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TTIP: Threat to Democracy and Constitutional State
by IG Metal, Verdi service union and Christoph Butterwegge
Email: marc1seed (nospam) yahoo.com
11 Aug 2014
The TTIP. the largest free trade zone comprising 800 million of the EU and the US, is being secretly negotiated. Democracy and the constitutional state are threatened by 3-person arbitration courts where corporations can sue states and decisions are irreversible
IG Metal, Verdi service union and C Butterwegge comment.
TTIP FREE TRADE BETWEEN THE EU AND THE US
By IG Metal
[This study published on 5/13/2014 is translated from the German on the Internet, http://www.igmetal.de.]
AGREEMENTS ONLY WITH THE HIGHEST LABOR AND SOCIAL STANDARDS
With a free trade agreement, the EU and the US want to create the largest worldwide common economic zone. Worker rights, social standards and democratic principles threaten to fall under the wheel. A few could profit at the expense of the many. This paper focuses on the questions: What is central in the transatlantic free trade agreement? What could the agreement cause? What are the risks? What is IG Metal’s position?
WHAT IS CENTRAL IN THE TRANATLANTIC FREE TRADE AGREEMENT?
Representatives of the European Commission and the US are currently negotiating a transatlantic free trade- and investment partnership (TTIP or TAFTA – Transatlantic Free Trade Agreement). The goal is to reduce tariffs, create standards in protecting the atmosphere and adjust technical norms and worker rights. In short, tariff and non-tariff trade barriers between the US and the EU should be removed.
TARIFF AND NON-TARIFF BARRIERS
Tariff trade restrictions are tariffs levied on the import of goods into a country that can make this more expensive for consumers. The reasons for non-tariff trade barriers lie mostly in different technical standards, regulations on product quality and legal regulations on goods and services. As examples, this involves food, medicines and cars. Target countries must fulfill criteria before the importation of goods. This raises the costs for their exports. If the criteria are not fulfilled, imports can be prohibited. For example, hormone-treated beef and chlorine-washed chicken cannot be introduced in the EU and molded French Roquefort cheese cannot be imported in the US.
The world’s largest common economic zone would arise between the EU and the US. According to advocates, the nearly boundless trade will increase productivity and lower import costs and prices for consumers. More growth, more prosperity and more jobs on both sides of the Atlantic is their promise. However studies show the promises are extremely uncertain and the positive effects on growth and jobs will be trifling.
STATE OF RESEARCH
The study of the Centre for Economic Policy Research (CEPR) mandated by the EU Commission is based on the very optimistic scenario that all tariffs and nearly all non-tariff trade barriers fall. The gross domestic product of the EU grows 0.48 percent thanks to the free trade agreement – over ten years. That is a plus of 0.05 percent per year.
Directed by the Bertelsmann foundation, the Ifo Institute analyzed the employment effects. With a far-reaching liberalization of trade, the Institute assumes a plus of 181,000 jobs in Germany, an increase of 0.4 percent…
WHAT ARE THE RISKS?
Critics see labor-, social-, product- and environmental standards in member countries endangered by the TTIP. They fear this will be adjusted to the lowest level as a result of the negotiations. That would decisively worsen the quality of life of people in Europe and America. Opening the European market for chlorinated chicken, hormone meat and unlabeled genetically-modified food would be only one side of the coin.
CONSEQUENCES OF INVESTMENT PROTECTION
Unions oppose investment protection. A TTIP designed for the interests of investors strengthens the power of corporations. The creative democratic possibilities of society will be enormously restricted.
Possible consequences can even be seen today. So the Swedish energy conglomerate Vattenfall is suing the Federal Republic of Germany for compensation on account of its nuclear exit because decommissioning the nuclear reactor reduces the profits of the business. If Germany loses the suit, taxpayers will have to pay 3.7 billion Euros. In Egypt a French business is bringing a suit against raising the minimum wage. While the US is a member of the International Labor Organization (ILO), it has only ratified two of the eight core ILO labor norms. If norms are not put in force that guarantee union activities and tariff negotiations, American unions fear that this investment protection may not be ratified in the US in the future.
The examples show: businesses can fight legally strengthened worker rights and higher environmental-, health- and social standards on the basis of investment protection.
EFFECT ON THIRD STATES
If trade between the EU and the US increases through the dismantling of present barriers, this will happen at the expense of states that do not belong to the free trade zone. That would have negative consequences for their economy. TTIP proponents ignore these consequences.
WHAT IS IG METAL’S POSITION?
This agreement is presently designed so the few profit at the expense of the many. No free trade agreement between the EU and the US without built-in worker- and consumer protection! The IG Metal union demands rules that protect worker rights and social and environmental standards at a high level.
NO INVESTMENT PROTECTION IS NECESSARY
The trade agreement between the EU and the US does not need any built-in investment protection in the opinion of IG Metal. The legal systems of the contracting parties are so developed that they sufficiently protect investors. The planned investment protection would undermine the constitutional democratic state since it gives businesses opportunity to bypass national laws and courts through private courts of arbitration. The action possibilities of democratic states would be limited. Taxpayers would have to pay the bill. They would have to pay compensation to foreign businesses for their lost profits.
CONDITIONS OF UNIONS
IG Metal and other DGB unions would agree to the Transatlantic Free Trade agreement under the following conditions:
• comprehensive transparent and democratic participation of the parliaments and civil societies,
• Clear binding and enforceable rules for the protection and development of worker rights and social- and environmental standards. No obstruction of social ecological state regulation. The public order should be connected with social conditions.
• The agreement must guarantee that at least the same labor standards and rights are in force as for other employees in the target country.
• The agreement may not lead to a liberalization or privatization of public areas – especially public services – or hinder re-regulations.
• The agreement may not include any regulations on investment protection that could impair employee rights or restrict the possibilities of the state for enacting sensible regulations in the interest of the population or the environment.
• That the US ratifies and implements the core labor norms of the ILO is an indispensable prerequisite for IG Metal’s approval.
SECRETLY NEGOTIATED TTIP AND TISA AGREEMENTS
New International Round of Liberalization in EU Trade Policy
By Verdi.de, German service union
[This article published on July 11, 2014 is translated abridged from the German on the Internet, http://www.verdi.de.]
On the legal foundation of the Lisbon EU treaty, the EU Commission is now negotiating seventy trade agreements. Bilateral international law agreements dominate EU trade policy since differences of opinion between the 169 member states in the World Trade Organization (WTO) make difficult multilateral agreements on world market rules. The EU wants to reduce tariffs and trade barriers with bilateral agreements, improve investment protection and capital freedom and ensure market shares, market access, public jobs markets and more new markets. The political alignment follows the global Europe strategy of the EU Commission.
Negotiations are secret; the guidelines designed by the EU council and essential negotiation documents are also secret. Nevertheless some explosive information is seeping through.
The powerful lobbyism of investors, secrecy policy, orientation in exclusive investor-protection, opening markets for culture and vital services as well as a threatened underbid competition at the expense of the environment and social standards through deficient regulation meet with increasing criticism. The planned agreements should include mechanisms that constantly increase the competitiveness of businesses through a regulatory convergence of the respective markets.
1. TTIP – SECRETLY NEGOTIATED AGREEMENTS SHOULD GRANT INVESTORS EXCLUSIVE RIGHTS
With the TTIP, the US and the EU want to create a transatlantic free trade- and investment zone through standardized common market rules and dismantling tariffs and trade barriers. Market liberalizations that previously were negotiated in the WTO and in other bilateral agreements should be codified and further developed on a higher level. In July 2014 the negotiations are in the sixth round. The result should be presented by the end of 2015 according to the negotiating partners.
Secrecy governs the TTIP negotiations. A draft of a document of the EU Commission with liberalization possibilities for the service sector was leaked on May 26, 2014… Will the restrictions be in force for the entire EU or only for certain member states or a group of member states?
According to the proposal of the EU, public services should not be completely excluded from the negotiations as unions demand. However vital necessities like water supply, the public health- and the public education systems should not be part of the agreement according to the EU proposal. In its offer, the EU reserves the right to abandon liberalization steps in the area of many transportation services. In addition, limiting market access by public monopolies should be possible on national and sub-national planes – for areas that come under a so-called public utility clause. Environmental-, health- and transportation services are among those areas. However the EU Commission accepts liberalization offers for sewage disposal and the waste industry, private hospitals, rescue services and transportation services at airports.
The EU retains the right to restrict the dispatching of workers by service companies or the activity of freelancers or self-employed persons… Individual EU member states formulate further conditions as to market access (for example, licensing by boards, economic need-testing etc) with many branches and vocational groups…
The US resists a regulatory cooperation on the field of financial services. In reaction to the financial crisis, the US intensified the regulations of the financial market and US regulatory authorities fear a possible undermining of regulation.
The unions clearly positioned themselves from the beginning of the negotiations. The demand for complete transparency and comprehensive participation of the parliaments, civil society and the unions in the negotiations is in first place. The governments of member EU states must make all relevant documents accessible to their parliaments and organizations of civil society and inform them completely about the negotiations.
In May the critical discussion of the TTIP at the DGB union congress led to the unanimous resolution “Stop Free Trade Negotiations with the US – No Agreement at the Expense of Employees, Customers or the Environment.”
DEMANDS OF VERDI CHAIRPERSON FRANK BSIRSKE TO THE GERMAN GOVERNMENT
In May 2013 Frank Bsirske addressed clear demands to the German government:
“Social and ecological goals must have equal importance with the economic goals. This means: adjustment of environmental regulations and standards to the highest level, complete ratification of all ILO social standards in the EU and the US and protecting joint-determination and employee rights in transatlantic businesses on the highest standard. When employees are sent to work in the US or to Europe, the host country principle must be in force: equal pay for equal work at the same place. The rights of consumers must also be protected on the highest level. The protection of personal data and copyrights must be guaranteed. Public services are factored out of the agreement. Past EU agreements that protect public services may not be threatened through the backdoor by the TTIP. The subsidiarity principle valid in the EU according to which local communities, countries and member states largely organize their vital necessities must be strictly observed. No rules that lead to further liberalization or privatization of public services may be binding on public job creation.
Investor-state-dispute settlement mechanisms ensure one-sidedly the privileges for investors. They protect their profits and preserve them from the costs of necessary social and ecological changes in the contracting states. Therefore we reject investor-state-dispute-settlement procedures in the TTIP. The legal systems of both economic zones offer sufficient protection for investors.
THE ALLIANCE OF PUBLIC SERVICES CRITICIZES THREATENED LIBERALIZATIONS THROUGH THE TTIP
The Alliance of Public Services is an alliance of communal and regional public enterprises, economic associations of the public economy, public employer associations and public administrations. In an expert opinion, the Alliance warns of the TTIP risks:
“Unrestricted market access obligations in the TTIP put in question the democratically legitimated national and European legal frameworks since the organizational sovereignty of territorial authorities and diversity of provisions as an expression of the communal right to autonomy would be endangered “ as the following sector analyses show.
COMMUNAL WATER SUPPLY
In this sector, transferring responsibility with liberalization or privatization would only be possible under competitive presuppositions. Water is recognized as a natural monopoly. Ties to the communal plane make possible orientation in the public interest and sustainability. Therefore competition and general market opening will be rejected in Germany by a majority after a long detailed debate. The successful “right2water” campaign, different recommendations in the water economy and the repurchases of private shares of providers in the branch demonstrate this. However re-communalization could be made difficult through the TTIP and the communal freedom of choice to take the water supply in the community’s own hands could be considerably restricted. The water supply as an important responsibility of communal self-government has stood the test of time.
THE PUBLIC NET ECONOMY AND AVAILABILITY
The trend to market opening and the obligation to competition endanger the net enterprise in Germany carried out by the public authority… A free trade agreement with the US could result in a further liberalization of the public net economy. Existing and planned environmental regulations of the branch could be disparaged as “profit-reducing” by private investors and competitors and tackled in the framework of the ISDS investor-protection system. This should be averted.
FINANCIAL SERVICES IN A PUBLIC-LEGAL FRAMEWORK
Savings banks are the providers of financial services in a public-legal framework. They could not satisfy their public commission in case of a privatization and/or liberalization. In the past, savings banks were consciously constructed as public-legal institutions since the structural presuppositions could only be created there for a permanent fulfillment of their public commission…
The interests of private investors do not match businesses with a public commission. Private investors rightly expect that their capital will realize the highest possible profit. The public-legal framework first creates the structural presuppositions for permanently satisfying the public commission.
…The exemption of busses and trains from the obligatory competition could be classified by the TTIP negotiating partners as a trade barrier in the area of services.
A second aspect concerns the power of authorities to give special or exclusive rights to a business and prevent cherry-picking in the area of vital necessities. This could be regarded as a trade barrier. With a market opening, responsible authorities cannot make clear binding and feasible regulations protecting and developing employee rights, environmental standards or other quality demands without a regulatory framework. In addition, financing within the transportation associations that nearly cover Germany would be endangered.
THE PUBLIC WASTE INDUSTRY
In Germany, local communities have freedom of choice. They can decide whether to provide services of the waste industry or farm out these services. This freedom of choice has stood the test of time and developed Germany into one of the most successful member states of the European community regarding the waste industry. A competitive pressure in a transatlantic domestic market increased by the TTIP and an intensified liberalization could restrict this freedom of choice and endanger past successes. The re-communalization of waste industry services practiced in the last years could be made difficult.
The rules on investment protection in the TTIP could aggravate further efforts at recycling when American firms provide their services on the basis of legislation, for example in the form of operating a dumping ground. The dumping prohibition for un-pretreated wastes discussed and planned on the European plane would destroy its business foundation… In the worst case, the present unsatisfactory state of the European waste industry could be cemented for years because member states want to avoid the arbitration procedures established in the TTIP.
The demand of the US to speed up liberalization of the European continuing education market, particularly adult education, was clear in the second round of negotiation in the middle of November 2013. Education systems already exist in the European Union with public and private providers. A competition occurs in certain market segments, for example in universities. In Germany, public universities guarantee general access to a comprehensive and qualitatively excellent academic education that stands its ground to the international comparison. This was guaranteed in the past by an extensive financing. This system of transferring state funds could be seen as a market-restriction within the TTIP negotiations. Private universities could participate in transferring state funds in an education market. This will have effects on the state education structure.
PUBLIC HOSPITALS AND RESCUE SERVICES
In the area of public hospitals and rescue services, state hospital planning and integration in the respective hospital plan of a country are regarded as state barriers to private investments in this area of “public services.” A complete liberalization of the hospital sector as a consequence of a TTIP agreement could undermine the legal commission to guarantee a qualitatively top-flight medical care through communal hospitals when state subsidies are made difficult.
PUBLIC CULTURE AND THE CULTURE ECONOMY
Cultural goods and services have a special double character. On one hand, they are economic goods and on the other hand bearers of cultural identity and cultural values. Cultural assets and services are provided by businesses in the private economy, publically-promoted institutions, institutions financed by fees and cultural establishments borne by public authorities. There are many linkages within the cultural sector including audio-visual media…
2. TISA – THE TRADE IN SERVICES AGREEMENT, THE AGREEMENT BETWEEN THE EU AND 22 OTHER STATES – NEGOTIATED IN SECRET AND CODIFYING LIBERALIZED SERVICE MARKETS
Negotiations on TISA began in 2012. TISA is negotiated in a pluri-lateral way, that is in a group of “willing” states, unlike the bilateral negotiations on trade- and investment agreements as in TTIP or CETA and also multilateral agreements like GATT or the General Agreement on Trade in Services (GATS) resolved under the shelter of the World Trade Organization (WTO), an agreement on trade with services completed in 1995. The current TISA negotiation partners are Australia, Canada, Chile, Taiwan, Columbia, Costa Rica, Hong Kong, Iceland, Israel, Japan, Lichtenstein, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, South Korea, Switzerland, Turkey, the United States and the European Union as representatives of its 28 member states.
The leaders of the TISA negotiations have the mandate of achieving a “very ambitious” liberalization of the service trade. In the framework of the TISA mandate, every participating country is urged to meet or even surpass the maximum in obligations to services that it already accepted in other signed trade- and investment agreements. The mammoth transnational corporations of the service economy that join forces in lobby groups like the US Coalition of Service Industries and the European Services Forum are drivers of the negotiations that are not conducted in public. The negotiation texts cannot be published.
Unlike other trade- and investment agreements, TISA focuses exclusively on trade with services. The term “trade with services” is very far-reaching. As with GATS, TISA could be invoked for every conceivable international service offer. This includes border-crossing provisions of services like tele-medicine, E-learning or Internet games, services abroad in areas of foreign transportation or medical tourism, foreign direct investments like the establishment of a bank branch in another country or the offer of communal water- or energy services and providing temporary residence of persons in the country of the service recipient, when for example nurses, housekeepers or executives of a business are temporarily sent to foreign countries to provide services there.
ALL BRANCHES ARE IMPACTED IN PRINCIPLE
As in the TTIP but unlike the regulations of GATS, a negative list approach is followed in the TISA negotiations. This means all service branches should be grasped and thus liberalized by TISA. If a branch is not included, it must be explicitly listed. Audio-visual services exempted from the negotiations form an exception with the TTIP.
The leaders of the TISA negotiations are now working on new sectoral agreements on the regulation of financial services, tele-communication services, electronic trade, sea traffic, air traffic and road traffic, freelance services, energy services and postal and courier services. These dialogues aim at liberalizing many service sectors, that is making possible market access to foreign businesses and not putting them at a disadvantage compared to domestic providers. A negotiation document on financial services published by Wikileaks in June 2014 reveals that a further deregulation and liberalization of the financial sector will be pursued. The US in particular wants banks and insurances to be able to exchange the data of their customers across borders.
In addition TISA will obligate governments to subordinate all “new services” to the regime of the agreement that will be in effect for services that do not even exist at the moment.
DANGERS FOR PUBLIC SERVICES
The TISA attempts to codify a certain liberalization level through an agreement binding as international law and to limit the possibility of public regulation. The central levers are the so-called restricted- and standstill clauses.
A deadlock clause would cement the state of liberalization of services in every country and make impossible every development from a market-oriented to a state-organized provision of public services. This clause would not prevent an exclusive public service per se but would make impossible its genesis in sectors now opened to competition from the private sector.
In the same way, the restricted clause would automatically make all future measures to liberalize services irreversible in a country. This clause would also not prevent exclusively public services per se if a government still resolved the privatization of public services, returning again to a public model at a later time would not be possible. A re-communalization in sectors subject to the agreement would be impossible on account of both clauses.
LABOR-, SOCIAL-, ENVIRONMENTAL- AND CONSUMER STANDARDS UNDER PRESSURE
The so-called internal regulations concern an important area that in the past did not appear in the GATS negotiations. These important regulations guaranteed standards for consumers or in vocational training were decided by the regulating authorities on the nation-state or European planes. Qualification requirements and procedures, technical norms and licensing prerequisites are concretely vital…
In view of the stagnating WTO process, the TISA participants will now present their own text on internal regulations. These regulations should not constitute any “unnecessary” barriers for trade with services corresponding to the liberalization agenda of the governments participating in the TISA. In other words, possible laws and decrees setting high standards in industrial safety -, environmental- and consumer protection are contested by TISA.
Our Global Union Public Services International (PSI) reacted to this development by going to the public with a study on the negative effects and action proposals. PSI declared in a petition to all trade ministries:
“The planned TISA is an attack on the public interest since foreign investments in the service sectors may not actually contribute to public goals and sustainable economics. We have special mistrust regarding a further undermining of essential services in the areas of the public health system, social security, the water- and energy supply, postal service, education, public transportation, sewage disposal and other services, when these services are left to private and foreign companies whose only motivation is profit and who only serve those who can pay the market prices. Therefore such essential services – including those in a mixed public-private form that compete with private providers or charge a fee – should not be subjects of negotiations behind closed doors and without an accounting duty.
We condemn promoting liberalization of the so-called temporary movement of natural persons or migrant workers without guaranteeing the legal protection of their human- and labor-rights. The migration of workers does not come in the sphere of responsibility of trade agreements and must be treated as part of the normative social partnership framework of the International Labor Organization (ILO).
The planned TISA also represents a threat for countries that are not involved. The European Union and the United States have said unmistakably that they intend a “multilateralization” of the negotiations. We call people to vigilance regarding the resolution of the EU and the United States to make the hyper-deregulation- and privatization agenda of the TISA into the global “norm” and to force other countries to co-sign, especially countries joining the WTO. If TISA should be passed, the signatory countries will try to evade the negotiation guidelines for services to which WTO members have amicably agreed and appear as a block in the service negotiations (GATS) in the scope of the WTO to also force other countries to the level in liberalization and deregulation planned in the TISA. We condemn the TISA as an attempt to advance the wish-list of companies in relation to services in the industrial countries and simultaneously let the obligations fall flat as occurred in the Doha- development agenda of the WTO to counter the concerns of the developing countries in regard to the removal of present asymmetries and unjust regulations in agriculture.
CETA AND TTIP AS DANGERS FOR THE EUROPEAN SOCIAL MODEL
By Christoph Butterwegge
[This article published on June 26, 2014 is translated abridged from the German on the Internet, http://www.nachdenkseiten.de/?p=22160. Christoph Butterwegge is a professor of political science at the University of Koln.]
Since the “Multilateral Agreement on Investments” (MAI) was defeated just before the turn of the millennium by enlightenment campaigns of global justice organizations and mass protests in several countries, agreements for the largest economic block of the earth have been devised so transnational corporations perpetuate the capitalist world system, cement their social hegemony and discipline insubordinate governments. Union, social, ecological and consumer protection political initiatives should be neutralized. Capital exploitation interests will be absolutely privileged legally. Ultimately a global rule regime will be established that creates a permanent free path for all kinds of business investment decisions and blocks possible objections by legal barriers. The European social model has been radically changed since the turn of the millennium under the influence of neoliberal forces and powerful economic circles that push secret negotiations of the EU with the US on a “Transatlantic Trade and Investment Partnership (TTIP) or a “Transatlantic Free Trade Agreement” (TAFTA) on the basis of a “Comprehensive Economic and Trade Agreement” (CETA). Tendencies to social polarization, precariousness and pauperization inherent to modern “turbo-capitalism” (Edward Luttwak) are more striking today than ever.
MASS POVERTY – A CONSEQUENCE OF THE TRANSFORMATION OF THE EUROPEAN SOCIAL STANDARD
For some time poverty, always a sad everyday reality in the so-called third and fourth worlds, also appears in progressive European welfare states where it was long largely unknown as a mass phenomenon. 2010 was the “European Year for Combating Poverty and Social Exclusion.” During the 1990s some EU member states kept the term “poverty” out of official documents and instead spoke of “social exclusion.” A structural connection exists between the two phenomena.
For a long while the East-West division blocked the view to the top-bottom division of society. Moreover understanding this erroneously as an explicitly socially homogenous society overlooks the fact that crass divisions are part of Germany’s political culture. In 1953 Helmut Schelsky coined the formula of a “leveled middle class society” in which classes and class oppositions seem to have dissolved in a strange way. Another leading sociologist Ulrich Beck in his 1986 book “Risk Society” spoke of an “elevator effect that lifted everyone upward during the so-called economic miracle while everyone was brought down with mass unemployment.
A socio-economic Lord’s Prayer effect promoting some members of society to the top and bringing others to the bottom exists as a structural defect in finance market capitalism. While poverty and wealth are opposites, they are also two sides of the same coin because they are closely interwoven in this economic and social system. The owners of banks become even richer while low earners everywhere in Europe often overdraw their accounts because of very harsh consequences of crises and must pay high interests. Ifd more families must shop at food discounters to make ends meet, the owners of discount chains like Aldi and Lidl who are among the richest men in all Europe accumulate even more gigantic private wealth.
Poverty and riches are functional in present finance market capitalism as long as they do not provoke any dislocations endangering the system. After the Euro crisis hysteria spread, domestic political themes, the social question and the problem of inadequate justice in Germany played at best a minor part. However we seem to be at an historical transition. Otherwise the social inequality would hardly be thematicized by authorities of the existing social order. From Pope Francis, the OECD and the IMF to the bestselling French author Thomas Piketty, social inequality has recently become a top theme from a taboo theme in the German media. On one side there is solidarity with the deserving poor fallen into distress through no fault of their own. On the other side the increasing anxiety of economic and political power elites before the “dangerous lower classes” results, that is the problems that they could have in the future and the loss of some privileges, not the problems they have.
From time to time the welfare state seems to experience a certain Renaissance and the era of forced privatization of enterprises, public necessities and social risks seems to come to its end. The world financial economic crisis has weakened and by no means strengthened the social state because the unsocial consequences of the crisis fiasco like mass unemployment and mass poverty are hardly removed while debts are created by brokers, bankers and speculators.
On the reasons for the rather half-hearted struggle against poverty in the European Union, reform measures of the Brussels administration and a symbolic policy against poverty and social exclusion are striking. The EU commission systematically encouraged the process of precariousness and pauperization… The European social model is in a radical process of neoliberal erosion and transformation because its supporters follow a location-logic and seen to increase the competitiveness of their own economic location through market-conforming structural reforms.
The “Lisbon strategy” resolved at a special EU summit of heads of state and government on March 23/24, 2000 in the Portuguese capital enables Europe to ensure prosperity to its citizens in that US hegemony on the world market is broken and a scientific-technical leadership role assumed. The extensive “modernization” and “adjustment of the social state to market requirements or powerful economic interests is a realization of the goal agreed in Lisbon. If the council presidency had the goal of “defeating” poverty by 2010, the EU summit from December 7-11, 2000 in Nizza limited itself to “advancing the removal of poverty.” The EU posted a further increase of social inequality instead of cutting poverty in half by 2010. The goal also turned out much less ambitious in the scope of the EU’s Agenda 2020. In the current decade, poverty should be reduced more than a quarter, that is around 20 million, through a “key initiative” (for example “Measures for the Modernization and Intensification of the Jobs- and Education Policy and social security through increased participation in working life and dismantling structural unemployment and strengthening the social responsibility of businesses”). The latest data shows this mark has not been reached. Around a quarter of all 500 million EU citizens are stricken by poverty and social exclusion. In addition Europe’s division is forced by the austerity program of the EU commission in the scope of its “Euro bailout policy” (“North-South differences”)
The poverty development was greatly influenced by the global financial-, world economic- and European monetary crisis. The inequality in income- and assets-distribution promoted on the state’s side was an important cause of the crises. Since the rich have become richer and the poor more numerous, the speculative tendencies on the financial markets have reached new all-time record highs while the mass purchasing power necessary to strengthen the domestic economy in crisis phases is lacking. This is similarly true for the debt-problematic in the Eurozone. Other EU countries, especially those at the southern periphery, have lost competitiveness compared to Germany so drastically that they must finance their growing imports through credits since Germany has become an even stronger export country through cuts in real wages for over a decade.
The more the social question fell by the wayside, the more intensely “bailout umbrellas” for the banks and the Euro (more exactly the capital investors) move to the center of policy. Meanwhile the worry about the stability of the European currency dominates public discourse so one-sidedly that social justice threatens to fall under the wheel. Another lesser welfare state is on the political agenda. A reorganization of the social state occurs together with its reduction. This is by no means the liquidation of the welfare state but its reorganization according to a concept that includes structural changes like the re-individualization of social risks or (partial) privatization of state old age benefits, increasing administrative control pressure and drastic expansion of sanction possibilities against benefit recipients. This occurs along with many benefit cuts.
Charitable engagements, voluntary activity in the “civil society,” charitable gifts and the foundation system have a boom season again since the social state is broken down and substitute social institutions are needed. According to the neoliberal forces within the EU, most educational-, academic-, cultural-, environmental-, free time-, sports- and welfare institutions, in short nearly all areas of public life that do not have a sovereign nature are ruled by commerce or depend on the generosity of private businesses, patrons and sponsors more strongly than in the past. A state of founders, private donors and sponsors ultimately replaces the social state. With some sarcasm, a deeper hidden political meaning can be seen in that the European Year of voluntary work followed the European Year for combating poverty and social exclusion.
TTIP AND CETA – ANOTHER ATTACK OF NEOLIBERALISM ON THE EUROPEAN SOCIAL MODEL
Neoliberalism is by no means threatened with downfall despite the global financial-, world economic- and monetary crisis that struck Europe with full rage on September 15, 2008 after the bankruptcy of the Lehman Brothers investment bank. Rather leading representatives of this school of thought resisted. The financial market crisis hardly upset their plans. At least their opinion leadership in the public was shaken. Against demonization efforts, they shifted to an argumentative attack or ideological counter-offensive. Instead of drawing sustainable lessons from the crisis-fiasco, neoliberal professors, journalists and politicians acted as though they always predicted the bubble on the financial markets would burst some time or other. Most ideologues of market freedom refused any responsibility in the bank- and stock market crash, spoke of “casino capitalism” following John Maynard Keynes (Hans-Werner Sinn) and gave the impression that as critics of globalization and capitalism they had warned of its worst excesses. Prominent neoliberals used TV talk-shows and other public stages to pass the buck to “politics.” The disaster was either reduced to the mistakes of individual persons (top managers, investment bankers) or to the failure of the state and its controlling bodies (politicians, financial monitoring).
Market radicals who should have worn sackcloth and ashes after the total bankruptcy of their liberalization-, deregulation- and privatization-concepts soon gained the upper hand politically and ideologically. They were actually never against state interventions. They were only against interventions that limited markets, entrepreneurial freedom and profit possibilities.
On the other hand, massive incursions like the 480-billion Euro package laced up practically overnight with the active collaboration of top executives of the bank association and the financial institutes were explicitly sought to bailout rotten degenerate banks so the stock exchanges would be stabilized and the profit prospects of businesses improved. That was a market-conforming state interventionism in the sense of the monopoly economy and big private banks that proposed corresponding concepts and developed them together with the ministries. In light of empty state treasuries and increasing debt overload of local communities, concepts like Public Private Partnership (PPP) may gain even greater significance under the sign of the “debt brake” and the fiscal pact.
The hope for the end of neoliberal hegemony in intellectual life was disappointed, not merely the hope for a change of course in economic policy. The discussion about the inadequate development of leftist alternatives hardly occurred up to now. The hope that neoliberalism would lose its power over the consciousness of millions of Europeans in East and West, North and South, only because they fear for their savings and must pay the bill for speculators and financial jugglers with their tax money.
Stock exchanges and bank shares register a rapid upswing like the neoliberal ideology production. For a long time, trade with derivatives and certificates is again booming and the bonuses set new records. The casino in the financial market characteristic for present-day capitalism is revitalized and modernized with tax money and not closed – as the global justice movement attac demands.
CETA and TTIP are integral elements of a global project of reorganization of nearly all areas of society according to the model of the market. They are signs that the neoliberals are on the offensive. The driving forces behind both agreements are transnational industrial- and trading conglomerates whose main goal is the repeal or lowering of wage-, social- and environmental standards on this side and beyond the Atlantic…
CETA and TTIP symbolize the triumphant advance of neoliberal free trade ideology together with the negotiations on liberalizing markets in the scope of the World Trade Organization (WTO) as in the framework of the agreement on trade with services (Trade in Services agreement, TISA) planned by the EU, the US and other states. The strong are strengthened and the weak weakened with capitalist free trade – like its medium, the commodity market. Social inequality grows inevitably. Whoever increases the freedom and political and economic power of highly concentrated capital limits the independence of employees, works councils and unions.
Neoliberals basically see taxes as theft and vital public necessities as an illegitimate field of activity of the state. Private businesspersons want to make them into profitable activities and change citizens in all areas of life into customers. Regarding the interests and needs of the majority of the population, there should be no downward leveling of protective regulations in the education-, social systems and employment. The free trade advocates could accomplish this in the agreements. As a last consequence, absolutizing the market, operational efficiency and competition represent the end of the European social model. Whoever weakens public enterprises (for example, savings banks, local community energy providers and municipal utilities) takes away their concrete foundation, shakes the welfare state in its foundations, damages social life together and endangers the social peace.
Even if the EU commission after malicious criticism from member states should create more transparency in the negotiations, the suspicion exists that the European public is being led by the nose by the secret-mongering and misled or blinded by the dubious content of the agreement. Parliamentarians were largely cut off from information while influential business associations and economic lobbyists were kept informed on the state of discussions.
All this nurtures the suspicion that the negotiation leaders are guided by the capital exploitation and profit interests of the economy, not by the public interest. Democracy, the constitutional state and the European social model are threatened. The greater the freedom of investor, the less consideration for the needs of the socially disadvantaged. The public necessities altogether come under pressure even if sectors like education, art and culture, media and water supply should be ignored in the negotiations. Neoliberals want to privatize or commercialize education, health care, water supply and garbage removal. Art and culture should assume a commodity character, be handled on markets and only unconditionally available to the wealthy. They should not be public goods any more to which all residents have a claim.
An adjustment of the legal rules governing working- and living conditions on this side and beyond the Atlantic threatens with the removal of non-tariff trade barriers in the planned agreement. Regarding food security, chlorine-washed chicken and genetic beef will hardly be welcomed by European consumers. Basic democratic and social rights threaten to be riddled with holes if CETA and TTIP are implemented. Since the US has only ratified two of eight core labor norms of the International Labor Organization (ILO), freedom of association, the collective bargaining system, the principle of equal wages for men and women and prohibition against discrimination in working life on account of “race4, skin color, gender, religion, political opinion and national or social origin are up for disposition in a transatlantic free trade zone.
The core of the European social model will be hit if North American corporations, big banks and funds can sue EU states for compensation on account of an investment protection agreement before private arbitration courts fille4d with repr4esentatives of international law offices only because they suspect new minimum wage rules, labor- or protection against unlawful termination laws, joint-determination rights of employees and their unions or generous transfer payments of states narrow their profit prospects…
The European social model already wickedly slashed by the neoliberal reform and austerity policy will be fundamentally put in question by CETA and TTIP. Setting the points this way is a challenge to the social systems of the partners to the agreement because it hides the danger of leveling downwards wage-, social- and labor law (industrial safety) standards. If the EU commission with its North American agreement partners succeeds in implementing both economic free trade and investment agreements, that would be a bitter defeat for all critics of neoliberalism including many welfare organizations and unions on this side and beyond the Atlantic.
Social inequality, poverty and wealth will increase in Europe and the US as long as market freedom, free trade and investment protection are at the center of European and North American policy. In addition CETA and TTIP set new standards for a world economic system in which hardly any room is left for deviation from and resistance against capital exploitation interests for effective industrial safety, democratic rights, constitutional principles, high social- and environmental standards and state sovereignty. Still both agreements could politically mobilize existentially afflicted persons in impacted countries and encourage greater protest actions of these citizens.
The Trans-Pacific Partnership: Stop the TPP and Other Rigged “Trade Agreements”
Solidarity Will Build the Power Needed to Transform Trade so People and Planet Come Before Profits
By Kevin Zeese and Margaret Flowers
Global Research, August 10, 2014
The moment facing the Trans-Pacific Partnership and its sibling the Trans-Atlantic Trade and Investment Partnership (known as ‘TAFTA’) and the future approach to trade is reaching a critical stage. The TPP and TAFTA are attempts to get past the failed World Trade Organization (WTO) negotiations, but like the WTO, these new agreements are meeting significant opposition and obstacles. We are poised to stop these attempts to rig the international economy in favor of multinational corporations and move to a new model of trade that respects the rights of people and nature, but it will take a coordinated effort. We must be prepared for moves to thwart that effort and organize to avoid them.
The TPP and TAFTA represent a new era of deception and back-room dealing to pass laws that have nothing to do with trade, but that hand even greater power to multinational corporations to profit from everything no matter the consequences for the health of people and the planet. For the first time, the text of the agreements has been classified and they are being negotiated in secret with hundreds of corporate advisers and minimal involvement by Congress. In order to complete the agreements without transparency and public input, the President has asked Congress to grant him the authority to sign them, ‘Fast Track,’ a form of Trade Promotion Authority.
As elections get closer, Democratic Party leaders in Congress are getting the message out to inside-the-beltway activists groups that they are unifying to support giving President Obama some form of Fast Track. Recent letters from member of Congress to the President indicate support for trade with particular stipulations, but the overall message is to continue negotiating. Washington advocacy groups believe that they must also show support for Fast Track or they will find themselves without access or influence.
Rather than kowtowing to the usual ‘on the table’ threat from the corrupt bi-partisan Congress, the movement needs to tell them that the only thing on the table is a complete transformation from the failed global trade that rigs profits for big business at the expense of the ecology of the planet and the necessities of the people. It is time to declare the TPP, TAFTA and the Services agreements as dead, develop a new approach to trade and begin to renegotiate past trade agreements like NAFTA that are doing ongoing damage to the economy, planet and people.
Congress be warned: The people are watching and are onto the rigged trade corruption scheme. Members of Congress will pay a political price, with the end of their careers, if they continue to force their failed trade strategy on the nation and the world.
Challenges for the TPP
For more than three years the President’s US Trade Representatives have sought Fast Track trade authority. Fast Track means that Congress would give up its constitutional responsibility “to regulate commerce between nations.” The movement for fair trade has fought back and pushed Congress to not give President Obama the authority he needs.
More than 3,150,000 have signed a petition to stop Fast Track. At the critical moment in January and February when the President and “free” traders in Congress (note: whenever you see “free trade” think “rigged trade”) were set to push Fast Track legislation, the people responded with over 40,000 phone calls and 600,000 emails to Congress. There were also protests across the continent. As a result, that Fast Track bill died.
The opposition is global. At the same time people were acting in the US, 65,000 people protested the TPP in Mexico and more than 1.8 million in Australia called for the text to be made public. President Obama was greeted with TPP protests when he visited Asia as was Vice President Biden when he visited Japan. We just returned from an economic conference organized by the Center for Global Justice that included people from the US, Mexico, Australia, China, Israel, Guatemala and other nations, and the top area where people agreed to work together was to stop the TPP and transform global trade.
This occurred because the TPP has been a matchstick that has united people into a ‘movement of movements’ of more than 150 organizations (including our project Popular Resistance) that worked together to Stop Fast Track. Activists concerned about food safety, worker rights, health care, finance, the environment, Internet freedom and more have organized scores of rallies and protests throughout the nation and around the world. There have been protests at trade negotiations even when they try to hide the location. The negotiators have become so fearful of protests that for the last negotiating session they fled 2,650 miles across Canada in an attempt to avoid them. The retreat failed as protesters exposed the TPP and brought 19,000 voices to the negotiations.
In this audacious protest last September, which we helped to organize, activists climbed up on and covered the US Trade Representative national office near the White House with four large banners to expose the secrecy.
In response to mobilization against the TPP, Congress in an election year has sent a variety of letters to the president on the shortcomings of the TPP. These include: 153 members of Congress calling for stronger labor standards, a bi-partisan letter signed by 140 members of Congress opposing the agricultural provisions of the TPP, and 120 members of Congress signed a letter saying they would not support a trade agreement with weak environmental standards and 35 members of Congress writing concerning the human rights violations in Vietnam, and Brunei adopting Sharia law. While these sound good, voters should be on alert to these election year actions. Language could be added to the TPP which sounds good but changes nothing as has occurred in previous trade deals. There is no form of the TPP that can actually protect the people and planet. Corporate lawyers have been writing the TPP for four years. The only response is to defeat the TPP.
Message to US Trade Representative, Obama and free-traders in Congress: If you have to be secretive, and fear protesters because your agreement is so unpopular, you need to start over. The process should be open, transparent and participatory. Simple message: Stop the Secrecy! This is supposed to be a democracy.
Desperate Attempts to Salvage the TPP
It has been evident that there is synergy between the movement’s success in stopping ‘Fast Track’ and the weakening negotiating position of the Obama administration. As protests have escalated, negotiators have become emboldened to stand up to the bullying of the United States.
Advocates of the TPP are beginning to face reality: the TPP negotiations may never reach completion. Last December, Wikileaks published documents that revealed there were wide chasms of dispute between the nations negotiating the TPP. Countries were unwilling to give transnational corporations as much power as the United States was demanding.
Now some advocates of the TPP believe that the TPP may be over. Negotiators have missed three deadlines to conclude the talks. Countries are recognizing that the TPP is skewed in favor of one country, the United States, and its transnational corporations. They also see the reality that the WTO has been stalled since the Seattle protests in 1999 and has been unable to reach any agreement in the Doha Round.
Advocates of corporate trade agreements realize the people are connecting globalized trade to the wealth divide, lowering of labor standards and destruction of the environment. And, there is near universal opposition to investor state rights to sue in rigged trade tribunals for loss of expected profits. Transnational corporate globalization is hitting a wall of opposition.
More opposition to rigged trade is developing: LGBT groups have demanded the US stop negotiating with Brunei because of its brutal treatment of a penal code that targets women, LGBT and religious minorities; others are protesting how the TPP will worsen inequality and the wealth divide, result in lost jobs, lower wages and expand the income divide, give corporations unusual new power under the guise of intellectual property, will make NSA spying easier, force policing of Internet users, and result in more fracking in both the United States and Europe, as well as off-shore drilling and other extreme energy extraction.
The Movement Should Not Compromise
We know that the transnationals and their corrupt congressional representatives want the TPP, TAFTA and Services Agreement to become law. It will result in concentration of wealth and political power in their hands and result in laws that could not be openly passed through legislatures to become law. We know they are not ready to give up on the trillions in profits they will reap from rigged trade.
We also know that the movement of movements that opposes rigged trade has shown some power and is capable of mobilizing even more people. As the push for rigged trade and a new form of Fast Track moves forward, if we are not fooled by false promises in Fast Track legislation, the movement to end corporate trade will grow even stronger.
Message to our allies: This is the time for continued solidarity, it is not the time for the movement to compromise, nor is the time for countries to give in to US demands. It is time for opposition to rigged corporate trade to take an even stronger stand: oppose the trade agreements that are currently being negotiated, refuse to enact any form of Fast Track and demand a transformation of trade to rules that provide for the necessities of the people and planet as the top priorities.
Labor has hopefully learned the lesson that merely improving the language in trade agreements that claims to protect workers will not protect labor, will not prevent the loss of jobs and will encourage the downward decline in wages. Environmentalists must have learned that trade agreements will encourage extreme energy extraction, ecology-destroying mining and destruction of the oceans and other waterways. The USTR knows the political importance of environmental protection and has been caught lying about the issue. People concerned with the power of big corporations must now know that rigged trade makes corporations more powerful than governments and will undermine democracy, food security and safety, clean water and air as well as health care among other basic necessities.
Senator Ron Wyden, the chairman of the Finance Committee, has signaled that he will be pushing for what he calls “Smart Track,” an embarrassingly obvious false marketing term designed to fool people. This is a trade authority that if enacted is very likely to allow the TPP, TAFTA and Services Agreement to become law. Wyden has been told by his constituents as well as tech companies, who are a key part of his base, that they oppose any form of Fast Track. People are not falling for this re-labeling and Wyden-marketing.
We need a new form of Trade Promotion Authority, but we cannot negotiate a new trade regimen until the current agreements: TPP, TAFTA and the Services Agreement are defeated. If the so-called “Smart Track” becomes law, what happens to these three agreements that have been negotiated for years? A new approach to trade cannot retroactively apply to agreements that are so far along in negotiation.
New Trade Era
What would appropriate trade look like? The goals of trade must be clearly stated. The first priorities for trade are meeting the necessities of people and benefitting their lives. This means trade must reduce wealth and income divides, raise wages and the standards of working conditions and ensure people have access to clean water, safe foods and high-quality healthcare. Second, trade must benefit the planet. The world needs to move toward clean, sustainable energy sources and stop the extreme energy extraction of carbon polluting energy as well as uranium for nuclear energy. Trade needs to be designed to move the planet to a carbon-free, nuclear-free energy economy. Ecology protecting trade means there should be less trade so that local communities can be self-sufficient, with small family farms thriving instead of being overcome by highly subsidized crops that allow large agribusiness to destroy traditional agriculture. Relying on transporting foods thousands of miles when they can be grown locally is bad for local economies as well as for the environment and climate change.
And, the process of negotiating trade must be very different. While each country has different legislative and executive processes, the basics must be transparency in the negotiations and participation by the public and elected representatives throughout the process. In the United States this could mean that as trade is negotiated chapters are shared with responsible committees and the public so we can weigh in on whether the chapter is supported. It also means that when the full agreement is reached, it is published with sufficient time for the public and legislators to read and review it. Further, the Congress should be able to hold hearings and make final amendment suggestions that the USTR will then bring back to other countries before the agreement is signed by the president.
These are transformational changes in the goals, purposes and process of trade agreements. To achieve these changes the movement of movements must show solidarity and defeat the TPP, TAFTA and Services Agreement. This show of political power is the only approach to bringing Congress and the president to our perspective.
The next steps for the movement are to organize locally to broaden the movement. We urge people around the world to put in place “Trade Justice Zones” where local governments pass laws and resolutions that make it clear – we will not obey trade agreements that are negotiated in secret without a democratic process. Local communities need to keep control of their sovereignty so they can protect the environment and people in their communities. See e.g. actions taken by Madison and Los Angeles.
The next big push by the Obama administration and Congress will come around the G-20 summit being held in Sydney, Australia on November 15 and 16, during the lame duck session of Congress. This is an opportunity for the world’s citizens to tell the leaders of the world – we oppose rigged corporate trade agreements and want a new approach to trade that puts people and planet before profits.
No doubt, some in Congress will take action to strengthen President Obama’s negotiating position before the G20, perhaps by promising Fast Track will pass during the lame duck or making it look like Congress is moving in that direction. Civil society must take united action across the Pacific and Atlantic just before the summit to show our opposition to rigged corporate trade; and during the summit with a worldwide day of action opposing globalized trade for transnational corporations. People of the world must unite against corporatization and in favor of real democracy.
In the United States, opposition to rigged corporate trade has made these trade agreements increasingly toxic. That toxicity needs to continue to build so that no elected representative thinks they can get away with supporting TPP, TAFTA or the Services Agreement, no matter how good they try to make it sound.
The movement has shown it is capable of educating each other despite a corporate media blackout of these corporate trade agreements. By sharing articles like this one widely we can educate and mobilize a growing mass movement for a new form of trade. To stay informed, take the pledge at our campaign, FlushTheTPP.org.
Now is the time to recommit to not compromising with the corporate-dominated governments that ignore our interests. If we do so, we can stop Fast Track, defeat corporate trade, transform it to a people and planet form of trade and begin to build the new economy essential to humankind and the planet.
This article is produced by Popular Resistance in conjunction with AlterNet. It is a weekly review of the activities of the resistance movement.
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Kevin Zeese, JD and Margaret Flowers, MD are organizers of Popular Resistance; they co-direct It’s Our Economy and co-host Clearing the FOG. Their twitters are @KBZeese and MFlowers8.