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Why countries are being sued

28 March 2014

Unfair global trade deals are being backed up by new laws, Nick Dearden warns


On the money: a protest against the TPP trade deal in San Francisco in January

On the money: a protest against the TPP trade deal in San Francisco in January

FIFTEEN years ago, British Churches were at the forefront of a campaign for trade justice. As the leaders of rich countries used the World Trade Organisation (WTO) to redraw the rules of the global economy to favour big business, so faith campaigners joined trade unionists and farmers, anti-capitalists and environmentalists, to speak up for people and planet.

We had our share of successes - stopping an international agreement on "investor protection", reversing the privatisation of many essential services, and stalling WTO talks. But, in 2014, we confront a new threat. Under the banner of "free trade", three agreements are being negotiated that threaten to hand large swaths of our society over to big business.

This time, world leaders have decided that the WTO is too unwieldy a tool to use, given that almost every country in the world has a voice there. So agreements are being negotiated by coalitions of the willing - which means those states most committed to so-called "free-trade" principles.

This does not mean that other, often more impoverished, countries have nothing to fear. Indeed, EU representatives, who negotiate on behalf of Britain, have been clear that these agreements will form a "global standard" that will eventually have an impact on almost all countries.

THE three agreements are: first, the Trans-Pacific Partnership (TPP), which is being negotatied by Asian and North and South American countries, as well as Australia and New Zealand; second, the Trade in Services Agreement (TISA), which seeks to deregulate services - from health and education to financial services; and, finally, the one that is of most concern to campaigners in Britain: the Transatlantic Trade and Investment Partnership (TTIP).

TTIP seeks to create a free-trade area between the EU and the United States, and says that it is the biggest bilateral trade deal in history. But "trade" here takes on a strange meaning, given that tariff barriers between our continents are already extremely low.

In fact, the intention of TTIP is to make life easier for, and give more power to, private investors.

This is seen most clearly in so-called "investor protection". The theory is that business needs special protection in order to invest overseas - which is an extremely dubious claim in itself. In TTIP, this protection takes the form of a privatised legal system, which allows overseas investors to override domestic court systems in order to sue govern-ments for bringing in laws that "infringe" investors' ability to make a profit.

We do not need to theorise on how these investor tribunals will work, because they already exist, having been created by hundreds of bilateral trade deals over the past 20 years. Dozens of cases are currently in process.

So Uruguay is being sued by a tobacco company for daring to put health warnings on cigarette packets. Canada is being sued because Quebec placed a moratorium on fracking. Egypt is being sued for trying to raise the public-sector minimum wage. Ecuador has had a massive award made against it for revoking a contract with an oil company, even though the company broke the law.

It is not difficult to imagine how such tribunals could be used in Britain to bully a future government that wanted to reduce the part played by private investment in the NHS, or to take energy companies back into public ownership, or, indeed, to regulate the financial sector more.

These tribunals are a direct attack on democracy, and an attempt to privatise access to the law. But they are not marginal to an agreement that is all about giving big business more of a say over laws.

THIS brings us to the second concern about TTIP: the "harmonisation of standards" between the US and the EU. The Conservative MP Zac Goldsmith told Parliament twoweeks ago, during a debate on the treaty:"It is hard to imagine that the process will involve any standards going up."

A lowering of standards could mean Europe's being taken to task for not allowing the import of chlorine-washed poultry, or hormone-treated beef. Similarly, the big US banks are keen to use TTIP to undermine post-crash legislation that restricts Wall Street, but has not been introduced in the EU. Trade unions are particularly worried about workers'-rights legislation, which is far higher in Europe than in the US.

As ever, "free trade" will also be used to create a more stringent set of intellectual-property laws, which is particularly worrying in the field of medicine. There has been talk of medical companies' being able to copyright surgical techniques, and certainly companies want more control over personal data that is collected online.

SO, WHETHER you are concerned about the environment, food safety, workers' rights, global poverty, privacy, the power of big business, or simply democracy, there is plenty in TTIP to worry you.

The good news is that we can stop this agreement.

Although we have got off to a slow start here in the UK, in both the US and Germany TTIP has become a significant issue of contention. The EU Trade Commissioner Karel de Gucht has been forced to call a public consultation on the investor tribunals because of opposition, particularly in Germany.

Most importantly, we are witnessing a re-emergence of a trade-justice coalition of social-justice, environmental, anti-poverty, and consumer-rights groups, alongside trade unions. So far, faith groups have not played a big part. But their involvement could tip the scales against TTIP.

We do not need to be only in oppositional mode. Great work has been done by the Alternative Trade Mandate, a coalition of social-justice, environmental, and development groups from across the world, in spelling out the principles on which global trade should be based. This is not pie in the sky: these principles are already being implemented by some governments in Latin America.

This time, the trade-justice movement needs to stay together - not simply to see off the latest moves to enhance corporate power, but to insist on the creation of a very different form of global trade, which puts people and planet before the profit of a few.

Nick Dearden is the Director of the World Development Movement. For more information visit www.wdm.org.uk/trade.

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