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02 September 2014
What would a positive TTIP look like?
Trade, free trade and TTIP
The debate over the Transatlantic Trade and Investment Partnership (TTIP) being negotiated in secret between the EU and USA is generating a great deal more heat than light. Proponents of TTIP are happy to make grand statistical claims for the gains that TTIP will bring, while privately admitting the statistics are groundless. Faced with mounting public outrage at the threats posed by TTIP, they regularly accuse their opponents of scaremongering, of focusing solely on the negatives, or of being ‘anti-trade’.
One easy way of shining light into this darkness is to note the fundamental distinction between trade and the ultimate aim of TTIP: free trade. Trade and markets have been a function of human societies since the earliest times, and no one seriously argues for a 21st century world without international commerce in some form or other. North Korean autarky is not, after all, a compelling model to follow.
‘Free’ trade, on the other hand, refers to the rules under which goods and services are traded between countries. Trade regimes are measured as more or less ‘free’ according to the extent to which companies are required to link their activities with the social and environmental objectives of the countries in which they operate. To use Karl Polanyi’s terminology, free trade is ‘free’ insofar as it is no longer embedded in public policy choices, thus maximising opportunities for business without any reference to the consequences this might have for society or ecology. ‘Freeing’ trade ultimately means freeing private companies from any consideration but the maximum accumulation of capital for its own sake.
The most obvious barriers to trade are tariffs, which have traditionally been used to protect infant industries in the early stages of development, allowing them to grow without facing the risk of being overwhelmed by competition from more developed companies in other lands. As described by Ha-Joon Chang in his classic account Kicking Away the Ladder, this was the strategy employed by Western economies such as the UK, USA and Germany as they undertook their own development in the 19th and 20th centuries. In their case, the old imperial powers had the additional advantage of military superiority and colonial brutality to help them press home their advantage.
Since the Uruguay Round of GATT which led to the birth of the WTO in 1995, trade negotiations have expanded to include more than just tariffs. Negotiations now address ‘non-tariff barriers’ to trade and investment, including affirmative policies that seek to promote broad-based national development, environmental protection or the basic food needs of the most vulnerable sections of society. While most of us would consider these to be the most progressive and praiseworthy of policy choices, free trade ideologues hold them to be unacceptable restrictions on the maximisation of corporate profit. The WTO regularly rules them illegal, imposing sanctions on those countries that would maintain such policy choices against the doctrine of free trade.
TTIP is the most extreme example of a trade and investment deal that reaches ‘behind the border’. Tariffs between the EU and USA are already at minimal levels, and negotiators state that 80 per cent of all corporate gains from TTIP will come from the removal of regulatory barriers, not tariffs. Yet these ‘barriers’ are in reality some of our most prized social and environmental policies, including labour rights, food safety standards, environmental protection and digital privacy laws. The precautionary principle, so important to social and ecological integrity in Europe, is a particular target in the negotiations.
So what would a positive TTIP look like?
What sort of radical redirection would make an EU-US deal work in the interests of society and ecology, rather than (as at present) against them?
Firstly, TTIP would have to start from a conception of trade and investment not as ends in themselves but as activities to be pursued only insofar as they serve higher goals. In place of the ideological drive for ever greater trade and economic growth, a progressive EU-US trade deal would explicitly embed all trade within social norms and restrict it within ecological limits. This is, of course, anathema to the European Commission’s free trade ideologues, and to the limitless expansion that capital needs in order to survive.
Secondly, a progressive TTIP would subordinate the activities of transnational capital to the highest social and environmental norms – a race to the top in place of the current race to the bottom. TTIP would require the EU and USA to agree to the maximum possible standards and regulations so as to promote public health, social well-being and ecological integrity. Rather than target the precautionary principle for removal, TTIP would enshrine it as a fundamental requirement of all corporate activity on both sides of the Atlantic. Rather than suggest that Washington might like to consider ratifying the ILO’s core labour conventions, the EU would make that a precondition of launching any negotiations in the first place.
Thirdly, any EU-US deal worth its salt would have to address the massive power imbalance that has been allowed to develop over the past four decades in favour of transnational capital. In place of the new rights for foreign investors currently envisaged under TTIP (including the infamous investor-state dispute settlement mechanism), we need to build new systems of accountability that allow public redress in cases of corporate malfeasance. Rather than handing transnational corporations new powers to sidestep domestic courts, we need to put in place binding rules through which communities can hold such companies to account through both judicial and non-judicial mechanisms alike.
Civil society groups from across Europe have worked together for several years on an Alternative Trade Mandate that puts people and planet before corporate profit. That mandate (available at www.alternativetrademandate.org) describes in more detail the sort of policy choices that our national representatives could and should be pursuing instead of their dedication to the dogma of free trade. It is a document of hope and aspiration, in sharp contrast to the hopelessness of those responsible for EU trade and investment policy today.
While the current process for EU policy making pertains, such aspirations remain unthinkable. The European Commission sets its trade and investment policy in close collaboration with the business lobby whose interests it represents. The Council of Ministers has in turn confirmed that the interests of the EU are considered to be identical with those of European capital. Any reference to European social norms is confined to the margins, and rendered non-binding at the first opportunity.
The opposition to TTIP growing so fast across Europe is not anti-trade. Nor is it anti-American; indeed, one of the plus points of our campaign is the close working relationship that it has allowed us to develop with sister organisations in US civil society that are also fighting for a more positive future, free from the dictatorship of transnational capital. Ours is an internationalist campaign in the best and fullest sense of the word.
One final point is worth making. As more and more people come face to face with the unacceptable face of European trade and investment policy, belief in the EU itself is coming under attack. If the European social model is to be sacrificed on the altar of free market fundamentalism, then the entire European project becomes meaningless. Why should we give up national sovereignty for a federal policy machine that meets the needs of business only? To put it simply: if the EU has no interest in us, the peoples of Europe, why should we have any interest in the EU?
John Hilary is Executive Director of War on Want, and author of the briefing The Transatlantic Trade and Investment Partnership: A charter for deregulation, an attack on jobs, an end to democracy, available in seven European languages at http://rosalux-europa.info/publications/books/TTIP_EN/