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  • Posted May 23rd, 2016

    My meeting with EU Trade Commissioner Cecilia Malmstrom and corporate representatives, and the rules they want to impose on us

    My meeting with EU Trade Commissioner Cecilia Malmstrom and corporate representatives, and the rules they want to impose on us

    At the end of April, I went to a Trade Commission ‘civil society dialogue’ meeting Brussels in which Trade Commissioner Cecelia Malmstrom was seeking input on how to push forward the WTO globalisation agenda via the mechanism of the EU. It was mostly big business representatives, with a (very) few NGO reps, some of whom spoke, but it was clear from whom she actually wanted input. The business organisations were not individual firms but trade associations like EU chemicals industry, EU textiles industry, Spirit Europe (booze), Eurochambres (chamber of commerce), national farmers’ associations etc.

    Actually, the chemicals representative referred to an April 11 meeting for business input, so this meeting was probably just for show.

    Background: the WTO came from a GATT agenda which had started as coal and steel, had been expanded to include manufactured goods, then, at the point when the WTO was set up (1995) – via corporate lobbying and against the wishes of developing countries – was greatly expanded to include agriculture, services and intellectual property rights.

    The EU shifted its main focus from the multilateral WTO to bilateral agreements in 2005 when the Doha ‘Development’ Round was going nowhere – mainly because the round was actually antithetical to development. The structure of the WTO was allowing developing countries to band together to resist the agenda of Western governments (i.e. corporations) and the new issues that they wanted to bring to the WTO – like investment.

    But having rules that apply to all 160+ members of the WTO (pretty much the world), remains the ultimate goal. The bilateral/regional/plurilateral deals we are fighting now are stand-alone but are also building blocks towards that.

    Some underlying themes of the ‘rules’ that are being sought are:

    1. Enforced ‘openness’, meaning all investment opportunities open to big transnational corporations with rules that favour their rights over those of government (as in TTIP).

    2. Hacking away at any public ownership, so it cannot be advantaged and ideally collapses, while being disallowed by WTO rules anyway.

    3. The use of the WTO’s Dispute Settlement Mechanism (DSM) to set rules. The DSM adjudicates state-to-state disputes on criteria of ‘free trade’ only (as in ISDS adjudication, but they are investor to state). However, intellectual property rights, which DSM strongly supports, are in fact trade restrictive e.g. no-one can use something for which a big corporation has a patent. So perhaps just ‘corporate interest’ more accurately describes the way that the DSM works. Either way, DSM sets global rules that have no consideration for social or environmental good, or justice, and in fact are mostly completely contrary to such considerations. When a country (at the behest of corporations) brings a dispute against a country’s limitations on free trade, the DSM judgement becomes a global ‘rule’. For example, in a recent case brought by Mexico and Canada against US country-of-origin labelling on beef, the WTO DSM ruled country-of-origin labelling on beef ‘trade illegal’. The US ‘lost’ and promptly changed its laws to disallow such labelling. But this is in fact a big winner for the US in supplying beef into the 500m market of the EU, as the EU will now be expected to fall in line with this WTO decision or face trade sanctions. The WTO DSM ruled that the EU’s de facto ban on GM was ‘trade illegal’. This has led to fragmented EU assessments of individual GM products, with the onus on defending to keep them out – especially difficult with a GM-willing Commission.

    4. ‘Servicification’ (Malmstrom’s word), i.e. everything becoming classed as ‘services’ – because ‘rules’ on services are very corporate-friendly, advantaging corporate power in relation to the power of states. Financial services are represented in such meetings by the very aggressive executive director of the European Services Forum (ESF). His language left no doubt about who is actually driving the TiSA (Trade in Services Agreement) negotiations. I have made the point elsewhere that rather than ‘services’ being the other side of the coin to ‘goods’, apart from the point where goods cross borders and tariff issues apply, everything is services, including most aspects of goods – e.g. distribution of goods, labour supply, credit, insurance etc. – and are subject to service rules. The ESF was using this to show how much of ‘trade’, especially of the EU, is services, and to argue that there should be a lot more WTO focus on services, rather than just agriculture and manufactured goods, which have usually been the main focus of the WTO – because most countries are developing countries and this is what they mostly trade.

    5. ‘Segmenting and clustering’. In TTIP there are both ‘horizontal’ chapters, with across-the-board application (like ISDS across everything) and sectoral chapters, like chemicals or the vehicle industry. The WTO until now has had only overall rules within the big agreements – agriculture, manufactured goods, services, intellectual property etc. – but the push was evident to also have WTO sectoral agreements. This is indicative of any and all means to break down resistance to transnational corporate access and power. Where segmenting works best, do that, where clustering – i.e. putting things together in one box – is more enforcing, do that.

    6. Global Value Chains (GVCs) were kept quite dark for a long time, coming to light typically in NGO and media exposés. This is because they generally involve the use of the world’s cheapest labour – but without employer responsibilities; tax avoidance via transfer pricing; and other ‘big business takes all’ mechanisms. But now GVCs are being glorified as the natural way that the world works and are to be supported with the whole bundle of corporate interest liberalisation ‘rules’ in the WTO.

    7. Destroying ‘localisation’. Local context and any sort of localisation is a major target. This is things like local government stipulating they want to spend public procurement money with local firms, for local jobs etc, as well as larger-scale ‘Buy America’ policies. Malmstrom described this yesterday as ‘obscure protectionist measures introduced since the global financial crisis’ – like something dirty that had been snuck in, that must be eradicated quickly.

    8. Small- and medium-sized businesses. There was a call from Eurochambres for more support/evidence for how small- and medium-sized businesses can benefit from the WTO agenda. Malmstrom showed her frustration, asking Eurochambres to come up with ideas for how to do this. This reflects the fact that although TTIP has been touted for the last year or so as being great for small business, promoters of TTIP haven’t been able to come up with anything to support this. This is not surprising when the trade agenda, favouring all business going to transnationals, is so inherently anti small business.

    9. There was just a hint of an idea of bringing ‘investor protection’ (ie ISDS/ICS) into the ambit of the WTO. Currently, as pointed out above, corporations can only act through governments, at the WTO, in state-to-state disputes, with trade sanction remedies – not by suing. If investor protection were to become mutilateralised, this would let the Trade Commission off the hook – obviously Malmstrom’s dream.

    Underpinning everything is the undisputed aim of more liberalisation.

    The views expressed in our blog are those of the author and not necessarily lowimpact.org's


    • 1John Harrison May 23rd, 2016

      I read this post and re-read it with a profound feeling of despair. It’s as if the dystopian science fiction is coming true with the rise of government by the companies, for the companies.

      I’d hoped the EU would use the power of its size to resist, not push the corporate agenda.

    • 2Dave Darby May 23rd, 2016

      Yes, I’ve had lots of conversations with good people who think that somehow the EU is going to do something to counter corporate power. But it’s just another corporate vehicle. EU policy is written by the European Round Table of Industrialists (literally – Corporate Europe Observatory pointed out that ERTI reports are taken up wholesale by the European Commission and rubber stamped by the European Parliament). The EU exists to maximise growth, exports and corporate market share. It’s no wonder that it’s not going to be a very good ‘counterbalance’.

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