Revised NAFTA shows every sign of being another Trump scam

If the renegotiated North American Free Trade Agreement were good for working people, its content wouldn’t be hidden. Just what the Trump administration and the Mexican government of Enrique Peña Nieto have cooked up we do not know, but given the proclivities of both it is not likely to be good.

That the hurried-up deal appears to be intended to force Canada, which has the strongest regulations among the three NAFTA countries, into signing on disadvantageous terms, provides all the more reason to be skeptical. And, finally, a study of the United States Office of the Trade Representative’s “fact sheet” leaves no doubt that any new NAFTA will be a windfall for multi-national corporations, at our expense.

Let’s back up for a moment and remind ourselves that we should judge actions, not words. The contrast between Donald Trump’s empty campaign lies and his administration’s actual policies and actions are glaring, such as, for example, in infrastructure, where his plan is little more than a package of subsidies to connected corporations under the guise of “public-private partnerships,” which are scams to funnel public money into corporate pockets. So it is with so-called “free trade” agreements, especially NAFTA.

Jardin de la Conchita, Mexico City (photo by Percisco)

In July 2017, the Trump administration quietly published its “Summary of Objectives for the NAFTA Renegotiation.” The 18-page document contained almost nothing concrete but did feature boilerplate language that in some cases appears to be lifted word for word from the Trans-Pacific Partnership. The document purports to adopt standards for labor and for the environment, but the language used is very similar to the language proposed for the Trans-Pacific Partnership and in use in other “free trade” agreements. There is little at all in these stated goals that differs from the stated goals that Obama administration put forth for the Trans-Pacific Partnership. They are meaningless window dressing.

Lest we believe those objectives were some sort of aberration, the Trump administration followed up in April 2018 with its “National Trade Estimate Report on Foreign Trade Barriers,” in which it took direct aim at no less than 137 countries. In this document, “trade barriers” are defined as “government laws, regulations, policies, or practices that either protect domestic goods and services from foreign competition, artificially stimulate exports of particular domestic goods and services, or fail to provide adequate and effective protection of intellectual property rights.” Note the absence of labor, safety, health or environmental standards. Among the hundreds of pages of complaints, to provide one example, was that Norway expects food that it imports to be proven safe.

Quite clearly, the Trump administration, headed by a billionaire grifter who built his fortune on stiffing working people and stuffed with corporate raiders and Goldman Sachs executives, is wholly dedicated to furthering corporate plunder, as its tax “reform” amply demonstrates.

Corporate giveaways on financial services, IP

Although only corporate lobbyists have had access to the revised NAFTA text, the U.S. Office of the Trade Representative did provide some highlights of the agreement in its public “fact sheet.” These are not promising.

It appears that corporate wish lists for intellectual property, financial services and other areas were largely granted. New IP rules, if this agreement is passed into law, include stepped-up enforcement against “camcording of movies” and “cable signal theft,” as well as “Broad protection against trade secret theft.”

The IP rules would extend copyrights to 75 years, long a U.S. demand (and one opposed by the Canadian government); increase pressure on Internet service providers to take works alleged to infringe copyrights (in actuality a tool for censorship); and provide for “strong protection for pharmaceutical and agricultural innovators,” which can be presumed to be code for enabling further medicine price-gouging and crimping accessibility to generic and cheaper alternatives. The last of these was a prominent U.S. goal for the Trans-Pacific Partnership, which, inter alia, sought to eliminate the New Zealand government’s program to provide medicines in bulk at discounted prices at the behest of U.S. pharmaceutical companies. Related to this is a measure to include 10 years’ protection for biologic drugs and an expansion of products eligible for “protection.”

New York Stock Exchange (photo by Elisa Rolle)

Noting that the U.S. runs a surplus in financial services, the new NAFTA agreement would force Mexico wide open to U.S. financial companies. The agreement explicitly prohibits any regulations restricting foreign financial-services companies. This would be done under the guise of “national treatment,” and the Trade Office fact sheet flatly states that it is intended “to ensure that a Party does not discriminate against United States financial service suppliers.” That language is “trade speak” for allowing any predatory U.S. bank to run roughshod over other countries with no restrictions. And, as an added bonus, the IP rules also prohibit regulations against cross-border transfers of data. (Here U.S. negotiators likely have European Union privacy rules in their sights as this is a contentious point in the Transatlantic Trade and Partnership talks.)

There do appear, on paper, to be token gains for labor and the environment. But that assumes any such gains would be enforceable, which can not be taken for granted. A revised labor chapter calls on Mexico to commit to strengthening Mexican workers’ ability to collectively bargain, but this strongly clashes with the Trump administration’s unrelenting hostility to U.S. unions. In conjunction with raising the minimum North American content of automobiles, at least 40 percent of auto content must be made by workers earning at least US$16 per hour.

On the environment, the Trade Office claims there would be new protections for marine species including whales and sea turtles; “prohibitions on some of the most harmful fisheries subsidies”; and “articles to improve air quality.”

Don’t hold your breath for clean air

Unfortunately, such sentiments run 180 degrees opposite to the actual policies of the Trump administration. Nor is global warming even mentioned. Furthermore, it is necessary to pay close attention to the actual words used in various places of “free trade” agreements and, crucially, how those passages will be interpreted in the secret corporate tribunals that adjudicate disputes between governments and corporations. Those tribunals are held in secret, have no appeal process and hand down decisions by judges whose day jobs are as corporate lawyers for the corporations that bring these suits.

The U.S, Trade Office “fact sheet” makes no mention of the Investor-State Dispute Settlement (ISDS) provision. Inside US Trade reports that ISDS will remain intact for the oil and gas, infrastructure, energy generation and telecommunications industries, while for other industries, ISDS “will be limited to expropriation or failure to give national treatment or most-favored nation treatment.” Because suits by corporations against national governments seeking to eliminate regulations are almost always raised on just those issues, this “limitation” will likely prove to be of no consequence.

Spent shale from a Shale oil extraction process (photo by U.S. Argonne National Laboratory)

The announced tepid advances in labor and environmental rules aren’t likely to be enforceable. In the language of trade agreements, rules benefiting capital and erasing the ability of governments to regulate are implemented in trade-agreement texts with words like “shall” and “must” while the few rules that purport to protect labor, health, safety and environmental standards use words like “may” and “can.” It remains to be seen if there will be any change to that language, but it would be best not hold one’s breath. Promised breakthroughs in past “free trade” deals have consistently proven to be empty platitudes.

A Sierra Club analysis of the revised NAFTA text warns that environmental rules will be weakened. The analysis said:

“NAFTA negotiators have explicitly stated that they intend for NAFTA 2.0 to lock in the recent deregulation of oil and gas in Mexico, which has encouraged increased offshore drilling, fracking, and other fossil fuel extraction. A future Mexican government may want to restrict such activities to reduce climate, air, and water pollution. However, NAFTA 2.0 could bar such changes with a ‘standstill’ rule that requires the current oil and gas deregulation to persist indefinitely, even as the climate crisis worsens and demands for climate action crescendo.

NAFTA 2.0 includes expansive rules concerning ‘regulatory cooperation’ that could require Canada, the U.S., and Mexico to use burdensome and industry-dominated procedures for forming new regulations, which could delay, weaken, or halt new climate policies. These rules also could be used to pressure Canada and Mexico to adopt climate standards weakened by the Trump administration, making it harder to resume climate progress in the post-Trump era.”

Will the Canadian government allow itself to be bullied?

The Institute for Agriculture and Trade Policy, calling the rushed deal between Mexico and the U.S. a “transparent bullying tactic” intended to force Canada into a deal with unfavorable terms, also said that the deal would hurt family farmers in all three countries. The Institute said:

“Given the Trump administration’s lack of adherence to existing international agreements, a handshake deal can hardly be seen as credible. What little has been released on agriculture makes the dubious assertion that U.S. farmers have benefited from NAFTA and, even worse, promises new rules to lock in the spread of agricultural biotechnology, which would favor agribusiness interests over those of family farmers in each of the three countries.”

Food and Water Watch also threw cold water on the idea of an improved NAFTA, saying it had “no confidence” that the Trump administration would address NAFTA’s flaws. The group’s executive director, Wenonah Hauter, wrote:

“The devil resides in the details of these corporate-driven free trade deals, and we expect that the fine print will include the kind of pro-polluter, pro-fossil fuel industry, pro-Wall Street deregulation that has been a hallmark of Trump’s domestic agenda. These rumored trade provisions would codify the administration’s savage attacks on environmental protection, food safety and consumer rights into trade deals that enshrine and globalize deregulation, making it harder to restore U.S. environmental and consumer protections once this administration is shown the White House door.”

The Alberta tar sands (photo by Howl Arts Collective, Montréal)

The Canadian government has joined the NAFTA talks, although it is difficult to see how Canada can do other than concede, given that U.S. Treasury Secretary Steven Mnuchin has said that Canada has until August 31 — four days after the Mexico-U.S. agreement was announced — to come to terms or the White House will move to replace NAFTA with a Mexico-U.S. bilateral deal. On the other hand, President Trump does not have the authority to do that without congressional approval, and opinions expressed in the U.S. Senate have opposed a deal without Canada. And despite the many concessions made by Mexico, tariffs imposed on Mexico will remain in force until and unless further negotiations eliminate them.

The Council of Canadians, long a NAFTA critic, fears Canada will show weakness. The group’s honorary chair, Maude Barlow, wrote:

“Trump is threatening to push Canada out of the agreement, or making it a junior partner to the U.S. and Mexico. Our government must not give in to these tactics and hold the line on our public interest. When NAFTA was signed 30 years ago, we worried that Canada would be at the mercy of the U.S, and we were right. Now, Canada is going to have its auto workers and farmers pitted against each other.”

No reason for optimism in Mexico

There is no reason for optimism to the south, either. Mexican activist Manuel Pérez-Rocha, noting that it is “not surprising” that the NAFTA text is hidden from the public, wrote:

“Unfortunately, the public doesn’t have an idea of what the exact decisions on energy are, labor organizations have been kept completely aside from the negotiations and in terms of the settlement of disputes these mechanisms will only handcuff [President-elect Andrés Manuel López Obrador’s] government when it starts office on Dec. 1.”

Without question, NAFTA has been a disaster for working people in all three countries — a lose-lose-lose proposition that has gone on for more than two decades. Despite President Trump’s rhetoric, Mexican farmers have perhaps been hurt the most. Is an administration that is overturning every environmental regulation it can, that denies global warming, that puts industry executives in charge of regulatory agencies, that features cabinet officers such as Wilbur Ross, an investment banker who buys companies and then takes away pensions and medical benefits so he can flip his companies for a big short-term profit, really going to help working people?

Given the massive power imbalances of today, the policies of capitalist governments reflect the interests of the largest industrialists and financiers. The Trump administration is actually composed of large industrialists and financiers, to a degree perhaps unprecedented in modern times, so all the more are those interests promoted.

“Free trade” agreements are part of this process, which is why they have little to do with trade and much to do with bringing to life corporate wish lists. These agreements are an inevitable result of production being moved to places with the lowest wages and weakest regulation — with products assembled across oceans with parts delivered from yet more places, the multi-national corporations that benefit from these global production chains require ever more “free trade” deals to keep their cross-border profits coming and to maintain their sweatshop empires.

There remains no alternative to working people uniting across borders, in a broad movement, to reversing corporate agendas that accelerate races to the bottom. Opposing “free trade” deals on nationalist grounds is playing into the hands of corporate plunderers.

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Fooled again? Trump trade policy elevates corporate power

Given the Trump administration’s all-out war on working people, a government by billionaires and for billionaires considerably more blatant in its class warfare than the ordinary White House, it has long puzzled me that some activists insist on giving it the benefit of the doubt when it comes to trade issues.

The Trump administration’s previously stated goals on what it seeks to achieve in the North American Free Trade Agreement (NAFTA) negotiations should have been sufficient evidence. But with this month’s issuance of the “National Trade Estimate Report on Foreign Trade Barriers” it should be painfully obvious that the Trump régime’s intent is to extend the dominance of U.S.-based multinational corporations into every aspect of life in as many corners of the globe as possible.

Directly contrary to Donald Trump’s hollow promises on the campaign trail, his administration released in July 2017 its “Summary of Objectives for the NAFTA Renegotiation.” This 18-page paper was written with boilerplate language that reads as if it was lifted from the Trans-Pacific Partnership, and some of the language appears to be repeated word for word. The intention is to strengthen corporate power, not promote the interests of working people.

Bárrás mountain, Norway (photo by Ville Miettinen)

As Friends of the Earth said at the time in its analysis of the Trump administration’s NAFTA objectives:

“Trump’s statement indicates he plans to step up his war on public health and the planet by modeling NAFTA’s provisions related to environmental regulation on the TPP. These objectives appear to set the stage for a stealth attack on strong regulation of food, agriculture, chemicals, and biotechnology.”

I was thus quite surprised recently when discussing NAFTA on the Eco-Logic environmental program on WBAI radio in New York when, summarizing the Trump NAFTA paper, I was quite rudely interrupted and addressed in a most condescending manner by another guest, the head of a Washington non-governmental organization (NGO) who purported to “correct” me by claiming that Trump’s trade advisers say they want to do away with the secret tribunals that corporations use to overturn government laws and regulations.

I was appearing on Eco-Logic as a representative of a grassroots organization I have worked with for several years, Trade Justice New York Metro, but even I as a lowly community organizer and not the head of a connected NGO know that campaign promises are meaningless. The Trump administration has put its intentions in print, and it would be folly to ignore what administration officials themselves say is their policy. There has been no attempt to do away with the private tribunals (the “investor-state dispute system”) in the NAFTA talks, only a push to eliminate panels that decide anti-dumping cases. This is simply because the White House wants to make it easier for U.S. companies to be able to sell excess production on the cheap across the border.

Trump administration takes aim at the world

In its National Trade Estimate Report (prepared by the Office of the U.S. Trade Representative, headed by nationalist Robert Lighthizer), the Trump administration takes direct aim at no less than 137 countries. And, for the few that were missed, the report’s introduction warns “As always, the omission of particular countries and barriers does not imply that they are not of concern to the United States.”

The report defines “trade barriers” in this way: “government laws, regulations, policies, or practices that either protect domestic goods and services from foreign competition, artificially stimulate exports of particular domestic goods and services, or fail to provide adequate and effective protection of intellectual property rights.”

You’ll note the absence of labor, safety, health or environmental standards, and the concern for “intellectual property rights” contrasts with the complete lack of regard for what other countries might see as their right to protect their own economy. This concern only with corporate profits, at the expense of all other human considerations, is hardly new of course. U.S. negotiators during the Obama administration consistently pushed for the most draconian rules for the Trans-Pacific Partnership, particularly on intellectual property. Any “investor” — defined as any person or entity that has “an expectation of gain or profit” in any form of participation in any enterprise, holds any financial instrument, possess any intellectual property right or has a “tangible or intangible” right in any “movable or immovable property — would have eligible to sue governments under the rules of the TPP.

The Rideau Canal in Ottawa (photo by John Talbot)

Health care, and government policies to make medicines more affordable, such as those of New Zealand, was at direct risk under TPP.

Nothing has changed. Any attempt by any government to place health or environmental concerns at least level with corporate prerogatives is what actually constitutes a “trade barrier” in the eyes of the Trump administration, true to its composition of a cabinet stuffed with billionaires and its managerial ranks with a fleet of Goldman Sachs alumni.

No country too small to be a target of U.S. capital

Let’s take the example of Norway. Not a socialist paradise as some U.S. liberals of the Bernie Sanders persuasion imagine, but nonetheless a country that does make efforts to ameliorate the conditions of capitalism and certainly a much more civilized place than the United States. Norway has an interesting relationship with the European Union, formally outside but part of the EU common market. Thus it is required that Oslo implement EU law, which it dutifully does with the exception of a couple of areas, including fishery policy, where it maintains independence.

The U.S. enjoyed a small trade surplus with Norway in 2017. Given Norway’s small population of five million one might believe the White House has bigger targets at which to aim. But no country is too small to feel the wrath of U.S. multi-national capital. The National Trade Estimate Report complains that Norway expects food that it imports to be proven safe. The nerve! The report says:

“Norway has effectively banned the importation of agricultural biotechnology products by implementing extremely restrictive policies for crops derived from such technology. The restrictions include prohibiting farmers from cultivating biotech crops and using biotech feed for farm animals. The United States continues to press Norway to recognize the applicable science on the safety of such products and accordingly to open its market to U.S. exports of such products. … Norway applies regulations developed by the European Union that ban imports of beef from animals treated with hormones, despite the absence of scientific evidence demonstrating that this practice poses any risk to human health.” [page 347]

Scientists, and not only EU officials, would differ. Note that in the Trump régime’s conception it is not up to the producer of a new product to prove it is safe; it’s up to consumers, or agencies designed to protect consumers, to prove it’s not safe after the fact. This backward formulation, unfortunately, is consistent with U.S. regulatory practice regarding chemicals.

Consistent with its attitude toward Norway, the Trump administration alleges the European Union raises “a proliferation of technical barriers.” [page 155] By no means can the EU be said to be immune to corporate pressure. But the EU does not have a policy of favoring U.S. corporations and has limitations in how far it can lower regulatory standards due to grassroots mobilization despite its best efforts to insulate itself from public opinion.

European Union, Canada and Mexico aren’t forgotten

The Trump administration’s complaints about the European Union go on for 47 pages, covering a vast array of industrial and agricultural products. We get to the heart of the matter on page 157, where the trade report complains that “technical committees that draft the European standards generally exclude non-EU nationals” and thus “The opportunity for U.S. stakeholders to influence the technical content of EU legislation setting out essential requirements (i.e., technical regulations) is also limited.”

Yes, if only Brussels would allow U.S. corporations to dictate their standards. We can all imagine the shrieking that would be heard if Europeans were to demand they dictate regulatory practices to Washington. Nationalism, in the end, is always a one-way street.

Canada and Mexico, of late subject to U.S. demands in the NAFTA re-negotiations, are not spared in the trade report, either.

The U.S. enjoyed a trade surplus with Canada in 2017, contrary to the nonsense that President Trump routinely utters. As expected, the trade report dwells on Ottawa’s protective measures for its dairy farmers and does not fail to complain about aid to Québec’s Bombardier company while not mentioning the massive corporate welfare doled out to U.S. corporations at the federal, state and local levels. But we again get to the crux of the matter when we read the complaint that Canada dares to uphold food-safety standards.

The trade report complains that “Canada’s Seeds Act generally prohibits the sale or advertising for sale in Canada, or import into Canada, of any variety of seeds that is not registered with Canada’s Food Inspection Agency.” [page 80] This is alleged to be unfair because the Canadian agency “verify[s] claims made which contributes to a fair and accurate representation of varieties in the marketplace.” Quelle horreur! How dare those Canadian bureaucrats value the safety of food above corporate profits!

Despite U.S. corporations using Mexico as a low-wage haven with low environmental standards that can be ignored, several items that met the displeasure of the White House were listed, among them Mexico’s intention to set standards for energy efficiency, alcohol and plumbing fixtures. The trade report complains that Mexico requires licensing for companies that seek to export steel there, an irony considering the Trump administration’s imposition of steel tariffs.

Although the trade report goes on to complain about other countries enforcing health and safety standards, its authors, with a straight face, claim to be upholding higher standards, asserting that the report “highlights the increasingly critical nature of standards-related measures (including testing, labeling and certification requirements) and sanitary and phytosanitary (SPS) measures to U.S. trade policy.” Perhaps in an Orwellian sense. It would be more accurate to say that U.S. trade policy, as with foreign policy in general, is best defined as “he who has the gold gets to make the rules.”

Watch out, world: The Trump gang is coming for you. Trump trade policy is set by economic nationalists determined to deepen the dominance of U.S. corporate power at the expense of working people everywhere, U.S. working people not excepted. It is the height of naïveté to expect anything else.

Trump’s re-negotiation proposal will make NAFTA worse

As a candidate for president, Donald Trump claimed he wanted a better deal for U.S. workers. Surprise! Oh, okay, that he was lying really isn’t a surprise at all. Far from a “better deal,” the Trump administration is now offering a North American version of the Trans-Pacific Partnership.

Although it might have seemed that the TPP was dead and buried after several years of struggle by activists on both sides of the Pacific Ocean (President Trump had as much to do with TPP’s demise as a rooster does for the rise of the Sun), the TPP’s language is being used as a model for a re-negotiated North American Free Trade Agreement.

The Trump administration issued an 18-page document on July 17, announcing its “Summary of Objectives for the NAFTA Renegotiation.” Please try to contain your excitement. But to spoil the fun of actually reading the document, the net result, should these plans come to fruition, would be to strengthen corporate power, not promote the interests of working people. There is almost nothing concrete in the text’s 18 pages but much boilerplate language that reads as if it was lifted from the TPP. In fact some of the language appears to be repeated word for word.

The Sierra Club’s executive director, Michael Brune, summarized the “Summary of Objectives” document this way:

“In a blunt display of hypocrisy, Donald Trump appears to want to copy and paste the weak labor and environmental provisions of the TPP, a deal that Trump claimed to hate. Based on today’s ‘plan,’ one could be forgiven for concluding that Trump’s opposition to the TPP was merely political theater and this administration has no intent of fundamentally changing NAFTA.”

Friends of the Earth was no more inclined to give the benefit of the doubt:

“Trump’s statement indicates he plans to step up his war on public health and the planet by modeling NAFTA’s provisions related to environmental regulation on the TPP. These objectives appear to set the stage for a stealth attack on strong regulation of food, agriculture, chemicals, and biotechnology.”

It would be all too easy to say “We told you so,” but, really, was it realistic to expect a billionaire who built his empire on screwing working people and who has populated his cabinet with a rouge’s gallery of corporate plunderers to do otherwise?

Meet the bosses’ panel, same as the old panel

Any re-negotiation that doesn’t eliminate the investor-state dispute settlement (ISDS) provision isn’t a serious re-negotiation. The “Summary of Objectives” document doesn’t, and it isn’t. Instead, the document offers a few reforms that will not change the substance of ISDS. The key passage states: “Establish a dispute settlement mechanism that is effective, timely, and in which panel determinations are based on the provisions of the Agreement and the submissions of the parties and are provided in a reasoned manner.”

That is consistent with the sort of language one can find in most any so-called “free trade” agreement. And that is actually a part of the problem — the one-sided tribunal decisions repeatedly handed down that strike down environmental and health regulations are consistent with “provisions of the agreements.” So the Trump administration’s goal would change nothing.

The only specific changes proposed are that tribunal submissions and final decisions be made publicly available, and that hearings be open to the public. As these proposals are found on the last page they do not appear to be at all a priority. Measures to reduce the secrecy of the process are welcome, but these would have no practical effect on the inherent unfairness of this process.

The same tribunal that handles complaints by multi-national corporations against government regulation, an arm of the World Bank, will still handle these complaints. The same structure, under which corporate lawyers who specialize in representing these corporations in regulatory disputes alternate between being lawyers and judges, handing down decisions with no accountability and no appeal, would remain in place.

There is no mention of NAFTA’s Chapter 11, which is the agreement’s linchpin. Chapter 11 codifies “equal treatment” in accordance with international law and enables corporations to sue over any regulation or other government act that violates “investor rights,” which means any regulation or act that might prevent the corporation from earning the maximum possible profit regardless of harm to others.

The rulings that have previously been handed down will remain as precedents that will be used in future hearings. If an earlier tribunal ruling said that a ban on a known carcinogen is prohibited by NAFTA rules protecting “investor rights,” that precedent will remain in place and be used as a justification to knock down the next health or environmental rule. That the tribunal would have some of the veil of secrecy lifted from its decisions won’t change any of this. As long as Chapter 11 exists, the same one-sided decisions will be handed down. As long as the investor-state dispute settlement provision exists, the same one-sided decisions will be handed down.

There is no “reform” that can make this system fair. There is no alternative to eliminating completely the entire investor-state dispute settlement system. The Trump administration is offering cosmetic changes that leave untouched the ability of corporations to force the reversal of rules protecting health, safety, labor or environmental standards.

Capital beats people in trade language

The “Summary of Objectives” document purports to adopt standards for labor and for the environment, but the language used is very similar to the language proposed for the Trans-Pacific Partnership and in use in other so-called “free trade” agreements. There is little at all in these stated goals that differs from the stated goals that Obama administration put forth for the Trans-Pacific Partnership. They are meaningless window dressing.

In the language of trade agreements, rules benefiting capital and erasing the ability of governments to regulate are implemented in trade-agreement texts with words like “shall” and “must” while the few rules that purport to protect labor, health, safety and environmental standards use words like “may” and “can.” So although the Trans-Pacific Partnership was promoted as constituting a big advance in protections for labor, health, safety and the environment, those were empty platitudes.

The Trump administration’s supposed intentions here are even less sincere given its undisguised contempt for environmental concerns.

The only specific change proposed is the elimination of Chapter 19, which means the elimination of anti-dumping review panels. The Institute for Agriculture and Trade Policy said the elimination of Chapter 19 would ensure that dumping of commodities (illegal for industrial goods) will occur unchecked by countervailing duties. Agricultural dumping of subsidized U.S. crops under NAFTA has driven millions of Mexican farmers off their lands. As more are driven off the land, more Mexicans will be forced to migrate to the United States by whatever means necessary and Mexican agriculture will continue to be badly hurt.

As for employees in manufacturing, The “Summary of Objectives” document does not meaningfully address the offshoring of jobs, or NAFTA’s prohibition of “buy local” rules.

Nor does the above exhaust the list of proposals that will allow multi-national capital to run wild. The objectives concerning “trade in services, including telecommunications and financial services,” appear to be cut and pasted from the Trans-Pacific Partnership and the Trade In Services Agreement. The goal of prohibiting “discrimination against foreign services suppliers” and against “restrictions on the number of services suppliers in the markets” signal the intention to eliminate any meaningful restrictions regulating the financial industry.

One prominent goal of the Trade In Service Agreement was to enable giant financial companies, particularly those based in the U.S., to take over the banking and financial systems of small countries, and it appears the Trump administration seeks to retain this goal, whether to directly target Mexican or Canadian banking, or alternatively as a model to be imposed in future trade deals.

Health and environmental laws will still be “barriers to investment”

Consistent with the objectives of the Trans-Pacific Partnership, the Trump administration says it wants to “Establish rules that reduce or eliminate barriers to U.S. investment in all sectors in the NAFTA countries.” What that passage means is that, consistent with what is written above, the intention is for the elimination of as many restraints on corporate behavior as possible.

Multi-national corporations consider a “barrier” to profits any rules or laws that protect health, safety, labor standards or the environment. Thus eliminating “barriers to investment” means eliminating protective laws. This would reinforce the tendency of the tribunal that renders decisions on corporate complaints to rule against protective laws.

There is nothing to celebrate in this re-negotiation. The North American Free Trade Agreement has been disastrous for working people and farmers in all three countries. The United States had a net displacement of 850,000 jobs through 2010 directly attributable to NAFTA, according to Economic Policy Institute calculations. U.S. food prices have risen 67 percent since NAFTA took effect, despite an increase in food imported from Mexico and Canada.

In Canada, the social safety net has been weakened while corporate revenue has doubled and manufacturing jobs disappeared. Composite revenues of 40 of Canada’s biggest businesses increased 105 percent from 1988 to 2002, while their workforces shrank by 15 percent and unemployment benefits were cut. In Mexico, nearly five million family farmers have been been displaced, inflation-adjusted wages are barely above the 1980 level and an unrestrained increase in mining has devastated Mexico’s environment.

Is it really necessary to make this worse? Yet that is what the Trump administration is proposing for its re-negotiation — another bait and switch. This follows another project for corporate plunder, President Trump’s supposed $1 trillion infrastructure plan, which is actually a plan for new “public-private partnerships.” Public-private partnerships are nothing more than a variation on straightforward schemes to sell off public assets below cost, with working people having to pay more for reduced quality of service.

No actual money is being committed. Rather, senior Trump administration advisers call for handing out $137 billion in tax credits for private investors who underwrite infrastructure projects. These officials estimate that over 10 years the credits could spur $1 trillion in investment.

Trade policy is yet one more front on which a fight must be waged. “Free trade” agreements have very little to do with trade and much to do with imposing corporate wish lists. As with all “free trade” agreements, the fault lines are along class, not national, interests. Industrialists and financiers around the world understand their class interests and are united to promote their interests. Working people uniting across borders, in a broad movement, is only path toward reversing corporate agendas that accelerate races to the bottom.

TPP is not dead: It’s now called the Trade In Services Agreement

One can hear the cry ringing through the boardrooms of capital: “Free trade is dead! Long live free trade!”

Think the ideas behind the Trans-Pacific Partnership or the so-called “free trade” regime are buried? Sadly, no. Definitely, no. Some of the countries involved in negotiating the TPP seeking to find ways to resurrect it in some new form — but that isn’t the most distressing news. What’s worse is the TPP remains alive in a new form with even worse rules. Meet the Trade In Services Agreement, even more secret than the Trans-Pacific Partnership. And more dangerous.

The Trade In Services Agreement (TISA), currently being negotiated among 50 countries, if passed would prohibit regulations on the financial industry, eliminate laws to safeguard online or digital privacy, render illegal any “buy local” rules at any level of government, effectively dismantle any public advantages to be derived from state-owned enterprises and eliminate net neutrality.

TISA negotiations began in April 2013 and have gone through 21 rounds. Silence has been the rule for these talks, and we only know what’s in it because of leaks, earlier ones published by WikiLeaks and now a new cache published January 29 by Bilaterals.org.

Earlier draft versions of TISA’s language would prohibit any restrictions on the size, expansion or entry of financial companies and a ban on new regulations, including a specific ban on any law that separates commercial and investment banking, such as the equivalent of the U.S. Glass-Steagall Act. It would also ban any restrictions on the transfer of any data collected, including across borders; place social security systems at risk of privatization or elimination; and put an end to Internet privacy and net neutrality. It hasn’t gotten any more acceptable.

Photo by Annette Dubois

Photo by Annette Dubois

TISA is the backup plan in case the TPP and the Transatlantic Trade and Investment Partnership don’t come to fruition. Perhaps fearful that the recent spotlight put on “free trade” deals might derail TISA as it derailed TPP, the governmental trade offices negotiating it have not announced the next negotiating date. The closest toward any meaningful information found was the Australian government’s bland statement that the “Parties agreed to reconvene in 2017.”

The cover story for why TISA is being negotiated is that it would uphold the right to hire the accountant or engineer of your choice, but in reality is intended to enable the financial industry and Internet companies to run roughshod over countries around the world. And while “liberalization” of professional services is being promoted, the definition of “services” is being expanded in order to stretch the category to encompass manufacturing. Deborah James of the Center for Economy and Policy Research laid out the breathtaking scope of this proposal:

“Corporations no longer consider setting up a plant and producing goods to be simply ‘manufacturing goods.’ This activity is now is broken down into research and development services, design services, legal services, real estate services, architecture services, engineering services, construction services, energy services, employment contracting services, consulting services, manufacturing services, adult education services, payroll services, maintenance services, refuse disposal services, warehousing services, data management services, telecommunications services, audiovisual services, banking services, accounting services, insurance services, transportation services, distribution services, marketing services, retail services, postal and expedited delivery services, and after-sales servicing, to name a few. Going further, a shoe or watch that measures steps or sleep could be a fitness monitoring service, not a good. A driverless car could be a transport service, not an automobile. Google and Facebook could be information services and communication services, respectively.”

Why is it you are kept in the dark?

Before we get to the details of the text itself, let’s take a quick look at how the world’s governments, on behalf of multi-national capital, are letting their citizens know what they are up to. Or, to be more accurate, what they are not telling you. Many governments have not bothered to update their official pages extolling TISA in months.

The European Union is negotiating TISA on behalf of its 28 member countries, along with, among others, the United States, Canada, Mexico, Australia, New Zealand, Japan, South Korea, Taiwan, Chile, Colombia, Peru, Norway, Switzerland, Pakistan and Turkey.

In the United States, the new Trump administration has yet to say a word about it. The Office of the U.S. Trade Representative web site’s page on TISA still says “TiSA is part of the Obama Administration’s ongoing effort to create economic opportunity for U.S. workers and businesses by expanding trade opportunities.” Uh-huh. President Donald Trump is not against “free trade” deals; he simply claims he can do it better. The Trump administration has issued blustery calls for “fair deals” and braggadocio puffing up Donald Trump’s supposed negotiating prowess. A typical White House passage reads, “To carry out his strategy, the President is appointing the toughest and smartest to his trade team, ensuring that Americans have the best negotiators possible. For too long, trade deals have been negotiated by, and for, members of the Washington establishment.”

overlap-of-trade-dealsMore typical of the TISA negotiators is the latest report from the European Commission, which summarized the latest round, held last November, this way: “Parties made good progress in working towards an agreed text and finding pathways towards solving the most controversial outstanding issues at both Chief Negotiators and Heads of Delegation levels.” The Canadian government’s last update is from last June and declares “Parties conducted a stocktaking session to assess the level of progress on all issues.”

Traveling across the Pacific brings no more useful information. Australia’s government offers this information-free update: “Parties agreed to a comprehensive stocktake of the negotiations, identifying progress made and areas which require ongoing technical work.” New Zealand’s government can’t even be bothered to provide updates, instead offering only discredited, boilerplate public-relations puffery similar to other trade offices.

The one hint that TISA negotiations are experiencing difficulty that could be found through an extensive online search is this passage in a U.S. Congressional Research Service report dated January 3, 2017: “Recognizing that outstanding issues remain and the U.S. position under a new administration is unclear, the parties canceled the planned December 2016 meeting but are meeting to determine how best to move forward in 2017.” Given that the new administration is moving as fast as possible to eliminate the tepid Dodd-Frank Act financial-industry reforms, it would seem TISA’s provisions to dismantle financial regulation globally would not be a problem at all.

But that these talks are not progressing at the present time does not mean the world can relax. It took years of cross-border organizing and popular education to stop the TPP, and this effort will have to replicated if TISA is to be halted.

The details are the devils already known

Commentary accompanying Bilaterals.org’s publication of several TISA chapters stresses that the Trans-Pacific Partnership, despite its apparent defeat, is nonetheless being used as the model for the Trade In Services Agreement. Thus we are at risk of the TPP becoming the “new norm”:

“Several proposed texts from the failed Trans-Pacific Partnership (TPP) agreement have been transferred to TiSA — including state-owned enterprises; rights to hold data offshore (including financial data); e-commerce; and prohibitions on performance requirements for foreign investors. While these texts originated with the United States, they appear to be supported by other parties to the TPP, even though those governments were reluctant to agree to them in the TPP and will no longer be bound by that agreement. That suggests the TPP may become the new norm even though it has only been ratified in two of the 12 countries, and that was done on the basis of U.S. participation that no longer applies. TPP cannot be allowed to become the new ‘default’ position for these flawed agreements.”

Some of the most extreme measures have been dropped (at least for now) and much of the text is not agreed. Nonetheless, there is nothing to cheer about, Bilaterals.org reports.

“The effectiveness of opposition to TiSA has led governments to conclude that they cannot sell some of the more extreme proposals, which have thus been dropped from previous leaked texts. But the fetters on the rights and responsibilities of governments to regulate in the interests of their citizens from what remains would still go further than any single other agreement. There are no improvements on the inadequate protections for health, environment, privacy, workers, human rights, or economic development. And there is nothing to prevent developing countries becoming even more vulnerable and dependent in an already unequal and unfair global economy.”

Hypocritically, TISA would prohibit developing countries from adopting measures that countries like the United States used to facilitate its industrial development when it was an emerging country in the 19th century. In an analysis for WikiLeaks, Sanya Reid Smith of the Third World Network, an international coalition specializing in development issues, wrote:

“[T]he proposals in this text restrict the ability of developing countries to use the development paths taken by many of the developed TISA countries. Some experts call this developed countries ‘kicking away the ladder’ after they have climbed up, to prevent developing countries from developing the same way. … In TISA, the USA is proposing restrictions on host countries being able to require senior managers be citizens of the host country. Yet when it was a capital importer, the USA had the opposite law: its 1885 contract labour law prohibited the import of foreign workers, i.e. the USA required senior managers (and all other staff) be Americans, which increased the chances of skills being passed to locals.”

Letting banks decide what’s good for you

These proposals are more extreme than language in existing bilateral trade agreements. Many of TISA’s provisions are lifted from TPP, but some go beyond the latter’s already extreme proposals For example, not even the TPP contemplated the entire elimination of regulations of any kind against the financial industry. Article 14 of TISA’s annex on financial services, which had contained the most explicit language prohibiting regulation, has been removed, but Article 9 still contains language requiring no limitations beyond those applying to domestic financial firms. In other words, a smaller country would be required to allow a giant bank from a bigger country to take over its entire banking system.

Incredibly, regulations against financial derivatives yet to be invented would be illegal. A Public Citizen analysis states:

“TISA would require governments to allow any new financial products and services — including ones not yet invented — to be sold within their territories. The TISA Annex on Financial Services clearly states that TISA governments ‘shall permit’ foreign-owned firms to introduce any new financial product or service, so long as it does not require a new law or a change to an existing law.”

As another example, the financial-services annex (in article 21) would require that any government that offers financial products through its postal service lessen the quality of its products so that those are no better than what private corporations offer. Article 1 of the financial-services annex states that “activities forming part of a statutory system of social security or public retirement plans” are specifically covered by TISA, as are “activities conducted by a central bank or monetary authority or by any other public entity in pursuit of monetary or exchange-rate policies.”

That social security or other public retirement systems are covered is cause for much alarm because they could be judged to be “illegally competing” with private financial enterprises. It is conceivable that central banks could be constrained from actions intended to shore up economies during a future financial crisis if banks decide such measures “constrain” their massive profiteering off the crisis.

The countries negotiating TISA.

The countries negotiating TISA.

Article 10 of the annex continues to explicitly ban restrictions on the transfer of information in “electronic or other form” of any “financial service supplier.” In other words, EU laws guarding privacy that stop U.S.-based Internet companies from taking data outside the EU to circumvent those privacy laws would be null and void. Laws instituting privacy protections would be verboten before they could be enacted. These rules, if enacted, could also provide a boon to companies like Uber whose modus operandi is to circumvent local laws. The Bilaterals.org analysis accompanying the leaks notes:

“The main thrust of TiSA comes through the e-commerce, telecommunications, financial services and localisation rules and countries’ commitments to allow unfettered cross-border supply of services. Together they would empower the global platforms who hold big data, like Google, without effective privacy protections, and tech companies like Uber, who have become notorious for evading national regulation, paying minimal tax and exploiting so-called self-employed workers. Given the backlash against global deals for global corporations TiSA will simply add fuel to the bonfire.”

Who interprets the rule is crucial

The language of TISA, like all “free trade” agreements, is dry and legalistic. How these rules are interpreted is what ultimately matters. TISA contains standard language requiring arbitration by judges possessing “requisite knowledge”; that language means that the usual lineup of corporate lawyers who represent corporations in these tribunals will switch hats to sit in judgment. The tribunals used to settle these “investor-state disputes” are held in secret with no accountability and no appeal.

The intention of “free trade” agreements is to elevate corporations to the level of governments. In reality, they raise corporations above the level of governments because only “investors” can sue; governments and people can’t. “Investors” can sue governments to overturn any law or regulation that they claim will hurt profits or even potential future profits. On top of this, a government ordinarily has to pay millions of dollars in costs even in the rare instances when they win one of these cases.

Each “free trade” agreement has a key provision elevating corporations above governments that codifies the “equal treatment” of business interests in accordance with international law and enables corporations to sue over any regulation or other government act that violates “investor rights,” which means any regulation or law that might prevent the corporation from extracting the maximum possible profit. Under these provisions, taxation and regulation constitute “indirect expropriation” mandating compensation — a reduction in the value of an asset is sufficient to establish expropriation rather than a physical taking of property as required under customary law. Tribunal decisions become precedents for further expansions of investor “rights” and thus constitute the “evolving standard of investor rights” required under “free trade” agreements. TISA contains the usual passages requiring “equal treatment.”

At bottom, “free trade” deals have little to do with trade and much to do with imposing corporate wish lists through undemocratic means, including the elimination of any meaningful regulations for labor, safety, health or the environment. TISA is another route to imposing more of this agenda. And the TPP itself isn’t necessarily dead — both Chile and New Zealand are holding discussions with other TPP countries to salvage some of the deal. Chile has invited TPP countries, plus China, to a March summit and the New Zealand trade minister is visiting Australia, Japan, Mexico and Singapore.

Working people around the world scored a major victory in stopping the TPP, at least in its current form. The activists who achieved this deserve much credit. But there is far more to do. Capital never rests; nor can we. Here we have class warfare in naked fashion, and there is no doubt on which side the capitalist world’s governments lie.

CETA’s specter of corporate dictatorship still haunts Canada, EU

The most tepid of blows for democracy was struck this week when the president of the European Commission, Jean-Claude Juncker, reversed himself and declared that the parliaments of the EU member states will vote on the “free trade” deal with Canada after all. Only a week earlier, President Juncker had dismissed the idea of any democratic input, insisting that the deal would be unilaterally approved by EU ministers.

The earlier intended diktat was no aberration, and the hasty reversal is much more a cosmetic exercise in public relations than a new-found respect for public opinion. The public has been excluded from the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union from the start. There are reasons for that, centering on CETA being indistinguishable from the various “free trade” deals under way and, like the Trans-Pacific Partnership, one that goes beyond even the North American Free Trade Agreement.

President Juncker first said on June 28 that there was no need for ratification by European parliaments — although he graciously conceded that EU governments  could “scrutinize” the CETA text. The problem, he said, was that “allowing national parliaments to have a say in the agreement will paralyze the process and put the bloc’s credibility at stake,” reported Deutsche Welle. Well, we can’t have messy democracy get in the way of corporate wish lists, can we?

Ottawa from the McKenzie Bridge (photo by Siqbal)

Ottawa from the McKenzie Bridge (photo by Siqbal)

Deutsche Welle reported on July 5 that Germany and France had insisted parliamentary votes be taken, with the German economy minister, Sigmar Gabriel, saying publicly that President Juncker’s comment was “incredibly stupid” and “would stoke opposition to other free trade deals.” No opposition to CETA here; merely discomfort that the lack of democracy had become too blatant. So it would be unrealistic to expect the Bundestag or any other parliamentary body to vote in the interest of their citizens without much more popular pressure being applied.

On the other side of the Atlantic, the Canadian government is putting a happy face on what will be a longer process than expected, saying the European reversal was “expected.” International Trade Minister Chrystia Freeland has has gone so far as to declare CETA a “gold-plated trade deal.” The government of Prime Minister Justin Trudeau has followed a path very similar to that of U.S. President Barack Obama, quickly making a couple of easy gestures, such as installing a gender-equal cabinet, but allowing almost all of Stephen Harper’s draconian laws to stay in place. Pushing for CETA’s passage, despite its being negotiated in secret by the Harper régime, is consistent with that path.

Consultation process is window-dressing

The European Commission’s antipathy to democracy is also par for the course. The EU trade office, the European Commission Directorate General for Trade, set up a process of public consultation, but seems to have not paid any attention to it. A spokesman for the watchdog group Corporate Europe Observatory said of this window-dressing “consultation”:

“The Commission is not really serious about its own consultation. It’s more about image than substance. … I think those who chose to respond to the Commission’s consultation are being ridiculed.”

The “consultation” that counted during negotiations was that of multi-national corporations. As is standard with “free trade” agreements, laws and regulations that protect health, workplace standards and the environment will be considered barriers to trade, and ordered removed by secret tribunals with no accountability. Here again we have a farce. Following the conclusion of CETA negotiations, the German and French governments wanted changes made to the investor-state dispute settlement mechanism that enables corporations to challenge governments (but not the other way around).

Grand Place, Brussels (photo by Wouter Hagens)

Grand Place, Brussels (photo by Wouter Hagens)

Did Berlin and Paris suddenly decide that ceding their sovereignty to secret tribunals, in which corporate lawyers who specialize in representing multi-national corporations sit in judgment, was maybe a bad idea? Not really. This was, like the entire process, a public relations problem. So instead of the traditional three-member tribunal picked from a roster created by an established corporate-aligned arbitration body, as is the case with complaints filed under NAFTA rules, CETA would have its own 15-member permanent tribunal. And, as an added bonus, there will even be an appeals tribunal. But who will sit on these two bodies? None other than the same corporate lawyers who would otherwise hear such cases.

Here’s the relevant passage, buried deep in the CETA text, at Article 8.26:

“The Members of the Tribunal … shall have demonstrated expertise in public international law. It is desirable that they have expertise in particular, in international investment law, in international trade law and the resolution of disputes arising under international investment or international trade agreements.”

Building on NAFTA’s anti-democratic principles

No different from the qualifications deemed necessary in existing “free trade” agreements or those proposed in the Trans-Pacific and Transatlantic partnerships. The wording guarantees that corporate lawyers or academics who specialize in existing tribunals and who have adopted the mindsets of their clients will adjudicate these decisions — in other words, a steady stream of decisions elevating the right of a corporation to make the maximum possible profit above all other human considerations. This dynamic has to led to NAFTA becoming a lose-lose-lose proposition for working people in Canada, the U.S. and Mexico, and CETA will accelerate this trend.

A report on the ramifications of CETA, prepared by Maude Barlow, says:

“With CETA and TTIP, for the first time, subnational governments (municipalities, provinces and states) will be subject to local procurement commitments that bar them from favouring local companies and local economic development. According to an analysis from the Canadian Centre for Policy Alternatives, this will substantially restrict the vast majority of local governments in North America and Europe from using public spending as a catalyst for achieving other societal goals — from creating good jobs, to supporting local farmers, to addressing the climate crisis.”

Regulations would be “harmonized,” meaning reduced to the lowest level of protection that can be found, and likely lower than that. Ms. Barlow writes:

“CETA commits to a process whereby any differences in regulations between Europe and Canada, be they labour rights, environmental protection standards, food safety rules or tax laws, could be considered an obstacle to trade and suppressed. Both parties agree to share information of contemplated or proposed future regulations with one another even before they share them with their own elected parliaments in order to ensure they are not trade distorting. That means the other party could make changes to a piece of legislation before it has been seen by its own elected officials or the public.”

Pressure will be brought to bear to privatize water systems and other public utilities, and pharmaceutical prices for Canadians will rise significantly — costing as much as C$1.6 billion per year. As is customary with “free trade” agreements, there are no limitations on who or what constitutes an “investor.” The rights of corporations are delineated over hundreds of pages, but the chapters that deal with labor, health, safety and environmental standards use the usual provisional language. For example, in Chapter 21.7, “The Parties endeavour to cooperate and to share information on a voluntary basis in the area of non-food product safety.” When it comes to corporate demands, however, “must” and “shall” are the words used.

CETA, like its cousins TTP and TTIP, would cement into place the right of multi-national corporations to dictate to governments without any democratic input. This would be irreversible. Worse, the approval of CETA would provide fresh momentum for TPP and TTIP. We have no time to waste.

Regulation of financial industry is history if Trade In Services Agreement passes

The most secret of the international “free trade” agreements being negotiated around the world is the Trade In Services Agreement, which also might be the most draconian yet. If TISA were to go into effect, regulation of the financial industry would be effectively prohibited, privatizations would be accelerated and social security systems would potentially be at risk of privatization or elimination.

The Trade In Services Agreement is multi-national corporations’ backup plan in case the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership are not brought to fruition. It is being promoted as the right to hire the accountant or engineer of your choice, but in reality is intended to enable the financial industry to run roughshod over countries around the world.

Protest against the Trade In Services Agreement

Protest against the Trade In Services Agreement

TISA is being negotiated in secret by 50 countries, with the unaccountable European Commission representing the 28 EU countries. Among the other countries negotiating are Australia, Canada, Japan, Norway, Mexico, New Zealand, Switzerland, Turkey and the United States.

Earlier leaks have revealed that Internet privacy and net neutrality would become things of the past under TISA. European rules on privacy, much stronger than those found in the United States, for example, would be eliminated. Further, any rule that in any way mandates local content or provides any advantage to a local technology would also be illegal, locking in the dominance of a handful of U.S. Internet companies.

The latest snapshot of the ongoing TISA negotiations is provided by WikiLeaks, which released several chapters on May 25.

Say goodbye to your retirement

Among the portions of TISA published by WikiLeaks in its latest publication is the financial services annex. Articles 1 and 2 of the annex are unchanged from an earlier leak in 2014 — there are no limits on what constitutes covered “financial services.” Article 2 specifically references central banks, social security systems and public retirement systems. It is unclear how these would be affected, but it is possible that TISA could be interpreted to mean that no public or other democratic check would be allowed on central banks and that public systems such as Social Security might be judged to be illegally “competing” with private financial enterprises.

Financiers around the world would dearly love to get their hands on social security systems, a privatization that would lead to disaster, as has already been the case with Chile, also a TISA participant. Chileans retiring in 2005 received less than half of what they would have received had they been in the old government system.

Some of the provisions in TISA’s financial services annex includes:

  • Requirements that countries must conform their laws to the annex’s text (the U.S. and EU are proposing the most draconian language) (annex Article 3).
  • A prohibition on “buy local” rules for government agencies (Article 7).
  • Prohibitions on any limitations on foreign financial firms’ activities (Articles 9 and 12).
  • Bans on restrictions on the transfer of any data collected, including across borders (Article 10).
  • Prohibitions of any restrictions on the size, expansion or entry of financial companies and a ban on new regulations, including a specific ban on any law that separates commercial and investment banking, such as the equivalent of the U.S. Glass-Steagall Act. Only one country, Peru, opposes this. (Article 14).
  • A provision that purports to allow protection for bank depositors and insurance policy holders, but immediately negates that protection by declaring such duties “shall not be used as a means of avoiding the Party’s commitments or obligations under the Agreement” (Article 16).
  • The standard language on dispute settlement: “A Panel for disputes on prudential issues and other financial matters shall have all the necessary expertise relevant to the specific financial service under dispute.” The effect of that rule would be that lawyers who represent financiers would sit in judgment of financial companies’ challenges to regulations and laws (Article 19)
  • A requirement that any government that offers financial products through its postal service lessen the quality of its products so that those are no better than what private corporations offer. It is possible this measure could also threaten social security systems on the basis that such public services compete against financial companies. (Article 21).

Rules designed to force privatizations

Some of those article numbers have changed since the earlier financial services annex leak; one change is the disappearance of an article that would have required countries to “eliminate … or reduce [the] scope” of state enterprises. But that may be because there is a chapter with more stealthy language devoted to the topic: The TISA annex on state-owned enterprises.

The annex on state-owned enterprises would restrict their operations, requiring they be operated like a private business and prohibiting them from “buying local.” Furthermore, governments would be required to publish a list of state-owned enterprises, with no limit on what information must be provided if a corporation asks. Article 7 of this annex would enable any single government to demand new negotiations to further limit state-owned enterprises, which would give the U.S. the ability to directly attack other countries’ state sectors or to demand privatizations in countries seeking to join TISA.

Jane Kelsey, a University of Auckland law professor who has long studied “free trade” agreements, notes that these TISA provisions are modeled on the Trans-Pacific Partnership. She writes:

“The goal was always to create precedent-setting rules that could target China, although the US also had other countries’ SOEs in its sights – the state-managed Vietnamese economy, various countries’ sovereign wealth funds, and once Japan joined, Japan Post’s banking, insurance and delivery services. All the other countries were reluctant to concede the need for such a chapter and the talks went around in circles for several years. Eventually the US had its way.”

The substitution of language unambiguously requiring elimination or shrinkage of state-owned enterprises with less obvious language may be a public-relations exercise, so that the specter of forced privatizations will not be so apparent.

Domestic regulations in the cross hairs

Another portion of TISA that has been published by WikiLeaks is the annex on domestic regulation. This annex is so far reaching that it would actually eliminate the ability of governments to regulate big-box retailers. This is one of the goals of corporate lobbyists, a WikiLeaks commentary points out. Referring to a U.S. business group, the commentary says:

“The National Retail Federation not only wants TiSA to ensure their members can enter overseas markets but to ease regulations ‘including store size restrictions and hours of operation that, while not necessarily discriminatory, affect the ability of large-scale retailing to achieve operating efficiencies.’ The National Retail Federation is therefore claiming that a proper role for the public servants negotiating TiSA is to deregulate store size and hours of operation so that large corporations can achieve ‘operating efficiencies’ and operate ‘relatively free of government regulation’ – completely disregarding the public benefit in regulations that foster livable neighbors and reasonable hours of work.”

In other words, behemoths indifferent to the lives of its employees, like Wal-Mart, would have an even freer hand.

Blockupy 2013: Securing the European Central Bank (photo by Blogotron)

Blockupy 2013: Securing the European Central Bank (photo by Blogotron)

The annex on domestic regulation would also require governments to publish in advance any intention to alter or implement regulations so that corporations can be given time to be “alerted that their trade interests might be affected.” The ability of a government to quickly issue a regulation in response to a disaster would be severely curtailed. Environmental rules, even requiring performance bonds as insurance against, for example, oil spills, would be at risk of being declared unfair “burdens.” The WikiLeaks commentary says:

“This draconian ‘necessity test’ would create wide scope for regulations to be challenged. For example, the public consultation processes that are required for urban development are about ensuring development is acceptable to the community rather than ‘ensuring the quality’ of construction services. They would fail the necessity test as more burdensome than necessary to ensure the quality of the service. Environmental bonds that mining and pipeline companies are required to post in case of spills and other environmental disasters are another licensing requirement that would not meet the test of being necessary to ensure the quality of the service.”

New Zealand has gone so far as to propose a rule that might eliminate standards for teachers and for protection against toxic waste. Wellington proposes that regulations in all areas be “no more burdensome than necessary to ensure the quality of the service”:

“Under New Zealand’s proposals, qualifications for teachers in both public and private schools, hospital standards, and licenses for toxic waste disposal are just some of the regulations that would have be reduced to the very low standard of being no more burdensome than necessary.”

You’re not allowed to know what’s in it

Secrecy protocols for handling TISA documents are in place, similar to those of the Trans-Pacific and Transatlantic agreements. These protocols include these requirements:

“[D]ocuments may be provided only to (1) government officials, or (2) persons outside government who participate in that government’s domestic consultation process and who have a need to review or be advised of the information in these documents.”

What that means in practice is that only the corporate lobbyists and executives on whose behalf these “free trade” agreements are being negotiated can see them. Consider that 605 corporate representatives had access to the Trans-Pacific Partnership text as “advisers” while it was being negotiated, with the public and even members of parliaments and Congress blocked from access. Or that the public-interest group Corporate Europe Observatory, upon successfully petitioning to receive documents from the European Commission, found that that of 127 closed meetings preparing for the Transatlantic Partnership talks, at least 119 were with large corporations and their lobbyists.

Perusing government trade office Web sites for useful information on TISA (or any other “free trade” agreement) is a fruitless exercise. To provide two typical specimens, the European Commission claims that “The EU will use this opportunity to push for further progress towards a high-quality agreement that will support jobs and growth of a modern services sector in Europe” and the Australia Department of Foreign Affairs and Trade asserts that “TiSA is an opportunity to address barriers to international trade in services that are impeding the expansion of Australia’s services exports.”

The same sort of nonsense that we hear about other secret agreements. The economic health of Australia, or any other country, is not likely to be dependent on sending more financial planners overseas. What reads as bland bureaucratic text will be interpreted not in ordinary courts with at least some democratic checks, but by unaccountable and unappealable secret arbitration panels in which corporate lawyers alternate between representing multi-national corporations and sitting in judgment of corporate complaints against governments.

Let’s conclude with some sanity. Almost 1,800 local authorities have declared themselves opposed to the various “free trade” agreements being hammered out, including TISA. The “Local Authorities and the New Generation of Free Trade Agreements” conference in Barcelona, attended by municipal and regional governments and civil society groups, concluded with a declaration against TISA, the Transatlantic Trade and Investment Partnership and the Canada-European Union Comprehensive Economic and Trade Agreement. In part, the declaration says:

“We are deeply concerned that these treaties will put at risk our capacity to legislate and use public funds (including public procurement), severely damaging our task to aid people in basic issues such as: housing, health, environment, social services, education, local economic development or food safety. We are also alarmed about the fact that these pacts will jeopardise democratic principles by substantially reducing political scope and constraining public choices.”

That is the very goal of “free trade” agreements. TISA, like its evil cousins TPP, TTIP and CETA, are a direct threat to what democracy is left to us. It promises a corporate dictatorship that in theory raises the level of corporations to the level of national governments but in reality raises them above governments because only corporations have the right to sue, with corporate “rights” to guaranteed profits trumping all other human considerations. We ignore these naked power grabs at our collective peril.

Another goodbye to democracy if Transatlantic Partnership is passed

Corporate control on both sides of the Atlantic will be solidified should the Transatlantic Trade and Investment Partnership be passed. Any doubt about that was removed when Greenpeace Netherlands released 13 chapters of the TTIP text, although the secrecy of the text and that only corporate representatives have regular access to negotiators had already made intentions clear.

Health, safety, environmental and food laws will all be at risk, with United States negotiators continuing to seek the elimination of European safeguards against genetically modified organisms. But European Union negotiators, although as yet unable to find sufficient common ground with their U.S. counterparts on some issues, are offering plenty of dubious language at the behest of European multi-national corporations.

The Transatlantic Trade and Investment Partnership is very much similar to the Trans-Pacific Partnership, and although negotiations over it are apparently far from complete it is firmly in the TPP’s anti-democratic spirit. The Transatlantic Partnership, just like other “free trade” agreements, has little to do with trade and much to do with granting the wish lists of corporate executives and financiers, complete with secret tribunals that can overturn legislation without appeal.

Germans protest against the TTIP in Hannover on April 23 as German Chancellor Angela Merkel and U.S. President Barack Obama confer (photo by Bernd Schwabe in Hannover)

Germans protest against the TTIP in Hannover on April 23 as German Chancellor Angela Merkel and U.S. President Barack Obama confer (photo by Bernd Schwabe in Hannover)

As is customary with “free trade” agreements, the devil is in the details. What really lies within the dry, bureaucratic language is text that leaves little, if any, room for democratic control over a wide range of legislative oversight. In part this is because the text uses words like “must” and “shall” for what signatory governments are expected to do on behalf of multi-national corporations but words like “may” and “can” when it comes to the very brief mentions of health, safety, environmental and labor concerns, and in part because of who will be interpret the text, and how.

Under existing “free trade” agreements, the countries with stronger regulations, such as Canada under the North American Free Trade Agreement, are routinely ordered to overturn them as “barriers” to trade. Smaller countries are routinely sued by multi-national corporations for attempting to safeguard sensitive environments or regulate tobacco, such as El Salvador’s attempt to protect its largest remaining water source from a gold mine. These suits are not heard in ordinary courts, but rather in secret tribunals in which corporate lawyers who specialize in representing multi-national capital in international disputes switch hats and sit in judgment of similar cases as judges.

Governments must meet corporate expectations

Such one-sided rules are imbedded in the Transatlantic Trade and Investment Partnership text. The leaked chapter on dispute settlement contains unmistakeable language. Multi-national corporations will be eligible to sue on the basis that “a benefit the Party could reasonably have expected to accrue to under this Agreement is being nullified or impaired.” A series of rulings handed down by the secret tribunals in similar cases have established that an “investor” is eligible to sue for any potential profits it asserts it would have earned had not a regulation it dislikes been in place.

The chapter goes on to set out the necessary qualifications of arbitrators, stating that they must have “expertise” in the field. These “experts” will almost inevitably be corporate lawyers as they fill the rosters of the secret tribunals. The clause that the judges “shall be independent and serve in their individual capacities” is a joke — these are people who have spent decades serving corporate clients and thoroughly absorb their clients’ perspective. That they have “officially” switched hats is meaningless.

That there will be no appeal against judgements handed down is exemplified three pages later. It is EU negotiators who propose these two sentences: “The ruling/report of the panel shall be unconditionally accepted by the Parties” and “The Party complained against shall take any measure necessary to comply promptly and in good faith with the panel ruling.” What these mean is that there can be no appeal against what tribunal panels consisting of three corporate lawyers decree and that laws must be changed immediately based on the secret tribunal’s ruling.

There is much more there. A reading of the chapter on sanitary and phytosanitary measures, which, inter alia, covers regulations on agriculture, can easily be interpreted to overturn bans on genetically modified organisms. Here is the chapter’s Article 11 as proposed by EU negotiators:

“1. Sanitary and phytosanitary procedures shall be established with the objective of minimizing negative trade effects and simplifying and expediting the approval and clearance process while ensuring the fulfillment of the importing Party’s requirements. 2. The Parties shall ensure that all sanitary and phytosanitary procedures affecting trade between the parties are undertaken and completed without undue delay and that they are not applied in a manner which would constitute an arbitrary or unjustifiable discrimination against the other Party.”

Corporations would get last word on regulation

Despite the European Commission’s attempts to paint itself as heroically standing against U.S. insistence on forcing GMOs on European consumers, this EU language could be interpreted to overturn bans on GMOs. That is especially so in the wake of the already agreed-upon language of Article 5, where we read:

“When issuing or submitting any final administrative decision for an SPS regulation, the Party shall make publicly available on the Internet an explanation of: … any alternative identified through public comments, including by a Party, as significantly less restrictive to trade.”

Under this clause, governments must make the case on behalf of complaining corporations that want to eliminate a protective regulation! There is further language demanding that any new regulation be justified, including a requirement that a government explain why it did not adopt any alternatives that would be “less restrictive to trade.” There is precedent here under the North American Free Trade Agreement, in which a tribunal, in ordering that Canada reverse a ban against PCBs, a carcinogen banned under two Canadian treaties, ruled that, when formulating an environmental rule, a government “is obliged to adopt the alternative that is most consistent with open trade.” So much for democracy!

Grand Place, Brussels (photo by Wouter Hagens)

Grand Place, Brussels (photo by Wouter Hagens)

There is also an agriculture chapter, which contains this sentence: “The Parties shall work together to facilitate the successful conclusion of agriculture negotiations in the WTO that substantially improves market access for agricultural goods.” All the activist work that prevented the conclusion of World Trade Organization talks over the past decade would be undone, and provide an additional opening for GMOs and the elimination of other safety rules.

Thus we should take with mounds of salt this public statement by European Trade Commissioner Cecilia Malmström, issued on May 2:

“Any EU trade deal can only change regulation by making it stronger. … No trade deal will limit our ability to make new rules to protect our citizens or environment in the future. I am simply not in the business of lowering standards.”

Commissioner Malmström further asserts that “no, the EU industry does not have greater access to EU negotiating positions than other stakeholders.” That statement is on par with someone offering to sell you the Brooklyn Bridge and the Eiffel Tower. The public-interest group Corporate Europe Observatory, upon successfully petitioning to receive documents from the European Commission, found that that of 127 closed meetings preparing for the Transatlantic Partnership talks, at least 119 were with large corporations and their lobbyists. Although it is true that EU negotiators are sometimes at odds with their U.S. counterparts, the EU has offered its share of anti-democratic measures, not inconsistent with the lack of accountability Europeans have come to expect from EU institutions.

Watchdog groups sound multiple alarms

In its latest assessment of the Transatlantic Trade and Investment Partnership, Corporate Europe Observatory said the TTIP will negatively impact laws on both sides of the Atlantic, noting that “the new EU proposal on regulatory cooperation in TTIP does nothing, not even little, to address the upcoming democratic threats.” The Observatory says:

“Regulatory cooperation, on the surface a way to ‘harmonise’ rules across the Atlantic, could in practice weaken rules on protecting us against everything from toxic chemicals and unhealthy food, to wild speculation by banks. The European Commission recently published its new positions on this cooperation. The two chapters they released reveal the Commission is willing to change how it makes laws to favour trade and multinationals over all public interest considerations. Under regulatory cooperation trade officials will continue to negotiate our future and existing laws. This pushes contentious issues farther away from public scrutiny to be brokered over the coming years after TTIP is passed, giving big business lobby groups ample opportunities to influence the result of the decision-making.”

Other watchdog groups sound similar warnings. The Sierra Club, noting the words “climate change” never appear in the TTIP text, points out some of its environmentally destructive measures:

“Under the National Treatment terms of the leaked text, the U.S. Department of Energy would be required to automatically approve the export of liquefied natural gas to the EU. … Both the U.S. and the EU have proposed “regulatory cooperation” rules that would undermine climate and environmental protections if they are deemed harmful to trans-Atlantic trade or investment. The U.S. has proposed that governments on both sides of the Atlantic should be required to review proposed regulations before enactment to pursue compliance with ‘international trade and investment obligations.’ The EU has proposed similar language.”

Compliance with “international trade and investment obligations” would mean conforming to the types of secret-tribunal decisions mentioned above.

Friends of the Earth, in its review of the leaked text, provides this warning:

“Sensible regulatory safeguards, such as those related to food safety and toxic chemicals, among many others, would also be stymied. Industry-friendly, cost-benefit analysis would hamstring new environmental initiatives. For example, insecticide safety standards would be lowered if the undervalued ‘benefit’ of new regulations protecting the bees is outweighed by the ‘cost’ to corporate profits, thus threatening the pollinators necessary for our food system.”

Yep, it’s as bad as we thought it would be

The senior policy analyst for the Institute for Agriculture and Trade Policy, Steve Suppan, in noting that predictions about the TTIP’s impact on agriculture “have been sadly confirmed,” wrote:

“The text shows the U.S. Trade Representative protecting corporate interests by shielding environmental, health and safety data used in TTIP risk assessment as confidential business information, preventing peer scientific review. The end result of the U.S. proposal would be increasing the burden on governments to justify food safety rules while placing no burden on industry to demonstrate that its products—including new kinds of GMOs, food or agri-nanotechnology products—are safe.”

What we have here is the ordinarily and normal course of capitalist logic. There is no real point to seeing something inherently evil in U.S. or EU officials or their having some particular moral failing. These governments reflect the dominant interests within their countries, as is the case in all capitalist 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 political leaders intellectually and financially dependent on them.

Thus the recent revelations of NSA spying in Europe have had no effect on the Transatlantic Partnership negotiations. The 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. The TTIP is quite consistent with the project of the EU: European capitalists’ desire to possess the ability to challenge the United States for economic supremacy, but who cannot do so without the combined clout of a united continent.

Working people on both sides of the Atlantic will be the losers if the TTIP passes, and that is underscored by the secrecy surrounding it. Capitalists, despite the competition among them, are united in their drive for complete domination and profits above all other human considerations. We had better be united across borders in the necessary fight to first stop TTIP and other agreements under consideration, and then roll back those already in place.