Cooking the Books: The Onward March of Globalisation

For years the World Trade Organisation has been trying to change the rules of global trade in the interests of global investors. The US in particular wants to ease the out-sourcing and off-shoring of jobs, permitting employers to seek the lowest wages and weakest government oversight protections around the world; and to incorporate patent and intellectual ownership rules that will further restrict access to medicines for millions and could be expanded to include even surgical procedures and not just drug treatments.

Overall, it is a bid to implement a globalisation policy of trade harmony at the lowest common denominator that will further the interests of global investors by relaxing various standards to weaker levels of consumer and public protection. It would represent a further reduction in the ‘sovereignty’ of national governments and their already weak power to resist the dictates of the world market. But these negotiations have not yet reached a conclusion because some countries do not want to open their doors too much to multinational corporations.

At the same time the EU and the US are negotiating a ‘Transatlantic Trade and Investment Partnership’. One of the points under discussion is a mechanism known as ‘Investor-State Dispute Settlement’ (ISDS), which would give corporations the right to challenge a country’s laws. Clearly, this is something more than a mere ‘free-trade’ deal.

Even if a new reform or policy applies equally to domestic and foreign investors, ISDS proposes to allow corporations to receive compensation for the absence of a ‘predictable regulatory environment.’  Already under existing WTO ‘free-trade’ rules this type of argument has been used to attack clean energy, mining, land use, health, labour, and other policies. More than $14 billion in the 16 claims are now under litigation in the US; all relate to environmental, energy, financial regulation, public health, land use and transportation policies, which are not traditional trade issues. EU investors have attacked Egypt’s minimum-wage increase, and a US corporation has attacked the Peruvian government’s decision to regulate toxic waste and close a dangerously polluting smelter. In one of the most notorious cases, US tobacco giant Philip Morris launched investor-state cases challenging anti-smoking laws in Uruguay and Australia after failing to undermine the health laws in domestic courts.

Another proposal in TTIP is for ‘regulatory cooperation’ which would give big business lobby groups wide opportunities to influence decision-making, outside the normal democratic decision-making processes on both sides of the Atlantic. The clear intention is to allow business to in effect ‘co-write’ international regulations, as already happens at national level.

All new relevant US or EU proposals for legislation or regulation would have to be screened first for their impacts on trade. A report has to be made to that effect, to make sure legislators don’t adopt anything that would be detrimental to business. Even before a proposal is launched, say by the European Commission, the US has to be notified, and vice versa. This opens the door to intense lobbying and also to all sorts of pre-emptive pressure – for example a threat of litigation under the ISDS mechanism.

The socialist attitude is that, at the end of it all, the arguments within the WTO which have so far prevented agreement are a dispute between vying capitalist factions, free-trader versus protectionist, foreign versus native capitalist – competitors, fighting to defend or create conditions that offer them the best return. Even so, among the casualties are working people the world over, who will end up as collateral damage, more powerless and more vulnerable than ever in the face of global capitalism.


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