Dangers of the US trade deal – and how to fight it

JVL Introduction

The US trade deal is about much more than trade, as Nick Dearden explains in a new book, Trade Secrets, available for free download from Global Justice Now.

It is about importing the US economic and regulatory model.

In other words it is about enshrining neo-liberal assumptions and ways of regulating that are in the interests of corporate power against the possibility of democratic control.

It is not just our food standards that will be jettisoned, but our right to public services generally. Workers’ right will be undermined, our health threatened, our ability to cut carbon emissions severely curtailed.

The cynicism of a government which fought on a slogan of Taking Back Control is breath-taking…

Mike Phipps spells it out in his review of Nick Dearden’s book on Labour Hub. He also provides a model motion for taking the debate into the Labour Party.

This article was originally published by Labour Hub on Thu 3 Sep 2020. Read the original here.

Dangers of the US trade deal

Mike Phipps reviews Trade Secrets: The truth about the US trade deal and how we can stop it, by Nick Dearden, published by Global Justice Now: https://tradesecrets.globaljustice.org.uk/

When Labour leader Jeremy Corbyn held up pages and pages of blacked out trade documents during last November’s general election debate, it became clear why the government wanted to keep them secret. They confirmed widespread fears about its willingness to capitulate to the US corporate lobby.

Now even the Daily Mail is expressing concern about the threat to UK food standards from a US trade deal, as British farmers mobilise to protect their livelihoods. Whatever views people may have had on Brexit in 2016, a clear-cut majority of the public is opposed to most of Trump’s top priorities for a trade deal.

“The US trade deal is not really about importing more American products,” explains Global Justice Now director Nick Dearden. “It’s about importing the American economic and regulatory model.” It would undermine food standards and public services and give US corporations special legal powers to challenge the policies of our national and devolved governments. It would give big tech corporations more powers to abuse our data. It would threaten workers’ rights and our ability to reduce carbon emissions and meet our climate change targets. And the fact that the deal is being negotiated in secret, away from the scrutiny of elected MPs, is an affront to our democratic rights.

On food standards, the US has made it crystal clear that it is not going to compromise. “We either have fair access for agriculture or we won’t have a deal,” said US Trade Representative Robert Lighthizer. The problem is that US food standards are a lot lower than the UK’s. US agriculture is dominated by largescale agricultural corporations, which push the intensive use of antibiotics, hormones and steroids to promote the rapid growth of animals, leading to quicker profits.

Genetically modified crops, chlorinated chicken and vegetables containing much higher levels of pesticides would all find their way onto our supermarket shelves. A recent report shows that American apples are allowed to contain 400 times the amount the UK allows of some insecticides linked to serious health conditions, and grapes 1,000 times the amount. In a recent test, 95% of US baby foods contained toxic metals.

This kind of competition would immediately lead to farmers here pressurising the government to lower UK standards. There would be a race to the bottom in levels of protection. Yet in a recent survey, only 8% of the public think the UK should lower food safety standards.

Cosmetics are another major health concern, with the US regulatory law in this area not updated since 1938. Over 1,300 toxic ingredients have been banned from use in cosmetics here, but only 11 in the US. Even asbestos has been found in small amounts in makeup marketed to children.

Modern trade deals tilt the balance of power firmly to the side of big business. They often given corporate lobbyists guaranteed access to decision‑makers and the ability to object to proposed regulations, even before elected representatives have seen the proposals. Concretely, there is a US offensive to get rid of “unjustified” warning labels on products, for example those indicating high sugar content.

Trade in services accounts for $5.8 trillion a year, or one quarter of all global trade. This includes what we would see as public services – like healthcare – and trade rules do not exempt them. They promote irreversible privatisation. Additionally, medicines are typically four times more expensive in the US than here. Despite government assurances that higher medicine prices won’t be part of a US trade deal, it is already being discussed. Returning other services, such as rail and energy, to the public sector would also be made significantly harder under any trade deal, despite the popularity of these policies.

Another likely part of the deal is the introduction of secret corporate courts, allowing companies to claim compensation if the government takes restrictive action to protect consumers. Argentina was sued in such courts for a cool $80 billion after its government froze water and energy prices in the public interest. But these courts don’t consider the public interest, only investor rights – real cases include companies suing governments that pass laws requiring cigarettes to be sold in plain packaging. Governments have no right to appeal in these courts, nor can they claim their legal costs – usually millions of dollars. They can only lose, or lose worse.

A digital trade chapter in a US trade deal could severely constrain the ability of future governments to make the big tech giants like Amazon and Facebook operate in the public interest. The UK idea of a ‘digital services tax’ to ensure these corporations pay their taxes would be out the window and online privacy would be compromised. A particular concern is whether UK negotiators even understand the issues at stake.

What impact would a US trade deal have on the climate emergency? “When the EU was negotiating a trade deal with the US (the now-shelved TTIP), it predicted an additional 11 million metric tons per year of CO2 as a consequence of that agreement,” notes Dearden. “Damage to the environment is hard-wired into the current trade system.”

Labour’s shadow foreign secretary Lisa Nandy MP has said Britain should not sign a trade deal with any country that refuses to abide by the climate change obligations in the UN Paris Agreement. The US is intending to leave the agreement this year. Here too corporate courts would have a role. Canada, for example, was challenged by a mining company under the North America Free Trade Agreement (NAFTA) for trying to take dangerous chemicals out of petrol and placing a moratorium on fracking. The company was awarded $300m.

Socialists should be particularly concerned about the effect of any deal on UK labour standards. Many of the hard-won protections for British workers simply do not operate in the US, where workers labour on average an extra 250 hours a year. Again, using NAFTA as a model, it’s estimated that 1.3 million jobs were lost in Mexico after it was signed.

The whole deal is being negotiated with no oversight by Parliament. When Britain was a member of the European Union, elected MEPs exercised some control over the negotiations. No such power resides in the UK Parliament, which is not even guaranteed a debate or vote once the deal is completed. In the words of one former trade official, Britain is “at the far end of the secrecy” spectrum.

So how can the deal be stopped? Public pressure inflicted defeat on the Transatlantic Trade and Investment Partnership (TTIP) – 250,000 people took to the streets in Germany alone – and eventually the deal was shelved. On the US deal, a wide coalition is already in formation – farmers, NHS campaigners, unions, anti-poverty and environmental campaigners – which promises to reach beyond the Brexit divide. But we also have to articulate a new positive vision of what equitable trading relations would look like.

“We need to start from the fact that tariffs are at very low levels, and further reductions are mostly likely to create little gain for society in general,” says Dearden. A better goal would be regulating trade and investment flows to ensure a fairer and more sustainable international economy that works for people and planet. This could involve coordinating taxation and controlling speculative financial flows, as well as finding ways to prevent the undercutting of government regulation between countries, which leads to a race to the bottom in standards. International rules also need to help poorer countries to diversify their economies. This includes a greater allowance for technology transfer, a preference for regional over global trading and agreements which improve commodity pricing.

“This is all a very long way from where we currently are,” concludes Dearden. True, but there were some very positive ideas setting out a new direction in Labour’s 2019 general election manifesto. “Labour believes human rights should drive our trade policy,” it said. It promised to require all UK trade agreements to be consistent with international humanitarian law, to introduce legislation to ensure parliamentary scrutiny of trade and investment agreements and to reject any trade agreements that undermine labour standards or environmental protections. If Keir Starmer’s team is going to step up the fight against the US trade deal, this would be a very good place to start.

Labour opposes the US trade deal, the idea of corporate courts and it wants more parliamentary scrutiny. That’s good, as far as it goes. But it needs to go further, argued Nick Dearden at the book’s launch this week: the Party needs to look at how globalisation has empowered a super-rich elite. This would require a complete rethink of how we trade.

And a word of warning for those hoping that President Trump’s defeat in November’s presidential election will remove this threat: don’t forget it was president Obama four years ago who pushed TTIP. “Whoever is president of the US,” said Dearden, “the terms the US would be pushing would be similar.”

Suggested model resolution:

This branch/CLP is concerned that the current trade deal that the British government is negotiating with the US has the potential to

  • undermine food standards
  • lead to further privatisation of public services, including the NHS
  • give US corporations special legal powers to challenge the policies of our national and devolved governments, by introducing investor-state dispute settlement (ISDS) or ‘corporate courts’ which allows foreign investors to sue governments in secret arbitration panels for ‘unfair treatment’
  • give big tech corporations more powers to abuse our data.
  • threaten workers’ rights
  • undermine our ability to reduce carbon emissions and meet our climate change targets.

We are further concerned that the deal is being negotiated in secret, away from the scrutiny of elected MPs.

We welcome the fact that the Labour leadership has taken a position against any deal which includes ISDS, and call on it to stand by the 2019 general election manifesto commitments to

  • require all UK trade agreements to be consistent with international humanitarian law,
  • to introduce legislation to ensure parliamentary scrutiny of trade and investment agreements
  • -and to reject any trade agreements that undermine labour standards or environmental protections.

We agree to:

  • send this resolution to the Labour shadow secretary for international trade and to the NEC
  • sign up as a local ally of Global Justice Now, so we can receive campaign updates and invite speakers on this issue [see globaljustice.org.uk/internationalist-network]
  • affiliate to Global Justice Now at a rate of £35/year.

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