Post-Brexit trade deals explained: how they will hand more power to multinational corporations – at our expense
With Brexit the main aim seems to be to have trade agreements with as many countries as possible and as soon as possible. Little attention is paid (none?) to the content or purpose of those post-Brexit trade deals – and for whose benefit they would be.
We can expect UK trade agreements to fit the pattern of recent trade agreements being negotiated, particularly by the EU on our behalf.
These current trade deals include the EU/US Transatlantic Trade and Investment Partnership (TTIP – on hold for the moment); the Canada/ EU Free Trade Agreement (Comprehensive Economic and Trade agreement – now 90% provisionally implemented); the Japan/EU free trade agreement (JEFTA) for which indications are for a speedy conclusion; and the EU/Vietnam free trade agreement.
Although the form and rhetoric of these agreements is that they are country to country or region to region negotiations, the provisions in them favour transnational corporations – giving them rights while reducing the abilities of states to control the corporations operating in their territory, and setting this into international trade law.
Thus these so-called ‘trade’ deals pitch transnational corporate rights against democracy, and give all the advantages to the former. International trade agreements are major, legalised elements in the path we are on towards a corporate–run world
These deals are not really about ‘trade’ but allow other agendas to be progressed behind a seemingly benign ‘trade’ façade that few in public positions would want to be seen questioning.
To increase profits, transnational corporations want regulation to be reduced and where possible removed (because it costs them to comply); for it to be homogenised so that adjustments don’t have to be made for different markets (and to be reduced in this homogenising process); and to influence the development of regulation to keep it minimal.
The two major elements of the current trade agreement pattern that facilitate this are:
- Regulatory co-operation (also called ‘harmonisation’)
- Investor state dispute settlement (ISDS)
Regulatory co-operation can be made to appear as common sense and benign, harmonising the regulatory regimes of different trade partners to reduce costs which can be (they say) passed on to consumers. Regulations are often referred to, within trade agreement contexts, as ‘Barriers to Trade’, ‘Behind the Border Barriers to Trade’ or ‘Non Tariff Barriers to Trade’
However these ‘barrier to trade’ regulations are often the regulations that keep the public safe, for instance as food, pesticide and chemical standards.
Where the regulations of trading partners differ, there is no doubt that the Regulatory Co-operation process will bring standards down to the lowest. For instance in any deal with the US, the UK currently, for the most part, has higher standards (very few GM imports, no hormone beef, no chlorine-washed chicken, over 1000 chemicals banned from cosmetics etc.) while the US has all these food products being sold, and far fewer chemicals banned – e.g. from cosmetics.
Usually these deals propose setting up some sort of Regulatory Co-operation Board – in fact a supranational body, to police and to action the ‘harmonisation’ process, with its work encompassing all new and existing regulations, and to which big business would have the opportunity of early input, which must be taken into account.
This drive to harmonise regulation, which is in fact a drive to reduce or eliminate regulation and to control regulatory processes, is boosted by the inclusion, in current trade deals, of Investor State Dispute Settlement (ISDS). This is the provision that allows transnational corporations , but not domestic companies, to sue the government for any regulatory changes that negatively affect their future profits. The effect is to inhibit the development of regulation, which, especially with technological developments, is vital for public protection and to control the power of corporations.
ISDS is already in agreements around the world, so the effects have been demonstrated – corporations suing governments; corporations winning large public purse pay-outs; the withdrawal of regulation or of regulatory chill as a precaution against being sued; and high legal costs to governments even when they successfully defend in a dispute. The 20 year old North American Free Trade Agreement, NAFTA, between the US, Canada and Mexico, has ISDS.
We can expect that UK trade agreements, for which there appears to be such a rush, with working groups already set up with many partner countries, will have all these worst transnational corporate-friendly elements. This is especially the case with Liam Fox in charge of the Department for International Trade. He has shown himself to be formally working in the interests of US big business via the ‘bridge’ organisation he had for the American Legislative Exchange Council (ALEC). This raises the question of for whom he would actually be working in negotiating a ’trade’ deal with the US, which is, as he has stated, his top priority.
The UK position at this point, with Brexit on the horizon but not yet enacted, is that we will be part of any trade deals that the EU has at least provisionally implemented before we leave, for some years after Brexit, in addition to upcoming UK trade agreements.
The first UK trade agreement, likely to include the dangerous corporate–friendly elements, will be the EU/UK trade agreement.
In regard to public services, trade agreements underpin the drive towards the privatisation and liberalisation (which means all investment opportunities open to transnational investors) of public services. While governments make the decision to open services to competition, as with the NHS in the 2012 Health and Social Care Bill, committing these liberalisations to trade agreements makes it very hard for any future government to reverse such privatisations/liberalisations – as is the intention.
In terms of parliamentary process, our current UK ‘parliamentary procedures’ do not allow for parliamentary debate or voting on trade deals that the UK negotiates. So for instance, at this point with CETA (Canada/EU), the parliaments of the EU – national as well as some sub-national parliaments that have this provision – will be voting whether to ratify CETA, towards its full implementation. However the UK parliament will not have such a ratification-decision vote.
EU trade agreements have been negotiated in secret, with the actual texts of agreements kept secret until negotiations are completed.
We now need:
- transparency throughout
- increased public awareness of what such deals really entail behind the benign rhetoric
- red lines on what must not be included; and
- changes in parliamentary procedures to allow for progressive debates and voting, through the negotiating process, not just at the end.
The views expressed in our blog are those of the author and not necessarily lowimpact.org's