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The EU's new Free Trade deal - a full frontal attack on democracy?


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The “Transatlantic Free-Trade Agreement”, or “Transatlantic Trade and Investment Partnership”, (TAFTA/TTIP) has recently concluded its second round of week-long negotiations, resulting in significant progress towards finalising the terms of the agreement.

TAFTA is an economic agreement between the EU and North America whose main aim to make trade between these nations even easier. It is understandable to assume however, that had there been more unprejudiced, thorough, transparent coverage of the negotiations and treaty as a whole, public outrage would have resulted in setbacks to the negotiations, and things would not be running as smoothly as they currently are.

TAFTA, The Regions

For the large part, the implications of such a hugely significant agreement have not been explored, and the lack of publication and coverage by mainstream media is rather worrying to say the least.

Other than heralding the “key prizes” as being more jobs in Europe, and more growth – both of which are highly contestable – information from those involved in the talks has been somewhat restricted, and this was done intentionally as the negotiations are purposely not for public ears. It looks like someone doesn’t want to draw attention to themselves. For a treaty that holds its main “prize and purpose” as creating jobs and growth in an economic zone desperately looking for its knight in shining armour, it seems strange that this knight is too shy to proclaim its coming to save us… or maybe this hero has something else in mind?

“Let's keep our eye on the prize: more jobs for people in Europe, more growth for the European economy” – a direct quote from the EU Trade Commissioner Karel De Gucht has underlining disastrous tones, for me at least. I read it as “tough concessions will have to be made, painful decisions and policies will go through that may be disastrous for not only local businesses, communities or individuals, but for democracy as well”.

Admittedly there is a chance I was a little doomsday about my translation as I see most things that give extended mandates to corporations through cynical tinted glasses. To an extent more jobs and growth may be achieved following the initial implementation of the treaty, as large corporations – with reduced restrictions, regulations and no tariffs – would flood into Europe, and consequently create this “growth”. However, as vast privatization occurs, and rights to stop corporations from, let’s say buying our NHS, taking local minerals or bulldozing down forests become redundant (which is a real possibility; I am not exaggerating), particularly when we consider that TAFTA/TTIP restricts a nation’s sovereignty to protect health, safety, or the environment; the longer-term effects may in fact leave us much, much worse off. Of course, it goes without saying: by “us”, I mean the 99%.

For most people, you would either have to be a Professor of Economics or a bit of bibliophile on the subject of Political Economy to come close to understanding what TTIP or TAFTA could mean. It is precisely for this reason that the entire process is “for private eyes only” and without someone debunking all the jargon most of us are completely clueless to the democratic rug being pulled from under our already fragile and unstable feet. Luckily or not, depending on where you lie politically, “public enemy number one”, Wikileaks, and campaign group, give us some insight and so the pieces of the very empty puzzle fall into place.

As we are allowed access to the fuller picture, the reality of what this Transatlantic Trade and Investment Partnership could mean becomes painfully clearer. It is also very important to mention that our democratically elected MEPs in the EU are not actually directly involved in the negotiations. The right has been given to The European Commission, who is talking with trading partners on the EU’s behalf. Although, they are working closely with the member states through the Council of Ministers, the final negotiated mandate doesn’t need to have European Parliamentary approval before its implemented; they can of course seek and adopt a resolution if they are unhappy about the outcome, but this can be easily overruled by a simple majority vote and the approval of the Council of Ministers.

Both critics and supporters of the free trade agreement liken the treaty to the controversial NAFTA which, although it has brought GDP growth to places such as Mexico, one of its main “beneficiaries”, it has also caused massive instability, further perpetuated inequality and societal segregation. The “Tortilla Crisis” is a direct result of NAFTA policies and perfectly demonstrates the dangers of leading a fully market-led economy; the crisis led to a food shortage and cost emergency. By embracing the NAFTA treaty, Mexico surrendered its corn output to the vagaries of the North American corn market. As the demand for corn in the US rose a few years ago, it led to an acute shortage in Mexico, and a quadrupling of the price or tortillas. The poorest were literally left starving, and all because the NAFTA agreement meant that the Mexican government couldn’t protect the price rises, subsidise its corn growers or have any “hand” in lessening the impact and protecting itself from the market.

Mexico had, and continues to have, access to cheaper food, of course - another benefit of NAFTA. But as this food significantly lacks nutritional value, the poorest of Mexicans now face a health crisis as rickets soars, their diets lack fibre and waistlines expand. Mexico is now considered to be in an obesity epidemic and it is by no means a coincidence that these outcomes are married with the rising cost of corn.

The claim that free trade “makes us better off” may apply in an aggregate economic sense, but that doesn’t take into account the distributional inequities or social costs. Often free trade ends up being dominated by few as competition cannot be regulated, and governments are strongly (and legally) discouraged from subsides or regulation. Assuming TTIP will resemble NAFTA, creating more corporate freedom would mean that corporations could sue governments in private and non-transparent trade tribunals over laws and policies – which are put in place to protect health, environment or safety – if they are seen to reduce corporation profits. One of the hundreds of examples is that of El Salvador. Exxon, the Canadian mining corporation, is suing the Salvadorian government for $350millon on grounds of profit loss as the government decided to not allow the corporation to mine its gold as it would directly be putting its people’s livelihoods and wellbeing at risk. The fight continues.

The question now lies, why should we be concerned? Maybe we don’t need to be, and maybe we should trust that those in the EU and the Council of Ministers are going to make absolutely sure that everyone gets a good deal out of this, but imagine the less positive outcome… As our governments’ sovereignty power reduces, and corporation sovereignty rises, it means we could no longer expect our governments to have the powers to protect us, and in doing so, accountability is almost entirely lost – because how would we make those responsible, accountable? Currently we do this through our electoral rights, but no one elects corporations or has any right over making them accountable for anything. We may find ourselves in a world where the right to profit, essentially, takes precedence over our rudimentary democratic right to maintaining laws, legislations and policies, which protect our safety, health and environment. The current fight in the EU and the UK to stop Fracking, and to reduce CO2 emissions to ensure climate change is kept under control to prevent our environment being hurtled into oblivion, is just one of the topical issues which I’m sure the new treaty will address, and the outcome I’m afraid will not be so pretty. We can wave goodbye to the NHS, and any other public service (whatever is still left) will be up to grabs too, with little to no barrier or avenue available for us to stop it – without getting slapped with a large lawsuit claiming loss of corporation profit. The outcome will most likely favour the profit margins of large corporations instead of the people. 

For more information you can check the website, Wikileaks, RTnews, Public citizen and even the EU’s own website. 

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