In economic history, never mind that the biggest winners – whether the US in the early 1900s or China now – are those who break the free trade rules. Never mind that the actual forecasts for Ceta show the gains will be relatively meagre. Never mind that the studies cited don’t bother to look at who wins and loses, and by how much.

Most of all, ignore their shared assumption that after any deal the affected economies undergo a short, sharp shock before bouncing back. Anyone’s who has lived through the past eight years has heard that one before. After the financial crisis, the Bank of England and Treasury both kept forecasting a return to normal – and they kept getting it wrong. Eight years on, that bounceback hasn’t materialised. British workers are still not paid as much after inflation as they were when Lehman Brothers collapsed.

That assumption’s lack of substance is called a “dirty little secret” by two independent economists, Pierre Kohler and Servaas Storm, in a recent paper scrutinising the likely effects of Ceta. As they say, it presumes that laid-off workers “will rapidly find new jobs” – whatever the industry, however far away the employer. A car engineer can up sticks and turn into a software engineer. And if there aren’t any actual jobs, they can deliver takeaways for Deliveroo.
The assumptions are both laughably far-fetched and, in the cost citizens are expected to bear, disgusting. No wonder the EU would rather there was as little public discussion as possible.

Using a model employed by the UN, Kohler and Storm found that the benefits of Ceta become microscopic next to the costs. For at least the first seven years after the agreement is brought in, unemployment will rise, wages will fall and economies will see their growth rates decline. Governments will lose revenue, and so increase austerity.

The burden will fall hardest on the poorest, the lowest-skilled, older people and those with disabilities. A senior lecturer at Delft University of Technology, Storm summed up for me the consequences: “The weaker your position in an economy, the more strongly you’ll feel the fall-out.” These aren’t people and regions who are left behind: they’ve been chucked off the train by their own governments. This is the settlement free-traders, left and right, are fighting to impose on voters. Is it any wonder the voters keep plumping for alternatives – no matter how reprehensible, how ruinous?