Negotiations are under way, behind closed and sealed doors, for the finalisation of two international Treaties on trade, both of them involving the US, but with different prospective trade ‘partners’. The TPP is the largest-ever economic treaty, encompassing 12 nations (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam).representing more than 40 per cent of the world’s GDP. If it as well as the TTIP are successfully concluded they will encompass over 60% of world GDP. Both include the US, and both exclude the US’s powerful economic rivals in the up-and-coming BRICS countries.
Insufficiency of the WTO from the point of view of imperialism
The aim of these Treaties will be to dismantle all barriers to trade between the countries involved to a far greater extent than has been possible through the World Trade Organisation, where negotiations have completely stalled, largely because of the insistence of some imperialist countries on retaining measures to protect their agriculture, but also because of differences on whether or not the “Singapore issues”, namely investment, competition, transparency in government procurement and trade facilitation, should be within the remit of the WTO. Most third world countries oppose their inclusion, or at very least worry about the way they would impinge on their sovereignty.
The effective collapse of the Doha round of negotiations in Seattle in 1999 spurred US imperialism to look for ‘bilateral’ agreements to promote the interests of its multinational monopolies in order to further their agenda of removing all government power to protect all or any class of its citizens against the ravages of free trade. The kind of thing that the multinationals consider unacceptable, for instance, was illustrated by the struggle that took place last December in Bali in reaching a partial agreement in the context of trying to revive the Doha round of WTO negotiations. No really controversial issue was comprised in the agreement reached, which was mainly about streamlining customs and removing tariffs. However, the meeting nearly failed because India refused to abandon its practice of buying up food stocks in order to regulate market prices for the benefit of its millions of poor. Only by granting India an exemption was it possible to reach agreement. The attitude of the multinationals is that with enhanced trade, millions of jobs will be created and there won’t be any poor people any more.
Only statistical swindling reduces poverty under capitalism
Well, the World Trade Organisation has already reached many, many agreements to enhance trade, but this does not seem to have had any impact on world poverty. Even the UN Food and Agriculture Organisation, which revised its methodology so as to show a trend of falling world poverty (see Lappé et al, ‘How we count hunger matters’; Ethical and International Affairs 27, 2013, no.3, p.251), has to admit that in terms of numbers, the hungry keep increasing in many parts of the world. The FAO is able, for instance, to reduce the number of people suffering hunger by redefining a hungry person as one who does not receive sufficient calories to support a sedentary life style (which requires fewer calories), whereas before what they considered relevant was the calories to support a normal lifestyle, and also by leaving out of account people whose suffer hunger for periods of less than a year! A word of advice to the multinationals in whose interests these statistics are manipulated – poverty could be eliminated altogether by reducing its definition to those who never get anything to eat at all and are thus afflicted for over a year!!!!
The TTIP and TTP are designed to bypass those objecting to the Singapore issues. They will be cut out of the action in favour of those prepared to submit. When the cost of submission comes to be weighed up, however, most participants will undoubtedly be surprised at its extraordinarily high price. South Korea has already decided it would be unwise to take part in the TTP.
Likely impact of the proposed trade agreements
A glimpse of what it entails is already observable through considering how existing bilateral or multilateral agreements of this kind have been interpreted and enforced. For instance, the North-American Free Trade Association treaty has been used by a US oil and gas company Lone Pine Resources as the basis of a law suit against the Canadian government for having instituted a moratorium on fracking in Quebec. Ilana Solomon comments in the Huffington Post of 10 March 2013:
” It sounds impossible to believe, but it’s true. NAFTA’s chapter on investment gives foreign corporations the right to sue a government over laws and policies that corporations allege reduce their profits or, in Lone Pine’s words, reduce the ‘expectation of a stable business and legal environment.’ When a new policy or regulation is put in place that a corporation doesn’t like, it can bring the government to a private trade tribunal where the case will get heard by three private sector attorneys, behind closed doors, for taxpayer compensation.
Lone Pine is suing the government of Canada for $250-million, claiming that the moratorium on fracking, put in place by Quebec’s provincial government, was a violation of its ‘right to mine.’ As if a quarter of a billion dollars wasn’t enough, Lone Pine is also asking to be paid for the full costs associated with any arbitration proceedings, including all professional and legal fees and disbursements; interest at a rate to be fixed by the tribunal; and — why not? – ‘further relief as an arbitral tribunal may deem just and appropriate.’ This is all so that Lone Pine can be compensated for a policy put in place to protect communities and the environment.” (‘No fracking way: how companies sue Canada to get more resources’).
These bilateral and multilateral treaties simply open the way for multinationals to extract millions of pounds in taxpayer money from governments which seek to put any kind of protection in place either for the environment or for the well-being of their citizens if some multinational, crazed by greed, can show they would make higher profits if that measure were not in place. This could include the minimum wage, limits on working hours, health and safety regulations – anything!
Another example is provided by the case of Philip Morris v. Uruguay. Like most countries in the world, Uruguay is taking measures to reduce cigarette smoking because of the adverse effects this has on health. However, Uruguay is party to a bilateral trade agreement with, of all countries, Switzerland, which includes a freedom to invest provision just like the one envisaged for the TTIP and the TTP along with Investor-State Dispute Settlement procedures (ISDS). ISDS allows corporations to sue governments of countries party to the relevant treaty for any government action (at any level, including local government level) that limits a corporation’s future profits. the corporations can sue for the loss, or ‘expropriation’ of its future profits. So US multinational Philip Morris, having conveniently set up an operations centre in Switzerland, at least for the duration of the litigation, is suing Uruguay for $25 million in damages for having laws which demand massive health warnings on cigarette packs and which outlaw the branding of cigarettes as safer to smoke. Uruguay is defending itself on the basis that it is complying with international treaties on tobacco controls. The result of the litigation, however, is far from a foregone conclusion and it is obviously placing a heavy burden of legal expenditure on Uruguay, whose $53 bn GDP is dwarfed by Philip Morris’s annual $80bn revenues.
Taking jurisdiction away from national courts and regulatory bodies
Philip Morris tried the same tactic in Australia but was seen off by the Australian courts. Under the TTIP, however, national courts will not have jurisdiction. Instead a high-powered international tribunal is to be set up, staffed by former corporate lawyers. It can well be imagined whose side they will be on!
The case against Uruguay is, under the Switzerland-Uruguay Treaty, not to be tried in national courts either but by the World Bank’s International Center for Settlement of Investment Disputes (ICSID) – the first time a tobacco group has taken on a country in an international court.
Although all negotiations concerning the TTIP and TTP are shrouded in secrecy, Wikileaks has managed to obtain some of the secret texts and has published them online. It seems that the European Commission is proposing an EU-US Regulatory Cooperation Council be set up which would vet any regulations any of the relevant countries proposed to introduce to ensure they had no adverse impact on trade. In addition ” The official language talks of ‘mutual recognition’ of standards or so-called reduction of non-tariff barriers. For the EU, that could mean accepting US standards in many areas, which are lower than those of the EU and for instance the eradication of Europe’s ‘precautionary principle’ [i.e., the principle that if evidence suggests there is a good chance that a certain item may pose widespread harm to the entire population if released for public consumption then it should be held back until it has been cleared through exhaustive testing] regarding genetically modified food and the eventual flooding of GMOs onto the commercial market” (Colin Todhunter, ‘The Transatlantic Trade and Investment Partnership (TTIP) Trojan horse. Selling out Europe to US corporate plunder’, Global Research 30 September 2014).
The TPP is expected to protect Big Pharma against the issue of generic brands of medicine that have, according to the NGO Public Citizens Global Access to Medicines Program, since 2000 saved 10 million lives threatened by HIV/Aids.
The TTIP is expected to remove virtually all financial regulation. According to Dominique Vidal-Bari, in a paper presented to the annual World Socialism Conference in Beijing in October 2014, ” Five years after the global financial crisis, the US and EU negotiators have agreed that regulation has had its day. The framework they want to put in place would remove all safeguards on high-risk investments and prevent government from controlling the volume, nature or origin of financial products on the market”. Furthermore: ” Financial services would not be the only sector deregulated. The TIPP… would open up to competition all ‘invisible’ and public interest sectors. Signatory states would be obliged to submit their public services to market forces, and to abandon all regulation of foreign service providers operating within their territory. This would reduce to almost nothing the room for policy manoeuvre in health, energy, education, water and transport…”
A nightmare scenario indeed!
Imperialist-sponsored trade agreements have only one purpose – to extend the scope of imperialist looting. The TTIP and TTP have the dual purpose of, on the one hand, killing off the public sector everywhere in order to provide opportunities for profitable investment that were previously closed in the interests of the public, and on the other hand acting as a shield for the dying imperialist powers against competition from the young and vibrant economies in the BRICS countries and elsewhere. These agreements be vehemently opposed as the death throes of a dying system. But at the same time it is essential to remember that the only real alternative is the overthrow of capitalism and the establishment of economic planning. There are those who imagine that the task of socialism is to control the market – who imagine that socialist governments devoted to the interests of the masses of the people will be able to tame the irrationalities of the market. Their endeavours are as doomed to failure as were King Canute’s to order the turning of the tide. The laws of economics are as immutable as the laws of nature, as was demonstrated by the collapse of the Soviet Union after 30 years of ‘market’ socialism. Our duty is not merely to fight against what is but also to fight for what shall be.