Trump as defender of democracy

George Monbiot in The Guardian

He gets almost everything wrong. But last weekend Donald Trump got something right. To the horror of the other leaders of the rich world, he defended democracy against its detractors. Perhaps predictably, he has been universally condemned for it. 

His crime was to insist that the North American Free Trade Agreement (Nafta) should have a sunset clause. In other words, it should not remain valid indefinitely, but expire after five years, allowing its members either to renegotiate it or to walk away. To howls of execration from the world’s media, his insistence has torpedoed efforts to update the treaty.

In Rights of Man, published in 1791, Thomas Paine argued that: “Every age and generation must be as free to act for itself, in all cases, as the ages and generations which preceded it. The vanity and presumption of governing beyond the grave is the most ridiculous and insolent of all tyrannies.” This is widely accepted – in theory if not in practice – as a basic democratic principle.

Even if the people of the US, Canada and Mexico had explicitly consented to Nafta in 1994, the idea that a decision made then should bind everyone in North America for all time is repulsive. So is the notion, championed by the Canadian and Mexican governments, that any slightly modified version of the deal agreed now should bind all future governments.

But the people of North America did not explicitly consent to Nafta. They were never asked to vote on the deal, and its bipartisan support ensured that there was little scope for dissent. The huge grassroots resistance in all three nations was ignored or maligned. The deal was fixed between political and commercial elites, and granted immortality.

In seeking to update the treaty, governments in the three countries have candidly sought to thwart the will of the people. Their stated intention was to finish the job before Mexico’s presidential election in July. The leading candidate, Andrés Lopez Obrador, has expressed hostility to Nafta, so it had to be done before the people cast their vote. They might wonder why so many have lost faith in democracy.
Nafta provides a perfect illustration of why all trade treaties should contain a sunset clause. Provisions that made sense to the negotiators in the early 1990s make no sense to anyone today, except fossil fuel companies and greedy lawyers. The most obvious example is the way its rules for investor-state dispute settlement have been interpreted. These clauses (chapter 11 of the treaty) were supposed to prevent states from unfairly expropriating the assets of foreign companies. But they have spawned a new industry, in which aggressive lawyers discover ever more lucrative means of overriding democracy.

The rules grant opaque panels of corporate lawyers, meeting behind closed doors, supreme authority over the courts and parliaments of its member states. A BuzzFeed investigation revealed they had been used to halt criminal cases, overturn penalties incurred by convicted fraudsters, allow companies to get away with trashing rainforests and poisoning villages, and, by placing foreign businesses above the law, intimidate governments into abandoning public protections.

Under Nafta, these provisions have become, metaphorically and literally, toxic. When Canada tried to ban a fuel additive called MMT as a potentially dangerous neurotoxin, the US manufacturer used Nafta rules to sue the government. Canada was forced to lift the ban, and award the company $13m (£10m) in compensation. After Mexican authorities refused a US corporation permission to build a hazardous waste facility, the company sued before a Nafta panel, and extracted $16.7m in compensation. Another US firm, Lone Pine Resources, is suing Canada for $119m because the government of Quebec has banned fracking under the St Lawrence River.

As the US justice department woke up to the implications of these rules in the 1990s, it began to panic: one official wrote that it “could severely undermine our system of justice” and grant foreign companies “more rights than Americans have”. Another noted: “No one thought about this when Nafta implementing law passed.”

Nor did they think about climate breakdown. Nafta obliges Canada not only to export most of its oil and half its natural gas to the US, but also to ensure that the proportion of these fuels produced from tar sands and fracking does not change. As a result, the Canadian government cannot adhere to both its commitments under the Paris agreement on climate change and its commitments under Nafta. While the Paris commitments are voluntary, Nafta’s are compulsory.

Were such disasters foreseen by the negotiators? If so, the trade agreement was a plot against the people. If not – as the evidence strongly suggests – its unanticipated outcomes are a powerful argument for a sunset clause. The update the US wanted was also a formula for calamity, that future governments might wish to reverse. But this is likely to be difficult, even impossible, without the threat of walking out.

Those who defend the immortality of trade agreements argue that it provides certainty for business. It’s true that there is a conflict between business confidence and democratic freedom. This conflict is repeatedly resolved in favour of business. That the only defender of popular sovereignty in this case is an odious demagogue illustrates the corruption of 21st-century liberal democracy.

There was much rejoicing this week over the photo of Trump being harangued by the other G7 leaders. But when I saw it, I thought: “The stitch-ups engineered by people like you produce people like him.” The machinations of remote elites in forums such as the G7, the IMF and the European Central Bank, and the opaque negotiation of unpopular treaties, destroy both trust and democratic agency, fuelling the frustration that demagogues exploit.

Trump was right to spike the Trans-Pacific Partnership. He is right to demand a sunset clause for Nafta. When this devious, hollow, self-interested man offers a better approximation of the people’s champion than any other leader, you know democracy is in trouble.

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.

Transatlantic Trade and Investment Partnership: Wake up people, we’re being shafted

A global ban on left wing politics

George Monbiot

Remember that referendum about whether we should create a single market with the United States? You know, the one that asked whether corporations should have the power to strike down our laws? No, I don’t either. Mind you, I spent ten minutes looking for my watch the other day, before I realised I was wearing it. Forgetting about the referendum is another sign of ageing. Because there must have been one, mustn’t there? After all that agonising over whether or not we should stay in the European Union(1), the government wouldn’t cede our sovereignty to some shadowy, undemocratic body without consulting us. Would it?

The purpose of the Transatlantic Trade and Investment Partnership is to remove the regulatory differences between the US and European nations. I mentioned it a couple of weeks ago(2). But I left out the most important issue: the remarkable ability it would grant big business to sue the living daylights out of governments which try to defend their citizens. It would allow a secretive panel of corporate lawyers to overrule the will of parliament and destroy our legal protections. Yet the defenders of our sovereignty say nothing.

The mechanism is called investor-state dispute settlement. It’s already being used in many parts of the world to kill regulations protecting people and the living planet.

The Australian government, after massive debates in and out of parliament, decided that cigarettes should be sold in plain packets, marked only with shocking health warnings. The decision was validated by the Australian supreme court. But, using a trade agreement Australia struck with Hong Kong, the tobacco company Philip Morris has asked an offshore tribunal to award it a vast sum in compensation for the loss of what it calls its intellectual property(3).

During its financial crisis, and in response to public anger over rocketing charges, Argentina imposed a freeze on people’s energy and water bills (does this sound familiar?). It was sued by the international utility companies whose vast bills had prompted the government to act. For this and other such crimes, it has been forced to pay out over a billion dollars in compensation(4).

In El Salvador, local communities managed at great cost (three campaigners were murdered) to persuade the government to refuse permission for a vast gold mine which threatened to contaminate their water supplies. A victory for democracy? Not for long perhaps. The Canadian company which sought to dig the mine is now suing El Salvador for $315m – for the loss of its anticipated future profits(5).

In Canada, the courts revoked two patents owned by the US drugs firm Eli Lilly, on the grounds that the company had not produced enough evidence that they had the beneficial effects it claimed. Eli Lilly is now suing the Canadian government for $500m, and demanding that Canada’s patent laws are changed(6).

These companies (and hundreds of others) are using the investor-state dispute rules embedded in trade treaties signed by the countries they are suing. The rules are enforced by panels which have none of the safeguards we expect in our own courts(7,8). The hearings are held in secret. The judges are corporate lawyers, many of whom work for corporations of the kind whose cases they hear. Citizens and communities affected by their decisions have no legal standing. There is no right of appeal on the merits of the case. Yet they can overthrow the sovereignty of parliaments and the rulings of supreme courts.

You don’t believe it? Here’s what one of the judges on these tribunals says about his work. “When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all … Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.”(9)

There are no corresponding rights for citizens. We can’t use these tribunals to demand better protections from corporate greed. As the Democracy Centre says, this is “a privatised justice system for global corporations.”(10)

Even if these suits don’t succeed, they can exert a powerful chilling effect on legislation. One Canadian government official, speaking about the rules introduced by the North American Free Trade Agreement, remarked, “I’ve seen the letters from the New York and DC law firms coming up to the Canadian government on virtually every new environmental regulation and proposition in the last five years. They involved dry-cleaning chemicals, pharmaceuticals, pesticides, patent law. Virtually all of the new initiatives were targeted and most of them never saw the light of day.”(11) Democracy, as a meaningful proposition, is impossible under these circumstances.
This is the system to which we will be subject if the transatlantic treaty goes ahead. The US and the European Commission, both of which have been captured by the corporations they are supposed to regulate, are pressing for investor-state dispute resolution to be included in the agreement.

The Commission justifies this policy by claiming that domestic courts don’t offer corporations sufficient protection because they “might be biased or lack independence.”(12) Which courts is it talking about? Those of the US? Its own member states? It doesn’t say. In fact it fails to produce a single concrete example demonstrating the need for a new, extra-judicial system. It is precisely because our courts are generally not biased or lacking independence that the corporations want to bypass them. The EC seeks to replace open, accountable, sovereign courts with a closed, corrupt system riddled with conflicts of interest and arbitrary powers.
Investor-state rules could be used to smash any attempt to save the NHS from corporate control, to re-regulate the banks, to curb the greed of the energy companies, to renationalise the railways, to leave fossil fuels in the ground. These rules shut down democratic alternatives. They outlaw left-wing politics.

This is why there has been no attempt by our government to inform us about this monstrous assault on democracy, let alone consult us. This is why the Conservatives who huff and puff about sovereignty are silent. Wake up people, we’re being shafted.