“Justice” for a billionaire, none for the state he ripped off

There has been much cheering across the corporate media about the Permanent Court of Arbitration in The Hague ordering the Russian government to pay more than US$51 billion as compensation for confiscating the assets of Yukos, yet silence concerning the original theft of the company by Mikhail Khodorkovsky.

The basis of the decision by the arbitration court was that the assets of Yukos, seized for alleged non-payment of taxes, were sold for US$9 billion, well below the estimated value of the company. Conveniently left out of this picture is that Mr. Khodorkovsky purchased the assets for $159 million seven years earlier in a rigged process that he controlled. He did so as one of seven oligarchs who bought deeply unpopular former President Boris Yeltsin a second term and were handed control of the country’s vast natural resources as a reward.

This is a story that can not be separated from the fall of the Soviet Union and the looting of its assets, with a handful of newly minted oligarchs, mostly former black marketeers who became bankers, coming to control post-Soviet Russia’s economy. Estimates of the size of the assets that came to be owned by the seven biggest oligarchs (Mr. Khodorkovsky was one of them) in the late 1990s range up to one-half of the Russian economy. This at the same time that the Russian economy shrank by 45 percent and an estimated 74 million Russians lived in poverty according to the World Bank; two million had been in poverty in 1989.

Siberian mountain formation (photo by Irina Kazanskaya)

Siberian mountain formation (photo by Irina Kazanskaya)

An important factor in the failure of Mikhail Gorbachev’s perestroika was that working people saw the reforms as coming at their expense. A 1987 reform loosened job protections in exchange for enterprise councils that were to have given workers a voice in management, but the councils were largely ineffective or co-opted by managements. The law had also been intended to eliminate labor shortages. It didn’t, and a 1990 reform was stealthily passed to reduce employment and eliminate the ability of working people to defend themselves. Enterprises would now have private owners with the right to impose management and ownership shares could be sold.

Exhaustion from years of struggle also were a factor in the lack of organized resistance to the elements of capitalism that were introduced in the last years of perestroika and to the shock therapy that was imposed on Russia at the start of 1992, days after the formal dissolution of the Soviet Union and the assumption of uncontested power by President Yeltsin. Shock therapy wiped out Russians’ savings through hyperinflation and state enterprises were sold at fire-sale prices, or sometimes simply taken.

Connections allowed him to set up businesses

Mr. Khodorkovsky used his connections as an official within the Communist Youth League to found a company that imported and resold computers and other goods at huge profits and engaged in currency speculation. The proceeds were used to buy companies on the cheap and found a bank. His bank, Menatep, earned large fees by providing credit when it was in scarce supply during the post-Soviet collapse.

When President Yeltsin was up for re-election in 1996, he faced a daunting challenge as his popularity rating was well below 10 percent — tens of millions of Russians had been plunged into poverty and the economy had contracted for several years in succession. The president admitted in his memoirs that he was about to cancel the election. But he was presented with a plan by the seven oligarchs, the scheme that became known as “loans for shares.”

These seven oligarchs offered President Yeltsin a bargain: In lieu of paying taxes, they would make loans to the government so it could meet its expenses, such as actually paying its employees. In return, the government would give the oligarchs collateral in the form of shares of the big natural-resources enterprises that were soon to be privatized. (Other state enterprises had been quickly privatized upon the implementation of shock therapy.)

If the loans were repaid, the bankers would give the shares back. If not, the oligarchs would hold auctions to sell the collateral. The government had no ability to pay back these loans, but President Yeltsin issued a decree sealing the deal in August 1995.

The oligarchs used their own banks to conduct the subsequent auctions, and, through a mix of rigged terms and conveniently closed airports, won them all at prices that were small fractions of the enterprises’ reasonable market value. These enterprises represented Russia’s enormous reserves of oil, nickel, aluminum and gold, and a minority share in the dominant gas company, Gazprom.

These seven oligarchs all became billionaires through the “loans for shares” scam. The oligarchs, who owned almost the entire Russia mass media, spent 33 times the legal limit on the election and provided 800 times more television coverage of President Yeltsin than was provided to his opponents.

Mr. Khodorkovsky’s bank, Menatep, was put in charge of the auction of Yukos. It avoided competitive bidding, enabling his holding company to buy it for $159 million, only $9 million above the starting price. As long as Boris Yeltsin was president, the oligarchs could steal all they wanted. Nor did Western authorities complain about this; President Yeltsin’s bombardment and illegal disbanding of the Russian Parliament in 1993, resulting in more than 500 deaths, was celebrated as a democratic triumph. Indeed, the World Bank’s chief economist for Russia declared, “I’ve never had so much fun in my life.”

Corporate lawyers as arbitrators

The Permanent Court of Arbitration that handed down the $51 billion judgment is one of the international tribunals that hear investor-state disputes behind closed doors. As is customary with these bodies, the arbitrators are corporate lawyers appointed by governments.

In the Yukos case, each side could choose one of the three panelists who hear the case. The deciding panelist was Yves Fortier, a former chair of one of Canada’s biggest corporate law firms and of Alcan Inc., a mining company since bought by Rio Tinto, and a director of several other companies.

I see no sense in denying that politics were behind Mr. Khodorkovsky’s prison sentence and his loss of Yukos. But there can be no dispute that politics and shady dealing earned him his fortune in the first place. The gangster capitalism in which he excelled in the 1990s, cheered on by the West, was without mercy. Are there going to be outpourings of sympathy for the tens of millions of Russians immiserated so that the country’s Khodorkovskys could become billionaires? I think we already know the answer.

Mayor de Blasio is the Obama of New York City

He’s only been in office six months and I know we should be leery of making comparisons that risk becoming glib, but the consistencies are already too apparent to be ignored: Bill de Blasio is the Barack Obama of New York City.

Both took office with expectations higher than were reasonable but have fallen short of what someone with sober expectations might have expected. High expectations without mobilizing a movement to realize those expectations is part of the problem, true. That is, and is not, a mitigating factor. That too many hopes were poured into individual office-holders, and too little effort into holding them accountable, is beyond reasonable dispute. But that does not ameliorate the necessity of judging them by what they do rather than what they say.

And who they appoint. Among President Obama’s first significant appointments was Lawrence Summers to be his lead financial adviser. All was lost right there; an unmistakable neoliberal signal. Among Mayor de Blasio’s first significant appointments was William Bratton as police commissioner. Commissioner Bratton held that office under Rudy Giuliani, a time when the New York Police Department often acted like an occupying army, with relations between the police and, in particular, Black and Hispanic communities, abysmal.

He followed his Giuliani-time stint with a lucrative deal with Kroll Inc., a security firm that describes itself as “Wall Street’s eyes.” He also greatly increased the use of “stop and frisk” tactics when he was Los Angeles commissioner despite his new boss’ promise to curtail usage, and the Los Angeles Police Department’s use of force increased under his leadership.

The new look of Williamsburg (Photo by Alex Proimos)

The new look of Williamsburg (Photo by Alex Proimos)

Should we judge Mayor de Blasio by his words or by his actions? He certainly said words welcomed by most New Yorkers in the days leading up to the June 23 vote by the city’s Rent Guidelines Board in which it voted for an increase in rents for rent-stabilized apartments, as it has in each of its 45 years of existence. Consistent with the position he took during last year’s mayoral campaign, he publicly called for a rent freeze. He went so far as to say, hours before the vote, that:

“We need a course correction, a one-time action to clearly rectify the mistakes of the past, and a course correction that will actually provide fairness to tenants who have been charged more than they should’ve.”

But he also said the decision should be based on “the actual facts, the actual numbers.” That was a signal to not expect a rent freeze.

The Rent Guidelines Board is independent, but the mayor appoints all nine members; Mayor de Blasio has had time to appoint or re-appoint six of them. So although the mayor can’t dictate what the board members will do, he can select people who will follow his alleged philosophy. Previous mayors such as Michael Bloomberg, Rudy Giuliani and Ed Koch, each unreserved servants of New York’s two dominant industries — real estate and Wall Street — had no difficulty packing the board with appointees who routinely gave landlords significant rent increases.

Two board members represent tenants and two represent landlords, so the five “public” members are decisive. And it was one of Mayor de Blasio’s picks, an executive with M & T Bank, who put forth the proposal for a one percent raise despite widespread hope that this year would see the first-ever freeze. According to a report in The Wall Street Journal, the bank executive, Steven Flax, cut a deal with landlord interests on the board because the latter realized they would not be able to get the much bigger increase they sought.

Landlord profits rise with rents

According to a report prepared by the board — which presumably relies on landlord reporting and thus likely somewhat understates their income — apartments in rent-stabilized buildings generated an average net income of $436 per month in 2012. The average building surveyed has 45.3 units — thus, the average building yields $237,000 in profits for one year! It is true that many buildings are much smaller, but it is also true that many landlords own multiple properties.

Moreover, that average net income has increased 31.5 percent since 1990, with much of that coming since 2005. Landlord profits have increased all but one year since — that is, the rents collected have risen faster than expenses.

Mayor de Blasio has kept former Mayor Bloomberg’s real estate policies intact. During the billionaire ex-mayor’s reign, zoning laws were changed over wide swathes of land to allow luxury high-rises where either smaller residential buildings or commercial operations had been, accelerating gentrification. The zoning could have been reversed; 40-story towers are out of place in neighborhoods where buildings had been on a human scale. But just last month, Mayor de Blasio allowed the notorious developer Two Trees (which has already rapidly gentrified another Brooklyn neighborhood down the East River) to build towers up to 55 stories in Williamsburg, on the site of a shuttered sugar factory.

The developer that previously owned the property wanted to build an out-of-scale luxury housing complex that is certain to put still more upward pressure on local rents — this is a historically working class area — consistent with the new zoning. Having instead flipped the property to Two Trees, the “progressive” mayor decided to capitulate to the new developers’ demand to allow even bigger buildings in exchange for a token increase in the number of affordable units.

But perhaps we should not hold our breath waiting for the lower-priced apartments to be built — another developer, Forest City Ratner, has pushed the date for the promised affordable housing associated with the massive luxury-housing project at Barclays Center far into the future. That despite hundreds of millions of dollars in government subsidies and buying rights to what had been public land for below market value.

Mayor de Blasio has made no move to reverse any of the Bloomberg-era rezoning — heavily opposed by neighborhood residents who rightly saw them as being implemented to benefit developers at their expense. He is eyeing similar rezonings (in other words, keeping the wave of gentrification moving) for another 15 neighborhoods. The mayor is already on the record as saying he will continue the Bloomberg administration’s policy of higher-density building. That’s music to the ears of the city’s billionaire developers. Not so much to neighborhoods lacking the infrastructure to handle such influxes.

Folding on charter schools

Then there is the matter of charter schools — funded through city taxes but privately run and given public-school space for free at the expense of the public-school students. Charter schools are the leading edge of efforts to privatize school systems and put them under corporate control while busting teachers’ unions so as to bring on younger teachers with less pay and less job security. And they achieve similar or worse results than traditional public schools, despite the hype that surrounds them.

In contrast to his campaign promises to reign in charter schools and make them pay for the space they use, Mayor de Blasio’s first move was to approve 39 of 49 charter-school applications that had been rubber-stamped late in 2013 in the waning days of the Bloomberg  administration. Hedge funders and other corporate interests, backed by “Governor 1%,” Andrew Cuomo, swiftly reacted with a counter-offensive against that tepid opening. Governor Cuomo rammed through a provision in the state Legislature that requires the city to hand over space for free to charter schools.

Mayoral control of schools was fine when a billionaire mayor wanted to corporatize them but not when there is a theoretical possibility of a mayor allowing public input in education policy.

Mayor de Blasio’s reaction? Not so much as a whimper as his charter-school promises were eviscerated as if they had never existed, and then he played a critical role in defeating an electoral challenge to the governor when the latter was challenged for the nomination of the Working Families Party, a small party that seeks to provide progressive cover to Democrats by cross-endorsing them.

The mayor has yet to challenge the governor on any issue, despite the latter’s corporate agenda, backed heavily by the financial industry. The New York City government is hamstrung in advancing tenants’ interests because of the state law known as the Urstadt Law, which forbids local governments from enacting rent laws better than the limited protections allowed under state law. The mayor could push for the repeal of Urstadt, a long-time demand of housing activists, but has remained silent. The one thing he could have delivered, a rent freeze, he did not do.

Although it may seem that a one percent increase — the smallest ever granted — is not much different than zero percent, a first-ever freeze would have set an important precedent and created the conditions for future rent freezes — or rollbacks. In 2011, about 55 percent of New York City’s households lived in apartments with rents that exceeded 30 percent of household income, defined as the maximum affordable rent, up from about 45 percent ten years earlier.

Just as President Obama made a couple of symbolic gestures that were easy to do — successfully pushing for the Lilly Ledbetter equal-pay act and withdrawing the Bush II/Cheney administration’s legal memos “legalizing” torture — Mayor de Blasio has overseen a reduction in “stop and frisk” police tactics and pushed for an expansion of pre-kindergarten school programs. Those are widely popular and represent a minimal “promise kept.” But, so far, overall, an Obama-esque drifting and surrender to corporate ideology. Both have effectively turned Right-wing offensives in bipartisan collaborations.

Trend is larger than any one personality

One person, one office-holder, can only do so much; all the more so is that the case when there is no sustained grassroots mobilization that can hold them to account. Nor should we overemphasize personalities when the structure that maintains corporate domination is as strong as ever. This is hardly a new phenomenon — North American liberals and European social democrats have been capitulating to corporate interests and adopting right-wing positions steadily through the three decades of the neoliberal era. The tenures of Bill Clinton, Jean Chrétien, Tony Blair, Gerhard Schröder, François Hollande, to name only a few at the national level, tell us there is something much larger than individual personalities at work here.

There is a breakdown of coherence beyond dependence on corporate money, corruption, domination of the mass media by the Right, philosophical and economic myopia, and cowardliness. It’s that North American liberalism and European social democracy no longer stand for anything. They, and their leaders, believe as fervently in capitalism and its limitations as strongly as any conservative. But although acknowledging problems and advocating reforms, they are trapped by their belief that capitalism will solve its own problems and nothing more than tinkering is necessary, or imaginable.

Beyond the exhaustion of liberalism and social democracy, and their submission to corporate perspectives, is the lack of mass movements. At the start of his first term, President Obama told his supporters to “make me” do what they wanted him to do by applying pressure. They didn’t, and haven’t. Mayor de Blasio did not go so far as to say that to his supporters, but the same principal applies. There is no serious movement pressuring him to not only fulfill his campaign promises, but, more importantly, to move the political agenda well beyond.

For example, why shouldn’t housing be a human right instead of a commodity for private profit?

In the absence of popular pressure, corporate money speaks all the louder. Ringing your hands in frustration gets you nothing. Organizing a movement, filling the streets, refusing to cooperate with business as usual changes societies. Until that happens, corporate power and money will continue to call the tune, no matter who is in office.

Labor rights respected nowhere on Earth

If labor rights were a test, the entire world would flunk. Basic labor rights are under sustained assault, but just how badly is quantified in a just released report by the International Trade Union Confederation in which every country scored below 50 percent.

To better summarize these results, the ITUC grouped the world’s countries into five rankings, with a ranking of one signifying the countries with the (relatively) best conditions for working people and a ranking of five signifying those with the most repressive conditions. Most of those countries with a ranking of one were in the European Union, but this group also included Togo and Uruguay. Those with a ranking of five include some of the world’s most repressive countries, including China and Saudi Arabia, but also Greece, Turkey and South Korea. The United States has a ranking of four. So much for the home of the free.

The ITUC describes itself as “a confederation of national trade union centres” that includes 325 affiliated organizations in 161 countries and territories. Its Global Rights Index summarizes data on the abuse of trade union rights around the world. The report’s introduction states:

“The increase in precarious employment relationships has further deepened the vulnerability of workers to discrimination at the workplace. Governments in the vast majority of countries have been convinced to alter their labour legislation to encourage various forms of precarious work. In virtually all countries, temporary work, agency work, subcontracting and other types of informal work are expanding rapidly. Given their unstable employment situation and the high risk of dismissal, precarious workers are discouraged from joining unions and being covered by collective bargaining. This means that workers in precarious forms of employment do not have the necessary support to improve their work situation.”

The report collects information on each country for 97 indicators derived from International Labour Organization standards. These indicators relate to one of five categories: Fundamental civil liberties; the right to establish or join unions; trade union activities; the right to collective bargaining; and the right to strike. It assigns a simple yes or no to each of the 97 questions rather than a more gradated system to eliminate any potential bias and because each is a “universally binding obligation” that all countries should respect.

Therefore, 97 is the highest possible score for any country. The highest score attained, however, was 43. The lowest was zero. Therefore, the study grouped the world’s countries into the five rankings, with each ranking containing roughly one-fifth of the total. The ITUC’s map of workers’ rights is below, with the brightest yellow those countries with a ranking of one (those with the most respect for rights) and the deepest orange and red those with a ranking of five (those with the least respect for rights).

ITUC map of workers' rights

ITUC map of workers’ rights

Countries with a ranking of four, such as the United States, Honduras, Indonesia and Kuwait, “have reported systematic violations. The government and/or companies are engaged in serious efforts to crush the collective voice of workers putting fundamental rights under continuous threat.” Only somewhat better are those with a ranking of three, such as Australia, Canada, Singapore and the United Kingdom, where “Government and/or companies are regularly interfering in collective labour rights or are failing to fully guarantee important aspects of these rights. There are deficiencies in laws and/or certain practices which make frequent violations possible.”

Those conditions are reflected in the dwindling number of strikes. During the 1970s, an average of During the 1970s, an average of 289 work stoppages involving 1,000 or more workers took place annually in the United States. In 2009, there were no more than five. Lockouts, in which management bars employees from working, have become more common, reaching record levels this decade.

That is a worldwide phenomenon, of course, in no way limited to any one country, including the one imposes its will on the rest of the world through a misguided ideology of “exceptionalism.” The ITUC notes in its report:

“[W]orkers are struggling everywhere for their right to collective representation and decent work deficits exist in varying degrees in most countries. Abuses of rights are getting worse not better and too many countries take no responsibility for protecting workers rights in a national context or through corporate supply chains. Based on reports from affiliates, workers in at least 53 countries have either been dismissed or suspended from their jobs for attempting to negotiate better working conditions. In the vast majority of these cases the national legislation offered either no protection or did not provide dissuasive sanctions in order to hold abusive employers accountable. Indeed, employers and governments are complicit in silencing workers’ voices against exploitation.”

A continuing race to the bottom is all that is on offer. Capitalists are well organized, across borders. Working people had better do the same.

Trade legerdemain on both sides of the Atlantic

The Democratic Party has responded to the resistance against ramming through new trade agreements by giving the process a new name. “Fast-track” has been rebranded as “smart-track” and, voilà, new packaging is supposed to make us forget the rotten hulk underneath the thin veneer.

Don’t be fooled. The Obama administration and its Senate enablers are nowhere near giving up on its two gigantic trade deals, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. Because the stealthy “fast track” route — special rules speeding trade legislation through Congress with little opportunity for debate and no possibility of amendments — is the only way these corporate wish lists can be enacted, a “rebranding” is in order.

The new chair of the U.S. Senate’s Finance Committee, Oregon Democrat Ron Wyden, earlier this month, in a speech given to apparel-industry corporate executives, announced his intention to replace the “fast track” process with a “smart track” process. That is noteworthy because the Finance Committee has responsibility in the Senate for trade legislation. It also noteworthy because Senator Wyden has voted to approve the last five U.S. “free trade” agreements, going back to 2005.

Grand Place, Brussels (photo by Wouter Hagens)

Grand Place, Brussels (photo by Wouter Hagens)

Although the Transatlantic Partnership being negotiated between the United States and the European Union receives less attention than the 12-nation Trans-Pacific Partnership, neither has much chance of passing without special fast-track authority. Should Congress agree to grant the White House fast-track authority, the Obama administration would negotiate a deal and submit the text for approval to Congress under rules that would prohibit any amendments or changes, allow only a limited time for debate, and require a straight yes or no vote.

None other than the previous U.S. trade representative, Ron Kirk, said the Trans-Pacific Partnership has to be secret because if people knew what was in it, it would never pass. We should take him at his word.

Tell the people what they want to hear

On the surface, Senator Wyden’s speech to the American Apparel & Footwear Association Conference on April 10 sounds conciliatory. He made the standard ritual references, calling for trade agreements that create jobs and “expand … the winners’ circle.” The senator proclaimed:

“I want to be very clear: only trade agreements that include several ironclad protections based on today’s great challenges can pass through Congress. I am not going to accept or advance anything less.”

He did not fail to declare that “strong standards and enforcement” on labor and environmental standards “is an imperative.” But we can be forgiven skepticism here because Senator Wyden had this to say on existing labor and environmental standards:

“People on all sides of the trade debate should more openly acknowledge the progress in these areas and the hard work that went into getting those reforms.”

Progress? There are no enforceable rules concerning these areas in existing trade agreements such as the North American Free Trade Agreement. Lost jobs, reduced wages, more unemployment, higher food prices and reversals of environmental laws have invariably been the results. Unaccountable, secret tribunals staffed by corporate lawyers have enabled corporations to overturn regulations in all three NAFTA countries — and the U.S. government, in its current trade negotiations, wants rules even more weighted in favor of multi-national corporations than exists in NAFTA.

If this is what Senator Wyden considers to be “progress,” what possible basis could there be for believing the Trans-Pacific and Transatlantic partnerships will deliver anything other than more corporate-dictated austerity?

The existing version of fast-track legislation — the Bipartisan Congressional Trade Priorities Act of 2014, better known as the Camp-Baucus bill — was effectively dead not long after its January release. It was expected that a new version of fast-track, with a couple of small, cosmetic changes and a cover story that opponents had been heard, would come. Senator Wyden has not disappointed, and it’s coming perhaps quicker than activists expected. This will become a hot potato as the November mid-term elections approach, so the senator was careful in his speech to not provide a timetable:

“I am going to work with my colleagues and stakeholders on a proposal that accomplishes these goals [of more transparency] and attracts more bipartisan support. As far as I’m concerned, substance is going to drive the timeline.”

‘Consultation’ only to let people vent

The perception of more transparency and public participation is all that we are likely to see, perhaps on the model of the European Union’s new public-consultation process. The process centers on a web site that E.U. citizens can use to fill out a questionnaire. The page is complicated to use, and has a 90-minute time limit, after which any imputed data is wiped out. Write fast! And for good measure, the E.U. trade commissioner, Karel De Gucht, once again declared, in his last visit to Washington:

“[W]e are happy to be scrutinized on this: no standard in Europe will be lowered because of this trade deal; not on food, not on the environment, not on social protection, not on data protection. I will make sure that [the Transatlantic Trade and Investment Partnership] does not become a ‘dumping’ agreement.”

Neither his office, nor that of the U.S. trade representative, Michael Froman, have been kind enough to share with the public when the next Transatlantic negotiating session will be held. There has been no lack of communication with corporate lobbyists, however. A European public-interest group, Corporate Europe Observatory, requested documents from the European Commission (the bureaucratic arm of the E.U.) to discover with whom E.U. negotiators are consulting.

It was revealed that of 127 closed meetings concerning the Transatlantic Partnership talks, at least 119 were with large corporations and their lobbyists. The Observatory reports:

“The list of meetings reveals that … there is a parallel world of a very large number of intimate meetings with big business lobbyists behind closed doors — and these are not disclosed online. These meetings, moreover, were about the EU’s preparations of the trade talks, whereas the official civil society consultation was merely an information session after the talks were launched. The Commission’s rhetoric about transparency and about consulting industry and NGOs on an equal basis is misleading and gives entirely the wrong impression of [the European Commission’s] relations with stakeholders.”

Three German Green Party members of the European Parliament (Ska Kellar, Rebecca Harms and Sven Giegold) have leaked the E.U.’s position paper on the Transatlantic Partnership negotiations (Members of the European Parliament are shut out of the negotiations.) Although this leak offers only a glimpse at E.U. negotiating positions, Europeans have a basis for concern. A rough English translation of the leaked document (available only in German) states:

“The agreement will provide for the reciprocal liberalization of trade in goods and services and rules on trade-related issues, which it pursues through ambitious goals that go beyond what is available via the existing WTO commitments.”

Although it also says the agreement will include a “general exception clause” on the basis of articles XX and XXI of the General Agreement on Tariffs and Trade (GATT), which purport to allow exceptions to trade agreements when necessary to safeguard human, animal or plant life or health, such clauses are meaningless. Other agreements have similar clauses, but are consistently superseded by rules such as Article 12.6 of the Trans-Pacific Partnership text that “Each Party shall accord to covered investments treatment in accordance with customary international law.”

‘Customary law’ is what a secret tribunal says it is

Precedents handed down in secret tribunals are what constitute “customary international law.” That the E.U. negotiators intend to “go beyond” the rules of the World Trade Organization should leave no doubt that “law” as desired by multi-national corporations is what is contemplated. Indeed, the leaked E.U. text states an intention to:

“Provide a level playing field for investors in the U.S. and in the EU. … The agreement should provide an effective mechanism for the settlement of disputes between investors and the state.”

That goal should be borne in mind when evaluating the E.U.’s April 10 announcement that it has refused to include the standard investor-state dispute rules in its proposed trade agreement with Canada, despite Canada’s now dropped insistence that it be included. Inside U.S. Trade reports that:

“Canada and the EU have agreed to a ‘closed list’ approach toward defining what constitutes a breach of fair and equitable treatment that was proposed by the EU. … The closed list that the two parties agreed upon is comprised of: denial of justice in criminal, civil or administrative proceedings; a fundamental breach of due process; manifest arbitrariness; targeted discrimination on manifestly wrongful grounds; and abusive treatment of investors.”

On the surface, the “closed list” approach to the bases over which a corporation can sue a government appears to have narrowed from the more common approach that places no limits on corporate suits. But, critics say, the list of arbitrable issues remains open-ended and open to corporate abuse. The Canadian public interest group International Institute for Sustainable Development, in a recently updated paper, warns:

“The definition of investment is defined too broadly, covering any kind of asset, independent of whether or not investments are associated with an existing enterprise in the host state. … [The E.U. proposal would] make the concept of fair and equitable treatment very open-ended and, as a consequence, highly problematic.”

The agreed-upon language, by not defining what constitutes an “asset,” would enable corporations unlimited opportunities to sue governments. Any rule or regulation that a corporation says will reduce its profits remains eligible to be overturned under the precedents of “customary international law.” The text of the agreements — and how they are likely to be interpreted — count for vastly more than the happy talk of trade negotiators, whichever side of the Atlantic or Pacific oceans.

European countries with strong regulations on the environment or food safety are at grave risk from the U.S., and environmental laws everywhere are prime targets. Activist work against these multi-national trade agreements has gained momentum in the past year, but there is much work to be done to stop what constitutes the most destructive corporate power grabs yet. Popular pressure is the only means to stop the Trans-Pacific, Transatlantic and Canada-E.U. trade deals. The next task will be to reverse existing trade deals that have done so much damage.

Corporate power grab of Trans-Pacific Partnership clearer, but opposition building

The usual boilerplate announcements that “significant progress” was achieved in the just concluded round of Trans-Pacific Partnership negotiations can’t mask that public opposition is growing and that the United States seems to be having difficulty bullying its negotiating partners.

That does not mean that the TPP is dead — far from it — but the continued insistence of the Obama administration that the text will be complete by the end of 2013 is no more than wishful thinking. That Congress might not play its assigned role of rubber-stamping was strongly signaled last week when 151 Democratic Party members of the House of Representatives and more than two dozen Republicans signed various letters opposing “fast-track” trade authority. Many did so due to sustained grassroots activism.

“Fast-track” is a mechanism whereby Congress waives its right to debate and amend, instead binding itself to a straight up-or-down yes or no vote in a limited time frame. The worst trade deals, such as the North American Free Trade Agreement, have become U.S. law through this mechanism. The Obama administration is widely expected to introduce such a bill, passage of which would greatly increase the chances of the Trans-Pacific Partnership getting approved by Congress.

Activists have anticipated since early October that a bill for fast-track authority — formally known as trade promotion authority — might be introduced at any moment. That such a bill has been delayed is a sign that mounting opposition to the TPP within the U.S. has introduced an element of caution into the Obama administration’s thinking.

Demonstration against TPP in Salt Lake City (Photo courtesy of Citizens Trade Campaign)

Demonstration against TPP in Salt Lake City (Photo courtesy of Citizens Trade Campaign)

Strong opposition to draconian U.S. proposals by several of the 11 other Pacific Rim countries negotiating the text of the TPP has certainly played a role in slowing down the negotiations. The divergence of the negotiating positions became clear earlier this month when WikiLeaks published the full text of the TPP chapter on intellectual property. Despite being billed as a “free trade” agreement, this chapter, like most of the TPP, has nothing to do with trade. Rather, it — and, in particular, the U.S. negotiating positions — are the dreams of the most powerful multi-national corporations.

The same is true for the Transatlantic Trade and Investment Partnership, another “free trade” agreement simultaneously being negotiated between the United States and the European Union. The TTIP also just concluded a negotiating round, with similar opaqueness. What the U.S. is attempting to impose on Canada, Mexico, Australia, New Zealand, Chile and the other TPP countries on behalf of its multi-national corporations is undoubtedly the basis for what it seeks to impose on Europe. Corporate lobbyists have access to the text, but legislators and parliamentarians do not.

Sustained and organized mass opposition is the only thing that will stop these two extraordinary power grabs that will fatally undermine any semblance of democracy. If the TPP were to be implemented, labor safeguards, safety rules, environmental regulations and measures to rein in financial speculation would be struck down because a multi-national corporation’s profits might be affected — corporations would be able to bypass national laws and courts when they are in a dispute with a government, and instead can have their dispute adjudicated by a closed tribunal controlled by their lawyers.

Huge giveaways to pharmaceutical industry

The TPP intellectual property chapter, published by WikiLeaks, is crammed with corporate giveaways in its 96 pages. (This is only one of about two dozen chapters.) Japan is the country, at least in this chapter, most often in alignment with U.S. negotiating position, although frequently the U.S. is opposed by all other countries.

There are several sections that broaden what is patentable subject matter — if implemented, the TPP would make patents:

  • “Available for any new uses or methods of using a known product.”
  • Require patents to be granted if the patent “involves an inventive step,” even if there is no new use for it.
  • Allowable for living organisms, including plants and animals.

What these proposals would mean, if implemented, is that a name-brand pharmaceutical company, for example, would be able to claim a new use for high-priced medicines just before the patent was due to expire, thereby extending the patent and blocking a far less expensive generic equivalent from becoming available.

Under the North American Free Trade Agreement, the U.S. pharmaceutical company Eli Lilly sued Canada for $500 million because the Supreme Court of Canada upheld the invalidation of an Eli Lilly patent. Canada’s ability to enforce its own laws would be undermined by the TPP, according to a Public Citizen analysis:

“Canada’s decisions are based in its ‘promise doctrine,’ a patent rule which requires patents claiming a future usefulness to demonstrate or soundly predict that usefulness at the time of filing. The United States has proposed a rule for the Trans-Pacific Partnership negotiations that could undermine Canada’s promise doctrine. Whether purposeful or not, this would support Big Pharma’s plans to transform Canadian practice and even, seemingly, some of the goals of Lilly’s outrageous suit.”

Stop TPPCompanies like Eli Lilly would be in a stronger position to overturn any law they don’t like. The TPP’s intellectual property chapter would also attack rules such as the Indian Patent Act that protect access to affordable medicines worldwide, and would require extensions of patents on the demand of a corporation if it deems the period of time required to approve its patent “unreasonable.” Doctors Without Borders/Médecins Sans Frontières reports:

“The leak confirms our worst fears—the US is continuing its attempts to impose an unprecedented package of new trade rules that would keep affordable generic medicines out of the hands of millions of people.”

The return of SOPA

The defeat of the Stop Online Piracy Act (SOPA) and the Anti-Counterfeiting Trade Agreement (ACTA) — thinly veiled attempts at Internet censorship stopped by popular pressure — would be reversed under the TPP. A proposal by the U.S. and Australia would require Internet service providers to police their users, with ISPs required to cut off Internet access, block content and actively monitor usage to avoid liability if a copyright holder claims one of its copyrights is being infringed.

Monica Horten, a visiting Fellow at the London School of Economics writing on her Iptegrity.com web site, summarizes the TPP’s dangers to the free flow of information:

“[T]t is a toxic potion that would force the Internet Service Providers (ISPs) to police their networks, and turns current law on its head. … Where it concerns the Internet and digital content, much of the TPP intellectual property chapter looks like a cut-and-paste from ACTA. Certainly, it brings in similar secondary liability and criminal measures that were in ACTA. However, there are specific new proposals that give more reasons for concern. … Within the Internet section, is a  USA/Australian proposal that contains the core desires of Hollywood and the Motion Picture Association.”

Canada, back by several countries, is seeking less onerous restrictions, University of Ottawa law professor Michael Geist writes:

“From a Canadian perspective, the U.S. demands would require an overhaul of Canadian copyright law and potential changes to privacy law. For many other TPP countries, the issue is creating a clear divide, with the U.S. conditioning ISP safe harbours on subscriber termination and content blocking, while the Canadian model favours greater flexibility in establishing systems that create incentives to address alleged infringements online.”

Will Canadian negotiators hold firm or capitulate? Given the harsh policies of Prime Minister Stephen Harper — the George W. Bush of the North — much activism will be required to avoid SOPA getting in through the back door.

You won’t be able to know what is in your food

At the behest of corporations like Monsanto, which seeks to control the world’s food supply, labeling of genetically modified organisms would be illegal. Specific Trans-Pacific Partnership language on GMOs and GMO labeling has not yet surfaced, but because the goal of Monsanto and other U.S. manufacturers of GMO foods is to remove European restrictions against GMOs, this is likely to be an area where U.S. negotiators are pushing hard.

The European Union’s chief trade negotiator Ignacio Garcia Bercero, said “We are not in the business of lowering standards” in response to concerns that food safety rules will be lowered if the Transatlantic Trade and Investment Partnership comes to fruition, and European Union justice and rights commissioner Viviane Reding threatened this week that the E.U. would “freeze crucial data-sharing arrangements with the U.S.” if the U.S. refuses to acquiesce to European privacy standards.

But despite huffing and puffing from various European leaders, the latest round of TTIP talks proceeded smoothly. A European Commission press release happily declared, “A good atmosphere and the active involvement of regulators from both sides meant significant progress was made.” But, as usual, no details were forthcoming. The Office of the U.S. Trade Representative similarly reported “a very successful and productive set of meetings” about the TTIP and “significant progress” in the just concluded Salt Lake City round of TPP negotiations.

This latest round of TPP talks was even more secret than usual, with negotiators not bothering this time with the pretense of meeting with civil-society groups; thus much caution is advised. A potential turn for the worse is possible with the recent election of the right-wing Tony Abbott government in Australia, which may reverse some of the previous positions Canberra had taken against certain U.S. proposals. For example, previous Australian governments opposed investor-state disputes being adjudicated by secret tribunals controlled by corporate lawyers. It is unknown if the Abbott government will reverse that position.

The Australian television program Lateline reports that Prime Minister Abbott is in favor of “fast-tracking” the TPP and other trade agreements. A worrisome sign, as the U.S. is pushing hard for anti-democratic provisions such as investor-state disputes to be adjudicated in the secret tribunals. These mechanisms are in force in the North America Free Trade Agreement and many bi-lateral trade agreements. NAFTA, for example, uses a tribunal that is an arm of the World Bank in which only two of the more than 200 cases it has heard have been open to the public.

Agreements like TPP and TTIP have little to do with trade and much to do with imposing a corporate dictatorship. There is no time to waste.

When you are on top, ‘might makes right’ is ‘rule of law’

The Obama administration’s moralistic paeans to the “rule of law” concerning whistleblower Edward Snowden would carry considerably more weight if the United States weren’t continuing to harbor an assortment of ex-dictators and a terrorist who killed dozens in an airplane bombing. As soon as we look under the hood, we see “might makes right” at work, not “rule of law.”

If the U.S. government actually cares about the sanctity of international law, it could start by handing over Luis Posada Carriles, convicted of blowing up a Cuban airliner that killed 73 people, to the government of Venezuela. Not only has Mr. Posada has been living in Florida for many years, he has at times worked for the U.S. government since escaping from a Venezuelan jail. Shortly after escaping prison (allegedly thanks to bribes paid by members of the Miami Cuban exile community) he was hired to work on Oliver North’s illegal Nicaraguan Contra supply network, and is suspected of involvement in an attempt to assassinate Fidel Castro in 1994 and a string of tourist-hotel bombings in the Havana area in 1997.

Mr. Posada, who trained with the CIA in the 1960s, gave an interview to three major U.S. newspapers in 1997 in which he admitted to some of activities. Writing about this topic in 2002 in an article published in BigCityLit, I wrote:

“The Miami Herald, Los Angeles Times and New York Times reported Posada’s revelations, which detailed a series of bombings and other terror acts and connections with Cuban exile groups in Miami. Posada, then 70 years old, ‘revealed that key Cuban American lobbyists in this country financed his activities, in apparent violation of U.S. law, while the FBI and CIA looked the other way,’ according to a Los Angeles Times report.”

The National Security Archive, a project of George Washington University that publishes declassified U.S. government documents, provided further details in 2005:

“The National Security Archive today posted additional documents that show that the CIA had concrete advance intelligence, as early as June 1976, on plans by Cuban exile terrorist groups to bomb a Cubana airliner. The Archive also posted another document that shows that the FBI’s attaché in Caracas had multiple contacts with one of the Venezuelans who placed the bomb on the plane, and provided him with a visa to the U.S. five days before the bombing, despite suspicions that he was engaged in terrorist activities at the direction of Luis Posada Carriles. …

“[A] report from the State Department’s Bureau of Intelligence and Research on the bombing of Cubana flight 455 … noted that a CIA source had overheard Posada prior to the bombing in late September 1976 stating that, ‘We are going to hit a Cuban airliner.’ This information was apparently not passed to the CIA until after the plane went down. There is no indication in the declassified files that indicates that the CIA alerted Cuban government authorities to the terrorist threat against Cubana planes.”

They said he’s a terrorist, but gave him a pardon anyway

The Cuban and Venezuelan governments have long requested extradition of Mr. Posada, to no avail. Another Cuban exile leader, Orlando Bosch, was granted a pardon by President George H.W. Bush in 1990 and lived free in the U.S. for three decades until dying in 2011. Mr. Bosch was also suspected in the Cuban airline bombing and in a series of other terroristic acts. Duncan Campbell, writing in The Guardian, reported a decade ago on him:

“According to US justice department records: ‘the files of the FBI and other government agencies contain a large quantity of documentary information which reflects that, beginning in the early 1960s, Bosch held leadership positions in various anti-Castro terrorist organisations. … Bosch has personally advocated, encouraged, organised and participated in acts of terrorist violence in this country as well as various other countries.’ ”

Lest we be tempted to chalk the above up simply to the U.S. government’s bipartisan obsession with Cuba, we’ve only scratched the surface of U.S. hypocrisy over the “rule of law.” Bolivia, for example, has requested extradition of former president Gonzalo Sánchez de Lozada. At the time already responsible for the deaths of dozens of protestors, President Sánchez sent his security forces to put down a peaceful rally opposing the selling off of Bolivian gas reserves; 67 were killed and more than 400 injured. He later fled into exile and was formally charged in 2007 with genocide.

The Obama administration refuses to send him back. A report by Glenn Greenwald in The Guardian states:

“Bolivia then demanded his extradition from the US for him to stand trial. That demand, ironically, was made pursuant to an extradition treaty signed by Sánchez de Lozada himself with the US. … The view that Sánchez de Lozada must be extradited from the US to stand trial is a political consensus in Bolivia, shared by the government and the main opposition party alike. But on [September 7, 2011], the Bolivian government revealed that it had just been notified by the Obama administration that the US government has refused Bolivia’s extradition request.”

Then there is Warren Anderson, former chairman of Union Carbide, who is wanted in India in the wake of the explosion of his company’s Bhopal pesticide plant that killed thousands of people and injured tens of thousands. Indians courts have issued warrants for his arrest, which have been met with silence while he shuttles between houses on the U.S. East Coast.

It’s not only terrorists and corporate criminals who enjoy safe havens in the United States. Amnesty International, in a 2002 report, US is a ‘Safe Haven’ for Torturers Fleeing Justice, estimated that at least 150 torturers were living in the county then, none of whom was brought to justice. The number of torturers that the U.S. has trained, at its School of the Americas at Fort Benning, Georgia, is far higher. At the SOA (currently operating under the name of “Western Hemisphere Institute for Security Cooperation”) the U.S. Army trains Latin American military and police officers in torture techniques as part of its curriculum; the countries with the worst human rights records consistently send the most trainees.

If they don’t like terrorists, why do they train them?

The watchdog group School of Americas Watch, in an investigative report written by Bill Quigley, summarizes the work of the SOA:

“[G]raduates of the SOA have been implicated in many of the worst human rights atrocities in the Western Hemisphere, including the assassination of Catholic bishops, labor leaders, women and children, priests, nuns, and community workers and the massacres of entire communities. Numerous murders and human rights violations by SOA graduates have been documented in Bolivia, Chile, Colombia, El Salvador, Guatemala, Honduras, and Paraguay among others. These horrendous acts correspond to part of the school’s curriculum: systematic use of torture and executions to neutralize dissidents.” [page 2]

An article in The Washington Post, a newspaper (despite its long-ago Watergate reporting) that often acts as if it were an official publication of the U.S. government (and which has eagerly joined in the attacks on Edward Snowden), nonetheless reported straightforwardly on the use of torture manuals released by the Pentagon under pressure:

“U.S. Army intelligence manuals used to train Latin American military officers at an Army school from 1982 to 1991 advocated executions, torture, blackmail and other forms of coercion against insurgents, Pentagon documents released yesterday show. Used in courses at the U.S. Army’s School of the Americas, the manual says that to recruit and control informants, counterintelligence agents could use ‘fear, payment of bounties for enemy dead, beatings, false imprisonment, executions and the use of truth serum.’ ”

That was the summation of a newspaper that ordinarily rushes to defend U.S. foreign policy. The techniques it described were not a small part of the curriculum, nor an aberration, as the Post article implied in an attempt to soften the revelation. A former SOA instructor, Major Joseph Blair, told The Progressive:

“I sat next to Major Victor Thiess who created and taught the entire course, which included seven torture manuals and 382 hours of instruction. … He taught primarily using manuals which we used during the Vietnam War in our intelligence-gathering techniques. The techniques included murder, assassination, torture, extortion, false imprisonment. … Literally thousands of those manuals were passed out. … The officers who ran the intelligence courses used lesson plans that included the worst materials contained in the seven manuals. Now they say that there were only eighteen to twenty passages in those manuals in clear violation of U.S. law. In fact, those same passages were at the heart of the intelligence instruction.” [“School of the Americas Critic,” July 1997]

He killed 1,000 a month, but he’s ‘dedicated to democracy’

The SOA continues to operate. One of the graduates of the school is Efrain Ríos Montt, the most blood-thirsty of a series of brutal dictators who ruled through terror in Guatemala. Each of these dictators ruled with the full support of the U.S. following the CIA-organized overthrow of the democratically elected Jacobo Árbenz Guzmán at the behest of the United Fruit Company, which had previously been the country’s de facto ruler. The succession of dictatorships killed more than 200,000 Guatemalans. The régime of President Ríos Montt murdered more than 1,000 people a month during 1982, with Ríos Montt himself hailed by U.S. President Ronald Reagan as “totally dedicated to democracy” and unfairly the target of “a bum rap.”

Simultaneously, the Guatemalan military intensified its assaults on Indigenous communities. For example, SOA Watch reports, a Guatemalan special forces unit with extensive ties to the SOA, the Kaibiles, carried out this operation:

“[The unit] entered the village of Las Dos Erres, systematically raped the women, and killed 162 inhabitants, 67 of them children. Current President of Guatemala Otto Peréz Molina, also a graduate of the SOA, spent much of his time in military service as a member of the Kaibiles. This military unit was developed by the Guatemalan government in 1974, and its initial leader was a fellow SOA graduate.”

Among the techniques used by Guatemala’s dictators, according to the book Harvest of Empire: A History of Latinos in America by Juan Gonzalez, were dropping mutilated bodies from helicopters into crowded stadiums and cutting out the tongues of people who inquired about the “disappearances” of friends and family.

And let us not forget the loyal sidekick of the U.S., Great Britain, which seeks to extradite WikiLeaks founder Julian Assange to Sweden merely for questioning at the same time it refuses to extradite a convicted pedophile, Shawn Sullivan, to stand trial in Minnesota, claiming that the U.S. justice system has a civil commitment program for sex offenders that is too draconian. The Daily Kos reports that the suspect is charged with raping a 14 year old girl and sexually assaulting two 11 year old girls in 1994, but escaped to Ireland.

In no way is Edward Snowden, a whistleblower who has provided a service to humanity, comparable to the murderous rouges gallery described in this article, but the Obama administration might want to meet its obligations under international law before it further strong-arms other countries. But then “rule of law” in a world in which force maintains vast inequality is a euphemism for “rule of the most powerful.”

Spying? Who cares? Profits are at stake!

Actions do speak louder than words, and thus the start of European Union-United States trade talks as previously scheduled would seem to hold more weight than European political leaders’ displays of public anger at the extent of the spying against them.

Resignation to their subordinate status, the extent of their own spying networks and the knowledge that considerable dirty work is necessary to remain a leading capitalist country are among the contradictory factors at work here. So, too, is a willingness by European leaders to rely on the U.S. to perform much of the dirty work, while European big business needs to sell to U.S. consumers. Business is business at the end of the day. Or at the (hoped) end of the scandal.

With the stream of new revelations showing no signs of stopping, the end of the scandal does not appear anywhere in sight. Nor does the spectacle of contradictory behavior by European countries, most dramatically exemplified by France.

Navy communicationsOn the one hand, the French government declared revelations that the U.S. has spied on E.U. offices and computer networks “completely unacceptable” and demanded a delay in the start of the E.U.-U.S. trade talks, intended to form a “Transatlantic Trade and Investment Partnership.” Yet France not only meekly agreed to the trade talks beginning on time but acceded to U.S. arm-twisting that it close its air space to the plane carrying Bolivian President Evo Morales on the mere suspicion that whistleblower Edward Snowden was aboard.

How much of the complaints from France, Germany and elsewhere in Europe are posturing and how much is genuine anger is an open question, but perhaps ultimately irrelevant. Le Monde has revealed that the France intelligence agency DGSE spies on the French public’s phone calls, e-mails and Internet activity in a manner similar to that of the U.S. National Security Agency (NSA). And Mr. Snowden has revealed that German spy agencies are “in bed together” with U.S. spy agencies.

The chief of Germany’s foreign intelligence agency has confirmed that his agency works closely with the NSA, Der Spiegel reports, with the U.S. agency using several German locations to engage in data collection. The arrangement is justified by the “fight against terrorism,” the favorite all-purpose excuse to trample constitutional norms and privacy concerns, both of which tend to be taken more seriously among Europeans than United Statesians. In its report, Der Spiegel asked:

“Is it really conceivable that the German government knows nothing of what the NSA is doing on its own doorstep? Last month Interior Minister [Hans-Peter] Friedrich said in a parliamentary debate on the NSA snooping: ‘Germany has fortunately been spared big attacks in recent years. We owe that in part to the information provided by our American friends.’ Sentences like that reveal a pragmatic view of the US surveillance apparatus: What the NSA gets up to in detail is secondary — what counts is what its snooping reveals. And that information, intelligence officials admit, is indispensable.”

The German government sees itself as dependent on the U.S., and that counts for more than public displays of anger that culminated in a German minister condemning revelations of U.S. spying on Germany as “methods used by enemies during the Cold War.” Whatever momentary anger her government may have felt, Chancellor Angela Merkel has not wavered in her support for the Transatlantic Trade and Investment Partnership (TTIP) talks. Germany’s economy, after all, is dependent on exports — increasingly so during the past decade as German workers have absorbed a decade of wage cuts — and German manufacturers are likely salivating at the thought of increased exports to North America.

You can be angry, but you’re still subordinate

After all the displays of anger and assertions of sovereignty, European government showed themselves not only subordinate to the U.S. but to their own industrialists and financiers. The U.S. government is similarly a captive of its own big business interests — that is what right-wing calls to “starve” government are about. It was all smiles on July 8 as the TTIP talks began, on schedule, with embarrassing discussions of spying relegated to a “parallel” track, separate from what really counts, the main negotiations to dismantle regulations.

Both newly seated U.S. Trade Representative Michael Froman and European Trade Commissioner Karel De Gucht made the ritualistic grand claims of the benefits that will fall from the sky if the TTIP is implemented, and business groups competed with themselves to issue the highest “estimates” of the increase in wealth. The Centre for Economic Policy Research in London, for example, claimed the TTIP would stuff pockets with more than US$100 billion a year from added growth.

Similar pie in the sky promises were made for the North American Free Trade Agreement and many other trade deals, so, dear reader, all is forgiven if you are skeptical about such claims. “Free trade” agreements elevate corporations and investors to equal status with governments on paper, and above governments in reality because disputes between businesses and governments are sent to unaccountable tribunals controlled by organizations like the World Bank and in which the judges are frequently lawyers who specialize in representing corporations in disputes with governments.

Ambassador Froman, the new U.S. trade representative installed by the Obama administration, will not represent any change in direction. The American Enterprise Institute, a leading lobbyist for multi-national corporations, gave its seal of approval:

“No white smoke floated up from the White House when the president announced that he had chosen deputy security adviser Michael Froman as the new US Trade Representative; but there was a huge, collective sigh of relief from all elements of the US business and trade policy communities. … Michael Froman is an excellent choice. He is close to the president, was deeply involved in passage of the Bush [free-trade agreements] with [South] Korea, Colombia, and Panama.”

Ambassador Froman’s neoliberal credentials are assuredly in order. He worked as chief of staff to former Treasury Secretary Robert Rubin, who played a leading role in the Clinton administration’s deregulation of the financial industry, and before that was a managing partner at Citigroup. He seems to have done well at Citigroup, receiving more than $7.4 million from the company from January 2008 to when he joined the White House early in 2009, including a year-end bonus of $2.25 million.

Full speed ahead! The U.S. Chamber of Commerce — a hard-line organization that has never seen a regulation it likes or a tax that is justified — had already called for a speedy agreement before any pesky elections get in the way. Eurochambres had declared that it sought “the highest possible standards of protection for investors” — thinly disguised code for an elimination of rules and regulations. As Systemic Disorder has previously noted, the Trans-Pacific Partnership, intended to go beyond NAFTA and formally codify the maximization of corporate profits as the central principle of governments, is the model for the TTIP, and it is unlikely that it is a coincidence that the two giant trade pacts are being negotiated simultaneously.

Some country has to be the top dog

The growth of spying operations and the shrinking of democratic spaces that accompanies bilateral and multilateral trade agreements progress hand-in-hand. The capitalist system has always required a center to hold it together. Capitalism has had a succession of dominant centers; each successive center has been bigger to be able to cope with increasingly complex tasks.

When London succeeded Amsterdam as the financial center, the financial center became located within a country with a powerful military, not only a large merchant fleet as Amsterdam’s United Provinces possessed. When New York succeeded London, the country at the center became continental in size, possessing a military that can be projected around the world, further intensifying the links between financial and military power that had solidified during Britain’s rise to dominance.

The projection of, and willingness to apply, force is crucial to the maintenance and expansion of the capitalist system. That force nowadays may be more often financial and commercial rather than military, but the military and intelligence services are in reserve. From the dozens of coups in Latin America to the forcible installation of regimes willing to do U.S. bidding in Iran and Iraq decades apart to propping up dictatorships around the world, the common thread has been using power to gain advantage for U.S. multi-national corporations. “Free trade” agreements are another methodology to the same goal.

All of the world’s advanced capitalist countries are a part of this system. They acquiesce in it however much they sometimes chafe at their subordinate status (in relation to the U.S.); their willingness to enter into trade pacts binds them to the dominant power. No single country is large enough or possesses a big enough military to challenge U.S. domination; today, only a unified Europe could challenge U.S. hegemony. European capitalists desire the ability to challenge the United States for economic supremacy, but cannot do so without the combined clout of a united continent.

The E.U., in its current capitalist form, is a logical step for business leaders who desire greater commercial power on a global basis: It creates a “free trade” zone complete with suppression of social accountability while giving muscle to a currency that has the potential of challenging the U.S. dollar as the world’s pre-eminent currency.

Thus the proposed TTIP is in the interest of industrialists and financiers on both sides of the Atlantic Ocean at the same time that its approval would spell disaster for working people — more concentration of power in the biggest corporations; less ability for citizens to influence government policy; and weaker labor, safety and environmental regulations. Concentration of power and shriveling of democracy can’t be accomplished without a stifling of dissent, which in turn requires, inter alia, more spying and less accountability by spying agencies.

There are common interests at the same time that spying is also deployed to gain competitive advantages for favored corporations; the latter is exemplified by U.S. bugging of E.U. offices. Those shared interests in maintaining the system, however much the advanced capitalist countries may compete, tend toward cooperative relations. Thus although countries like France and Spain demonstrate their subordinate status in humiliating fashion by closing their air spaces under U.S. orders, the blocking of President Morales’ plane is not reducible to only that subordination; European governments have shared interests in maintaining the system. That force is what maintains it speaks for itself.