Whatever you think of him, Donald Trump is right on TPP and TTIP

Youssef El-Gingihy in The Independent

In a YouTube video of policy proposals released this week, President-elect Trump announced that the US would withdraw from the Trans-Pacific Partnership. This trade agreement encompasses the major economies of the Pacific Rim with the notable exclusion of China. Other policies included a hodge-podge of climate change denial through promoting fracking and coal, deregulation, infrastructure spending and measures against corporate lobbying.

There are mounting concerns about xenophobia following Trump's victory. The appointments of Breitbart's Stephen Bannon as chief strategist, the anti-immigration Jeff Sessions as attorney general, Mike Pompeo as CIA director (in favour of bulk data collection) and General Michael Flynn as national security advisor would appear to reinforce Trump's targeting of Hispanics, Muslims and other minorities.

Yet amid all this soul-searching, the key question liberals should be asking is why authoritarian nationalism is spreading across the West. The answer is relatively simple. Neoliberal globalisation has left millions behind both in the advanced economies and the global south over several decades. Wealth has been siphoned to the top. The economic fallout post-2008 has seen inequality widening, with many falling into poverty. The effects of austerity on southern Europe are a social catastrophe.

The liberal and social democratic parties previously representing working-class constituents have abandoned them and are captured by corporate power. The Democratic party under the Clintons and Obama as well as New Labour under Blair and Brown were emblematic of this process. The result has seen millions of voters turn to candidates positioning themselves as anti-establishment. Hence the success of the SNP, Ukip, Brexit and now Trump.

Free trade agreements are at the heart of the matter. Negotiations have taken place behind closed doors with corporate lobbyists. Transparency has been minimal. It is exactly this kind of undemocratic, technocratic managerialism which is prompting a backlash against elites. It is the same technocratic managerialism that saw the troika of the European Central Bank, the European Commission and the IMF impose unrelenting misery on southern Europe, rendering Greece as expendable. The troika even issued memoranda to be rubber-stamped by national parliaments.

Both the EU-US trade agreement, or Transatlantic Trade and Investment Partnership (TTIP), and the Trans-Pacific Partnership (TPP) are sold as reducing barriers to trade through harmonisation of regulations thus increasing growth. But harmonisation effectively means a race to the bottom with the lowest common denominator regulations being adopted. In fact, there are not many barriers left and the question is more of how growth is distributed. It is now clear that trickle-down economics is a myth.

Trump has stated that he is against TTIP and TPP, and may even reverse the North American Free Trade Agreement (Nafta). Many people do not understand what these trade agreements mean so let me spell it out. They promote trade liberalisation. This essentially means opening up public services to corporate takeover. They would likely make public or state ownership difficult. They would restrict the financial tools available to countries to regulate banks. They would also limit their ability to impose capital controls.

They would lock in privatisation through Investor-State Dispute Settlement clauses. This means that multinational corporations could sue governments if they took steps that harm their profits or even the future expectation of profits. This would take place through private, secretive courts rather than the normal law courts. In fact, precedents have already seen tens of countries sued by corporations for measures taken in the public interest.

The NHS is a good example. It is currently being privatised, paving the way for a private health insurance system. TTIP would mean that if a future UK government took steps to reverse this then they might well be sued. In effect, this acts as a deterrent against government actions harming corporate interests. This would apply not just to healthcare but to all public services, from education and broadcasters such as the BBC to public transport and utilities.

These trade agreements would also enforce enclosure of the commons through intellectual property rights. So drug patents would be extended to combat cheaper generic medicines. Patenting of the human genome would be enforced. Farmers might have to buy seeds from corporations. I don’t know about you, but that sounds like a dystopian world to me.

Neoliberal globalisation is not some irresistible force of nature. Economic protectionism may not exactly be progressive but the current status quo of wage stagnation and falling living standards is unsustainable. If steps are not taken to remedy the damaging effects of neoliberalism then the backlash will only intensify, likely leading to rising nationalism, fascism and global conflict.

Trade is the lifeblood of humanity. Closed doors lead to closed minds

Will Hutton in The Guardian

For 70 years, the US and Britain have underwritten the open global trading system, partly because of a stubborn and correct belief in the merits of free trade, partly out of self-interest as beneficiaries of globalisation and partly because, strategically, it spreads democracy, peace and capitalism.

They have spearheaded successive rounds of tariff cuts and multilateral trade deals and stood by, first, the General Agreement on Tariffs and Trade (Gatt) and its successor, the World Trade Organisation, to keep the system honest. They have cut regional trade bargains, promoted the European single market and, above all, kept their markets open despite other countries, notably China, gaming the system for their own narrow advantage.

The consensus in both countries was that the wider gains transcended any localised pain. No longer. The Americans voting for the anti-trade, America first Trump have consigned all that to history and the unintended consequence of Brexit will mean the same for Britain. The system that underpinned our collective prosperity is about to be trashed.

It brought national and international benefits, including an avalanche of inward direct investment into both countries, powerful international financial and business service sectors, rising global living standards and the economic and democratic transformation of Asia. But both countries’ manufacturing sectors have taken disproportionately heavy hits. Drive round the ailing industrial towns of south Yorkshire or Ohio and compare the economic and social landscape with that of Düsseldorf, Munich, Shanghai or Shenzhen. Decade of consistent manufacturing trade deficits have exacted a cruel toll.

This year, working-class voters across America and Britain’s rotting industrial heartlands delivered their verdict. No more plants moving abroad. No more closures because of cheap imports. No more sales of great companies to foreigners. No more stagnating blue-collar wages. No more immigration. It may be that there are jobs and great prospects aplenty in the burgeoning tech and service sectors in the big cities driven by global trade, but they don’t care. They are hurting and nobody has taken decisive action to help them. The votes for Trump and Brexit mark the end of an era and a new dark age of closure, protectionism and nationalism.

Leading Tory Brexiters will insist that this is a travesty of their position; they want Britain to access more global trade and not be imprisoned, they crazily claim, by the confines of the slow-growing European Union and its bureaucratic inability to cut aggressive trade deals with the rest of the world. They live in a dreamland if they feel that the rest of the world is more committed to free trade than Europe, while EU membership did not hold back Germany from being among the world’s major exporters.

In any case, apart from the promised closure of borders to immigrants, that is not what their voters want, as Nigel Farage always better understood than any of his Tory allies he cordially despises. Working-class voters in south Yorkshire and the West Midlands want the same as their counterparts in Pennsylvania, Michigan and Wisconsin. After all, it was those three states, with their tiny 100,000 vote margin, which gave Trump the electoral college votes for victory. He might be a billionaire, but he is, or at least styles himself, a “blue-collar billionaire”. Blue-collar (post-)industrial workers don’t benefit from free trade and immigration, as he has consistently said for 18 months, in the teeth of opposition from the Republican mainstream who remain free traders. His movement, as he called it, wants to stop both.

‘Build that wall” – along the US-Mexican border – was one of the most insistent chants at his rallies, along with the forced deportation of 11 million illegal immigrants. But more importantly for the international trading system, Trump wants to withdraw from the North American Free Trade Agreement (Nafta) between the US, Canada and Mexico, which he casually dismisses as the “worst trade deal in history”. He also wants an immediate halt in negotiations for both the Transatlantic and Trans-Pacific trade agreements and unilaterally he wants to impose swingeing 45% tariffs, against the rules of the World Trade Organisation (WTO) from which he is prepared to “walk away”, on Chinese imports, which account for half of the US’s trade deficit. Thirty-five per cent tariffs are promised on Mexican imports. The remaining 20 free-trade agreements the US has signed are to be reviewed or abrogated. Cumulatively, the impact would be devastating, killing multilateralism by exposing the already enfeebled WTO as helpless, inciting Chinese and Mexican trade retaliation and destabilising the entire global system of trade and finance.

Optimists say that Trump the president will be much more cautious and realist than Trump the campaigner: his talk on trade should be seen as threats to produce more fairly balanced agreements, not a tearing up of the world system. Maybe. But there cannot be a complete divorce between campaign rhetoric and policy. He believes what he says and nobody in his close coterie is going to urge caution. Not Dan DiMicco, his senior trade adviser, who has promised a potential withdrawal, in the first six months of the Trump presidency, from every major US trade deal if it cannot be shown actively to benefit the US. “The era of trade deficits is over,” he says. “It will be: let’s talk, but otherwise we put tariffs on.”

Another intimate, Walid Phares, has said Trump will go “back to ground zero” on every trade deal, such as the one with South Korea that the president-elect described as “job destroying” and wants to revoke. Trump has already given a commitment that on day one he will declare China a currency manipulator as a precursor to introducing up to 45% tariffs on Chinese imports.

These positions are not posturing: they represent a deeply held view that the US does not need trade except on terms that put America first. The idea that successive American administrations have negotiated deals loaded in the US interest is impossible to concede. Because how else would he explain the rust belt? Equally, there can be no concession that blue-collar jobs are disappearing with or without trade because of robotisation and automation. The America of the 1940s and 50s has disappeared for ever and destroying the international trading system is not going to bring it back.

None of that cuts any ice with a demagogic populist. Trump has promises to keep to a “movement” that expects no less. The last time a Republican president and his party controlled both the House of Representatives and Senate with the same convictions on America first trade was 1928. There were warnings that introducing the Smoot-Hawley tariffs on American imports in 1930 would trigger a slump, but America first Republicans could not help themselves and the Democrats were too weak to stop them.

The Peterson Institute for International Economics in Washington predicts that if Trump raises tariffs on China and Mexico, and they retaliate, then US growth will stop in its tracks for at least two years. The prospects could be even worse if Trump goes further. Already world trade growth over the last year has been the slowest for the last 15. Even introducing the mildest of Trump’s measures must presage a further deceleration and if he goes as far as he promises – walking away from the World Trade Organisation, withdrawing from multiple trade agreements and freely imposing tariffs – then the prospect of a 1930s-style implosion is all too real.

In this context, the foreign secretary, Boris Johnson, babbling alongside other Brexiters about the opportunities for trade deals with the US is surreal. To exit the EU, the one continent pledged to open trade, in order to plunge into a world trade system threatened by collapse is the height of folly. If British voters had known Trump was going to be president in June – and known of his attitude to trade – Remain would have won comfortably. Parliament may find it has a duty to veto the application to exercise article 50 before the end of March; the referendum was only ever advisory and Trump’s attitude to trade changes everything.

One of the many tragedies of the rise of neoliberalism is that the promotion of international trade has been able to be portrayed by some on the left as part of the same portfolio of policies as austerity, privatisation and assaulting trade unions. Wrong. Trade is the essential ingredient of growth and prosperity. The rise of Egypt, Greece and Rome was because the Mediterranean promoted seaborne trade. The rise of maritime Europe after the middle ages was because of Atlantic trade. China has grown so explosively since 1978 because of its opening to trade.

Autarchy, protection and closure to immigration have always meant economic stagnation and, lacking the stimulus of other cultures and ideas, a parallel freezing of innovation and cultural vitality. Trade, exchange and intermingling are the lifeblood of humanity. Of course trade brings losers, and the rise of contemporary Conservatism, with its ferocious enmity to state action to support the incomes, skills and life chances of working-class men and women, in a period of great economic change, laid the foundations of huge anger.

It has been two rightwing demagogues – Trump and his British echo, Farage – who have been the first beneficiaries. But as this drama plays out in recession, nationalism and perhaps even forms of inter-state conflict, there will be a rediscovery of ancient verities. Trade and exchange are the foundations of our civilisation and, whatever Trump and his movement think, the more, the better.

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?

Jeremy Corbyn says he 'won't take the blame' if UK votes to leave

Oliver Wright in The Independent

The Labour leader Jeremy Corbyn last night warned he would not take the “blame” if Labour supporters tipped the balance in favour of Brexit.

In an interview on Sky News Mr Corbyn, who has been accused of running a lackluster remain campaign, admitted he was “not a lover of the European Union”.

But he insisted he wanted Labour supporters to vote to stay – although if they didn’t it was not the fault of his party.

“I am not going to take blame for people’s decision,” he said.

“There will be a decision made on Thursday. I am hoping there is going to be a remain vote. There may well be a remain vote. But there may well be a leave vote. Whatever the result – that will be the result of the referendum. We have got to work with it.”

Mr Corbyn also warned that the EU must change "dramatically" even if Britain remains a member.

Facing questions from a studio audience Mr Corbyn admitted that most people “do not understand” all of the implications of this Thursday’s vote.

But despite having voted against European treaties in the past Mr Corbyn insisted that Britain was better off in the EU than outside.

"It's a big decision,” he said. If we stay in Europe there are implications, if we leave Europe there are massive implications.

"But, it is also a turning point because if we leave I don't think there is an easy way back. If we remain, I believe Europe has got to change quite dramatically to something much more democratic, much more accountable and share our wealth and improve our living standards and our working conditions all across the whole continent."
Mr Corbyn said his support for a Remain vote was "not unconditional by any means" and set out a list of problems with the EU.

He said: "I'm opposed to the Transatlantic Trade and Investment Partnership, which is being negotiated largely in secret between the European Union and the US because it would import the worst working conditions and standards from the US into Europe.

"I'm also opposed to the way in which Europe shields tax havens - this country as well shields tax havens.

"And the way in which systematically big companies are exploiting loopholes in employment laws.

"So I'm calling for a Europe in solidarity.

"But I would also say that if we are to deal with issues like climate change, like environmental issues, you cannot do it within national borders, you can only do it across national borders."The refugee crisis has to be dealt with internationally, not just nationally."

He added: "I want to remain in Europe in order to work with others to change it."

Brexit may be the best answer to a dying eurozone

Larry Elliott in The Guardian

Staying in the EU means hitching ourselves to an undemocratic project run by and for a remote elite

 

Illustration by Ellie Foreman-Peck

The elephant in the room. Everybody knew what Mark Carney meant when he paused halfway through his regular three-monthly update on the state of the economy: the implications of Brexit.

The governor of the Bank of England did not pull any punches. He warned of a potential run on the pound and of possible problems financing the UK’s whopping balance of payments deficit. He said the Bank expected growth to be materially lower and inflation to be notably higher. Voters trust the Bank of England. They sat up and took notice. The opinion polls started to move in favour of remain. When the history of the referendum campaign is written, Carney’s may be seen as the decisive intervention.

In truth, there was more than one elephant in the room. Carney was right when he said there was a risk that the upheaval caused by Brexit could tip an already weakening economy into recession. But as elephants in the room go, this was the smaller, Indian version. The equivalent of the bigger, African elephant was the shocking state of the eurozone after the failure of the single currency experiment. This went unremarked by Carney, although it is relevant to the debate aboutEurope.

Why? Because, although Britain is likely to stay in the EU, Brexit will remain a live issue unless the eurozone can sort itself out. That means either admitting that the euro has been a terrible mistake, or going the whole hog and integrating further, with a single banking system, a Europe-wide treasury, and a democratically elected finance minister with the power to raise money in Germany and spend it in Greece. This is not going to happen any time soon, and perhaps never. Countries that joined the eurozone gave up a considerable amount of economic power when they adopted the euro, but they retained the right to raise their own taxes and make their own spending decisions.

Britain is not in the euro, for which we should all be thankful. But let’s be clear: staying in the EU means hitching the wagon to a currency zone unable to go forwards or backwards, and which will continue to struggle as a result.

The euro brought to fruition the idea of ever-closer union, a plan that dates back to the early 1950s. Lots of things considered good ideas back then are no longer considered quite so clever: system-built high-rise flats as the answer to slum housing; nuclear power to meet energy needs. Put ever-closer union in the same category as the Birmingham inner-city ring road: it seemed a good idea at the time.

Dan Atkinson and I spent the winter working on a book about the single currencycommissioned in the wake of last summer’s Greek crisis. The brief was to look at what had gone wrong from a left-of-centre perspective; to explore the widespread disquiet about the way in which a country that voted in January 2015 for an end to austerity ended up seven months later being forced to accept even deeper cuts in wages and spending.
The eurozone crisis is about more than Greece. It is about Italy, where the economy is barely any bigger now than it was when the single currency was introduced. And France, where unemployment is double the level of the UK or the US. And Finland, one of the most tech-savvy countries in Europe, where the economy is 7% smaller than it was before the start of the financial crisis. And even Germany, where an export boom and high corporate profits have been paid for by workers in the form of below-inflation pay increases.

Our investigations took us back to the last time Britain held a referendum on EU membership, when during the cabinet discussions Tony Benn warned that Britain was signing up for something that was undemocratic, deflationary and run in the interests of big business. “I can think of no body of men outside the Kremlin who have so much power without a shred of accountability for what they do,” Benn said.

Benn’s dystopian vision proved entirely accurate. When the architects of the new Europe looked to the future, they envisaged a new and better version of the United States of America. Europe would have all the good bits about the US – such as the economic dynamism, a large barrier-free market and a single currency – without any of the bad bits: the inequality, the high levels of incarceration, the poverty and the inadequate welfare safety net. 

This dream lives on. Yanis Varoufakis, the deposed finance minister of Greece, thinks the eurozone could be recast along Keynesian lines, with the rich and strong countries obliged to provide financial help to the poor and weak. Good luck with getting Germany to agree to that.
Economic policy has been relentlessly deflationary. The interests of bankers have been given a higher priority than workers’. Greece, Ireland, Portugal, Cyprus and Spain have been the laboratory mice in a continent-wide neoliberal experiment of a sort Tea Party Republicans in the US can only fantasise about.

Given the obscene level of long-term unemployment, the idea of Europe as the guardian of labour rights is laughable. The gap between the US and Europe has widened, not narrowed, since the launch of the single currency. Populist parties of both left and right are gaining in support. One left-of-centre argument against Brexit is that it would result in the breakup of the euro and by doing so set off a chain reaction that would lead to the next global crisis: a perfectly fair point. Those who fear that another recession and even higher levels of joblessness would threaten a return to the totalitarian politics of the 1930s are right to highlight the risks. Some on the left who want Brexit say that the time is not yet ripe.

The left-of-centre case for divorce is that Europe doesn’t work, is not remotely progressive and is heading for an existential crisis anyway. Last year’s threat was Grexit. This year’s threat is Brexit. Next year’s threat will be something else: Italy leaving the single currency, perhaps, or Marine Le Pen’s tilt for the French presidency.

This presents an opportunity for those who believe that the way ahead still involves closer integration. Jean Monnet, the godfather of the EU, always said that ever-closer union would be forged through crises, which is what Brexit would undoubtedly trigger.

If the polls are right, Britain seems unready to trigger this act of creative destruction and it will be left to Varoufakis to do out of office what he could not do in power: prove a different Europe is possible.

A different Europe is needed, but it is stretching credibility to imagine that the Europe of Greece and the Transatlantic Trade and Investment Partnership can easily morph into America with the nice people in charge. The eurozone is economically moribund, persists with policies that have demonstrably failed, is indifferent to democracy, is run by and for a small, self-perpetuating elite, and is slowing dying. The wrong comparison is being made. This is not the US without the electric chair; it is the USSR without the gulag.

If "Protest never changes anything"? Look at how TTIP has been derailed

Owen Jones in The Guardian

People power has taken on big business over this transatlantic stitch-up and looks like winning. We should all be inspired.

 

Illustration by Ben Jennings


For those of us who want societies run in the interests of the majority rather than unaccountable corporate interests, this era can be best defined as an uphill struggle. So when victories occur, they should be loudly trumpeted to encourage us in a wider fight against a powerful elite of big businesses, media organisations, politicians, bureaucrats and corporate-funded thinktanks.

Today is one such moment. The Transatlantic Trade Investment Partnership (TTIP) – that notorious proposed trade agreement that hands even more sweeping powers to corporate titans – lies wounded, perhaps fatally. It isn’t dead yet, but TTIP is a tangled wreckage that will be difficult to reassemble.

Doubts rise over TTIP as France threatens to block EU-US deal



Those of us who campaigned against TTIP – not least fellow Guardian columnist George Monbiot – were dismissed as scaremongering. We said that TTIP would lead to a race to the bottom on everything from environmental to consumer protections, forcing us down to the lower level that exists in the United States. We warned that it would undermine our democracy and sovereignty, enabling corporate interests to use secret courts to block policies that they did not like.

Scaremongering, we were told. But hundreds of leaked documents from the negotiations reveal, in some ways, that the reality is worse – and now the French government has been forced to suggest it may block the agreement.

The documents imply that even craven European leaders believe the US demands go too far. As War on Want puts it, they show that TTIP would “open the door” to products currently banned in the EU “for public health and environmental reasons”.

As the documents reveal, there are now “irreconcilable” differences between the European Union’s and America’s positions. According to Greenpeace, “the EU position is very bad, and the US position is terrible”.

The documents show that the US is actively trying to dilute EU regulations on consumer and environmental protections. In future, for the EU to be even able to pass a regulation, it could be forced to involve both US authorities and US corporations, giving big businesses across the Atlantic the same input as those based in Europe.

With these damning revelations, the embattled French authorities have been forced to say they reject TTIP “at this stage”. President Hollande says France would refuse “the undermining of the essential principles of our agriculture, our culture, of mutual access to public markets”. And with the country’s trade representative saying that “there cannot be an agreement without France and much less against France”, TTIP currently has a bleak future indeed.

There are a number of things we learn from this, all of which should lift hopes. First, people power pays off. European politicians and bureaucrats, quite rightly, would never have imagined that a trade agreement would inspire any interest, let alone mass protests. Symptomatic of their contempt for the people they supposedly exist to serve, the negotiations over the most important aspects of the treaty were conducted in secret. Easy, then, to accuse anti-TTIP activists of “scaremongering” while revealing little of the reality publicly.

But rather than give up, activists across the continent organised. They toxified TTIP, forcing its designers on the defensive. Germany – the very heart of the European project – witnessed mass demonstrations with up to 250,000 people participating.

From London to Warsaw, from Prague to Madrid, the anti-TTIP cause has marched. Members of the European parliament have been subjected to passionate lobbying by angry citizens. Without this popular pressure, TTIP would have received little scrutiny and would surely have passed – with disastrous consequences.

Second, this is a real embarrassment to the British government. Back in 2011, David Cameron vetoed an EU treaty to supposedly defend the national interest: in fact, he was worried that it threatened Britain’s financial sector. The City of London and Britain are clearly not the same thing. But Cameron has been among the staunchest champions of TTIP. He is more than happy to undermine British sovereignty and democracy, as long as it is corporate interests who are the beneficiaries.

And so we end in the perverse situation where it is the French government, rather than our own administration, protecting our sovereignty.

And third, this has real consequences for the EU referendum debate. Rather cynically, Ukip have co-opted the TTIP argument. They have rightly argued that TTIP threatens our National Health Service – but given that their leader, Nigel Farage, has suggested abolishing the NHS in favour of private health insurance, this is the height of chutzpah.

Ukip have mocked those on the left, such as me, who back a critical remain position in the Brexit referendum over this issue. But if we were to leave the EU, not only would the social chapter and various workers’ rights be abandoned – and not replaced by our rightwing government – but Britain would end up negotiating a series of TTIP agreements. We would end up living with the consequences of TTIP, but without the remaining progressive elements of the EU.
Instead, we have seen what happens when ordinary Europeans put aside cultural and language barriers and unite. Their collective strength can achieve results. This should surely be a launchpad for a movement to build a democratic, accountable, transparent Europe governed in the interests of its citizens, not corporations. It will mean reaching across the Atlantic too.

For all President Obama’s hope-change rhetoric, his administration – which zealously promoted TTIP – has all too often championed corporate interests. However, though Bernie Sanders is unlikely to become the Democratic nominee, the incredible movement behind him shows – particularly among younger Americans – a growing desire for a different sort of US.

In the coming months, those Europeans who have campaigned against TTIP should surely reach out to their American counterparts. Even if TTIP is defeated, we still live in a world in which major corporations often have greater power than nation states: only organised movements that cross borders can have any hope of challenging this unaccountable dominance.

From tax justice to climate change, the “protest never achieves anything” brigade have been proved wrong. Here’s a potential victory to relish, and build on.

TTIP leak could it spell the end of controversial trade deal?

Andrew Griffin in The Independent

Hundreds of leaked pages from the controversial Transatlantic Trade and Investment Partnership (TTIP) show that the deal could be about to collapse, according to campaigners.

The huge leak – which gives the first full insight into the negotiations – shows that the relationship between Europe and the US are weaker than had been thought and that major divisions remain on some of the agreement’s most central provisions.

The talks have been held almost entirely in secret, and most information that is known in public has come out from unofficial leaks. But the new pages, leaked by Greenpeace, represent the first major look at how the highly confidential talks are progressing.

They indicate that the US is looking strongly to change regulation in Europe to lessen the protections on the environment, consumer rights and other positions that the EU affords to its citizens. Representatives for each side appear to have found that they have run into “irreconcilable” differences that could undermine the signing of the landmark and highly controversial trade deal, campaigners say.

For instance, the papers show that the US is looking to weaken the EU’s “precautionary principle” that governs how potentially harmful products are sold, Greenpeace says. The US has much weaker regulation that aims to minimise rather than avoid risks, and that same less strict regime could come to the UK and Europe under the deal.

If the EU made further changes to similar regulations, it would have to inform the US and corporations based there, according to the documents. American companies would then be able to have the same input into EU regulation as European ones do.

There are also notable missing parts of the agreement. None of the texts includes any reference to the global effort to cut CO2 emissions agreed in Paris last year, according to Greenpeace, despite a commitment from the European Commission that it would make environmental sustainability a key part of any deal.

Those who support TTIP argue that it represents an important step that will allow the US and EU to work together more closely and that it will support business in both regions. But parts of the deal and the secrecy that surrounds it have led campaigners to argue that it could include dangerous changes to the consumer protections that are guaranteed by the EU.

UK Parliament 'would not be able to stop NHS sell-off under TTIP'

Poverty, environmental and other campaigners have claimed that the new leak could be enough to undermine those already controversial talks.

"The TTIP negotiations will never survive this leak,” said John Hilary, the executive director of War on Want. “The only way that the European Commission has managed to keep the negotiations going so far is through complete secrecy as to the actual details of the deal under negotiation. Now we can see the details for ourselves, and they are truly shocking. This is surely the beginning of the end for this much hated deal."

Other campaigners criticised the fact that the only public information that has emerged about TTIP has come from leaks.

“TTIP is being cooked up behind closed doors because when ordinary people find out about the threat it poses to democracy and consumer protections, they are of course opposed to it,” said Guy Taylor, trade campaigner at Global Justice Now. “It’s no secret that the negotiations have been on increasingly shaky ground. Millions of people across Europe have signed petitions against TTIP, and hundreds of thousands have taken to the streets to call for an end to the negotiations. These leaks should be seen as another nail in the coffin of a toxic trade deal that corporate power is unsuccessfully trying to impose on ordinary people and our democracies.”

TTIP is a very bad excuse to vote for Brexit

Nick Dearden in The Guardian

Barack Obama gave TTIP the hard sell, but leaving the EU would only make the controversial trade deal more likely – and possibly worse
 

‘In Berlin, 250,000 people took to the streets last October to protest about TTIP.’ Photograph: Axel Schmidt/Getty Images



Barack Obama’s key message to Europe’s leaders last week was “let’s speed up TTIP”. The US-EU trade deal, formally called the Transatlantic Trade and Investment Partnership, has been mired in controversy on both sides of the Atlantic. The “free trade” agenda has become poison in the US primaries, forcing even pro-trade Hillary Clinton to re-examine TTIP.

The next round of talks begin on Monday in New York and Obama is worried – unless serious progress is made in coming months, his trade legacy may be doomed. The problem for the US president is selling TTIP at the same time as trying to warn against the dangers of Brexit. This is a tough ask because TTIP has been a godsend for Brexit campaigners, who argue that the deal is a major reason to cut loose from Brussels.

It’s true that TTIP is a symbol of all that’s wrong with Europe: dreamed up by corporate lobbyists, TTIP is less about trade and more about giving big business sweeping new powers over our society. It is a blueprint for deregulation and privatisation. As such it makes a good case for Brexit.

Until you remember that the British government has done everything possible to push the most extreme version of TTIP, just as they’ve fought against pretty much every financial regulation, from bankers bonuses to a financial transaction tax. While Germany and France were concerned about TTIP’s corporate court system – which allows foreign business to sue governments for “unfair” laws like putting cigarettes in plain packets – the UK secretly wrote to the European commission president demanding he retain it.

At the heart of TTIP is a radical agenda of deregulation. The ambition is that everything from food standards to financial policies are “standardised” in the US and EU, with big business gaining new powers over the process. This could have been inspired by David Cameron’s own programme of stripping away laws that annoy big business, no matter how important they are for people and the environment.

Cameron’s policy means scrapping two laws for every one brought in and giving every regulatory body the duty to have regard to the desirability of “promoting economic growth”. That could include the equality and human rights commission and the health and safety executive. The TUC described Britain as “exporting their anti-worker position into Europe and it is spreading like a bad outbreak of gastric flu”.

Brexit wouldn’t necessarily stop TTIP anyway – that’s all down to the transition process. At the very least, Britain would need to adopt many of TTIP’s provisions in order to remain in the single market.

But it gets worse: every scenario for Brexit is premised on extreme free trade agreements coupled with looser regulation to make us more competitive. “Outcompeting” the EU through lower standards is the strategy. High-profile supporters of the Brexit campaign have repeatedly said that they believe the UK would be able to realise a more “ambitious” and faster free trade deal if we stood alone. There’s every reason to think that Brexit will turn the UK into a paradise for free market capitalism: a TTIP on steroids.

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What is TTIP and why should we be angry about it?
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Is there any hope? Yes – the movement to defeat TTIP received the support of well over 3 million Europeans in a little over a year. In Berlin, 250,000 people took to the streets last October. The deal was meant to be signed by now – but together, Europe’s people have seriously stalled things. Would it really be possible to stop such a move if we couldn’t link up with campaigners across Europe? If being in the EU has brought us TTIP, it has also brought us the means to stop it.

Europe also allows the potential to take on the corporate power which TTIP symbolises: the biggest threat to our sovereignty. Even in the best of circumstances, there is only so much a small nation state can do against the size and power of global big business. But through being in Europe we could stop tax avoidance, introduce a financial transactions tax, hold corporations legally responsible for their human rights abuses, enforce world-leading climate targets, develop new forms of public ownership of key resources. At least, we could if Britain stopped standing in the way.

Obama’s rationale for avoiding Brexit is quite different. The US establishment has always been interested in Britain’s role as a fifth column in Europe, undermining a social Europe on behalf of global (read US) corporations. Reclaiming our sovereignty means not playing this role, and instead working with those in Europe who want to build a different world. Another Europe is possible.

UK could be better off leaving the EU if TTIP passes says Joseph Stiglitz

Hazel Sheffield in The Independent

Joseph Stiglitz, a Nobel-prize winning economist, has said that the UK could be better off leaving the European Union if the Transatlantic Trade and Investment Partnership passes.

“I think that the strictures imposed by TTIP would be sufficiently adverse to the functioning of government that it would make me think over again about whether membership of the EU was a good idea,” Stiglitz said.

TTIP gives corporations the power to sue governments when they pass regulation that could hit that corporation's profits.

READ MORE

• TTIP talks 'could be completed before the end of 2016'
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• TTIP rules make fighting tax avoidance harder

United Nations figures have shown that that US companies have made billions of dollars by suing other governments nearly 130 times in the past 15 years under similar free-trade agreements.

Details of the cases are often secret, but notorious precedents include the tobacco giant Philip Morris suing Australia and Uruguay for putting health warnings on cigarette packets.

“Every time you passed a regulation against asbestos or anything else, you would be sued,” Stiglitz said. 

“There’s nothing in TTIP to stop you writing the regulation. You can write the regulation. You would just have to keep writing a cheque to Philip Morris to make up for the profits that they would have had if they were able to kill people like they were able to in the past,” he said.

The planned TTIP agreement between the EU and the US would create the world’s largest free-trade zone, sweeping aside tariffs and other barriers to the trade of goods and services. Proponents say it would encourage investment and create jobs.

But the controversial provision for an investor-state dispute settlement would allow multinationals to sue foreign governments if it thought regulations were hurting profits.

Stiglitz described TTIP as “a massive rewriting of the rules with no public discussion”.

“The dangers to our society are very significant,” he said.

I’m starting to hate the EU. But I will vote to stay in

George Monbiot in The Guardian

On jobs, health and wildlife, the European Union is often all that stands between us and unfettered corporate power

 

Slurry runoff polluting a river: ‘What Cameron described in parliament as “pettifogging bureaucracy” are the rules that prevent children from being poisoned by exhaust fumes, rivers from being turned into farm sewers.’ Photograph: Alamy



By instinct, like many on the left, I am a European. I recognise that many issues – perhaps most – can no longer be resolved only within our borders. Among them are grave threats to our welfare and our lives: climate change and the collapse of the living world; the spread of epidemics whose vectors are corporations (obesity, diabetes and diseases associated with smoking, alcohol and air pollution); the global wealth-grab by the very rich; antibiotic resistance; terrorism and conflict.

I recognise that the only legitimate corrective to transnational power is transnational democracy. So I want to believe; I want to belong. But it seems to me that all that is good about the European Union is being torn down, and all that is bad enhanced and amplified.

Nowhere is this clearer than in the draft agreement secured by David Cameron. For me, the most disturbing elements are those that have been widely described in the media as “uncontroversial”: the declarations on regulations andcompetitiveness. The draft decisions on these topics are a long series of euphemisms, but they amount to a further dismantling of the safeguards defending people, places and the living world.

What Cameron described in parliament as “pettifogging bureaucracy” is the rules that prevent children from being poisoned by exhaust fumes, rivers from being turned into farm sewers and workers from being exploited by their bosses. What the European commission calls reducing the “regulatory burden for EU business operators” often means increasing the costs the rest of us must carry: costs imposed on our pockets, our health and our quality of life. “Cutting red tape” is everywhere portrayed as a good thing. In reality, it often means releasing business from democracy.

There is nothing rational or proportionate about the deregulation the commission contemplates. When Edmund Stoiber, the conservative former president of Bavaria, reviewed European legislation, he discovered that the combined impact of all seven environmental directives incurred less than 1% of the cost to business caused by European law. But, prodded by governments including ours, the commission threatens them anyway. It is still considering a merger and downgrading of the habitats and birds directives, which are all that impede the destruction of many of our precious places and rare species.

Alongside such specific threats, the EU is engineering treaties that challenge the very principle of parliamentary control of corporations. As well as theTransatlantic Trade and Investment Partnership (TTIP), it has been quietly negotiating something even worse: a Trade in Services Agreement (Tisa). These claim to be trade treaties, but they are nothing of the kind. Their purpose is to place issues in which we have a valid and urgent interest beyond the reach of democratic politics. And the commission defends them against all comers.

Are such tendencies accidental, emergent properties of a highly complex system, or are they hardwired into the structure of the EU? The more I see, the more it seems to me that the EU’s problems are intrinsic and systemic. The organisation that began as an industrial cartel still works at the behest of the forces best equipped to operate across borders: transnational corporations. The commission remains a lobbyists’ paradise: opaque, sometimes corruptible, almost unnavigable by those without vast resources.

People such as the former Labour home secretary Alan Johnson, who claim the EU is a neutral political forum – “simply a place we have built where we can manage our interdependence” – are myth-makers. They are the equivalent of the tabloid fabulists who maintain that European rules will reclassify Kent as part of France, force people to trade in old battery-operated sex toys for new ones, and ensure that dead pets are boiled for half an hour in a pressure cooker before they are buried.

So should those who seek a decent, protective politics vote to stay or vote to leave? If you wish to remain within the EU because you imagine it is a progressive force, I believe you are mistaken. That time, if it ever existed, has passed. The EU is like democracy, diplomacy and old age: there is only one thing to be said for it – it is not as bad as the alternative.

If you are concerned about arbitrary power, and the ability of special interests to capture and co-opt the apparatus of the state, the UK is in an even worse position outside the EU than it is within. Though the EU’s directives are compromised and under threat, they are a lot better than nothing. Without them we can kiss goodbye to the protection of our wildlife, our health, our conditions of employment and, one day perhaps, our fundamental rights. Without a formal constitution, with our antiquated voting arrangements and a corrupt and corrupting party funding system, nothing here is safe.


Though the EU’s directives are compromised and under threat, they are a lot better than nothing

The UK government champs and rears against the European rules that constrain it. It was supposed to have ensured that all our rivers were in good ecological condition by the end of last year: instead, lobbied by Big Farmer and other polluting businesses, it has achieved a grand total of 17%. On behalf of the motor industry, it has sought to undermine new European limits on air pollution, after losing a case in the supreme court over its failure to implement existing laws. Ours is the least regulated labour market in Europe, and workers here would be in an even worse fix without the EU.

On behalf of party donors, old school chums, media proprietors and financial lobbyists, the government is stripping away any protections that European law has not nailed down. The EU’s enthusiasm for treaties such as TTIP is exceeded only by Cameron’s. His defence of national sovereignty, subsidiarity and democracy mysteriously evaporates as soon as they impinge upon corporate power.

I believe that we should remain within the union. But we should do so in the spirit of true scepticism: a refusal to believe anything until we have read the small print; a refusal to suspend our disbelief. Is it possible to be a pro-European Eurosceptic? I hope so, because that is what I am.

What is TTIP? The controversial trade deal proposal explained

Julia Kollewe in The Guardian

The EU claims it will create millions of jobs and bring down the cost of living – but others say it is a threat to public services such as the NHS
 

An anti-TTIP banner is held aloft at a rally before the G7 summit in Munich in June. Photograph: Wolfgang Rattay/Reuters



If you are not yet familiar with the acronym TTIP it is likely you soon will be. TheTransatlantic Trade and Investment Partnership is a proposed trade agreement and the subject of an ongoing series of negotiations between the EU and US aimed at creating the world’s biggest free trade zone spanning the north Atlantic.

It would dwarf all past free trade deals: the European commission reckons it could boost the size of the EU economy by €120bn (£85bn) – equal to 0.5% of GDP – and the US economy by €95bn – 0.4% of GDP.

It would create several million jobs dependent on exports, Brussels says, while consumers would enjoy cheaper products and services. The average European household of four would be around €500 a year better off as a result of wage increases and price reductions, according to the study commissioned from the Centre for Economic Policy Research in 2013.

The plan is to cut tariff barriers – levies imposed to control cross-border trade – to zero and other non-tariff barriers by 25-50%. The study insists this is a realistic prospect. The business sectors that would benefit most include industries based around metal products, processed food and chemicals, and especially the motor industry.

In the UK (and elsewhere), the main beneficiaries would be big businesses, as smaller firms are less likely to trade outside Britain. The UK could benefit to the tune of £10bn, which means the average household would be £400 a year better off.

The main aim of TTIP is to reduce regulatory barriers to trade, in areas ranging from food safety law to environmental rules and banking regulations. Opponents argue it will water down important EU regulations.

Food safety has become a major stumbling block in the negotiations as both sides prepare for the latest round – the 10th – which takes place from 13 to 17 July in Brussels.

The talks have been conducted largely in secret, but opposition to TTIP is growing on the ground. More than 2 million people in Europe have signed an online petition against the proposed deal. Campaigners have been outspoken about TTIP’s potential dangers and have painted it as a threat to European democracy.
In Britain, MPs on the all-party business, innovations and skills committee havedenounced the government’s firm support for TTIP amid fears for the NHS and other public services.

Concerns are mounting that TTIP could lead to more privatisation, with the prospect of US corporations providing vital UK public services such as transport, education, water and health.

As highlighted in this Guardian video, another major concern is whether standards will drop. For example, the EU bans cosmetics tested on animals but the US does not. Another question is what happens if EU countries want some protection, for instance Italy for its Parma ham, and the UK for its pork pies.
One of the most controversial elements of the trade proposal is the Investor State Dispute Settlement (ISDS) provision. ISDS provisions have been included in many trade deals since the 1980s, to encourage overseas investment in poorer countries. It means private investors can ask a tribunal of international arbitratorsto judge if a government has treated them unfairly – and can get compensation.

Over the past decade some big, mainly American companies, such as tobacco conglomerate Philip Morris, have used ISDS to claim rights. The provision would in theory allow private investors to sue governments for the loss of future profits due to decisions made by national parliaments. Critics say it could be used to attack the UK’s NHS by making privatisations of specific services harder to reverse.



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TTIP: the key to freer trade, or corporate greed?

Some say the US/EU trade deal that could be agreed this year will open up markets and promote UK growth. Others fear it will drive down wages and promote privatisation

Philip Inman in The Guardian


Cheap American olive oil could, in a few years’ time, be sitting on supermarket shelves next to the Tuscan single estate varieties loved by British foodies. At present a prohibitive tariff on US imports effectively prices them out of contention.

But a groundbreaking trade deal could lower the $1,680-a-tonne tariff on US olive oil to match the $34 a tonne the US charges on imports from the EU. Or the tariffs could disappear altogether. Either way, Greek, Spanish and Italian olive farmers must fear the Transatlantic Trade and Investment Partnership (TTIP), a deal that aims to create a level playing field between them and massive US agri-businesses.

Trade deals were once seen as a panacea for global poverty. In the 1990s, the World Trade Organisation was formed to harmonise cross-border regulations on everything from cars to pharmaceuticals and cut tariffs in order to promote the free flow of goods and services around the world.

There was always a fear that, far from being a winning formula for all, lower tariffs would favour the rich and powerful and crucify small producers, who would struggle to compete in an unprotected environment.

The effects of the North American Free Trade Agreement (Nafta), signed by the US, Mexico and Canada in 1993, appeared to justify that fear: it became in later years a cause celebre for anti-poverty campaigners, angered by the plight of Mexican workers. Not only were they subjected to low wages and poor working conditions by newly relocated US corporations – and, as consumers, to the relentless marketing power of Walmart, Coca Cola and the rest – but the major fringe benefit of cutting corruption remained illusory.

This year the US hopes to sign what many believe will be Nafta’s direct successor – TTIP. Should it get the green light from Congress and the EU commission, the agreement will be a bilateral treaty between Europe and the US, and, just like Nafta before it, outside the ambit of a gridlocked WTO.

Supporters say it will be an improvement on its predecessor because the main proponents are a liberal US president and a European commission that considers itself concerned with workers and consumers. Why, the commission asks, would 28 relatively affluent member states with concerns about high unemployment, stagnant wages, welfare provision and climate change agree to a charter that undermines workers’ rights, attacks public services or reduces environmental regulations?

TTIP is also billed as an agreement between equals that allows both sides to promote trade: it is claimed that the UK’s national income could be raised by £4bn-£10bn annually, or up to £100bn over 10 years. That amounts to a 0.3 percentage point boost to GDP, which would have pushed this year’s expected 2.4% growth to 2.7%.

  An anti-TTIP demonstration in Berlin this year. Photograph: Wolfram Steinberg/EPA

But it strikes fear into the hearts of many, who believe it to be a Trojan horse for rapacious corporations. These corporations, hellbent on driving down costs to enhance shareholder value, spell the end for Europe’s cosy welfare states and their ability to shield fledgling or, in the case of steel and coal, declining industries from the harsh realities of open competition.

TTIP has been compared to the 1846 Corn Law abolition, which either swept away protectionist tariffs that impoverished millions of workers, or protected a vital source of food and led Karl Marx to ask: “What is free trade under the present condition of society?” His answer was: “It is the freedom which capital has to crush the worker.” Is that the case with TTIP? Here are five key factors to consider.

Health and public services

From the moment TTIP became part of President Barack Obama’s growth strategy, critics have feared that he little realised the expansionary intentions of US healthcare companies or was too distracted to care. The concern relates to the prospect of EU countries, under pressure from rising healthcare costs, handing over major parts of healthcare provision to the private sector. Once services are in private hands, say critics, TTIP rules will prevent them being taken back into state control.

Since these fears were voiced, trade negotiators have excluded provisions that would have allowed firms to sue governments for the loss of health and public services contracts once they expired. This allows the UK’s rail franchise system and the contracting-out of health services to continue under time-limited contracts.

But the US private health industry, which is the largest in the world, views a Europe struggling with the needs of an ageing baby-boomer generation as ripe for the picking. For this reason alone, contracting out the distribution of drugs, the supply of medical devices and the provision of vital services could prove irresistible.

Dispute resolution

A little known facet of every trade deal is a separate form of arbitration for the businesses covered by the agreement, allowing them to avoid the civil courts. As such, the investor-state dispute resolution (ISDS) gives foreign investors the power to sue a government for introducing legislation that harms their investment.

Famously, it was used by big tobacco to sue the Australian government when it introduced plain cigarette packaging. Before and after the scandal, other governments have come under legal challenge from corporations concerned that public policymaking is denying them revenues.

In spring 2014, UN official and human rights lawyer Alfred de Zayas called for a moratorium on TTIP negotiations until ISDS was excluded. He warned that the secret court tribunals held to settle trade disputes were undemocratic. Their reliance on a small group of specialist lawyers also meant that arbitrators sitting in judgment were the ones who at other times represented corporate clients.

De Zayas feared that smaller states would find themselves in the same position as many governments in trade disputes, suffering huge legal bills and long delays to public policy reforms. He was joined in his mission by NGOs and, most importantly, by MEPs in Strasbourg.

As a first concession, the US side agreed to prohibit “brass-plate” firms – those that exist only by name in a county, without any employees or activity – from suing a government. This aimed to prevent a repeat of the Australia incident when the Ukrainian arm of tobacco firm Philip Morris, effectively a brass-plate entity, spearheaded the attack on plain packaging.

  European commissioner Cecilia Malmström has proposed an international court of arbitration to settle investor disputes. Photograph: Emmanuel Dunand/Getty

Many EU politicians said this concession was too easy to circumvent, leaving corporations in a powerful position. So Europe’s chief negotiator, Swedish commissioner Cecilia Malmström, hatched a scheme for an international court of arbitration – an open public forum instead of the private court system. Even her critics said it was a bold move, and unlikely to be accepted by the Americans.

Washington has countered with proposals for a more transparent ISDS court, with live-streamed meetings and the publication of all documents. Not enough, says de Zayas, who wrote recently: “Alas, countless ISDS awards have shown a business bias that shocks the conscience. To the extent that the procedures are not transparent, the arbitrators are not always independent and the annulment procedure is nearly useless, ISDS should be abolished as incompatible with article 14(1) of the ICCPR [International Covenant on Civil and Political Rights] which requires that all suits at law be decided by independent and competent tribunals under the rule of law.”

The two sides have yet to formally discuss either proposal: under deals between the US and Japan and the EU and Canada the issue was barely mentioned, but it is now expected to be among the most contentious.

Regulations

Michael Froman, the US chief negotiator, described the task of harmonising regulations as follows: “For years the US and EU have accepted each other’s inspection of aeroplanes because it was obvious they would not be able to check all the planes landing in their jurisdiction. We seek to expand this practice to other areas.”

So how would Froman apply this to the fact that American cars will still be left-hand drive, restricting their use on British roads? He argues that the cost of imported cars, research and development and testing can still benefit from the harmonisation of regulations on either side of the Atlantic.

Yet there is nothing US food regulators would like less than to accept processed foods tested by EU officials who failed to spot the horsemeat scandal.

And EU regulators are duty bound to reject GM foods, after sustained protests by Europe’s consumers in direct conflict with US farmers. Washington claims it will accept the science when it applies to regulations, which supports GM foods being accepted by the EU as part of TTIP, just as it is part of the WTO agreement.

Tariffs

Dispensing with tariffs seems like a straightforward process compared with tackling complex regulations. Under TTIP, tariffs on goods and services should disappear, though it is expected that some will only be reduced, and others may take years to go the way of history.

Under the Trans Pacific Partnership (TPP) recently agreed, but not yet implemented, between the US, Japan, Australia, Vietnam and other East Asian countries, all goods, from pork to cars, are covered.

A good example of how long it can take for tariffs to come down is found in the case of the 2.5% rate slapped on Japanese car imports to the US: this will start to be incrementally lowered 15 years after the agreement takes effect, halved in 20 years and eliminated in 25 years. In return, Japan will, among other things, lower its tariff on imported beef from 38.5% to 9% over 16 years. A similar programme could be possible under TTIP, with olive oil tariffs lowered over 25 years.

Labour standards and workers’ rights


Japanese trade unions supported the TPP deal, and unions in Europe are expected to follow suit with TTIP. They accept that labour protection rules lie outside the scope of a deal, and that their governments can therefore continue to implement minimum wage legislation and other supportive measures without being sanctioned.

But unions, where they exist, tend to represent workers in successful industries, which naturally welcome access to wider markets. Workers in weaker areas of the economy could find their jobs coming under pressure from harmonised regulations, lower tariffs, or even just exposure to a US rival with a work ethic that denies most employees more than two weeks’ holiday a year.

TTIP is important to the UK government because the US is our biggest market for goods and services outside the EU. It’s seen as especially important for small and medium-sized businesses, which appreciate the lack of language barrier. Britain also has a trade surplus with the US: we export more than we import, which helps counterbalance the country’s huge trade deficit.

Such is the momentum behind the talks that a deal could be agreed by the end of the year, and go before Congress and EU parliaments in 2017. Both sides claim to be making good progress. But the dispute over ISDS and protests from farmers could yet quash Obama’s hopes for US olive oil sales.