Free market nightmare

Nick Dearden on the danger of Johnson dancing to Trump’s tune on trade

Boris Johnson is in office and moving with great speed to embark on a number of post-Brexit trade deals, deals which could fundamentally and irreversibly shift the balance of power and wealth in favour of capital.

An ‘independent’ trade policy has always been at the heart of the Tory Eurosceptic vision of Brexit. Partly this comes from their imperial fantasies, in which Britannia will once again use her control of the seas to impose free trade on the rest of the world. But there’s a hard reality to their trade obsession too: trade deals today are mammoth agreements which can effect massive changes across an economy with no parliamentary accountability and the force of international law to hold them in place. As such they are a key mechanism for deregulation, liberalisation and corporate rule.

Johnson’s prize is a US deal, of course. This suits Donald Trump down to the ground – he’s spent the last three years using trade policy to undermine the economies of the US’s main competitors, the EU and China. As leaks from the US trade talks have shown, US negotiators are desperate for the hardest possible Brexit, moving Britain away from EU standards and protections both as a way of increasing the penetration of US capital in the British economy, and weakening the EU economy as a whole. The changes which Johnson has already made to the EU Withdrawal Act are dancing to Trump’s tune.

So what does the US want from a trade deal with Britain? First it wants regulatory changes. At the moment, industrially produced US agriculture is often blocked from EU markets because of the quantities of antibiotics, steroids, hormones and chlorine used. The US is demanding these prohibitions are removed. This wouldn’t necessarily change British standards, but it would mean these US goods appearing on our supermarket shelves.

This is how modern trade deals put downward pressure on standards and protections across the board. In case you think, ‘well, it’s up to the consumer what they eat’, remember that the US is pushing hard to reduce labelling standards under a trade deal. And, perhaps more importantly, British farmers’ ability to compete against this industrial-scale agriculture depends on us too adopting lower standards and ‘getting big or getting out’.

Second is services. Trade deals are increasingly about ‘trade in services’ and ensuring that sector is as liberalised as possible. This includes everything from energy services to financial services to telecommunications, insurance, and much of what we’d regard as ‘public services’. Once liberalised, it’s a one-way street – trade deals have ‘standstill’ clauses to ensure countries cannot ‘un-liberalise’ services and ‘ratchet’ clauses to ensure that any policy change goes in the direction of more liberalisation.

So taking public control of energy, telecommunications, broadband, contracted-out bits of the NHS, are all extremely difficult under these clauses. True, you can opt out services from these liberalising disciplines, but it’s not as easy as it sounds. You can’t opt out services that don’t yet exist (think NHS online services), and it relies on having a government that actually wants to exclude certain services from trade deals.

Related to this is intellectual property provisions, which also get higher and more stringent under trade deals. Trump calls us ‘freeloaders’ off US drug research because we don’t simply allow the market to dictate what the NHS should pay for new medicines. In trade deals, he’s trying to force countries to remove the ability to regulate medicine prices, potentially raising medicine costs to the NHS astronomically. And this is not all one way – Johnson’s government will attempt to do very similar things in trade deals with developing countries, potentially threatening access to medicines for millions of people across the world.

A new innovation in trade deals is the so-called ‘e-commerce’ agenda. This is really about setting new global rules governing digital trade. Sadly, the current push – for US and British governments – is setting those rules in the interest of the Big Tech industry. This makes it much more difficult for governments to hold Big Tech companies to account – it makes it more difficult from them to control where Big Tech can hold your data, impossible for them to scrutinise source code and algorithms, and harder for them to tax and regulate Big Tech giants. US negotiators have told us that a digital services tax would be impossible under a US trade deal. Doubtless public broadband would be too. Trade Secretary Liz Truss won’t mind – she’s already said we are “a nation of Airbnb-ing, Deliveroo-eating, Uber-riding freedom fighters”.

Finally, modern trade deals often include a parallel legal system only open to foreign-based big business. This ‘corporate court’ system allows corporations to sue Britain for doing almost anything they don’t like: environmental protection, regulating finance, renationalising public services, anti-smoking policies – you name it. These things already exist in numerous international deals and have seen tobacco giants suing countries for putting cigarettes in plain packaging, water companies suing when governments raise the minimum wage and, recently, an energy company suing when a government promised to phase out coal use.

While such tribunals exist already, they don’t currently exist between the US and European Union. The potential for thousands of the biggest corporations in the world to sue the British government for practically anything they don’t like is a chilling prospect indeed.

Trade deals today aren’t just massive. They’re also incredibly secretive. In the EU we spent many years fighting for a relatively open and democratic trade negotiating process. In Britain, we haven’t even started to have that fight. That means that as things stand, MPs have no right to see a government’s negotiating objectives, no right to see the negotiating papers and an ability to stop a trade deal that they don’t like. Trade deals will be negotiated under royal prerogative. While Theresa May relented to parliamentary pressure and promised some accountability to MPs in negotiating an EU-UK deal, Boris Johnson has removed those commitments.

So our ability to stop these deals will be won or lost by campaigns, in the media, and on the streets. It is possible. Trade deals have been defeated by campaigning before – most recently the US-EU deal TTIP. But we need to make crystal clear what these deals mean – both for us and for others, as we will discover when Johnson starts negotiating in earnest with African, Asian and Latin American countries. Trade is not primarily about eating more interesting foods from far-flung corners of the world. Deals like the US-UK deal is about handing vast swathes of our society over to big business. We can and must stop it.

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