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Free Trade and Economic Growth instead of Democracy and Ecology
by Thilo Bode, Christopher Stark and Sahra Wagenknecht
Email: marc1seed (nospam) yahoo.com
14 May 2015
The TTIP agreement between the EU and the US creates a parallel private arbitration system where corporations can sue states for lost profits and decisions are irrevocable. Labor and environmental regulations can be invalidated as “takings” or “indirect expropriation.” Public interest laws can be chilled or invalidated as infringements of the “human right to profit” of foreign investors. Fast Track, TPP and TTIP Should Be Scrapped!
DEMOCRACY INSTEAD OF TTIP
By Sahra Wagenknecht
[This article published in Frankfurter Rundschau is translated from the German on the Internet, http://www.fr-online.de.]
The transatlantic trade agreement TTIP is a concrete litmus test for democracy. Fortunately there are strong public protests against this deal.
The EU now suffers under a deficiency in democracy. For example, the EU parliament has no right to propose laws and guidelines. The European commission that has this right of initiative wants to completely amputate the parliament through economic associations.
In the framework of the transatlantic trade agreement TTIP, a regulatory council should be established to harmonize all laws with European and US-American corporate interests. This cannot dissolve the dangers for employees, the environment, consumer protection and health. With TTIP, we lose the basic democratic right to form our future. Before a legal draft can reach the hands of a delegate or the general public, it would already have been coordinated with the US government and corporate lobbyists.
If a law is passed that does not suit a company, the company would have the possibility of suing the government for compensation before an arbitration court. Limits are hardly set to the lawsuit-rage of corporations: minimum wages, an import-prohibition for toxic substances, laws against tax dumping, shorter running times for nuclear power plants and a moratorium for dangerous fracking. Corporations have already filed lawsuits against all this – usually successfully – on the basis of the investment- and trade agreement.
Businesses are granted this special right to sue in the already negotiated agreement of the EU with Canada (CETA) which is regarded as a blueprint for the TTIP. States cannot appeal the judgments.
For all these reasons, the German Left Party (DIE LINKE) rejects both TTIP and CETA. The unions, the Greens and the SPD are predominantly against them. On the other hand, economics minister Gabriel wants to approve CETA and TTIP and has insulted Germans on account of their hesitations as “rich and hypocritical.”
CETA and TTIP are concrete touchstones for our democracy. For democracy’s defense, we need strong movements, unions and critical media to indict politicians in bondage to corporations.
Fortunately, around 500 public protests against TTIP are taking place today in 30 countries. 1.7 million signatures were collected against TTIP and CETA.
TTIP PREVENTS URGENTLY NECESSARY IMPROVEMENTS OF OUR STANDARDS
Interview with Thilo Bode
[This interview published 3/13/2015 is translated from the German on the Internet, http://www.heise.de.]
At the end, ”Eat or die” – the consumer advocate Thilo Bode on the transatlantic free trade agreement and the influence of national parliaments
Thilo Bode, founder of the consumer protection organization foodwatch  published a book  whose title “The Free Trade Lie” shows how he positions himself. Bode criticizes  a targeted disinformation policy connected with the agreement: “exaggerated advantages and hidden risks.” Telepolis spoke with the free trade agreement critic since the TTIP information policy leaves open many questions.
Why is TTIP always associated with chlorinated chicken?
Thilo Bode: At the beginning of the debate, the chlorinated chicken was used as a catchy example but doesn’t work as a symbol for the disadvantages of TTIP. I do not regard chlorinated chicken as dangerous to health and do not assume it will be allowed in Europe. However criticism of TTIP is not overcome if chlorinated chicken are barred. Again and again politicians try to calm us with the promise that our standards in Europe and Germany will not be lowered.
No all-clear signal is in order even if no one needs to fear that hormone-treated beef or genetically-altered food will land on our plates without labeling. Quite the contrary! The great danger of TTIP is that the urgently necessary improvement of our standards, for example better livestock breeding or an expanded genetically-engineered labeling will not be possible any more if the TTIP rules stand in the way.
ARBITRATION COURTS AND THE POWER OF PARLIAMENTS
Doesn’t TTIP bring more protection for the consumer by warning that soaking cats should not be in the microwave?
Thilo Bode: You are hinting at the partly absurd warnings with which US firms want to protect themselves from costly compensation lawsuits. Effective legal consumer protection has other priorities as we see it. We need a right to collective lawsuits that would give consumer organizations an effective possibility for taking actions against anti-consumer regulations. That absurd warnings or other things could spill over the Atlantic to Europe is not central in the criticism of TTIP.
Very different aspects with effects on democratic and constitutional procedures are crucial – for example the controversial arbitration courts that enable businesses to sue states when these states enact public interest laws.
Like the free trade agreement with South Korea, TTIP does not need to be ratified by all partners to take effect provisionally. Can this automatism be eliminated (or is all resistance pointless)?
Thilo Bode: How the TTIP is decided must be explained first. In the EU, the Council of Europe must first concur, the governments of the 28 member states. Then the text goes to the European parliament where the delegates can only vote “Yes” or “No.” The parliamentarians cannot change the text any more.
A lengthy ratification process must be started if the agreement is a “mixed agreement” that encroaches on nation-state authority. The national parliaments in all 28 EU countries will vote on TTIP. The German Bundestag must also approve or reject and cannot make changes in the text. Thus it is wrong to assume that the national parliaments will have substantial influence on the contents of the TTIP. Eat or die, it is said at the end. The delegates can approve an agreement or must answer for an inter-continental agreement running aground because of their vote.
A “mixed agreement” can be carried out provisionally before the delegates have even raised their hands. Again and again politicians point out TTIP could “take effect” after parliamentary decisions. This formulation is correct in a formal legal sense. On the proposal of the European commission, the European council can decide that most regulations of the agreement are valid before the ending of the ratification procedure.
On the other hand, only a broader public protest helps so the TTIP negotiations will be broken off and a new negotiation resolved by the European Union!
Is there a market in North America that is marked by convenience products for regional artisan European farm products?
Thilo Bode: In farming, there are economic interests that are hard-as-nails on both sides of the Atlantic. For example, Americans want to export beef. Milk products are especially valued in export-oriented German farming. Regional farm products of smaller suppliers play a trifling role. The share of “craft” food is not very high in Europe.
The resistance of French cultural artists helped against MAI (Multilateral Agreement on Investments, imploded in 1998). Why is resistance against TTIP coming mainly from Germany?
Thilo Bode: The better people are informed about TTIP, the greater is the resistance. In Germany, we are having a broad debate over the planned agreement – on account of the work of non-governmental organizations. The resistance is relatively strong. TTIP has enormously lost approval in the German population. Only 39% of citizens regard TTIP as “a good cause,” a representative survey of the TNS Emnid opinion research institute commissioned by foodwatch reported in February.
In October 2014, 48% supported the trade partnership compared with 55% of citizens who supported the partnership in February 2014. The resistance will be even greater in other countries when the debate goes further and reaches more people.
Will standards only improve in the future in agreement with the US trading partner?
A cancellation time limit of 20 years was provided with MAI. For TTIP, permanence or irrevocability is emphasized. Is there an escape?
Thilo Bode: TTIP is conceived as a “living agreement” in the sense of a permanent regulatory cooperation between the EU and the US. Thus the transatlantic traded partnership should not be rigidly fixed in an agreement. Both partners to the agreement are obliged to scrutinize their legislative intentions whether they have effects on transatlantic trade- and if so discuss the plans with the partner to the agreement.
In other words, before the EU passes a law that has effects on transatlantic trade, it must seek dialogue with the US and strive for a common solution if the EU and the US agree on the TTIP, and mutually acknowledge certain standards for instance in labeling agricultural genetic engineering or livestock breeding, then we can only improve these standards in the future in agreement with the US trading partner. A unilateral change is not possible any more if we do not consciously break an international agreement and risk trade sanctions.
Are not free trade agreements like TTIP massive protectionism against developing and threshold countries?
Thilo Bode: A transatlantic free trade agreement could have terrible consequences for poorer countries. Economists expect drastic income losses for people in developing countries. In a study undertaken for the Bertelsmann foundation, the ifo-Institute assumed that “dramatic” losses for developing countries are possible.
According to the arrangement of the TTIP agreement, the researchers calculated that people in countries like Guinea will have to accept a real-income loss of 7.4% or people in Botswana with a minus 4.1%. TTIP could become a genuine poverty program for the poorest countries of the world. However neither the German government nor the EU commission speaks about that.
FREE TRADE AND ECONOMIC GROWTH INSTEAD OF DEMOCRACY AND ECOLOGY
An Analysis of the EU-negotiating Position in the TTIP Agreement
By Christopher Stark
[This article published on 3/30/2015 is translated from the German on the Internet, http://www.heise.de/tp/druck/mb/artikel/44/44487/1.html.]
Since 2013 top politicians from the US and the EU have been negotiating an inter-state agreement called the Transatlantic Free trade agreement (TTIP). The agreement should contain different measures for free trade, adjustment of standards and liberalization of public economic areas. The alleged goal of the agreement should be more economic growth. Jobs should be created. In the following, the negotiating position of the EU delegation  published by the Greens  will be analyzed. Why this agreement is being pushed should become clearer.
The title page reveals the character of the negotiations on the TTIP agreement. The secrecy notes show that the negotiating position of the EU is non-transparent. The EU obviously does not want civil society actors or the population learning about the details and exercising influence.
This is a clearly undemocratic process since all people in a parliamentary democracy must be informed about essential procedures so voting decisions can be made in their interest and in the interest of the whole society. In this sense, this agreement contradicts basic democratic standards. The interests of very definite groups like transnational corporations are represented.
THE INTENTIONS OF THE TTIP
Ultimately the TTIP agreement tries to enforce existing WTO rules for maximum liberalized trade and total privatization of all parts of social development.
“The agreement will provide the mutual liberalization of trade with goods and services and rules on trade-referring questions. Ambitious goals are pursued that go beyond the existing WTO obligations.”
“With the agreement, the goal is expanding trade and investments between the EU and the United States by using the unexhausted potential of a real transatlantic market, better market access and a greater regulatory compatibility opening new economic possibilities for creating jobs and growth.”
“The obligations resulting from the agreement will be binding on all public or state levels.”
It is no wonder that the document has been kept secret. The well-known WTO repertoire of preventing “discrimination, domestic treatment and most-favored treatment” should be expanded with “protection from direct and indirect expropriation including the right to prompt, appropriate and effective compensation.” The above-mentioned words “protection” and preventing “discrimination” have positive connotations. This should not obscure the fact that economic actors and activities are protected, not people.
“Full protection and comprehensive security of investors and investments” is essential. An unhindered transfer of capital and payments by investors should be guaranteed through other effective protective regulations like the “umbrella clause.”
“The agreement consists of three main components: a) market access, b) regulatory questions and non-tariff barriers and c) rules.”
There is no emphasis on protecting humans from harmful products and political incapacitation. Protection of businesses from indirect expropriation is central. This can mean many things. As a rule, such a formulation serves as a basis for businesses to take legal action against state regulations to restrict conduct damaging the environment or health.
The agreement claims to change totally and comprehensively the political-economic conditions effective in the past, like the unhindered transfer of capital. This demand contradicts the financial transactions tax (Tobin tax) as urged since the beginning of the financial crisis. This tax should help prevent further major financial crises. But this socially and economically important political measure is now permanently prevented by the TTIP agreement.
APPEASEMENT RHETORIC AND GEOPOLITICS
The massive criticism that opposes the TTIP negotiators from the whole spectrum of non-governmental organizations, unions, opposition politicians, civil society actors and persons of the public life since the beginning of the negotiations is anticipated with appeasement rhetoric…
“The parties to the agreement promise to communicate with all relevant actors including private enterprise and civil society organizations.”
“Questions of transparency are treated in the agreement. To this end, there is an obligation to consult with representatives before introducing measures with effects on trade and investments.” “The commission will issue regular reports providing transparency on the course of the negotiations to the committee on trade policy.”
These sentences on the apparent inclusion of civil society organizations and the supposedly desired “obligation to consult interested parties before introducing measures” are obviously rubbish as the secret negotiations and the confidential status of these papers prove. What is the point for civil society to be consulted when the agreement is already resolved and the essential decisions already made? The word transparency may be repeated 13 times on 18 pages but does not become credible by repetition.
The range of the agreement is obscured when it says: “The agreement will contain regulations on trade and trade-relevant areas.” Comprehensive privatization measures or regulatory adjustments as demanded in TTIP are not really trade policy. A great palette of neoliberal political measures are enforced under the mantle of supposed trade-reforming regulations. All possible areas of society that were publically regulated in the past like the education system, vital public necessities and even the democratic structures are partly suspended by arbitration courts.
Even if only trade were involved, “necessary measures” could be taken in the areas of health, security, labor, consumers, environment and promotion of cultural diversity as in the UNESCO agreement to cushion negative effects of the agreement.
Alongside minimizing concrete negative effects for the population, the diminished state sovereignty is justified by US-government and economic lobbies. Thus the “EU and member states should be allowed to take and carry out measures necessary for pursuing legitimate public interest goals like social, environmental and security goals, the goal of stability of the financial system and the goal of public health and security in a non-discriminatory way. The agreement should take account of the policy of the EU and its member states to promote and protect cultural diversity.”
“Legitimate public interest goals” are supposedly acknowledged after naming investor interests. How the agreement allows for standardization of “cultural diversity” remains incomprehensible. Standardization of the existing diversity is the target of the agreement. The addition, public interest goals may be pursued by partners to the agreement, is supplemented by the addition “in a non-discriminatory way.”
This supplement gives businesses legal possibilities for taking action against public attempts at regulation. Thus a US meat producer despite deviating “legitimate public interest goals” could sue in an arbitration court against a “discrimination” of the EU if beef treated with growth hormones can be sold in the US but not in the EU. The situation is similar for a genetically-engineered seed producer whose products are not approved in the EU because of ecological objections. The paragraph altogether sounds like a generous concession of EU bureaucrats to critics even if the concession is weakened by the aforementioned addition.
“The promotion of European protective standards is planned.” The vagueness of this formulation is manifest. One could formulate: “The EU protective standards must be considered in the framework of the TTIP agreement.” The allegedly desired protection of nature and labor rights is invoked to whitewash or gloss over this delicate principle.
[Labor Rights] “The agreement will also include mechanisms supporting the promotion of dignified work through effective conversion of the core lab or norms of the International Labor Organization (ILO) in the sense of the 1998 ILO Declaration.”
The aforementioned ILO agreement contains absolute minimum standards that are already in effect in the EU and the US. This paragraph is absolutely meaningless and only serves to appease critics.
[Sustainability and Ecology] [“Sustainable development”] “The partners to the agreement cannot promote trade or foreign direct investment by lowering internal legal regulations and norms in environmental protection, labor law or health protection and security on the job.”
Since the themes sustainability and ecology are in vogue, they are also named in the TTIP agreement – irrespective of the actual goals. Ultimately all this is only a question of perspective. The treatment of chicken with harmful chlorine allowed in the US and prohibited in the EU could be judged a violation of hygienic standards and thus forced against the will of consumers in the EU. The decision-making sovereignty disappears here from the power realm of the real sovereign, the citizen. For environmental protection and labor rights, no agreement is needed because national laws are completely adequate.
Adjusting standards is another aspect that should lead to more economic growth. This seems understandable for purely technical standards as for transport…
“Technical regulations, norms and conformity-evaluation procedures are adjusted in the framework of the WTO agreement on technical trade barriers.”
Standardization in the realm of the economy and trade is find and good… For decades, people in the United States have refused to orient themselves in the international standard in relation to the metric measuring system. It should not be expected that anything will change here through the TTIP agreement. What good is such an agreement – from the view of the economy – if it remains ineffective in central points?
Adjusting standards conceals a very concrete danger for European citizens. More genetically-modified plants will be grown on European fields if the standards of risk assessment are adjusted in relation to green genetic engineering. There will be negative effects like the contamination of plants of eco-farming, a higher use of pesticides and an accelerated dying of species.
The TTIP strategists know about the potential resistance that can be aroused in the population by such a policy and therefore struggle for credibility by referring to alleged “common values.”
“In the preamble, we are reminded that partnership with the United States is based on common principles and values,” […] “common values in areas like human rights, basic freedoms, democracy and the rule of law […] and international security.”
The emphasis on supposed common values between the US and the EU sounds understandable on one side and not understandable on the other side. “Common values in areas like human rights” and “rule of law” can be recognized in the wider sense when the value canon between the US or EU and Saudi Arabia is compared. Nevertheless there is no essential consensus between Europe and the US about crucial moral and ethical principles like the barbaric death penalty as applied in many US states. The tortures carried out in the US, the illegal deprivation of freedom of alleged terrorists in Guantanamo Bay and the illegal drone war in Pakistan make us question “common values.” Thus the pretended value consensus is more fragile and less unequivocal than presented here.
Obviously there is a measurement with two kinds of standards in comparison with other trading partners – when the German chancellor always decries the missing human rights in the China visits and criticizes neither the death penalty nor torture prisons in the US. There is no word about excessive economic spying or the monitoring of European citizens, politicians and digital infrastructure by the US secret services. This is not a strong sign of common values.
The basis for consensus in relation to protectionist trade policies is very thin on both sides. Protection of local production and goods is always presented as a great problem by free trade dogmaticians – even if protectionism makes sense economically in some cases. On the surface, all protectionism is rejected but protective policies are in no way excluded. This is formulated in a very contradictory way in the paper. “A better protection and a stronger acknowledgment of the geographical specifications of the EU” should be guaranteed through the agreement.
The “geographical specifications of the EU” are very sensible for everyone who does not want to buy and eat tasteless parmesan cheese from Michigan. However these specifications should be rejected on principle from the view of WTO and free trade champions. Like the more rationalistic, culturally motivated “Buy American” campaign, Americans always persist in giving priority to goods produced in the US in shopping or in investments over what is “foreign.” On the EU side, local contents and local production are urged.
Interestingly a backdoor as big as a barn door is built into the agreement. The agreement should contain a bilateral protective clause so a party to the agreement can withdraw partly or completely if considerable harm is caused or threatened a native economic branch by the increased imports of a good from the other party to the agreement by the most far-reaching liberalization obligations. “The right of the parties to judge and master risks according to the protective level regarded as necessary by each side” is essential.
The liberalization of markets can be cancelled at any moment and in relation to every economic branch with such a protective clause. This sentence shows that the agreement hardly makes any sense and that people have great anxiety about this agreement!
PRIVATIZATION UNDER THE MANTLE OF FREE TRADE POLICY
Privatizations are part of the core repertoire of neoliberal institutions like the World Bank, the WTO, the International Monetary Fund and the European Council. The TTIP agreement should guarantee that the last exceptions are now finally abolished and resistance against privatizations broken.
“The agreement should aim at acceptance of the rules on competition policy, including rules on cartels, mergers and public subsidies. The agreement should make allowances for state monopolies, state enterprises and businesses with special or exclusive rights.”
This first formulation from the TTIP negotiation foundation shows how public control and public enterprises are rejected by the choice of words. “Cartels” and “state monopolies” are emphasized. Core areas like educational institutions, universities and schools are ultimately also privatized and opened up to the markets. This perspective is alarming in the light of already fatal economization tendencies in the education system and genuine dangers for free and critical education.
For free trade dogmatists, state monopolies should always be rejected as economically inefficient. The fact that schools should be intellectually and didactically capable and not efficient is ignored. That public waterworks and sanitation facilities can be built very efficiently even without competition is also ignored. Whether competition makes any sense is not seen. Different suppliers entering in competition makes little sense in the water supply with a uniform infrastructure. The product water always remains the same. Poor and rich persons should both have the best possible water quality.
Consensus (hopefully) also rules among the TTIP negotiators. According to TTIP, all waterworks and all other public structures should ultimately be privatized. This has already happened to prisons in many countries. Even public authorities are partly privatized… Many Bertelsmann lobbyists work for the TTIP behind the scenes and the partial aspect of total privatization.
WHAT IS CENTRAL TO THE TTIP NEGOTIATORS
“The service industry will be concretized on the highest liberalization level for all sectors and kinds of production. New market access possibilities will be realized by tackling long existing obstacles to market access.”
PROGRESS (= GENETIC ENGINEERING, NUCLEAR POWER AND FRACKING) AND ARBITRATION COURTS (=DE-DEMOCRATIZATION)
TTIP is not an agreement that is primarily committed to understanding among nations. The vehement attempts to enforce this agreement against all civil society resistance have a clearly economic motivation. Economic- and job-growth should occur in the US and Europe. All other aspects have only little relevance for the negotiating politicians. The following statements also demonstrate this.
TRADE-REFERRING ASPECTS OF ENERGY AND RAW MATERIALS
“The agreement will include rules on the trade and investment-aspects of energy and raw materials. The negotiations should aim at guaranteeing an open transparent and calculable business environment in energy affairs and an unrestricted and permanent access to raw materials.”
This paragraph aims rather obviously at enforcing fracking already widespread in the US and often rejected in Europe (unconventional coil- and gas production as environmentally hazardous). On account of the very open formulation, we can assume TTIP will be formulated in a benevolent way toward the mammoth energy companies with the focus on nuclear and coal power. States are already sued today before WTO arbitration courts by energy companies and obliged to high fines – on account of alleged discrimination or prevention of investments – mostly for ecological reasons. In 2009 the Federal Republic of Germany was ordered to pay a high fine in the millions to the Swedish coal- and nuclear company Vattenfall by such a secret arbitration court.
The TTIP arbitration courts will have more power than the WTO arbitration courts. If the existing arbitration courts were enough, there would be no reason for further arbitration courts between the US and the European Union in the scope of the TTIP agreement.
The analyzed EU paper says on the arbitration courts: “The agreement should provide an effective mechanism for settling disputes between investors and the state.” “Transparency,” “independence” and “calculability” of the arbitrators are vital. The goal is guaranteeing the highest possible measure of legal security for European investors in the US. To this end, the agreement must contain a “flexible mediation process. In the framework of this process, relieving dispute settlement in questions of non-tariff obstacles is given special attention.”
Non-tariff means areas that go far beyond tariffs and export and import restrictions. The privatization efforts are rejected by the majority of the population and environmental conditions are only annoyances for companies.
Investment protection and arbitration courts are two words with a very positive sound. The economy should be protected from the supposed injustices “inflicted” by states and societies. “Arbitration court” sounds like a team sport where the rules are monitored by an arbitrator. Obviously no arbitration court can be governed by justice if its own existence is not democratically legitimated. Supposedly arbitration courts should be necessary for environment protection.
“Preservation and sustainable management of legitimately acquired natural resources like timber, wild plants and animals and fish stocks and trade with these resources should be central. In the agreement, monitoring the enforcement of these rules is planned by means of a dispute-settlement mechanism in which civil society is also tied. The economic, social and ecological consequences of the agreement will be investigated by an independent sustainability test.”
More or less effective means and rules guarantee a sustainable management of natural resources both in the European Union and in the United States. Why the TTIP agreement is necessary is unclear. This circumstance gives rise to mistrust. Connecting environment- and sustainability in the non-state legal system of arbitration courts means conflicts settled so these groups can largely elude the grasp of civil society and democratic processes. Politics loses creative power when it is open to attack by arbitration courts. The population loses democratic possibilities of joint determination when crucial future questions are negotiated in the scope of inter-state “dispute-settlement mechanisms.”
This model for the negotiating position of the EU delegation in the TTIP negotiations obviously did not come from civil society. The handwriting of economic lobbies is unmistakable. From a European perspective, the document is a manifesto of weakness – of our own political stripping of power.
TTIP is another attempt at enforcing the neoliberal agenda after many failed and contested negotiations like “ACTA” between the US and Europe (copyrights), the CETA agreement negotiated between Canada and the EU (free trade) and the effective WTO rules. Protection of intellectual property have been codified since 1995 in the WTO, the GATS agreement, questions in trade with services and in the WTO – TRIPS agreement, The Transatlantic Free trade Agreement TTIP is a new attempt at enforcing business interests that oppose the public interest. The past agreements of the social market economy and the partly socialist-leaning ideas in Europe could not deliver the death-blow.
With the Transatlantic Free Trade Agreement TTIP, civil society is once again forced in a defensive battle without making progressive alternative suggestions for a more humane society, a society in which the intellectual, health care and participative well-being of humans stands with its desire for a life worth living and a functioning order are at the center. Instead materialist values are underlined, more economic growth and perhaps a few additional jobs as a killing argument against justified substantive criticism.
The alphabet is long and allows many other combinations of letters as abbreviations for lobby-agreements against the interests of the population. We and the civil society must resist and come to parallel forms of approval and decision-making with positive social goals and conversion possibilities.