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.

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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.

The crises of neoliberalism won’t be solved by more neoliberalism

We’re in a world of trouble if we are unable to conceive of alternative economic models. We need not linger on the details of rising inequality, political instability, tightening corporate control of governments, looming environmental crisis, increasingly precarious employment (if even available) and the inability to meet the basic needs of billions of people around the world to see that capitalism is failing humanity.

To put this in a nutshell, on a global basis, about 200 million people are unemployed among 2.4 billion who have no stable employment.

Neoliberalism is not a virus foisted on the world by some secret cabal; it is merely the latest phase of capitalism, one that, from the standpoint of capitalists, is the logical outgrowth of the breakdown of mid-20th century Keynesianism. We’re not going back to Keynesianism, because that was a brief period dependent on an industrial base and market expansion. A repeat of history isn’t possible because the industrial base of the advanced capitalist countries has been hollowed out, transferred to low-wage developing countries, and there is almost no place remaining into which the capitalist system can expand.

What happens to rain forests when the market is allowed to decide. (Photo of Montane Rainforest in Ecuador by Gunnar Brehm)

What happens to rain forests when the market is allowed to decide. (Photo of Montane Rainforest in Ecuador by Gunnar Brehm)

So when I saw a paper titled “Industrial policy in the 21st century: merits, demerits and how can we make it work” in the latest issue of Real-World Economic Review, I was intrigued. As its title implies, Real-World Economic Review specializes in papers by economists who think far outside the orthodox box that serves industrial and financial elites very well; the very fact that a field requires a publication with such a title speaks for itself.

The disappointing prescriptions offered in the paper, however, might at best be described as “neoliberal lite.” The author of “Industrial policy in the 21st century,” Mohammad Muaz Jalil of the NGO Swiss Foundation for Technical Cooperation, is well-intentioned, but advocates the same export-oriented policies that have led to sweatshops and dangerous working conditions across the developing world. It also implies endless growth, a dangerous illusion.

More of the same hardly seems a likely escape, and that is before we contemplate the mathematical impossibility of every country exporting its way out of economic difficulty. For every country that achieves an trade surplus, some other country has to have a trade deficit.

What works for a few doesn’t work for all

Mr. Jalil begins by noting that East Asian countries used industrial policies, including protectionist policies, to build their economies, most notably Japan, South Korea, Taiwan and Singapore. He uses the Organisation for Economic Co-operation and Development (OECD) definition of industrial policy:

“Industrial Policy is any type of intervention or government policy that attempts to improve the business environment or to alter the structure of economic activity toward sectors, technologies or tasks that are expected to offer better prospects for economic growth or societal welfare than would occur in the absence of such intervention.”

The above East Asian countries used various mixes of export-oriented growth strategies and protection for young industries. Favored corporations received export subsidies, reduced interest rates and preferential allocation of foreign exchange with the goal of these enterprises becoming competitive globally. Manufacturing in these countries started at a low level but steadily moved up the “value chain” — that is, they were able to produce increasingly sophisticated products.

Mr. Jalil does acknowledge some criticisms of this type of policy, noting the difficulty in foreseeing who or what will be the winners in the future, the much stiffer international competition of today, that international supply chains have become dominant, and that today’s severe global trade regime restricts the ability of governments to intervene. Governments today nonetheless use industrial policies, albeit within the so-called “Washington consensus” (which is really the “Washington diktat”) that imposes neoliberal policies around the world through the World Trade Organization and international lending banks controlled by the United States and to a lesser degree the European Union.

When we get to specific examples, the paper’s prescriptions rapidly break down. Mr. Jalil presents Brazil and South Africa as examples. Brazil is one of the world’s most unequal societies, and one with severe economic problems not likely to improve in the wake of the Brazilian Right’s soft coup against former President Dilma Rousseff. A weak currency, lack of growth, continuing inflation, huge piles of debt owed in dollars and euros, and local corporations saddled with debt and low credit ratings seems not a rosy picture. Poverty is widespread, and activists who challenge land owners who clear-cut rain forests are not infrequently killed.

South Africa has the most inequality of any country in the world. The African National Congress threw away its moral authority to implement its “Freedom Charter” upon taking power by negotiating away its economic control. The ANC took office handcuffed, and having tied themselves to financial markets, those markets applied further “discipline” by attacking the South African economy at the first sign of anything that displeased them.

South African workers, especially miners, are subjected to violence at the hands of the ANC government, abetted by ANC-aligned unions. More than half of South Africans live in poverty and the unemployment rate is 26.6 percent. This is an example to emulate?

Sweatshop advocates don’t have to work in them

Next up, the author promotes the Bangladesh garment industry as a success story! Well, for Wal-Mart and other global retailers who rack up enormous profits on the backs of sweatshop workers being paid starvation wages this is undoubtedly a success. But as a development strategy beneficial to working people? Let’s look at the evidence.

Bangladeshi garment workers can work 14 to 16 hours a day, some seven days a week. The minimum wage is little more than half of the minimum required to provide a family with shelter, food and education, according to the activist group War on Want. The Institute for Global Labour and Human Rights estimates that a worker in Bangladesh would have to labor 15 1/2 hours to buy a gallon of milk. In 2014, the Wal-Mart chief executive officer earned 24,500 times more than a Bangladeshi sweatshop worker. Yet despite repeated accidents resulting in mass deaths, little has changed.

The shipbuilding industry is also promoted as a route to prosperity for Bangladeshis. A key component of this industry is “ship-breaking,” whereby ships are driven onto land to be disassembled. The Institute for Global Labour and Human Rights reports that ship-breakers work 12-hour shifts, seven days a week, and are paid 30 to 45 cents an hour to perform a job “in which it is common for workers to be maimed or killed.” The ship-breakers are reported to live in crowded hovels, sleeping on concrete floors.

Ship-breaking in Chittagong, Bangladesh (photo by Naquib Hossain)

Ship-breaking in Chittagong, Bangladesh (photo by Naquib Hossain)

Nobody would choose to do such things except under the most dire deprivation. That such work is a route to sustainable development is a common trope of neoliberal apologists, but defies common sense in any humanistic context.

The author points to the increasing number of developing-country corporations among the world’s biggest, but those numbers are nonetheless still minuscule. In fact, the corporations of the Global North remain overwhelmingly dominant. A study by Sean Starrs in New Left Review found that, when the world’s industries are grouped into 25 broad categories, U.S. firms led in 18 and in 10 of those U.S. corporations hauled in at least 40 percent of the aggregate profits. Germany and Japan hold the lead in two other sectors.

In support of these prescriptions, Mr. Jalil argues that as countries move up the value chain, the next country can “take over” “entry” industries and begin its own ascent. But there is only so much productive capacity that the world can absorb — the idea that every country can become a manufacturer of the same high-end electronics equipment, for example, defies reality. It also ignores, again, that every country can’t be a net exporter. It also sidesteps the fact that China’s growth threatens to “crowd out” other competitors due to its massive size.

Minqi Li, in his book The Rise of China and the Demise of the Capitalist World Economy, argues that the huge mass of low-wage Chinese workers will drag down wage levels globally; the increase of industrialization in developing countries will lead to exhaustion of energy sources; and that ecological limits will force a halt to growth, fatal to a system dependent on growth. Professor Li argues that an upward convergence of wages around the world in present-day low-wage havens would significantly reduce capitalists’ profits.

In this scenario, capitalists would seek to cut wages in core countries to make up the difference, which in turn would trigger reductions in demand. Reduced demand would spell trouble for any export-oriented economy, especially as the ultra-low wages suppress domestic consumption.

Nor can sufficient jobs be created for the expanding population of farmers and others dispossessed from the countryside — Samir Amin calculates that even with an increase of seven percent in gross domestic product for the next 50 years, no more than a third of this population could find regular work. No such growth has ever occurred for such sustained periods.

Where is the second Earth going to come from?

Finally, all this imagined explosion of industry is predicated on endless growth. We live on a finite planet, and thus infinite growth is impossible. Consumption is already growing beyond Earth’s carrying capacity and the anthropogenic changes to the atmosphere have us dangerously close to the point of no return in terms of global warming. Humanity is currently consuming the equivalent of 1.6 Earths, and at current rates of consumption trends, that will rise to two Earths by the 2030s.

Not a substitute for Earth (Image created by NASA via Hubble Space Telescope)

Not a substitute for Earth (Image created by NASA via Hubble Space Telescope)

Ramping up ever more production, even assuming that markets could be found for it, can not be a long-term solution for poverty. Managers of corporations are answerable to private owners and shareholders, not to society, and thus do all they can to externalize environmental and other costs onto society. Alas, renewable energy is not a short cut to reversing global warming. Renewable energy is not necessarily clean nor without contributions to climate change (the production of wind turbines and electric cars lead to plenty of pollution), and the limits that living on a finite planet with finite resources presents are all the more acute in an economic system that requires endless growth.

Finally, the belief that industrial policy can create prosperity is predicated on developing countries having the independence to implement protectionist measures. Mr. Jalil argues that the poorest countries have temporary reprieves from World Trade Organization rules until the end of this decade, but that they have room for maneuver is questionable at best. Not only WTO rules, but the bilateral and multilateral “free trade” agreements render such protections illegal. The Trans-Pacific Partnership, which includes several developing countries, would further restrict any ability to protect local industries — and the TPP is intended to be a model for other countries. (Although wounded, TPP is not dead yet because a two-year window has yet to expire.)

In a world where “free trade” agreements strongly constrict the ability of governments to enact laws and regulations, and which grant multi-national corporations the right to sue to eliminate any law they don’t like — in essence, a requirement that corporate profits trump any labor, safety, environmental or health measure — the road to becoming a net exporter will begin and end with sweatshops for most countries.

Low wages and a lack of enforceable regulations are precisely why multi-national capital is invested in developing countries like Bangladesh. The global “free trade” regime is nothing more than a mechanism for the most powerful industrialists and financiers of the Global North to accelerate a race to the bottom and increase their exploitation to the maximum humanly possible. That developing countries can win at this — or that the advanced capitalist countries will allow more competitors to arise — is fantasy. A neoliberal fantasy.

Mr. Jalil concludes with a call for private-sector funding able to “respond to diversity and dynamism inherent in markets.” Huh? Markets in the capitalist world are nothing more than the aggregate interests of the largest industrialists and financiers — allowing markets to make an ever wider range of social decisions is what has led the world to its impasse and ever harsher austerity for working people. Neoliberal capitalism may teach that people exist to serve markets, but we don’t have to accept that.

The belief that private funding — which, after all, is done to extract profit regardless of social or environmental cost — will make us live happily ever after should be left to the realm of fairy tales. As the saying goes, insanity is believing that doing the same thing over and over again will produce different results.

International tribunal seeks to build case against Monsanto

Monsanto is going on trial! Not, alas, in an official legal proceeding but instead a “civil society initiative” that will provide moral judgment only.

The International Monsanto Tribunal will conduct hearings in The Hague this weekend, October 15 and 16, and although not having legal force, its organizers believe the opinions its international panel of judges will issue will provide victims and their legal counsel with arguments and legal grounds for further lawsuits in courts of law. The organizers also see the tribunal as raising awareness of Monsanto Company’s practices and the dangers of industrial and chemical agriculture. The tribunal web site’s “Practical Info” page summarizes:

“The aim of the Tribunal is to give a legal opinion on the environmental and health damage caused by the multinational Monsanto. This will add to the international debate to include the crime of Ecocide into international criminal law. It will also give people all over the world a well documented legal file to be used in lawsuits against Monsanto and similar chemical companies.”

There certainly is much material on Monsanto, a multi-national corporation that has long sought to control the world’s food and which is able to routinely bend governments to its will.

March Against Monsanto in Chile (photo by Mapuexpress Informativo Mapuche)

March Against Monsanto in Chile (photo by Mapuexpress Informativo Mapuche)

For example, there was the “Monsanto Protection Act,” quietly slipped into an appropriations bill in 2013 that had to be passed to avoid a U.S. government shutdown, requiring the Department of Agriculture to ignore any court order that would halt the planting of genetically engineered crops even if the department were still conducting a safety investigation, and rubber-stamp an okay. This past July, a piece of legislation known as the “DARK Act” was signed into law by U.S. President Barack Obama that, under the guise of setting national standards, nullified state laws that mandate labeling genetically modified organisms (GMOs) in food and substituted a standard that makes it almost impossible for any GMO food to be so labeled.

Its reach by no means limited to its home country, Monsanto has pushed to overturn safety standards across Europe, and among the goals of the Transatlantic Trade and Investment Partnership is to reverse EU laws mandating GMO labeling and eliminate laws banning GMOs in food.

A long-term goal of ending corporate impunity

Because it is not possible to bring criminal charges against Monsanto, tribunal organizers say, it is necessary to initiate civil actions. They write:

“Critics of Monsanto claim that the company has been able to ignore the human and environmental damage caused by its products and pursue its devastating activities through a systematic concealment strategy through lobbying regulators and government authorities, lying, corruption, commissioning bogus scientific studies, putting pressure on independent scientists, and manipulating the press. Our endeavor is based on the observation that only through civic action will we be able to achieve compensation for victims of the American multinational.”

The tribunal organizers also recognize that a company like Monsanto does not exist in a vacuum, but rather is part of a larger system that is imperiling the world’s environment:

“Monsanto’s history is a paradigm for the impunity of transnational corporations and their management, who contribute to climate change and the depletion of the biosphere and threaten the security of the planet.

Monsanto is not the only focus of our efforts. Monsanto will serve as an example for the entire agro-industrial system whereby putting on trial all multinationals and companies that employ entrepreneurial behavior that ignore the damage wrecked on health and the environment by their actions.”

Tribunal will follow customary international law

Lawyers and judges from five continents will be involved in hearing evidence; they expect to hand down their legal findings in April 2017. Customary international law will be followed in all proceedings, tribunal organizers say:

“The Tribunal will employ as its legal guidelines: the UN Guiding Principles on Business and Human Rights, adopted by the Council of the UN Human Rights June 2011; the Rome Statute establishing the International Criminal Court (ICC) giving it jurisdiction to try alleged perpetrators of genocide, crimes against humanity, war crimes and crimes of aggression.

The UN Guiding Principles on Business and Human Rights is the international authority on the responsibilities of business with regard to human rights. The guidelines state that companies must respect all human rights, including the right to life, the right to health and the right to a healthy environment. They define society’s expectations vis-à-vis businesses. They will serve as the basis on which plaintiffs will build their case for demanding compensation from Monsanto for damage caused by the company’s activities. The Court will consider whether Monsanto’s conduct could be considered criminal pursuant to existing international criminal law, or under the law of ecocide, which is gaining support for consideration as an offence.”

Using international treaties as a basis for adjudicating these questions, the tribunal will focus on six topics:

  • The right to a healthy environment.
  • The right to health.
  • The right to food.
  • Freedom of expression and academic research.
  • Complicity in war crimes.
  • The crime of ecocide.

Monsanto has been invited to present a defense and supporting documents against any evidence presented against it. The company has declined to participate, calling the tribunal a “publicity stunt” by people “not interested in dialogue,” and saying it is “is not against organic agriculture” in a statement issued last December. In announcing its latest financial results earlier this month, it predicted “continued strong penetration of key soybean traits, global corn germplasm upgrades and spend discipline” for 2017. So no change in its behavior should be expected.

Monsanto wants to tell you what to eat

Monsanto’s march toward control of the world’s food supply is focused on proprietary seeds and genetically modified organisms. Standard contracts with seed companies forbid farmers from saving seeds, requiring them to buy new genetically engineered seeds from the company every year and the herbicide to which the seed has been engineered to be resistant.

monsanto-government-pipelineThe U.S. environmental group Food & Water Watch, in its report “Monsanto: A Corporate Profile,” summarizes the corporation’s power:

“Monsanto is a global agricultural biotechnology company that specializes in genetically engineered (GE) seeds and herbicides, most notably Roundup herbicide and GE Roundup Ready seed. GE seeds have been altered with inserted genetic material to exhibit traits that repel pests or withstand the application of herbicides. In 2009, in the United States alone, nearly all (93 percent) of soybeans and four-fifths (80 percent) of corn were grown with seeds containing Monsanto-patented genetics. The company’s power and influence affects not only the U.S. agricultural industry, but also political campaigns, regulatory processes and the structure of agriculture systems all over the world. …

Because of Monsanto’s market dominance, its products are changing the face of farming, from the use of Monsanto’s pesticides and herbicides, to the genetic makeup of the food we eat. … Monsanto has a close relationship with the U.S. government, which helps it to find loopholes or simply create regulations that benefit its bottom line. Monsanto and other corporations have increasingly funded academic research from public universities, which they use to justify their latest products. Monsanto’s international power has grown at an alarming rate, much to the dismay of developing countries that have inadvertently been exposed to its relentless business strategy. For all of these reasons, Monsanto has become a company that farmers and consumers around the world should fear.”

India has no laws Monsanto is bound to respect

Vandana Shiva, a member of the International Monsanto Tribunal’s steering committee, last year provided a case study in Monsanto’s practices with an examination of how it forced its way into India. The introduction of corporate agriculture has been so catastrophic in India that more than 300,000 farmers have committed suicide since 1995, with Dr. Shiva reporting that 84 percent of farmer suicides have been attributed to Monsanto’s genetically engineered cotton.

Baskets of many different kind of Brinjal (aka "Eggplant") put out by protesters during the listening tour of India's environment minister relating to the introduction of BT Brinjal. Spring 2010 in Bangalore, India. (photo by Infoeco)

Baskets of many different kind of Brinjal (aka “Eggplant”) put out by protesters during the listening tour of India’s environment minister relating to the introduction of BT Brinjal. Spring 2010 in Bangalore, India. (photo by Infoeco)

She explains what she calls Monsanto’s “outright illegality” in India as based on Monsanto claiming patent rights to its products even though patents on life forms are illegal in India; that its collections of royalties on unpatenable products have led to a wave of bankruptcies by farmers who struggle to survive in the best of times; and its “smuggling” of unapproved genetically modified organisms into India that “pose grave risks” to health. Dr. Shiva writes:

“India’s laws do not permit patents on seeds and in agriculture. But that hasn’t stopped Monsanto from collecting close to USD 900 million from small farmers in India, pushing them into crushing debt. This is roughly the same amount of money Monsanto spent buying The Climate Corporation — a weather big data company — in a bid to control climate data access in the future. … [L]ocal seeds used to cost [a tiny fraction of the cost of Monsanto’s seeds] before Monsanto destroyed alternatives, including local hybrid seed supply, through licensing arrangements and acquisitions.”

Local pests developed resistance to Monsanto’s GMO cotton, which releases toxins, forcing farmers to use more pesticides — an extra expense and environmentally destructive. Although this is bad for farmers, consumers and the environment, it is highly profitable for Monsanto. Dr. Shiva writes:

“Genetic engineering has not been able to deliver on its promises – it is just a tool of ownership. [Monsanto’s genetically modified] Bt Cotton is not resistant to Bollworm, RoundUp Resistant varieties have only given rise to super weeds, and the new promises being made by biotech corporations of bio-fortification are laughable. There is no benefit to things like Golden Rice. By adding one new gene to the cell of a plant, corporations claimed they had invented and created the seed, the plant, and all future seeds, which were now their property. Monsanto does not care if your cotton field has Bollworm infestations, just so long as the crop can be identified as theirs and royalty payments keep flowing in. This is why the failure of Bt Cotton as a reflection of bad science does not bother them — the cash is still coming into St Louis. At its core, genetic modification is about ownership.”

Farmers become Monsanto’s hired hands

Seeds containing genes patented by Monsanto, the world’s largest seed company, account for more than 90 percent of soybeans grown in the U.S. and 80 percent of U.S.-grown corn, according to Food & Watch Watch. Standard contracts with seed companies forbid farmers from saving seeds, requiring them to buy new genetically engineered seeds from the company every year and the herbicide to which the seed has been engineered to be resistant. Farmers have become hired hands on their own farms under the control of Monsanto.

Worse, Monsanto has agreed to sell itself to Bayer A.G., the German chemical conglomerate with its own history of abuse. Should regulators allow these two corporations to merge, it would create the world’s largest supplier of seeds and pesticides. Bayer’s chief executive officer, Werner Baumann, enthused that the proposed deal would “deliver substantial value to shareholders, our customers, employees and society at large.” That “value” for “shareholders” was mentioned first is all you need to know that profits and control are what this deal is really about.

What better monopoly could a corporation achieve than a monopoly in food? That has long been Monsanto’s goal, and a merger with Bayer would only tighten its grip. This is not reducible, however, to simple greed or evilness. Grow or die is the ever-present mandate of capitalism and one result of that tendency is the drive toward monopolization — a small number of enterprises controlling an industry. Just because food is a necessity does not mean it is exempt from capitalism’s relentless competitive pressures.

When “markets” are allowed to dictate social outcomes, actions like those of Monsanto are inevitable. Capitalist markets are nothing more than the aggregate interests of the most powerful industrialists and financiers. And they have no interest in you knowing what is in your food, or even that it is safe.

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.

Fanaticism and fantasy drive purported TPP ‘benefits’

So-called “free trade” agreements are continually advertised as creators of jobs, yet jobs are lost and wages decline once they go into effect. As representatives of the 12 countries participating in the Trans-Pacific Partnership gather this week in New Zealand to begin their final push for it, the usual unsubstantiated claims are being put forth.

Why is this so? I mean beyond the obvious answer that such claims are propaganda in the service of corporate elites and financiers. Corporate-funded “think tanks” that pump out a steady barrage of papers making grandiose claims for “free trade” deals that are relied on by the political leaders who push these deals require some data, no matter how massaged. One organization prominent in this process is the Peterson Institute for International Economics, which has issued rosy reports in expectation of deals like the North America Free Trade Agreement — for example, it predicted 170,000 new jobs would be created in the U.S. alone in 1995 and that the Mexican economy would grow by four to five percent annually under NAFTA.

Protest against the Trans-Pacific Partnership, October 2015 (photo by Lorena Müller, Pirate Times)

Protest against the Trans-Pacific Partnership, October 2015 (photo by Lorena Müller, Pirate Times)

One way to look at this is that the Peterson Institute is to “free trade” agreements as the Heartland Institute is to global warming. Heartland began as a Big Tobacco outfit issuing reports denying links between smoking and cancer. As late as 1998, Heartland President Joe Bast claimed that there were  “few, if any, adverse health effects” associated with smoking and boasted to a Phillip Morris executive that “Heartland does many things that benefit Philip Morris’s bottom line, things that no other organization does.”

Heartland later began specializing in global-warming denial, receiving $676,500 from Exxon Mobil alone between 1996 and 2006; after which it stopped identifying its contributors. Mr. Bast seems to have no shame, writing that “Most scientists do not believe human activities threaten to disrupt the Earth’s climate” in an article describing global warming as a “scam.” In fact, 97 percent of climate scientists agree that human activity is behind global warming.

It is this same attitude toward the truth that pervades papers predicting wondrous results from “free trade” agreements. In contrast to the Peterson Institute’s rosy projections, the first 20 years of NAFTA proved to be a lose-lose-lose proposition for Canada, Mexico and the United States. Almost 5 million Mexican farmers have been displaced with inflation-adjusted wages in Mexico barely above the level of 1980; U.S. food prices have risen 67 percent since NAFTA took effect and two-thirds of displaced manufacturing workers in the U.S. have been forced to take work with reduced wages; and Canadians suffered drastic cuts in government benefits while their environmental laws were reversed in the wake of corporate challenges.

Rosy reports rest on ideology, not real world

The Peterson Institute is at it again, first claiming the Trans-Pacific Partnership (TPP) will result in gains of US$1.9 trillion, and in a new report once again making extravagant claims even if scaled back. In its latest report, the Institute claims there will be no net job losses, while annual income in the U.S. would increase by $131 billion. These sorts of predictions are routine, and not the product of any single corporate organization. How is it that, all actual experience to the contrary, these sorts of calculations are presented with a straight face?

The political economist Martin Hart-Landsberg, in his book Capitalist Globalization: Consequences, Resistance, and Alternatives, writes that economic models that presume wondrous benefits from “free trade” agreements assume, inter alia:

  • There are only two inputs, capital and labor, which are able to move instantaneously but never cross national borders.
  • Total aggregate expenditures in each economy will be sufficient, and automatically adjust, to ensure full use of all resources.
  • Flexible exchange rates will prevent lowered tariffs from causing changes in trade balances.

Thanks to these starting points, Professor Hart-Landsberg writes:

“[T]his kind of modeling assumes a world in which liberalization cannot, by assumption, cause or worsen unemployment, capital flight or trade imbalances. Thanks to these assumptions, if a country drops its trade restrictions, market forces will quickly and effortlessly lead capital and labor to shift into new, more productive uses. And since trade always remains in balance, this restructuring will generate a dollar’s worth of new exports for every dollar of new imports. Given these assumptions, it is no wonder that mainstream economic studies always produce results supporting ratification of free trade agreements.”

Given the strong biases in favor of “free trade” agreements, all the more skeptical of the TPP we may be when we see the tiny gains forecast by the World Bank. Vietnam is expected to see the biggest boost among the 12 TPP countries, according to the World Bank forecast — a 10 percent gain in gross domestic product cumulative through 2030. In other words, less than one percent per year. As a TechDirt summation of this report noted:

“So according to the World Bank’s figures, the US will gain an extra 0.04% GDP per year on average, as a result of TPP; Australia an extra 0.07% annually, and Canada a boost of 0.12% per year.”

If this is the best that promoters of corporate hegemony can come up with for the TPP, its likely effect will surely be dismal.

The vanishing “gains”

Jane Kelsey, a New Zealand law professor who has long sounded the alarm on the TPP, notes that even the slightly larger gain forecast for that country would actually constitute a statistical blip that may or may not actually exist. She writes:

“[The] National [government]’s glitzy new ‘TPP fact’ page is bad wine repackaged in new bottles. Here’s a few facts they don’t tell you. The projected economic gains of 0.9 per cent of GDP by 2030 are within their own margin of error, even before costs are factored in and disregarding unrealistic modelling.”

One of several blockades in New Zealand on February 4 in protest of the TPP (photo via Real Choice NZ)

One of several blockades in New Zealand on February 4 in protest of the TPP (photo via Real Choice NZ)

A more balanced investigation conducted by Tufts University researchers Jeronim Capaldo and Alex Izurieta led to the conclusion that the TPP, if enacted, would result in the loss of three-quarters of a million jobs through 2025, including 448,000 jobs to be lost in the U.S. alone. Canada, Mexico, Japan and Australia would each suffer jobs losses in the tens of thousands. The Tufts report concludes:

“The TPP would lead to higher inequality, with a lower labor share of national income. We expect competitive pressures on labor incomes, combined with employment losses, to push labor shares of national income further down, redistributing income from labor to capital in all countries. In the USA, this would exacerbate a multi-decade trend.”

Working people in the 11 other TPP countries would get to experience the stagnant wages and declining living standards that United Statesians have been treated to during the past three decades.

More than 330,000 manufacturing jobs are expected to be lost in the U.S. alone if TPP is passed, according to a separate calculation by the United Steelworkers, and Unifor estimates that 20,000 Canadian jobs in auto manufacturing alone are at risk.

If no gain, there will be pain for you

Underlying all this further tilting of the scales already heavily weighted toward corporate money and power is the “investor-state dispute settlement” provision, whereby multi-national corporations can sue governments to overturn laws and regulations they don’t like under the excuse that measures to protect safety, health or the environment constitute a “taking” of their expected profits — not even actual profits. The secret tribunal that will hear corporate complaints (the same as the one used under NAFTA) must assume the corporation’s claim is true under some circumstances.

Canada, because it has higher standards than do the U.S. or Mexico, is most frequently sued under NAFTA, although the Canadian pipeline company TransCanada has committed the latest outrage, suing the U.S. government for $15 billion because the Obama administration declined to permit the Keystone XL pipeline. TransCanada is suing for $15 billion even though it has spent $2.4 billion on the pipeline.

Although the governments of the 12 TPP countries are “signing” the agreement this week, that is a formality: The deal must still be approved by legislatures and implementing legal changes enacted.

The TPP would enter into force 60 days after all 12 signatories ratify it or, if that doesn’t happen within two years, in April 2018 if at least six of the 12 countries accounting for 85 percent of the combined gross domestic product of the original signatories have ratified the agreement. That 85 percent can’t be reached without the U.S. or Japan, effectively giving those countries a veto and thus placing extra responsibility on opponents in both those countries. It also can’t be reached if Canada, Australia and Mexico each fail to ratify, so opponents there can also stop it.

The TPP, even more so that previous deals, has very little to do with trade and much to do with solidifying corporate control over life, arguably the most significant erosion of what is left of formal democracy yet. Regardless of where you live, the TPP can be defeated if we continue to organize. And once the TPP is sent to the trash heap, it will be time to go on the offensive to roll back existing trade pacts.