‘Transatlantic Partnership’ intended to duplicate secret Trans-Pacific Partnership

Neoliberalism knows no borders, so perhaps it should not come as a bolt out of the blue that the United States and European Union are set to negotiate a “Transatlantic Trade and Investment Partnership.”

It might be thought that the Obama administration would have its hands full with the ongoing, top-secret Trans-Pacific Partnership talks, but it seems that much can be done in the absence of any pesky oversight. It might be thought that European Union officials would have their hands full with their series of financial crises, but it appears this is an irresistible opportunity to safeguard austerity.

Ah, can’t you just imagine corporate leaders sitting around a camp fire singing, “We are all the Cayman Islands now.” Surely they would be jolly folks and allow the political leaders who so graciously granted their wishes seats close to the fire.

This dystopia is sponsored by the usual corporate organizations. The trans-Atlantic trade agreement evaded all radar until U.S. President Barack Obama’s announcement in his State of the Union address but had been in the works for more than a year. To the applause of business groups on both sides of the Atlantic.

No details of any kind have emerged about the trans-Atlantic trade agreement, only generalities. It would seem that holding two sets of negotiations among dozens of countries would be difficult, but then it is remembered that the Trans-Pacific Partnership is designed to be “scalable” — a euphemism meaning that the terms will be final. Any countries not among the present negotiators can join at any time but must accept that no terms already agreed upon are negotiable. Could this be the model for the Trans-Atlantic pact?

Big Business already cheering on the negotiators

A “U.S.-E.U. High Level Working Group on Jobs and Growth” was created at a United States-European Union summit meeting in November 2011, tasked with “identifying policies and measures to increase U.S.-EU trade and investment to support mutually beneficial job creation, economic growth, and international competitiveness,” according to the Office of the United States Trade Representative. It is unknown who sat on the “high-level” group, but it is chaired by European Trade Commissioner Karel De Gucht and U.S. Trade Representative Ron Kirk. Early in February 2013 — this seems to account for President Obama’s timing — the group said talks should go ahead.

Although it is impossible to be specific about the influences on the working group, the corporate interests who promote and benefit from “free-trade” agreements were not likely absent from the room. Eurochambres, a regional network of European chambers of commerce, published the paper it presented to the working group online. Eurochambres calls for harmonization of regulations, elimination of all tariffs and “the highest possible standards of protection for investors.”

That last wish should set off alarm bells. In pursuit of “protection for investors,” Eurochambres advocates that trade negotiators “Build on the Joint Statement of Principles on the Treatment of Foreign Investment elaborated by business organization on both sides of the Atlantic.” Those “principles” include:

“[T]he rule of law, transparency and predictability in government administration, regulatory fairness, the sanctity of contracts and private property, respect for intellectual property rights, and sound macro-economic policies. … This general approach should apply to the widest possible definition of investments, including all forms of assets and tangible and intangible property; property rights such as leases, mortgages, liens and pledges; intellectual property rights; rights conferred by law or contract, such as licenses and permits; business enterprises and equity and other forms of participation in them; claims to money and to performance; and returns.”

On the other side of the Atlantic, the U.S. Chamber of Commerce — a hard-line organization that has never seen a regulation it likes or a tax that is justified — has similarly provided its wish list. The Chamber calls for the same things as its European counterpart, including a “a highest standard investment agreement.” The Chamber did go a bit further by demanding an immediate deal, insisting that negotiators:

“Complete a bilateral investment agreement between the United States and the 27 EU member countries. An updated and comprehensive bilateral agreement would improve the flow of capital, prevent discrimination against investors, and provide protection from expropriation. … The Chamber calls for a swift time frame to avoid delays from election calendars in any participating country.”

Trans-Atlantic echoes of the Trans-Pacific Partnership

These demands are staples of “free-trade” agreements, whether bilateral or multi-national. Bland-sounding calls for “equal treatment” for foreign and domestic investors and property rights only thinly mask a thicket of detail-loving devils. These platitudes form the basis of undemocratic, drastically one-sided trade agreements such as the North American Free Trade Agreement, which in turn provides the starting point for the Trans-Pacific Partnership, a negotiation being conducted in secret by 11 countries.

These agreements use the same language as that of the Big Business pressure groups quoted just above. It is not unreasonable to speculate that the Transatlantic Trade and Investment Partnership will contain rules mirroring those proposed for the Trans-Pacific Partnership. The TPP goes beyond NAFTA in several ways, via rules granting additional “rights” to multi-national corporations and further expanding the definition of “investor,” while containing no rules concerning labor, the environment, public health or safety.

For example, the TPP, if ratified, would overturn the policies of countries like Australia and New Zealand that force lower prices on medicines, significantly tighten corporate control of the Internet, and require that speculators be paid the full face value of a government bond even if bought at a deep discount from a third party.

The TPP would require disputes be judged in the International Centre for Settlement of Investor Disputes — a secret tribunal closed to the public that is an arm of, and controlled by, the World Bank. ICSID, and similar tribunals, are bodies that adjudicate disputes between investors and governments, but the judges who sit in judgment are often corporate lawyers who specialize in representing investors in disputes with governments. These tribunals issue a steady stream of rulings favoring corporate interests, and these decisions then become the standards to which future trade agreements will be held, building a floor for subsequent decisions that will be still more harsh.

The rules governing the TPP, if enacted, would require that maximizing corporate profits be the highest priority for governments, by law. Measures to reign in financial speculation, even during economic crises, would be illegal, and rules safeguarding workplace safety or the environment would be struck down as interference with corporate profits.

It is difficult to imagine that the corporations goading on the trans-Atlantic governments intend to settle for anything less. And also at risk for Europeans are laws blocking genetically modified foods — U.S. agribusinesses have sought to eliminate E.U. rules safeguarding food safety and the Transatlantic Trade and Investment Partnership may well be their route. “Harmonizing” rules ordinarily means “harmonizing” at the lowest level, and in this case that would mean the weaker safety regulations, and lackadaisical enforcement, of the U.S.

No Trans-Pacific Partnership text has ever been made available; the little that is publicly known is due to leaks published on the Internet by consumer organizations. The White House TPP page offers no substance. In its report on the most recent negotiation round, the White House provides this less than scintillating summary:

“Trans-Pacific Partnership (TPP) negotiators were pleased to report further solid steps forward in closing the remaining gaps between them during the 15th round of negotiations. … [T]he Leaders reaffirmed their mutual priority of concluding a state-of-the-art, comprehensive agreement as quickly as possible.”

The next round of TPP talks is in Singapore from March 4 to 13, where similar communiqués are likely forthcoming. Once again, it must be asked: What is being hidden?

Different ocean, but same concept

Information on the details of the Trans-Atlantic agreement are likely to be as scarce. Nonetheless, European leaders are mostly lining up in support. German Chancellor Angela Merkel and British Prime Minister David Cameron, for example, are pushing the idea. The corporate media is also lining up behind it, with “resistance” to an agreement portrayed as “interest groups” stubbornly clinging to parochial concerns. An excellent specimen of corporate ideology at work is provided by the centrist German newsmagazine Der Spiegel, which is presented not to single it out but rather because it is typical. Der Spiegel writes of potential opposition:

“Some interest groups have refused to budge. The powerful US agrarian lobby, for example, insists on unlimited access to European markets, including such products as genetically modified produce, which is controversial on the Continent. European companies, for their part, refuse to accept the diktats of US regulatory authorities regarding whether and how they can pursue state contracts. … Furthermore, promoting a trans-Atlantic agreement would allow Obama — on the eve of his planned visit to Berlin in June — to address European concerns that the US has turned away from the Continent in favor of Asia. … But in his Tuesday evening speech, Obama still lauded the benefits of a trans-Pacific trade agreement with Australia and Asian countries before he mentioned the trans-Atlantic deal.”

The primary controversy, a reader might be led to believe, centers on a potential lack of resolve in giving corporations what they want. That there might be interests other than that of corporate profits — say, workers’ ability to have jobs with good pay and dignity, or a desire not eat food untested and unlabeled, or avoiding environmental damage — are not mentioned. Such matters are immaterial, evidently, at most the concern of “interest groups.”

The only clue as to the contents of what a Transatlantic Trade and Investment Partnership might contain are in the final report issued by the High Level Working Group on Jobs and Growth. Two key passages in the final report’s six pages state:

“The [High Level Working Group] recommends that a comprehensive U.S.-EU trade agreement should include investment liberalization and protection provisions based on the highest levels of liberalization and highest standards of protection that both sides have negotiated to date. … The HLWG recommends that the two sides explore new means of addressing these ‘behind-the-border’ obstacles to trade, including, where possible, through provisions that serve to reduce unnecessary costs and administrative delays stemming from regulation.” [page 3]

These provision could include:

“[R]educ[ing] redundant and burdensome testing and certification requirements … [and inserting p]rovisions or annexes containing additional commitments or steps aimed at promoting regulatory compatibility.” [page 4]

Stripped of bureaucratic niceties, what the above passages mean is that the most one-sided trade agreements (and tribunal interpretation) will be in force. For now, that arguably means the standards of NAFTA, under which taxation and regulation constitute “indirect expropriation” that require  compensation for corporations. The Trans-Pacific Partnership, however, would supersede NAFTA if implemented, mostly because it would be more draconian but also because Canada and Mexico have formally joined the nine original TPP negotiating countries, making NAFTA superfluous. To add to the complexity, Canada is negotiating its own secret trade pact with the E.U. and, like the U.S. Congress vis-à-vis the TPP, Canadian members of parliament are being left in the dark.

Market forces demand a race to the bottom

In the High Level Working Group’s six-page report, environment and labor safeguards are discussed in one paragraph. Here it is:

“The EU and the United States are both committed to high levels of protection for the environment and workers. The HLWG recommends that the two sides explore opportunities to address these important issues, taking in to account work done in the Sustainable Development Chapter of EU trade agreements and the Environment and Labor Chapters of U.S. trade agreements.” [page 5]

There are no effective environment or labor chapters in U.S. trade agreements, only boilerplate language that is meaningless. If that is the standard, then labor rights, workplace safety rules and environmental safeguards will be under sustained assault under any Trans-Atlantic trade agreement. Protections for the environment and employees are barriers to corporate profits, and will be treated as such. Regulations will be “harmonized” at the lowest level because that is what the “market” demands — the market simply being the aggregate interests of the most powerful industrialists and financiers.

In the context of European Union elites sparring over financial policy, Chancellor Merkel is not a stubborn holdout nor obsessed with Weimar-era inflation; she is simply reminding other national political leaders that financial harmonization will conform to the tightest policy among them and Germany so happens to have that tightest policy. Trade harmonization, regardless of where the borders are drawn, will follow a similar dynamic. The United States will seek to impose its looser regulations and weaker labor laws on Europe, and further weaken its own.

That is not because there is something inherently evil about U.S. officials or due to some particular moral failing of the Obama administration, but because the U.S. government, like all capitalist countries, reflect the dominant interests within their countries. Large industrialists and financiers dominate their societies through control of the mass media and a range of other institutions to the point that their preferred policies become, through heavy repetition, the dominant ideas across society and the ideas adopted by the political leaders who become intellectually and financially dependent on them. That is a crucial part of the puzzle as to why governments around the world enter into agreements that are so one-sided against themselves.

Coordinated international struggle is the only counter-force that can block these draconian trade agreements.

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18 comments on “‘Transatlantic Partnership’ intended to duplicate secret Trans-Pacific Partnership

  1. Alcuin says:

    Ah, yes, “coordinated international struggle.” Reminds me of the work that appears on the WSWS site. There’s always a tag line to that effect down at the bottom of each piece. Have you ever read Douglas Dowd? He’s great fun!

    I’m going to take the plunge and read Capital. Here’s the plan: buy the Penguin edition of Capital, David Harvey’s The Limits of Capital and then use Harvey’s online class, Reading Capital to navigate the waters. What do you think?

    • I haven’t read Douglas Dowd. A quick glance at his blog yields the article title “We Need a People’s Movement — Soon.” I agree — and that’s just another way to say “coordinated international struggle.”

      I have not read Capital all the way through; in fact, I only own a copy of Volume III and have read much, but not all, of that. But if you want a thorough examination of the workings of capitalism, that’s truly going to the source. The work of David Harvey is an excellent supplement. I would also recommend Against the Market by David McNally.

  2. Jeff Nguyen says:

    Perhaps the NAFTAII.com domain was already taken. Is it a moral failing if the people who the POTUS and his administration were duly “elected” to serve are not adequately and fairly represented by such agreements or partnerships? Or is there no moral equation because all institutions, i.e., education, government, are to be run like businesses? My point is I think its lets the political class off the hook to say there is no moral failing. But then the question leads to what moral measuring stick are we using? The sacred rule of law certainly doesn’t seem to apply to them.

    • Alcuin says:

      Good point, Jeff. From my perspective, the crucial point to keep in mind is who is the “government” and who does it serve? Obama is merely a tool of the capitalist class – he and the rest of the government do not serve the vast majority of the population of this country. They serve the capitalist class, not the rest of us. And, yes, “all institutions, i.e., education, government, are to be run like businesses.” For it is only when institutions are run as businesses, with the bottom line of profit, that there is an entity from which wealth can be extracted by the capitalist class. The history of capitalism is one of expropriating the commons so that profit can be extracted from institutions that were formerly embedded in society. Reading The Great Transformation, by Karl Polanyi, might shed some light on your questions.

      • Jeff Nguyen says:

        Thanks for the reading suggestion, as if I didn’t have enough on my to-do list. :-) Great blog by the way.

        • Thank you for your interesting comments, Jeff. To clarify the point I was attempting to make, the Obama administration is not more or less amoral than any other U.S. administration. It is surely true that the Obama administration does not represent the voters who put it into office or the working people of the country as a whole. I agree that political leaders should be not be let off the hook. They do have responsibility. But, as Alcuin writes, those leaders serve capitalists and are put into office by capitalists.

          If Mitt Romney or George W. Bush were president, they would be doing the same as Barack Obama. A Conservative prime minister, Stephen Harper, is doing the same thing. And it was under another Democratic president (Bill Clinton) and a Liberal prime minister (Jean Chrétien) that NAFTA was instituted. So we need to look at the picture in a systemic way — if all these leaders are doing the same things, then it is necessary to look beyond the personal characteristics of the leaders. Those leaders simply express the ideas of the dominant members of society, who are capitalists.

          Extracting wealth out of every aspect of human creation, and from nature, is the core of those ideas, so we have schools and prisons being run for profit, with people being put into jail to guarantee the profits of the corporations that run the prisons. A system that would do something so grotesque lacks morality; the personality of political leaders who carry out the policy is immaterial. It is under this top-down corporate ideology that trade agreements like NAFTA and the Trans-Pacific Partnership are conceived and implemented. Changing this or that political leader does not touch the economic system that creates these disasters. Only changing the system can effect a permanent reversal.

  3. Jeff Nguyen says:

    I appreciate the clarification Systemic Disorder, you are right of course. Changing the head of any cartel does not change the nature of the cartel itself. I try to convey similar themes at Deconstructing Myths, that all of these players are part of the same theater troupe, that arguing over personalities or parties only serves to keep our eyes off the prize, systemic change. It is hard for me sometimes to not address the morality of the POTUS et al. when their hypocrisy reaches a certain level on the slime-o-meter. Or maybe its my own morality I’m trying to preserve. You have an incredibly insightful blog, I’m glad to have found it.

  4. Paul Gilman says:

    A law that would make it the government’s responsibility to maximize corporate profits. We don’t we just pay our taxes directly to the corporations and not expect anything in return? So much for neo-liberal economics.

  5. Alcuin says:

    Here’s an essay by William I. Robinson on global capitalism – I think it explains both the TAP and TPP initiatives. After reading this, read his response to his critics – quite interesting. Robinson has a number of articles that anyone can read on his website.

    • I was previously familiar with the work of William Robinson; I once read an earlier paper of his, “Beyond the Theory of Imperialism: Global Capitalism and the Transnational State.” He offers interesting ideas, and his attempt to formulate an updated theory of capitalist development for our present globalized world is vital work. But I nonetheless have reservations.

      In “Beyond the Theory,” he advances the same ideas as in the paper you linked to. He correctly sees transnational corporations as transcending borders as corporate globalization develops, but he goes too far in suggesting that the nation-state is becoming irrelevant and that it is no longer proper to focus on U.S. imperialism. To the extent that Professor Robinson is arguing that we need to look at globalization and the austerity it imposes as a systematic condition rather than as the U.S. simply imposing its will on the rest of the world, I firmly agree.

      But to go as far as he does, by arguing that capital is now wholly transnational and outside the bounds of the nation-state, is to undervalue the role of the largest nation-states in maintaining the system through force —— military, financial and otherwise. I believe that the world-systems theory of Immanuel Wallerstein and Giovanni Arrighi is helpful. In short, world-systems theory posits that the capitalist system (both when its covered only a part of the planet and today when it has crept into nearly every corner) always needs a center to hold it together. Each successive center —- Amsterdam, London and New York as the last three —- has been located in a larger country with a greater ability to impose itself militarily.

      Capitalist governments are decisively influenced by their most powerful industrialists and financiers, and these governments in turn animate institutions like the World Bank and IMF. Professor Robinson doesn’t deny that national governments provide services for multi-national corporations, but I do find that his theories underplay the roles of governments. The capitalists will always need enforcers, and no there are no enforcers remotely comparable to the military and economic apparatuses wielded by the U.S. government, with other advanced capitalist countries lending a hand as needed.

      • Alcuin says:

        I suspect that you and Robinson agree on more than you think:

        “Robinson recognizes that global capital requires coercion to enforce its interests throughout the globe and that the supranational institutions of the incipient TNS lack the requisite military apparatuses. Instead, the United States is seen as playing a major part in this policing and militarizing role, acting not in the interests of U.S. capital when it does so, but rather in the interests of the TCC more generally. “The only military apparatus in the world capable of exercising global coercive authority,” he underlines, “is the U.S. military.” However, “The beneficiaries of U.S. military action around the World are not ‘U.S.’ but transnational capitalist groups.” The problem is that this theory—one that overlaps substantially with that of Leo Panitch and Sam Gindin—is never adequately linked empirically to Latin American realities in subsequent chapters.”

        From Monthly Review

        Robinson acknowledges his deep debt to Wallerstein in a number of his publications. I suppose the reason that Robinson’s theory appeals to me (I’m not an academic nor am I well-read in these subjects) is because it explains a lot of what I see happening in the world today. Has he gone too far? Perhaps. At times, it is necessary to push the boundary so that there is room for new ideas. Academics can be extraordinarily conservative at times, despite those who label them as radicals. I think Robinson is on to something – something that those locked into older ways of looking at the world might be missing. To be clear, I don’t think it is possible to win a battle against capital but having said that, I think it is critically important to know who your enemy is before sallying forth. We all have a limited amount of time and energy and it is critical to allot those resources wisely.

        • I don’t underestimate the large areas of commonality I have with William Robinson. He is doing necessary work of re-examining our ideas about imperialism and corporate globalization, and his stress on the necessity of a global counter-movement should be applauded. And he is correct when he says the beneficiaries of U.S. force are often multi-national capital is general, not necessary specifically U.S. capital.

          But the U.S. military is ordinarily deployed to benefit U.S.-based multi-national corporations (certainly this was a primary goal for the Bush II/Cheney administration’s Iraq invasion) and other governments act in the interests of “their” multi-nationals. That these acts often serve to benefit trans-national capital as a whole rather than U.S. interests is something of a byproduct, I believe. Certainly the U.S. government acts to maintain the capitalist system on a global basis (for capitalism can no longer exist in any other form) and sometimes acts on this basis rather than explicitly promoting U.S. capital.

          Nonetheless, the maintenance and intensification of the world capitalist system is both an unavoidable duty of the U.S. as the capitalist center (and home of the world financial capital, New York City) and a requirement for U.S.-based multi-nationals to continue to grow. Thus even the “system maintenance” work that benefits multi-national capital generally rather than U.S.-based capital can’t be neatly separated from the work of interventions explicitly tied to specific U.S. capital.

          Trans-national capital does seek to throw off national government oversight, shifts profits to the places with the lowest wages, sets up offices and even sham headquarters in tax havens, and works to erase borders (for capital, not people). The success of these efforts does require us to look at the world in fresh ways not beholden to concepts formed when the world was not globalized to the extent it is today. But I would caution against going too far in theorizing the demise of national interests. Nationalism remains a potent social force and global capitalist competition still retains a very significant element of competition among countries.

  6. Alcuin says:

    I found a blog that is truly fascinating – it explains, in a way similar to the work of William I. Robinson, our present state of affairs. The posts are excellent (like yours!), particularly the post entitled What is an Institutional Crisis of Capitalism and its follow-up, Keynesian Fordism: global political economy of a passive revolution. Do check them out!

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