capitalist trade agreements

Edited by Satoko Kishimoto and Olivier Petitjean - Transnational Institute, June 2017

You would be forgiven, especially if you live in Europe, to think that public services are by nature expensive, inefficient, maybe even somewhat outdated, and that reforming them to adapt to new challenges is difficult. It would seem natural to assume – because this is what most politicians, media and so-called experts tell us continuously – that we, as citizens and users, should resign ourselves to paying ever higher tariffs for services of an ever lower standard, and that service workers have no choice but to accept ever more degraded conditions. It would seem that private companies will inevitably play an ever larger role in the provision of public services, because everything has a price, because politicians have lost sight of the common good and citizens are only interested in their own individual pursuits.

This book, however, tells a completely different story. Sometimes it may feel as though we are living in a time when profit and austerity are our only horizons. In reality, below the radar, thousands of politicians, public officials, workers and unions, and social movements are working to reclaim or create effective public services that address the basic needs of people and respond to our social, environmental and climate challenges. They do this most often at the local level. Our research shows there have been at least 835 examples of (re)municipalisation of public services worldwide in recent years, some of them involving several cities. In total there have been more than 1600 cities in 45 countries involved in (re)municipalisation. And these (re)municipalisations generally succeed-ed in bringing down costs and tariffs, improving conditions for workers and boosting service quality, while ensuring greater transparency and accountability.

Read the text (PDF).

By Jayati Ghosh - Dollars and Sense, March/April 2017

Twenty-first century imperialism has changed its form. In the 19th century and the first half of the 20th century, it was explicitly related to colonial control; in the second half of the 20th century it relied on a combination of geopolitical and economic control deriving also from the clear dominance of the United States as the global hegemon and leader of the capitalist world (dealing with the potential threat from the Communist world). It now relies more and more on an international legal and regulatory architecture—fortified by various multilateral and bilateral agreements—to establish the power of capital over labor. This has involved a “grand bargain,” no less potent for being implicit, between different segments of capital. Capitalist firms in the developing world gained some market access (typically intermediated by multinational capital) and, in return, large capital in highly developed countries got much greater protection and monopoly power, through tighter enforcement of intellectual property rights and greater investment protections.

These measures dramatically increased the bargaining power of capital relative to labor, globally and in every country. In the high-income countries, this eliminated the “labor aristocracy” first theorised by the German Marxist theorist Karl Kautsky in the early 20th century. The concept of the labor aristocracy derived from the idea that the developed capitalist countries, or the “core” of global capitalism, could extract superprofits from impoverished workers in the less developed “periphery.” These surpluses could be used to reward workers in the core, relative to those in the periphery, and thereby achieve greater social and political stability in the core countries. This enabled northern capitalism to look like a win-win economic system for capital and labor (in the United States, labor relations between the late 1940s and the 1970s, for example, were widely termed a “capital-labor accord”). Today, the increased bargaining power of capital and the elimination of the labor aristocracy has delegitimated the capitalist system in the rich countries of the global North.

Increasing inequality, the decline in workers’ incomes, the decline or absence of social protections, the rise of material insecurity, and a growing alienation from government have come to characterise societies in both developed and developing worlds. These sources of grievance have found political expression in a series of unexpected electoral outcomes (including the “Brexit” vote in the UK and the election of Trump in the United States). The decline of the labor aristocracy—really, its near collapse—has massive implications, as it undermines the social contract that made global capitalism so successful in the previous era. It was the very foundation of political stability and social cohesion within advanced capitalist countries, which is now breaking down, and will continue to break down without a drastic restructuring of the social and economic order. The political response to this decline has been expressed primarily in the rise of right-wing, xenophobic, sectarian, and reactionary political tendencies.

By the admin - Systemic Disorder, November 11, 2015

The text of the Trans-Pacific Partnership can now be viewed by the public, thanks to the New Zealand government, and it is every bit as bad as activists have been warning.

The TPP, if enacted, promises a race to the bottom: An acceleration of jobs to the countries with the lowest wages, the right of multi-national corporations to veto any law or regulation their executives do not like, the end of your right to know what is in your food, higher prices for medicines, and the subordination of Internet privacy to corporate interests. There is a reason it has been negotiated in secret, with only corporate executives and industry lobbyists consulted and allowed to see the text as it took shape.

The threat from the TPP extends beyond the 12 negotiating countries, however — the TPP is intended to be a “docking” agreement whereby other countries can join at any time, provided they accept the text as it has been previously negotiated. Moreover, the TPP is a model for two other deals: the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union, and the Trade In Services Agreement (TISA), an even more secret “free trade” deal being negotiated among 50 countries that would eliminate any controls on the financial industry.

The elimination of protections is precisely what U.S. multi-national corporations intend for Europe by replicating the terms of the TPP in the TTIP, a process made easier by the anti-democratic nature of the European Commission, which is negotiating for European governments. Already, higher Canadian standards in health, the environment and consumer protections are under sustained assault under the North American Free Trade Agreement. The TPP is an unprecedented corporate giveaway, going well beyond even NAFTA, which has hurt working people and farmers in Canada, the U.S. and Mexico.

More than 300,000 jobs in the U.S. alone may be eliminated by the passage of the TPP. The Wall Street Journal, in an article celebrating victory for multi-national capital, nonetheless reported that 330,000 manufacturing jobs would be lost, basing this estimate on an estimated US$56 billion increase in the national trade deficit. That forecast is based on a U.S. Department of Commerce estimate that 6,000 jobs are lost for every $1 billion of added trade deficit.

By staff - International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations, June 2014

At its 2002 World Congress, the IUF adopted a wide-ranging resolution on trade and investment committing our organization to vigorously oppose the expanded WTO “Doha Round” agenda and to combat the growing number of bilateral trade and investment agreements as instruments for entrenching and expanding corporate power at the expense of democratic rights and the rights of workers and their trade unions.

The resolution highlighted the function of the expanding web of regional and bilateral agreements in building on the WTO rules to construct, layer upon layer, “investment regimes which enforce the right of corporations to pursue maximum profit while removing and undermining restrictions which seek to regulate corporate activities in the interest of public health, worker and consumer health and safety, public services and the environment.”

The Resolution recalled the IUF’s historical and statutory commitment to promote and defend a broad spectrum of basic rights: the right to adequate, nutritious and safe food; the right to food security and food sovereignty; the right to a safe working and living environment; and the right to livelihood protection. Congress further called on the IUF and its affiliates to “actively support and campaign for governments at every level (local, national, regional) to review all existing trade and investment rules and treaties using these fundamental rights as a benchmark and to reject all trade and investment agreements which conflict with those rights.”

Organized opposition killed the proposed Multilateral Agreement on Investment (MAI), an attempt to establish far- reaching powers for transnational investors only partially realized in the WTO’s TRIMS agreement. Popular resistance also halted the proposed Free Trade Area of the Americas, an attempt to extend the reach of the North American Free Trade Agreement (NAFTA) to all of Central and South America and the Caribbean. Since 2002, growing popular resistance has blocked the advance of the WTO Doha Round. This has arrested the insertion of more far-reaching investment rules into the WTO, but has also frozen into place a global food system whose destructive features were dramatically highlighted in the 2008 and subsequent food crises which are essentially permanent. And while attention has largely focused on these ambitious mega-treaties, an intricate web of bilateral and regional investment agreements, some of them deliberately and misleadingly packaged as free trade agreements, have conferred on transnational capital new powers to directly challenge the democratic right of governments to regulate and to legislate in the public interest.

The latest proposed treaty instruments to embody these investor ambitions are the EU-US trade deal now known as the Transatlantic Trade and Investment Partnership (TTIP) and the twelve-nation Trans-Pacific Partnership Agreement (TPPA) between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

Both these treaties are being negotiated under conditions of the strictest secrecy. Corporations draft and share the negotiating texts, but citizens are denied access in the name of national security. On the basis of the leaked texts we know that they would build on existing trade and investment rules by incorporating the most toxic elements of the already-existing thousands of treaties and granting expanded powers to transnational capital to challenge public interest policies and practices, eliminating or putting at risk rights for which workers and unions have struggled over many decades.

This publication builds on the past work of the IUF and the efforts of many activists in explaining the nature of these threats and why the labour movement must commit to defeating these treaties as an urgent political priority. We would also hope to stimulate discussion on how we might move beyond these defensive struggles to begin putting in place a system of global rules to effectively enforce respect for human rights over the private claims of investors.

Read the report (PDF).