'Free' trade deals a corporate power grab

Issue 

Three huge free trade deals are being negotiated right now, that will sacrifice workers' rights, health care and the environment across much of the world on the altar of corporate profits.

The Trans-Pacific Partnership Agreement (TPP), Trade in Services Agreement (TISA) and Transatlantic Trade and Investment Partnership (TTIP) are being negotiated in secret, with privileged access for selected corporations.

The TPP is a free trade deal being negotiated by countries on the Pacific rim: the US, Australia, Singapore, New Zealand, Chile, Brunei, Canada, Malaysia, Mexico, Peru, Vietnam and Japan. These countries represent about 40% of global GDP. It covers a very wide range of industries.

TISA is being negotiated between the US, European Union, Australia, Canada, Chile, Hong Kong, Iceland, Israel, Japan, South Korea, Liechtenstein, New Zealand, Norway, Switzerland, Taiwan, Uruguay, Colombia, Costa Rica, Mexico, Panama, Peru, Turkey, Pakistan and Paraguay. These countries make up about two-thirds of global GDP.

TISA aims to liberalise service industries, including transport, telecommunications and finances. Service industries make up a large part of the economies of the negotiating countries, even the poorer ones, accounting for nearly 80% of the economy in the US and EU and 53% in Pakistan.

TTIP is a bilateral deal being negotiated between the US and EU. The US and EU already have very low tariff agreements with each other. Therefore the agreement focuses mainly on reducing legal and regulatory trade barriers, including in sectors such as food and safety, environment, banking, and privacy. The US and EU make up 60% of global GDP, 33% of world trade in goods and 42% of world trade in services.

The BRICS countries – Brazil, Russia, India, China and South Africa - are conspicuously absent from these negotiations. These deals can be seen as a Western attempt to consolidate its economic dominance over the world, especially in opposition to China.

WikiLeaks released NSA interceptions of communications between French treasurer Jean-Francois Boittin and EU Trade Section head Hiddo Houben. It says Houben “insisted that the Trans-Pacific Partnership (TPP), which is a US initiative, appears to be designed to force future negotiations with China. Washington, he pointed out, is negotiating with every nation that borders China, asking for commitments that exceed those countries' administrative capacities, so as to 'confront' Beijing …

“Finally, he assessed that this focus on Asia is added proof that Washington has no real negotiating agenda vis-à-vis emerging nations, including China and Brazil, or an actual, proactive [World Trade Organisation (WTO)] plan of action.”

Indeed, much of the impetus for these big three trade deals is the developed countries' frustration with slow progress of discussions in the WTO. To even get a seat at WTO negotiations, Third World countries had to agree to open up many of their industries in agreements that favour developed countries.

It is no surprise then that Third World countries are reluctant to go further without commitments from developed countries to open up their own markets in areas where Third World countries do have a competitive advantage, such as agriculture.

Developed countries created these big three agreements as a way of circumventing the deadlocked WTO discussions The aim is to create alternative agreements that lock in measures that further impoverish poor countries and further enrich Western transnational corporation — thus applying pressure on WTO negotiations to accept the same.

In particular, TISA arose from a subgroup within WTO called “Really Good Friends of Services” who were unhappy with the extent of WTO's General Agreement on Trade in Services and the slow progress in expanding it.

All three deals do not limit themselves to the traditional topics of trade negotiations — for example, lowering tariffs and raising import quotas. They extend into areas such as health, environment and labour and privacy laws, challenging the sovereignty of national governments.

The standardisation of these laws across the countries involved will generally mean a lowering of standards to the lowest common denominator.

The ability of governments to decide how to protect their citizens will be greatly limited.

In particular, opponents are concerned about Investor State Dispute Settlement. This allows foreign corporations to sue governments if they implement laws that reduce their profits, even potential profits. For example, Australia has been sued for its plain packaging tobacco laws, which were brought in as a public health initiative.

The experience of the North American Free Trade Agreement has defined much of the debate, especially in North America. NAFTA was the first major deal that included regulatory limits as well as traditional trade aspects. It is seen by many on the left as a disaster, while the right praises its effectiveness.

The US Bureau of Labor Statistics estimated that nearly 5 million jobs were lost in the US since NAFTA came into effect. This cannot all be attributed to NAFTA alone, especially since China joined the WTO in 2000, contributing to manufacturing job losses. But that disclaimer itself speaks to the negative effects of free trade.

When the Department of Commerce tried to estimate the number of jobs gained directly from NAFTA, rather than lost, the program was cancelled when only 1500 jobs could be found.

But the dominance of neoliberalism and the further corruption of social democracy means there is a good chance these deals will go ahead regardless of the historical lessons we should learn from past free trade agreements.

In the US at least, bipartisan support for the deals granted President Barack Obama fast-track authority on June 29. This allows him, for the next six years, to put any trade deals to a vote in Congress with no possibility of amendment. This earned him rare praise from the Republican Party. Republican majority leader Mitch McConnell said, “We were really pleased to see President Obama pursue an idea we’ve long believed in. We thank him for his efforts to help us pass a bill to advance it.”

Left-leaning Democrat presidential contender Bernie Sanders has made opposition to the trade deals a focus of his campaign.

“In my view, US trade policies for the last 35, 40 years have been a disaster. They have resulted, and I think it has been objectively documented, in the loss of millions of decent paying jobs, and a race to the bottom which is lowering wages,” he told the Guardian.

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