The Global Trade Corporatocracy Slams into Local Resistance

by Don Quijones, Wolf Street

Not everything seems to be going according to script for the self-anointed architects of the new global order. For years lobbyists and representatives of the world’s largest corporations and banks have been meeting with government trade negotiators from Europe, North America and Asia to patch together what could soon be the world’s two biggest ever “trade” deals, the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). The problem is that as more and more people learn about them, public opposition continues to grow — and with good reason.

If signed, these new deals will enshrine into international law a new system of semi-global, technocratic governance for the exclusive benefit of the world’s largest, richest multinational corporations and private investors. What’s more, in the eternal words of the U.S. Trade Rep Michael Froman, once they are passed, agreements like TTIP will become “the global benchmark for standards in a globalized world.”

For the world’s uber-class of super wealthy individuals and corporations, this is great news.

A Two-Tier Global Justice System

Thanks to the inclusion of the investment protection charter – A.K.A. the Investor State Dispute Settlement (or ISDS) – foreign companies and big investors will be able to sue national governments in private arbitration tribunals for profits they might lose as a result of local or national laws or regulation.

As The Guardian columnist George Monbiot writes, “while the rest of us must take our chances in the courts, corporations across the EU, US and vast swathes of the Asia-Pacific region will be allowed to sue governments before a tribunal of corporate lawyers.” They will be able to challenge the laws they don’t like, and seek massive compensation if these are deemed to affect their “future anticipated profits.”

According to the English sociologist and political scientist Colin Crouch, ISDS is post-democracy in its purest form:

In post-democratic societies, all the formal institutions of democracy – elections, open debate, changes of government – survive but cease to be the focal point of political dynamism. Instead, this is relocated in small, private circles where political elites do deals with corporate lobbies.

Yet just as the agents of the global corporatocracy are on the verge of turning this nightmarish fantasy into a reality, a confluence of messy little forces, including, ironically, local democracy, keep getting in their way.

The Obama Administration’s growing TPP migraine is a perfect case in point. In the face of growing grassroots resistance, Obama has tried to personalize his struggle to gain trade promotion authority by blaming just one person, Elizabeth Warren, the junior senator of Massachusetts, for stirring the pot of TPP opposition. It is a dangerous game he plays, especially in a country still smarting from the painful memory of Bill Clinton’s broken NAFTA promises.

As Vox’s Matthew Yglesias points out, like most politicians, wherever Warren stands, she typically has a coalition of interest groups standing behind her. And in the case of TPP, that happens to be a very broad group. It includes the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the Sierra Club and the National Resources Defense Council, Doctors Without Borders, Consumers Union, the Electronic Frontier Foundation and the Alliance for Justice, a key liberal advocacy group on constitutional issues that is bitterly opposed to TPP’s Investor State Dispute Settlement.

A Grassroots Struggle

It also includes a growing number of local communities that have passed resolutions in recent months expressing opposition to fast track. They include the councils of small provincial towns as well as sprawling metropolises such as New York City, Seattle, Pittsburgh, San Francisco, and Columbus, Ohio.

It is not hard to see why local councils have their reservations: if TPP is finalized, they will be among the biggest losers, as their room for maneuver and policy choices are significantly curtailed. Thanks to ISDS, local laws in the public interest, such as campaigns to support local businesses or introduce GMO labeling, could — and almost certainly would — be challenged by foreign corporations half a world away.

The result will be to substantially erode the ability of elected representatives at all levels of the political system to “represent” their constituents — something that admittedly increasingly few representatives do anyway, especially at the national level. It is no coincidence that trade agreements such as TPP, TTIP and TiSA – the chosen silent assassins of representative democracy – are fully endorsed by the leadership of almost all establishment parties in all of the signatory nations.

By contrast, at the local level the poisonous effects of lobbying, regulatory capture, and a rampant revolving-doors culture have been somewhat more muted. As corporate lobbyists have learnt, it’s much easier and quicker to destroy a system of governance at its core than at its roots. The result is that in most countries there is still some degree of representative democracy at the local level. And it is here where resistance to the global corporatocracy is at its strongest – and not just in the U.S.

Europe Bites Back

In my local region of Catalonia, Spain (total population: circa 7 million) 29 councils have already declared their opposition to TTIP.

“What we have learnt about the negotiations shows that it will have direct effects on democracy, popular sovereignty and the welfare state system,” says Carmen Garcia Lores, the Mayor of Rubí, a small town on the edge of Barcelona that recently voted to reject the trade agreement.

According to Lores, more and more councils are opting out of TTIP — even before it’s been signed! “In Germany more than 1,000 have signed up to the movement, in Austria more than 250 and in France more than 100.” If anything, the strength of opposition in Europe is more intense and widespread than in the U.S. Opposition is strongest in Germany – where 1.2 million people signed a “Stop TTIP” petition in just ten weeks. But there has also been increasing opposition in France, Austria, the Netherlands, Spain, and even the UK – traditionally the most Atlanticist EU member state.

According to a policy brief by the influential think tank, the European Council on Foreign Relations (ECFR), policy makers in national governments and parliaments as well as in the EU would do well to take public opposition to TTIP very seriously. On June 10 the European parliament is scheduled to issue an opinion on TTIP. The vote isn’t binding – we Europeans already have permanent “fast track” as our largely neutered parliament can only say yes or no to any trade agreement. Even so, if the parliament rejects TTIP it could send a very powerful message to the Commission, as well as to Europe at large.

The EU’s Trade Commissioner Cecilia Malmström has tried to placate opposition forces by offering promises — albeit largely empty ones — of more transparency as well as reforms of the ISDS system, by far the biggest bone of contention. She has suggested making the ISDS arbitration tribunals more like traditional courts, with a view to eventually setting up a permanent international investment court, but unimpressed EU lawmakers failed to greet her proposal as full-fledged reform, while the U.S. rejected the idea outright.

The Sweet Sound of Fear

Meanwhile, the voices of dissent continue to grow. Even on the hallowed pages of the Financial Times questions are being raised. According to Martin Wolf, not only are TTIP’s economic gains unlikely to be large, there is the risk that the WTO will be sidelined as well as the growing perception that the “US is using its clout to impose regulations that are not in the interests of its partners,” including brutally rigid intellectual property protection laws.

“Tread carefully,” Wolf warns. “Overreaching could prove counterproductive even to the cause of global trade liberalization.” Wolf’s concerns are echoed by the ECFR, which recommends scrapping ISDS and taking a less ambitious approach to trade negotiations:

Even if the EU and U.S. succeed [in reaching an agreement], a failure to engage with public concern on both sides of the Atlantic could cause an even greater backlash against globalization and trade liberalization in the future.

You can almost hear the sweet sound of fear – the fear of a big public backlash. By refusing to even inform the people of its malign intentions, then rubbishing public concerns when news was leaked, the corporatocracy may have, as Martin Wolf puts it, overreached this time. One can only hope he’s right! By Don Quijones, Raging Bull-Shit.

Bankers, politicians, academics, even startup guys are all lining up on the same side. Read… The “War on Cash” in 10 Spine-Chilling Quotes

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