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Trade, Democracy, and the Politics of Backlash
There has never been a greater need to quash the global corporate agenda. Government regulation is necessary in order to keep the remaining hydrocarbons below ground. That regulation should include not only the extractive corporations themselves but also the banks that have financed so many of these projects. Movements against the most notorious projects are vital and have been a source of inspiration, but every time one is blocked other options pop up elsewhere. As Naomi Klein puts it, it is like a game of whack a mole.
If agreements like CETA are enacted, adequate regulation will surely have become an occasion for suits under the dispute resolution features. These suits would not directly knock out the regulations but would make regulation prohibitively expensive. And the expense would become even greater were banks subject to the proper regulation. The ability to regulate the banks is crucial not only because it denies them much of the funding for further exploration and exploitation but also because their financial "innovation" produces economic instability and makes environmental planning more difficult. Just as importantly it deprives alternative energy of adequate financing.
Advocates of CETA advance the typical claim that markets possess a super information processing capacity or are ideal self-organizing systems. There are both theoretical and historic reasons to doubt that markets have such capacity. The claim for super rationality rests on very dubious assumptions about financial events following a typical bell shaped distribution curve. As for markets as good long term self-organizing systems one problem is that markets are only one of many self-organizing systems. Climate systems, ocean currents, social movements, financial and labor markets, all display characteristics of self -organizing systems. They have multiple feedback loops occasioning results that are more and different from the sum of the parts. And each is a partially open system interacting with other systems.
If neoliberalism had been true to the theories of one of its key founders, Friedrich Hayek, it would have allowed all the big banks and auto companies to go bankrupt, figuring if they scraped along the bottom long enough a vigorous rebound would be certain. Such logic elicited the famous quip--in the long run we are all dead. An even more sobering thought is the ways political extremism, another potent self-organizing system, would interact with a plunging economy.
Such systems, especially as they increasingly interact, require attention and at the very least the availability of regulatory tools, fiscal stabilizers, and prudential safeguards of one sort or another. Defeating corporate trade agreements is one step toward seeing these tools remain available.
The struggle to enact these agreements has been part of a broad assault on democracy. It is also part of an effort to strengthen an authoritarian state. Neoliberals have understood for many years that they needed one doctrine, classic laissez faire, to preach in public even as they acknowledged in private the need for a strong state to impose market discipline on the rest of us. Neoliberals proclaim the era of big government is over, but they do not hesitate to use government to fund an immense military establishment and arms "modernization," crush labor unions, spy on and disrupt public demonstrations, criminalize those who cannot survive the corporate economy's volatility, enforce intellectual property's requirements. Big government has ended only for those who might need its assistance to survive the travails of corporate capitalism, for whom "welfare as we know it" has been ended.
Of course a government accountable to the people might be reluctant to perform these functions. Not surprisingly leading neoliberal thinkers like Hayek expressed antagonism toward democracy. A number of recent political initiatives, self-reinforcing in nature, should still this concern. That disposition has manifested itself in the processes by which these deals are negotiated, in their secret trials, in court rulings that say money equals speech, in efforts to disenfranchise poor and minority voters, in felony disfranchisement laws, in an "independent" central bank controlled by finance capital, and in the gerrymandering of Congressional districts. All of these agendas become a self-reinforcing machine that in turn strengthens the power and wealth of the corporate players.
Having turned to government to enforce its version of market discipline, neoliberals and those influenced by its practice (if not its public doctrine) turned to government for bailout when the financial crisis hit. Neoliberalism in practice has made our government both more powerful and less accountable. Defeat of these corporate trade treaties is a good step toward restoring our democracy.
One hopes that activists will keep the pressure on an out-going President Obama and (the likely) President-elect Clinton. They should keep in mind the false promises of enhancing labor rights and environmental protection made by another Clinton to steer NAFTA through a reluctant Congress.
Although many candidates have promised they will vote against the new Trans Pacific Partnership, few have offered a positive vision of international trade regulation. Some form of protectionism appears to be Donald Trump's position, but protectionism is a non-starter. Economic self-sufficiency, even for such advanced economies as the U.S. or Great Britain, is impossible. Supply chains are complex and international. Establishing high tariff barriers would drive up the price of most manufactured goods.
While the campaign has thus far done little to illuminate these issues, the recent Verizon strike may offer a preliminary model of alternatives to corporate globalization. An excellent article by Michelle Chen in the May 25 issue of The Nation raises some points that both better explain the fallacies of the corporate globalization model and suggest some contours of a grassroots and rank-and-file model of global trade and development.
Chen's piece counters the contention that some particular skill or aptitude of the Philippine workers led to Verizon's decision to outsource these call center jobs. Workers received $1.78 an hour. More importantly, the company counted on the willingness of the government to ruthlessly repress any effort to unionize in behalf of higher wages. Rather than seeking an optimal distribution of skills, company policy was to drive both wages and government enforcement mechanisms into a race to the bottom. Verizon management imposed the worst features of early twentieth century industrial supervision: "To match US customers' time zones, the delegation learned, workers run on an eternal graveyard shift, regimented by strict call-time performance targets. "
Most heartening in Chen's story is the role of Philippine workers in the successful strike. Forced to handle service calls from disgruntled Verizon customers, their already long hours were stretched whereas the overtime pay for those hours never arrived.
Philippine activists imagine a more ecological and egalitarian form of globalization. They envision " the alternative as a more ethical trade structure, in which the Philippines would invest in sustainable modernization and internal industrialization. To the extent that outside investment is used to foster development, he adds, it should be accompanied by transnational organizing efforts (pdf) in tandem with US unions. "If they have rights to unionize," Concepcion argues, "we should have too." Through these initial online contacts, Concepcion suggested a more durable organizing network could emerge, like "a call center workers of the world alliance...that could bring all those workers with similar jobs in the fight for better conditions." Just as significantly, union activists are invoking larger community concerns, stressing how better worker training, compensation, and working hours can give workers the opportunity to become problem solvers rather than mindless automatons. Customers as well as workers become the beneficiaries.
Ultimately trade needs to become both more free and more local. By this I mean that not only tariff barriers but intellectual property barriers copyrights and patents) need to come down. Ideas should be allowed to flow freely both within and across borders. Capital and natural resources are another matter. For ecological and environmental reasons, the real cost of transit needs to be included in the price of goods.
The communications revolution is something that can and has spread world- wide. The consequences of that spread remain yet to be determined. The very modes of communication that Verizon disseminates and employs to outsource its work can also aid grass roots collaboration to advance these goals. Absent practices and bodies to curb global capital and the relentless fall in global living standards, protectionism may be the least of our worries.
Wallonia Has Shown Us the Way to Stop CETA and TTIP
"Wallonia has shown the way. Diversity, decentralization, and democracy work for people. Monocultures, centralisation, and dictatorship serve corporate interests." --Vandana Shiva, NavdanyaAs such, the Wallonian experience could radically change the future course of events, as Vandana Shiva, president of Navdanya, explains: "Wallonia has shown the way. Diversity, decentralization, and democracy work for people. Monocultures, centralisation, and dictatorship serve corporate interests. It's time to reclaim our freedoms from corporate rule imposed through so-called 'Free Trade' agreements."
According to Shiva, the Wallonian case is a beacon of light and an example of the path that Europe, as well as the rest of the world, should follow. "Free Trade agreements, beginning with the one written by the East India Company to colonise India, are instruments of slavery, of destruction of people's freedoms and sovereignty. The WTO agreement on TRIPS aimed at patenting life was written by Monsanto and the Agriculture Agreement was written by Cargill. This shows has just two or three giant corporations get together to write rules which take over our national and local economies, and destroy our democracies. CETA, TTIP, TTIP and other new free trade agreements with their ISDS clauses are clear attempts to destroy what remains of our fragile democracies and fragile economies. That is why we must stop them."
CETA, the free-trade treaty between the EU and Canada, would guarantee to over 40,000 big US companies--such as Coca Cola, Mc Donald, and Cargill--the same privileges that TTIP would guarantee, through their Canadian associates. Those involved in the negotiations are now questioning its procedures and what went wrong. In the front row, Alessia Mosca, Member of the European Parliament and member of the EU's Committee on International Trade, states: "There is evidently a democracy issue where and when a small parliament can keep the European Parliament from expressing its position." Public attention seems focused in the right direction, which is on the democratic consensus surrounding a treaty which promises to have a substantial impact on millions of workers' and consumers' lives on either side of the Atlantic. Yet the MEP's statement sits uneasily with civil society organisations' recent claims, namely that of having experienced in their own turn a democratic deficit during the treaty's negotiation.
Having been negotiated behind closed doors and without the involvement of civil society representatives, CETA triggered outrage in European public opinion as millions of citizens took over the squares of major European capitals to oppose a new generation of treaties such as CETA and TTIP. Almost 3.5 million signatures have been collected all over Europe against the new free trade agreements. From the negotiators' point of view, the issue does not so much lie in the quality of the negotiation procedures (which are exclusive and even secret), but rather in the fact that "0.6% of the European population has proven to be an obstacle to an agreement reached by the whole of Europe." In other words: it's all Wallonia's fault, guilty of having declined an ultimatum in the name of quality and transparency for the protection of its citizens.
Meanwhile, the negotiators have already sounded the death knell. According to the negotiators' interpretation, the European Union is bound to pay--in terms of GDP and job losses, as well as loss of credibility and trust in the international market. The staunchest pessimists go as far as to warn that the very future of the European Union is at risk, as Ms. Mosca herself stressed when she stated "Europe has no future, until the okay on CETA is reached." This is a common refrain which we already heard during the Brexit referendum. However, this strategy aimed at influencing democratic decisions through the spread of apocalyptic messages does not seem to work. The strategy of "terror" and "fear" cannot and should not find fertile ground in Europe. The most immediate example of this is the proliferation of vague, approximate data being spoon-fed to a public whose opinion has by now grown used to being wary of easy promises. Moreover, the ruckus raised around the loss of jobs and GDP is based on biased studies, which have been widely criticized and contradicted by independent studies published over the last few months by civil society organizations and by experts in the field.
The issue of propaganda is crucial in the context of this new generation of corporate-friendly treaties. As Nina Holland of the Corporate Europe Observatory, in the "Attack on Democracy" session recently held at the International People's Assembly at The Hague, underlined: "It is from this play on words, from the capacity to manipulate language and the essential European principles, from propaganda tactics used to promote free-trade treaties, that we need to protect ourselves: the principle of precaution does not harm a country's innovation; on the contrary, it promotes the safety of innovation and the freedom of its citizens."
The mobilization of citizens and civil society organizations against CETA, TTIP, and similar deals is thus to be considered a positive European Union experience, as underlined by the "green" Member of European Parliament Bart Staes who stated: "The movement that is growing around free-trade treaties represents a positive historical event because it is unifying Europe in such a moment of divisiveness at the political level. Europe risks falling to pieces." However, the Belgian MEP concluded, "the movement protesting against the new generation of trade treaties (which are anti- democratic by their very essence) is managing to bring together consumer associations and trade unions as well as common citizens."
All in all, then, the best recipe for Europe's comeback on the international scene seems to be exactly this: a solid dose of democracy to lead citizens back into believing in a project of integration, which is crucial for the fate of humanity as a whole.
'Final Death Blow' to CETA as Delegates Hold Firm Against Pro-Corporate Deal
"We made new significant progress, especially on the agriculture issues, but difficulties remain, specifically on the symbolic issue of arbitration, which is politically extremely important," Wallonia president Paul Magnette told the regional parliament. ISDS permits companies to sue governments over perceived loss of profits due to regulations or other laws.
Magnette had told reporters Thursday that the delegation had particular concerns over "matters affecting U.S. companies in Canada which will benefit from the system."
Friday's talks were held as a last-ditch effort to save the trade deal. After they fell apart, an emotional Freeland told reporters, "I've worked very, very hard, but I think it's impossible," referring to the impasse. "It's become evident for me, for Canada, that the European Union isn't capable now to have an international treaty even with a country that has very European values like Canada."
Campaigners who have led the fight against CETA and its sister trade deals--the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP)--rejoiced over the news, saying the planned October 27 signing ceremony now looks "improbable."
"Canada's trade minister may be 'very, very sad', but there are millions of people in Europe who will be very, very happy," said Mark Dearn, senior trade campaigner with the UK-based War on Want.
And while many were happily toasting Magnette and the Wallonia delegation, critics of the deal also emphasized the growing movement against these anti-democratic agreements that helped lead to CETA's downfall.
"This major setback for CETA is not just because of Wallonia alone," said Maude Barlow, national chairperson of the Council of Canadians. "There is deep, widespread opposition to CETA and many millions of people agree with Wallonia's stance."
"Thousands across Europe and Canada spoke up and took action to make this happen," added Barlow, who is currently in Germany campaigning against CETA. "This collapse of attempts to reach a deal on CETA shows governments should listen to people instead of trying to push these deals through against the wishes of the people they're elected to represent."
As Dearn further explained, "Since talks first started on CETA back in 2009, the deal has sat alongside TTIP [referring to the U.S.-E.U. agreement] as an example of how not to do a trade deal--absolute secrecy, zero input from public interest groups, and sheer contempt for the very valid concerns of people across Europe."
"Today we have seen the European Commission's chickens come home to roost," he continued. "If the Commission fails at yet another trade deal, the fault lies wholly with its anti-democratic approach."
Speaking from the negotiations in Belgium, Sujata Dey, trade campaigner with the Council of Canadians, agreed. "It's time to take a long hard look at CETA and what this breakdown means for corporate-led globalization, including for other controversial deals like the [12-nation TPP]."
"It's time for a fundamental shift toward international agreements that put people and the planet before corporate profits," she added. "That's the message from Europe today."
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