A PART of Britain’s Establishment has always looked to the United States for leadership. They view the US as a model economy in which the market rules, big business can behave as it sees fit, and rich individuals are free from irritating “burdens” such as redistributive taxes.
We have more than a few such figures in our Government, including the Trade Secretary, Liz Truss. That is appropriate because an important vehicle for pulling our economy closer to the US is the controversial trade deal currently being negotiated. This deal is not so much about importing more American products as it is about importing the American economic model.
Trade deals today go well beyond tariffs. They interfere with how we regulate food- production, provide public services, and constrain big business. For once, President Trump was right when he said, “Look, I think everything with a trade deal is on the table. When you’re dealing in trade everything is on the table. So NHS or anything else, a lot more than that.”
HOW does it work? Anyone who knows anything about the US trade deal has probably heard of chlorine chicken. Washing poultry in treatments such as chlorine dioxide is common in the US, where it is used to remove bacteria accumulated over a tortured lifetime.
It has become an issue because trade deals today focus on ridding the world of regulations that “interfere” with the market. Negotiators try to level standards, by saying that two products must be treated the same, even if they are made differently. This might be fine if two goods really are equivalent, but often they are not. US food standards are radically different from Britain’s, with farming on an industrial scale and intensive use of antibiotics and chemicals.
To label this “equivalent” in a trade deal will mean letting food produced to lower standards into our shops, forcing food producers here to pressure the Government to lower standards, too, in a classic “race to the bottom”.
Trade deals also give huge powers directly to big business. It could be the “right” to bid for NHS contracts or rail franchises in perpetuity, making regulation of those services more difficult. It could be the “right” to challenge governments about regulations that big business regards as unnecessary (think stricter environmental standards). It could be the rights of pharmaceutical corporations to charge the NHS whatever they like for medicines; or the rights of Amazon and Google not to have to pay a digital-services tax.
This might explain why so many are campaigning to stop such a deal: from health workers to farmers, environmentalists to the Daily Mail. Stopping the US trade deal is imperative if we want to build a better Britain.
But we should recognise that there is nothing particularly special about the US deal, except that the size of the US economy means that it will fundamentally reshape Britain. The deal is a microcosm of what is wrong with our global trading system, which has fostered an unsustainable economy and handed the significant decisions over our lives to the super-rich. The political crisis that we are living through is a product of this economy.
TRADE does not have to be a problem. It can introduce new technologies and skills, as well as new products. Investment can stimulate new industries. But these benefits will not be shared, unless governments can control, tax, and direct the resulting activity: more wealth will simply accrue to those at the very top.
So, instead of slashing standards, the goal of trade rules should be regulating flows of goods and money. This will also require, for instance, coordination on tax and controlling speculation. But, as a minimum, trade rules should not scupper these efforts. Enforceable clauses in trade deals should ensure that they cannot block a government’s ability to support public services or tackle climate change.
Trade rules currently encourage the free movement of big businesses, allowing them to play governments against one another, forcing down standards. We need to reverse this process — for example, by setting minimum wages and conditions that companies need to meet to take advantage of preferences.
Trade deals should not protect corporate monopolies, be they in medicines, energy, or the high-tech economy. The transfer of technology is crucial to countries’ being able to develop. Learning and copying technologies should be encouraged.
Trade deals should cease to give privileges to the powerful. But let’s aim higher. If trade is supposed to improve people’s lives, let’s give communities and individuals the power to challenge them if the opposite happens. As trade deals affect so much of our lives, we also require greater parliamentary and public scrutiny.
This seems utopian. But, as figures such as President Trump rip up the international system, and climate change poses an existential threat, radical reform is the only way to avoid a retreat into xenophobia, bullying, and a collapse of internationalism.
In the US, the Democratic presidential candidate Joe Biden has shown some interest in adopting some of the more radical policies of Bernie Sanders. It remains to be seen how serious he is, but, either way, substantial mobilisation to push politicians will be vital if we are to break with “market-knows-best” economics.
A return to 1990s-style globalisation is not an option. Only through radical transformation can we hope to turn things around.
Nick Dearden is the director of Global Justice Now.
This article is based on his book Trade Secrets: the truth about the US trade deal and how we stop it, which is available for free at tradesecrets.globaljustice.org.uk