Trade Area Agreements Damage Democracy

Everybody is aware of the effects of Trade Area policies like NAFTA and CAFTA.  They promise lower prices and prosperity, freedom and happiness, but deliver draconian policies and enforcement mechanisms that hurt workers, the environment, and democracy.  The latest maneuver in this bait and switch approach to trade, which some know as “NAFTA on steroids,” is called the TransPacific Free Trade Area proposal, or the TPFTA.

So the current situation is a bit like the old saying, “We have an elephant in our living room.”  There is something that everybody in the room knows is a problem, but nobody is willing or able to talk about it.  So why aren’t people talking about the TPFTA negotiations? Where are the rival presidential candidates opposed to unfair trade deals that will produce a “great sucking sound,” as Ross Perot proclaimed in his opposition to Bill Clinton and NAFTA?

Nobody is talking so far because the process is being carried out behind closed doors. The nations discussing the proposed agreement have agreed to keep the text, the meeting agendas, and even their notes secret until four years after approval (or failure).  The only groups privy to the negotiations are corporate executives named as “advisors” for the negotiations, not civil society organizations, nor labor, not environmental groups. So people aren’t talking about it, even though negotiations have gone on for years, because they are sworn to secrecy and there is an effective media blackout on the proposed agreement. 

Seems like an odd way for the participating democratic countries to proceed: claim democracy as your system of governance, then hide your proposed policies from your voters, only to spring it on them after everything is set in stone to try to avoid public opposition. Trade Area agreements, like the World Trade Organization deal of 1995, have been plagued with secrecy problems from early on, so that the need for transparency has been a consistent demand of proponents for fair trade and global justice. This new tactic of keeping all negotiations secret is a Public Relations attempt to limit the ability of opponents from mobilizing against the proposals. It makes a mockery of the new moniker for this particulare trade area deal, the “partnership,” unless the relations between government trade officials and corporate executives is what they mean by “partnership.” For this reason, the TPFTA might better be known as the TransPacific Back Room Deal (TPBRD).  But back room deals don’t smell so good: they smell like cigar smoke and corruption, rather than the clean air of open-door democratic negotiations.

The secrecy only makes sense if we remember that so-called free trade pacts are tremendously unpopular; a November 2010 poll by the Pew Research Center found that only 35% of people in the U.S. believe the agreements are beneficial, and the numbers are worse in other countries. So of course the negotiating countries want to keep the public out of the process, since they remember losing the battle for this type of agreements in the fight over the Multilateral Agreement on Investments (MAI), on the Doha Round of the WTO negotiations, and the Free Trade Area of the Americas (FTAA).

This aversion to democratic process characterizes not only the TPFTA negotiations, but also the Trade Area agreements in general. Jane Kelsey has shown how they take decision-making power away from democratically elected bodies in many areas beyond trade and investment to give decision powers to transnational corporations and closed door tribunals staffed not by judges but by trade officials. That is why she describes neoliberal trade agreements as giving priority to corporate demands, profits, and lawsuits over all other interests. These other interests, what  called “non-commercial” interests in the world under globalization, include any policies and regulations that promote the public interest, rather than private profit. In other words “non-commercial” interests are public interests, and trade agreements are really about private interests only, even when governments that claim to represent their publics draft the agreements.

The privileging of private profit over all other government policies constitutes a massive rearrangement of social priorities and government practices, a kind of silent coup. In this sense, the so-called “free trade” agreements are not free, and they are not really about trade. The overthrow of electoral representative forms of democracy and their replacement with corporate rights to profit are what Lori Wallach of Public Citizen’s Global Trade Watch has called a Trojan Horse. By thinking consumers are getting the gift of benefits, we invite the Trojan horse into our democratic system through treaty ratification, only to find that its leverage mechanisms and tribunals attack democratic practices.

Trade Area agreements like the TPFTA are like corporate rights agreements. They allow corporations to avoid national and local courts and to eliminate domestic laws that get in their way.  They can eliminate national laws through World Bank and United Nations tribunals, very much like the World Trade Organization tribunals set up by the WTO in 1995.  Through something called an “investor-state” suit, corporations can sue nation-states and charge them with violating the Trade Area agreement. These suits are heard in secret chambers by trade officials, who decide whether the agreement has been violated. So when complaints have been brought through this tribunal system over the past fifteen years to protect public interests, corporate trade interests have defeated public interests over 98% of the time, according to WTO and World Bank statistics. No due process. No appeals process. No transparency. And the tribunal decisions are binding, and may be enforced with trade sanctions and other penalties.

Perhaps more ominously, the Trade Area agreements are permanent. The only way to change the agreements is generally if all nations party to the agreement agree to the change. So if voters in one nation who signed the agreement want to change their own policies, they cannot change them without putting the nation at risk for investor-state suits and penalties. This is why I refer to the TPFTA as the TransPacific Corporate Rights Deal (TPCRD); it is not about freedom and it is not really an agreement, since the vast majority of people affected by these trade area deals do not agree to the deals. In the view of Kenneth Davidson, such agreements take sovereignty for state policies away from democratic governments, shifting “from the one-person, one-vote democratic formula to the one-dollar, one-vote market formula.”

This is the trade proposal that Hilary Clinton’s major 2011 foreign policy statement supported. The TPP is a cornerstone in the so-called Pacific Pivot, as the Obama administration turns U.S. attention towards the Pacific Rim rather than following the historic focus of U.S. foreign policy on Europe and the Mediterranean and Middle East.  While Clinton claimed that the TPP and other U.S. policy initiatives will “enhance regulatory regimes,” such trade agreements historically have only served to lower regulation to the lowest common denominator among participating nations.  Clinton heralded the TPP as beginning of “the Participation Age, where every individual…is a contributing and valued member of the global marketplace.” Clearly Clinton means participation in predatory market practices dominated by large corporations and not democratic participation by all citizens of all political, socio-economic, and other classifications.

The text of these TransPacific Proposals are currently undergoing a series of secret negotiations around the Pacific Rim that started in 2010. The secrecy was met with an international campaign throughout 2011 by farmers, human rights groups, labor, indigenous and environmental groups, political parties, education and public health organizations, and other civil society organizations to publicly release the text being negotiated and open the process up to democratic participation. This campaign has followed the negotiators as they have moved from Malaysia to Chile to Peru to the U.S. to Australia and New Zealand for each round of negotiations.

The most recent round of TPP negotiations was held last week in San Diego. As has been the practice of each participating nation, negotiations were closed to all stakeholders except for large corporations. The United States Trade Representative officials did meet with non-corporate stakeholders, but only in order to “answer questions and brief stakeholders on the ongoing talks” or to “hear from and share information with” them rather than opening negotiations for their direct participation. This anti-democratic practice demonstrates how nervous the negotiators and the elected representatives they serve are about public opinion on the proposed agreements.

Only the future will tell how effective democratic organizing and interventions will be in stopping such anti-democratic proposals.