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International Free Trade Agreements: Blessing and Curse

by John Brian Shannon | October 13, 2014

International free trade deals are the sexy new thing for world governments.

From the U.S. and Canada, to Europe, China and Japan, trade negotiations are taking place with the goal of lowering barriers to international trade and thereby increasing economic growth. Which could be reasonably argued, is a very good thing.

But as is often the case, the devil is in the details.

TTIP protest in London, UK

Trans-Atlantic Trade and Investment Partnership (TTIP) protest in London, UK October 2014. Image courtesy of AP

Few people have trouble with free trade agreements that are negotiated in good faith and which serve our national interest by lowering the price of goods for consumers — while simultaneously increasing our ability to profitably export to other nations.

In principle, this is a fine idea in a world that’s rapidly becoming smaller. The essence of free trade is so logical, so timely, it’s difficult to argue against it.

Yet TPP and TTIP appear to be one-sided

The problem isn’t that China has better negotiators than Canada. Nor is it that the Americans are more skilled negotiators than the EU negotiators. Nor is it any bloc gaining unfair advantage against any other country or bloc.

What has occurred is that multinational corporations will gain generous clauses, stacking the deck in favour of corporations, so as to infringe on the sovereignty of nations and the rights of citizens and workers.

These unprecedented privileges afforded to corporations will help corporations exert veiled or overt control over our governments, our defence establishment, and on citizens and workers. It’s so prone to abuse that it will get worse over time, no doubt about it.

We didn’t elect our politicians to hand the keys of the country to foreign corporations

If TPP and it’s cousin the TTIP aren’t fixed soon, nations will have surrendered much hard-won sovereignty to the often faceless, ever-changing, and unelected executives of the world’s multinationals. Nations which lost hundreds of thousands of soldiers and citizens in WWI, WWII, the Cold War, the Korean War, the Viet Nam War and other 20th-century wars will have handed over much of what we and they have paid dearly for… to unaccountable and (sometimes) foreign corporations.

We fought those wars to guarantee our sovereignty and we won. Shall we now hand our winnings to multinational corporations?

Not that I have anything against corporations. They’re a part of our modern world. Without them, we’d live with much-reduced technology, less convenience, and every jurisdiction would need their own butcher, baker, and candlestick maker — and everything else for that matter.

Not to mention that each local auto dealership would need a tiny manufacturing plant out back, where each car would be built on a per order basis. Your car would cost $100,000 and take two weeks to build, and you would have to pay for it in cash, and in advance, without multinational auto manufacturers and multinational banks, and reliability might not be as stellar as today’s mass produced cars.

Similar would be the case for your cellphone, computer, home appliances, etc. (You’d need to pay in advance, and those things would be built and warranted by a local manufacturer, non-uniform quality might be a problem, and higher and non-uniform pricing would be a national irritant)

Without multinational corporations it’s safe to say that prices would rise and some goods may not be profitable in some markets. Meaning; Not available

Would northerner’s have fresh lettuce in the winter months without multinationals?

Maybe, but growing produce in northern greenhouses in the winter months is more costly than growing vast quantities of it in the south and then shipping it north.

The benefit of large-scale production that only multinationals can manage is that lower and more uniform pricing is the result. Aside from exchange rates, the price and quality of lettuce is pretty much the same across North America due to the large-scale production and shipping methods of agricultural and transportation multinationals.

We survived for thousands of years without multinational corporations and we could do so again if the need arose. They’re not as indispensable as they would like us to believe. Some countries operate without them or have only limited interaction with them.

But they do allow us more variety in the marketplace, lower and more uniform prices, uniform levels of quality, access to financing via multinational banking syndicates and year-round agricultural products.

So, mostly good. Until they try to take our countries on the sly

One of the major definitions of sovereignty is that nation-states have the right to create and pass legislation pertinent to their country.

In Canada, the country I live in, it has historically been the right of various levels of government to pass laws governing the actions of people, corporations, and of the government itself. Here, there are three levels of government, federal, provincial and municipal and most nations have parallel arrangements.

Notice the part where I mentioned the government can pass laws to regulate corporations?

In Canada, corporations can be regulated by three different levels of government. Which is a hassle for corporations as they must occasionally meet the regulations of all three levels of government. This is to protect the rights of citizens and workers.

Let’s say that I live in a small town and a large corporation wants to build a nuclear power plant next door. They want to buy many of the homes in the neighbourhood, tear them down, and install a nuclear power plant thirty feet from where I live.

They can’t do that in Canada because this is a developed nation and Canadian citizens have rights. All three levels of government would come together to stop such a plan from getting past the drawing board.

If you live in a developed nation, your town or city would likewise intervene if a corporation tried such a stunt. The government works for the people to prevent inappropriate development from occurring. Just one of the benefits of living in a developed nation.

But with the proposed free trade agreements governments will get sued by corporations for passing new laws or changing existing laws and regulations that could impact their operations. There is no legislation preventing the most frivolous of cases being brought against any level of government. Nor is there any limit to how many court cases (frivolous, or not) that corporations can bring against the government.

A profound change is about to hit our civilization — in ways we can’t yet imagine

Whether the corporations win every court battle or not may be completely irrelevant. If you represent a corporation you can choose to tie up the court system with challenges to new or changing laws — or merely threaten to tie up the court system with legal challenges. And of course, corporations can be quite active in the media with some owning entire media chains.

All of this could leave government employees (both elected and civil servants) afraid to do their jobs in case they, or their department, get sued by a foreign multinational corporation. Which has already happened.

At that point, we no longer live in a democracy

Hundreds of thousands of valiant men and women died in wars and in conflicts to defend our rights and freedoms. And they didn’t make the ultimate sacrifice so that neophyte trade negotiators or accomplices of the multinationals (choose your terminology) could hand over those hard-won rights and freedoms to a (possibly foreign-based) corporation.

It’s completely normal for corporations to want to diminish the power of governments as this gives them more latitude to operate and may increase profits.

The question is; Should we give them unique levers of power over our elected governments? Levers that citizens don’t have!

Again, it’s not that corporations are evil. It’s not that the people running corporations are evil. But corporations are in business to profit their shareholders, wherever those shareholders live in the world.

They’re not in business for the citizens nor should they pretend to be. Their industry is what matters to them, consequently, they have their own agendas which can conflict with national sovereignty, with the democratic rights of free people, with civil rights of citizens and worker rights.

Benito Mussolini created the word ‘fascism.’

He defined it as ‘the merging of the state and the corporation.’ He also said a more accurate word would be ‘corporatism.’

This was the definition in Webster’s up until 1987 when a corporation bought Webster’s and changed it to exclude any mention of corporations. — Adam McKay

See what I mean?

Corporations aren’t in business for us! They’re in business to make a profit for their shareholders — and while that’s not a bad thing — it can conflict with the role of governments, with the rights of citizens, and of workers.

Conversely, governments exist to protect national sovereignty, democratic rights, the civil rights of their citizens, and worker rights.

Cut to today’s Western economies…

The corporations don’t have to lobby the government anymore. They are the government. — Jim Hightower

Handing-off our hard-won rights and freedoms to corporations will not increase our rights and freedoms, nor does it strengthen our democracy — no matter what corporate spin is put on it.

We elect our leaders to guide and protect us from threats to our society. CEO’s of foreign corporations are not elected by our citizens, are not accountable to us, cannot be removed from office at elections, and can be faceless people moving among us, yet may soon have more power over us than the people we elect to protect our interests!

Not only that, but CEO’s tend to be nomadic by nature. If one CEO gets too much heat due to a particular policy or an unpopular project, they simply leave that corporation to become a CEO somewhere else — leaving the whole mess behind with little in the way of personal punishment.

Did firing the CEO of Exxon magically fix the Exxon Valdez oil spill? No. Did firing the CEO of BP magically fix the blowout in the Gulf of Mexico? Of course not. Did firing the CEO’s of major financial institutions in 2008 magically repair that damage to the economy and to the financial situation of millions of people? No.

All of them walked away from those situations and were simply hired somewhere else after a short vacation in some exotic locale. Not what you’d expect, yet it’s a common practice.

I’ll bet you can’t even remember the names of those CEO’s

If you or I commit gross errors or outright frauds which later cause untold economic or environmental damage we’d go to prison for life.

But if you’re a CEO, you get fired and you pick up your multimillion dollar bonus before you leave town on your way to a nice vacation spot. Then you settle in as a CEO of a corporation down the street from your old office. Just like that. See? No problem. Except for the truth that he or she might have destroyed the environment, or the economy, or people’s livelihoods — or all three.

In Andrew Jackson’s time 1767-1845, we were warned about the dangers of corporatism

Unless you become more watchful in your states and check the spirit of monopoly and thirst for exclusive privileges you will in the end find that… the control over your dearest interests has passed into the hands of these corporations. — Andrew Jackson
I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country. — Thomas Jefferson

Both Andrew Jackson and Thomas Jefferson worried about too much power concentrated in the hands of too few industrialists, which is exactly what played out in the former Soviet Union — is now a concern in the West today — and was well expressed by such groups as the Occupy movement.

Cut to modern America…

Multinational corporations do control. They control the politicians. They control the media. They control the pattern of consumption, entertainment, thinking. They’re destroying the planet and laying the foundation for violent outbursts and racial division. — Governor Jerry Brown
If our elected leaders and their negotiators fail us, it could eventually change everything about our way of life. Whether they do it in cahoots with multinational corporations or will be outclassed in negotiations remains to be seen.

That’s almost irrelevant, however. What really matters is preventing corporations from unduly influencing elected politicians and civil servants so that our democracies become permanently stuck under the corporate thumb, our citizen rights and worker rights become weakened, and citizens and governments alike become mere extensions of multinational corporations.

That isn’t what millions fought and died for.

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