I attended a local meeting about TTiP and then launch of Scotland Against TTiP in Glasgow last year, these were my thoughts on the subject .
I was struck by the lack of any real knowledge some people have on the subject. That said, I am in no way a fountain of all knowledge either, (but thanks to the internet and The Morning Star, I have dug out the info) and am prone to make the odd mistake or wrong conclusion. But I have been pondering the subject for some time. I first came across the treaty about two years ago and have followed the proceedings on and off ever since. What has struck me most is that people are viewing it in isolation, or worse only concentrating on the NHS aspect. It really needs to be viewed and encompassed within the wider ongoing neo-liberal agenda. So here are my, as yet not fully formed, thoughts on the subject.
Over the last 30 years Neo-Liberal Capitalism has been hell bent on returning the mode and means of production to an early 20th century form.
Neo Liberal Capitalism is the real enemy.
Thatcher once said in a speech,
“It is our job to glory in inequality and see that talents and abilities are given vent and expression for the benefit of us all.”
What did she mean? I think it is this: If the competitive system is “given vent” as the neo-Liberal system insists it should, society will be the better for it.
The good old “Trickle Down Theory.”
This dictates that people are unequal by nature. But this is good “because the contributions of the well-born, the best-educated, the toughest, will eventually benefit everyone.”
“Nothing is owed to the weak or the poorly educated, what happens to them is of their own making and is never the fault of society.”
On the other hand we have:
Karl Polanyi (Economist) who said
“To allow the market mechanism to be the sole director of the fate of human beings and their natural environment…would result in the demolition of society”
From the 30’s to the 70’s Neo-Liberalism as an ideology was held within a very small right wing minority.
You go back to the Great Depression in the 1930s that created what economists called a “crisis of overproduction.” Whereby, Capitalism had been expanding by increasing productivity and decreasing wages and creating deep inequalities. Average wages fell and working people could not afford to consume the products and this created a glut of goods that could not find a market. Somewhat similar to now!
To solve this crisis and prevent it recurring in the future, economists of the time, led by John Maynard Keynes and Harry Dexter White, suggested that the state should get involved in regulating capitalism.
This became the Keynesian Social Democratic model.
They argued that by lowering unemployment, raising wages, and increasing consumer demand for goods, the state could guarantee continued economic growth and social well-being. A compromise between capital and labour that would prevent further instability.
In effect if you give the less well paid an income increase, they will spend the money locally on goods and products, thereby creating demand, jobs and growth.
If you give the richest 10% an increase in income, they will just bank the extra or invest in offshore accounts etc.
The Keynesian principles were widely applied after World War II. Policymakers believed that they could use these principles to ensure economic stability and social welfare around the world, and thus prevent another world war.
They developed the IMF, and the WTO, in order to smooth out any balance of payment problems and to foster reconstruction and development in Europe. Neither organisation was ever intended to have any influence on a countries economic decision making.
So in the UK, we gained the:
NHS, Social Security, nationalisation of Industry, Transport, Energy etc. This worked as planned throughout the 1950s and 1960s. However, by the early 1970s there was created a combination of high inflation and economic stagnation. Inflation rates soared from about 3% in 1965 to about 12% in the 70’s.
Economists argue about the causes:
In the US the high cost of the Vietnam War left the US with a deficit, the first of the 20th century, where worried international investors began to offload their dollars, which set inflation rates rising.
Nixon scrambling to pay for the spiraling costs of the war, un-pegged the dollar from the gold standard in 1971: the price of gold skyrocketed while the value of the dollar plummeted.
The oil crisis of 1973 drove prices up and caused production and economic growth to slow down and led to stagnation.
On the other hand conservative economists blamed this crisis as a consequence of high taxes on the wealthy, too much economic regulation and inefficient nationalised industries.
The 80’s and beyond:
Thatcher in the UK and Reagan in the USA, were responsible for promoting and implementing the Neo-Liberal free market thinking and philosophy into our lives.
7 key features of this are:
1. Free market competition is the only way to produce growth and efficiency, with free, lightly regulated competition between:
o The individual
“I think we’ve been through a period where too many people have been given to understand that if they have a problem, it’s the government’s job to cope with it. “I have a problem, I’ll get a grant.” “I’m homeless, the government must house me.” Thatcher.
“They are casting their problem on society. And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first.” Thatcher
2. Free movement of labour, goods, services and finance
o They say: Only by freeing up the rich, the financial markets and corporations can economic growth and stability be achieved.
o What it actually means: Allows the movement of cheap labour from one country to another, thereby creating a race to bottom for wages and Terms and Conditions.
o Gives companies the ability to freely relocate their businesses to a more profitable less regulated country.
o Allows companies to move its finances to a country with a more “liberal” taxation policy.
o Amazon, Vodaphone, Google, Starbucks etc, etc, etc.
o Gives banking and financial systems the ability to exploit tax loopholes, create offshore banks, non-transparent and lighter regulation, etc, etc
• 3. The “trickle down theory”: Less taxation and regulation on corporations and the rich, results in more investment and therefore more jobs and prosperity.
o In 2012 it was reported that companies in the UK were sitting on between 650 and 750 billion pounds
Since the crash of 2008: The Footsie 100 has reached record levels.
The gulf between the rich and poor has achieved its greatest level since Victorian times.
The richest 1000 people have doubled their wealth.
When is it going to start trickling down?
4. Privatisation of all public services and national industries
o Neo-Liberal theory states that all public services and industries are inherently inefficient.
o The public sector must be brutally downsized because it does not and cannot obey the basic law of competing for profits or market share.
o Privatisation is one of the major economic transformations of the past thirty years. The trend began in Britain and has spread throughout the world.
o They say: Only the free market has the ability to efficiently run and maintain services and industry.
After the war infrastructure and public services required very large investment outlays. Steel, Coal, Shipbuilding, Railways and Power grids etc. That’s why public monopolies were the obvious solution. The privateers held onto their money and sat back and allowed this public investment and nationalisation. Safe in the knowledge that at some point in the future privatisation would be on offer. Why should they invest when the public purse was going to create the very industries and services for them to later plunder?
The UK in 1984: Public companies contributed over 7 billion pounds to the treasury. Where is this money going now? To the privateers and investment bankers.
What inevitably happens with privatisation?
• Reduction in staffing
• Reduction in wages
• Reduction in terms and conditions
• Reduction in pensions
• Reduction in H&S
5. De-regulation of the financial sector
• 2008, see where that got us.
This in reality should have been the death of Neo-Liberalism. But it has been allowed it to re-generate itself, to flourish and multiply. It is still the inherent ideology of all the main political parties.
It has transformed a crisis of capital and banking into a crisis of public spending and welfare, where we foot the bill and suffer the consequences.
• 6. Creation of a fully flexible workforce
o A necessary by product is the need to maintain mass unemployment. This has been the case since the early 1980s.
o Destroy Unions: Graph 1
o Zero hours contracts
o Increase in the use of agency workers and temp. staff
o Less “Red Tape” i.e. reduced H&S, reduced terms and conditions etc
o Reduced wages: Graph 2
“There are significant differences between the American and European version of capitalism. The American traditionally emphasises the need for limited government, light regulations, low taxes and maximum labour-market flexibility.” Thatcher
7. Reduction of the Welfare State
o Universal Credit
o Bedroom tax
o Destruction of social housing
o Benefit cap
o Social cleansing of the more affluent parts of our cities and towns
o Benefit Sanctions
o Increase in food banks
o Alienation of the unemployed, disabled and the poor
The whole “We are for hardworking people” that is now being spewed from all parties. No longer is there talk of mass unemployment. It is all “we now have more people in employment than ever before.” “We have created x number of jobs.”
What type of job, at what pay and what terms and conditions, are never disclosed. This is just more ammunition with which the unemployed and disabled can be further stigmatised.
And so the onslaught continues. Once the US and the EU finalise the Free Trade agreements, they are working on, will we see the culmination in Neo-Liberal policies being implemented throughout Europe, North America, the Pacific and beyond.
This will be the last nail in the coffin of the Social Democratic Keynesian experiment. All public services and industries will be wide open to the free market and therefore privatisation. All welfare spending will face continued reductions.
The biggest problem we do face, is the fact that all the mainstream political parties, Tory, SNP, Labour and Lib/Dem, are all pro EU, with the EU as the guiding hand of the Neo-Liberal agenda on this side of the Atlantic.
We are faced with the greatest attack on working people since the 1920’s.
And so to the trade deals:
The Trans-Pacific Partnership (TPP) is a proposed regional regulatory and investment treaty. As of 2014, twelve countries throughout the Asia Pacific region have participated in negotiations on the TPP: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam.
The proposed agreement began in 2005 as the Trans-Pacific Strategic Economic Partnership Agreement. Participating countries set the goal of concluding negotiations by the end of 2012, but disagreements on issues such as agriculture, intellectual property, services and investments have caused negotiations to continue into the present, with the last round of talks in July 2014. Implementation of the TPP is one of the primary goals on the trade agenda for the Obama administration.
On 12 November 2011, the nine Trans-Pacific Partnership countries announced that the TPP intended to “enhance trade and investment among the partner countries, to promote innovation, economic growth and development, and to support the creation and retention of jobs.”
Although the text of the treaty has not been made public, WikiLeaks has published several documents since 2013. A number of global health professionals, internet freedom activists, environmentalists, organised labour, advocacy groups and elected officials, have criticised and protested against the treaty, in large part because of the secrecy of negotiations.
“Acceptance of the Trans-Pacific Partnership pact currently being considered will be the equivalent of signing a forced arbitration clause on behalf of the entire world. Like all these trade treaties, its basic thrust is anti-union.”
Transatlantic Free Trade Area (TAFTA) to create a trans-Atlantic free-trade area covering Europe and North America. Such proposals have been made since the 1990s.
In 2013 another agreement between the United States and European Union has been under negotiation, the Transatlantic Trade and Investment Partnership (TTiP). Once completed, if combined with free trade agreements with Canada, Mexico and the European Free Trade Association. It could form a free trade area covering the whole of both continents.
TTiP is being thrashed out between EU and US officials, and promises to amount to an extra £98 billion a year to the EU and £78 billion a year to the US economies. The deal is being celebrated all around by the Tories, Labour, SNP and Lib Dems for its potential job creation and financial gains.
These negotiations are held, again in secret, in week-long cycles, alternating between Brussels and Washington. The negotiators had hoped to conclude their work by the end of 2015.
Both TPP and TTiP agreements are designed in reality to isolate the BRICS nations. (Brazil, Russia, India, China and South Africa) and to strengthen and enhance Americas grip on the global markets.
There are of course 100’s of existing trade agreements between countries, such as:
Transatlantic Free Trade Area (TAFTA) Europe and North America
European Free Trade Association (EFTA) Iceland, Liechtenstein, Norway, and Switzerland
North American Free Trade Agreement (US, Canada & Mexico)
Canada–European Free Trade Association Free Trade Agreement (Canada & EFTA)
Comprehensive Economic and Trade Agreement (Canada & EU)
Free Trade Agreement between Mexico and the European Union (Mexico & EU)
European Economic Area and bilateral Swiss treaties (EU & EFTA)
TTiP is the latest and potentially the most dangerous, for workers’ rights and democracy within Europe.
They say the purpose of the Transatlantic Trade and Investment Partnership is to remove the regulatory differences between the US and European nations. The US and EU together represent 60% of global GDP, 33% of world trade in goods and 42% of world trade in services.
The growth of the EU’s economic power has led to a number of trade conflicts between the two powers; although both are dependent upon the other’s economic market and disputes affect only a small percentage of trade between them. A free trade area between the two would represent potentially the largest regional free-trade agreement in history, covering 46% of world GDP.
TTiP’s supporters aim to liberalise one-third of global trade which is argued will generate millions of new jobs. I like this word liberalise. It sounds very fair and in no way threatening. In reality this liberalisation means attacks on regulations, wages, terms and conditions, employee rights, environmental standards and democracy.
The message is that the trade deal is about “delivering growth and jobs” and will not “undermine regulation and existing levels of protection in areas like health, safety and the environment”.
From the outset, the transatlantic partnership has been driven by corporations and their lobby groups, who boast of being able to “co-write” it. Persistent digging by the Corporate Europe Observatory reveals that the commission, by 2014, had held eight meetings on the issue with civil society groups, and 100’s with corporations and their lobbyists. Unlike the civil society meetings, the meetings with the corporations and their lobbyists, have all taken place behind closed doors and have not been disclosed.
Those in opposition say:
The UK government could be sued for risking company profits through the ISDS system.
All public services would be open to privatisation, including the NHS.
Food regulations will be watered down.
Unions are concerned that the weakened regulations will allow bosses to reduce wages and labour rights will suffer.
A race to the bottom in wages and Terms and Conditions will ensue.
Environmental standards will be undermined.
This is just the tip of the Iceberg
TTiP is divided into 15 specific working groups, each covering different areas. The scope of TTiP is vast but according to the leaked information the most prominent points are:
• The first aim is to eliminate, as far as possible, all customs duties between the EU and the US. This is already practically achieved, except in the agricultural sector where they remain steep.
• The second aim is to reduce, or even to eliminate, what the specialised jargon refers to as non-tariff trade barriers. This refers to the constitutional and legal norms, rules and regulations liable to limit the scope of economic competition, defined here as a supreme, inalienable fundamental freedom. These norms can be of any type: ethical, democratic, legal, social, health or environment-oriented, financial, economic, technical.
• The third objective is to enable private firms a right of litigation against the laws and regulations of the various States, whenever these firms feel that these laws and regulations represent unnecessary obstacles to trade, access to public markets, investment and service-providing activities. This litigation will no longer be enacted through national jurisdictions, but through private arbitration structures.
The 28 governments will then have to approve the negotiated agreement in the EU Council of Ministers. At this point, the European Parliament will be asked for its decision. It is empowered to approve or reject it. A controversy has arisen on the issue of whether the national Parliaments should also have to ratify this agreement.
Investor-state dispute settlement (ISDS) is an instrument that allows an investor to bring a case directly against the country hosting its investment, without the intervention of the government of the investor’s country of origin. A coalition of over 200 environmentalists, labour unions and consumer advocacy organisations on both sides of the Atlantic sent a letter to the USTR and European Commission demanding the investor-state dispute settlement be dropped from the trade talks, claiming that “Investor-state dispute settlement is a one-way street by which corporations can challenge government policies, but neither governments nor individuals are granted any comparable rights to hold corporations accountable.”
As of Friday 29th May 2015, the EU Voted to pass the bill to the next stage, including a slightly amended ISDS clause. ISDS is already being used, through existing trade agreements, to kill regulations protecting people and the planet.
The Australian government, after massive debates in and out of parliament, decided that cigarettes should be sold in plain packets, marked only with shocking health warnings. The decision was validated by the Australian supreme court. So, using a trade agreement Australia struck with Hong Kong, the tobacco company Philip Morris has asked an offshore tribunal to award it a vast sum in compensation for the loss of what it calls its intellectual property.
During its financial crisis, and in response to public anger over rocketing charges, Argentina imposed a freeze on people’s energy and water bills (does this sound familiar?). It was sued by the international utility companies whose vast bills had prompted the government to act. For this and other such crimes, it has been forced to pay out over a billion dollars in compensation.
In El Salvador, local communities managed at great cost (three campaigners were murdered) to persuade the government to refuse permission for a vast gold mine which threatened to contaminate their water supplies. A victory for democracy, you say! Not for long. The Canadian company which sought to dig the mine is suing El Salvador for $315m, for the loss of its anticipated future profits.
In Canada, the courts revoked two patents owned by the American drugs firm Eli Lilly, on the grounds that the company had not produced enough evidence that they had the beneficial effects it claimed. Eli Lilly is now suing the Canadian government for $500m, and demanding that Canada’s patent laws are changed.
This is what one of the judges on these tribunals says about his work. “When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all. Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts and all laws and regulations emanating from parliament.”
There are no corresponding rights for ordinary people. We cannot use these tribunals to demand better protections from corporate greed. This is a privatised justice system for global corporations.
Investor-state dispute rules could be used to smash any attempt to save the NHS from corporate control and to prevent Trade Unions, from organising or taking industrial action.
We will lose the ability to re-nationalise or even re-regulate the banks, to curb the greed of the energy companies, to renationalise the railways and transport, the Royal Mail, to leave fossil fuels in the ground. These rules will in effect shut down all democratically chosen alternatives.
In the UK we have already sold off all of our Industries, Transport, Energy and Banking etc, to private corporations. The only viable options left, for Private corporations, to increase their portfolios is in the privatisation of our public services. As the NHS is by far the largest single publicly owned service it is the prime target for global corporations. The politicians can continue to give assurances that it will be protected, but after the ratification of TTiP, how long will these assurances last? Already the existing EU rules are being used as the excuse for the privatisation of Scot Rail and the Ferries.
We are already seeing the devastation in local services being privatised piece meal by Councils throughout the UK. With TTiP, this will only accelerate the process.
The prime directive for Neo-Liberal Capitalism is the fulfilment of a truly free and unfettered global market economy. Where the financial markets and multi-national corporations will have free reign to conduct their business. Completely free from any governmental regulation or constraint.
TTiP and TPP are one more step in the creation of this ideal.