Sunday, January 18, 2015

Democraticide, that's the real problem with TTIP

Of late, whenever I tweet something on #TTIP (you know, the Free Trade Agreement (FTA) that US en EU are currently negotiating) I am immediately chased by a bunch of official trolls, trying to seduce me into dialogue or bombarding me with counterclaims and links to the official line of the EC on this. Confuse the opponent with 'official facts' and transparency' seems the new strategy since Cecilia Malmström took up the post of European Commissioner for Trade.

Note the EC website dedicated to TTIP, which abounds in interactive features, overwhelms the reader with documents and information and is scattered with nice sounding terms like 'transparency', 'openness' and 'public interest'. Note the 49 (!) documents that Malmström has made available on January 7, albeit after gentle prodding from the European Ombudsman. Clearly following the precept: If you can't convince them, bury them under your shit!

Make no mistake: transparency is much to be preferred to the policy-making-by-stealth through which so much in the EU is being decided. But even better than enforced, hesitant transparency ex post would have been voluntary co-decision making for citizens ex ante. Moreover, as Corporate European Observatory noted, much that has now been made public had already been leaked over the last few months. Even worse is that many crucial passages are still blacked out. In other words, this is transparency a la EU not the full blown reempowerment of European citizens that the EC claims it up to be.

Malmström's new strategy is not only the outcome of the failings of the De Gucht-method, her predecessor. According to De Gucht it was only natural that decisions that would have far reaching consequences for the livelihood of more than 850 million people would be the sole prerogative of a small bunch of technocratic 'experts' without any democratic oversight. And whatever criticism there might arise could always be waylaid by blinding the hoi polloi with the growth and employment benefits cooked up by commercial think tanks (Bertelsmann Stifting, Ecorys, Ifo) in commissioned reports (see here for a critical assessment by the Austrian Foundation for Development Research of the claims made in these EC-commissioned reports).

But Malmström's strategy is as much the outcome of the poor quality of arguments against TTIP endorsed by its critics. To put it bluntly, if 'chlorine chickens', 'hormone beef', genfood, Monsanto's Round-Up and secret trade dispute settlement procedures is all that is wrong with TTIP, Malmström and her trolls are going to have a field day. For in that case, she will zoom in with deadly precision on precisely those concerns and will go out of her way to address these -- and forget the rest.

Take the document dedicated to the public consultation on the controversial Investor-State-Dispute-Settlement (ISDS) procedures. Two third of the contributions expressed concerns over TTIP as such and could hence be disregarded since that was not within the remit of the consultation. This serves as a reminder that the recent PR attempt of the EC is not about democracy or citizen involvement, it is about the legal trappings of consultation in order to proceed towards concluding the treaty as quickly as possible. Hence the importance for citizens to spell out what is really at stake with TTIP.

That is not as hard as it seems -- and doesn't require fancy econometrics. For the logic of TTIP is exactly the same as that of any other FTA, including NAFTA and the European Single Market: the incremental integration of national markets through legal harmonization into a single supranational market with one set of entrance, exit and compliance rules in order to decrease the costs of transactions, especially for multinational corporations. The issue is that once an FTA has been concluded decision making automatically moves from politicians to judges and lawyers. It is judges who, using the liberalizing spirit of the agreement and mostly after gentle prodding by an MNC, enforce further harmonization. In that sense, TTIP does the same as NAFTA or the Single Market did and do, albeit between two already integrated trading regions (US and EU) instead of between different nation-states. TTIP can thus be expected to have the same (negative) effects on employment, equality and democracy as NAFTA and the Single Market. 

Take NAFTA. A recent study by Public Citizen, an American NGO, has shown that NAFTA resulted in unprecedented deindustrialization in the US. It is estimated that since 1994 more than five million well-paid manufacturing jobs have disappeared. Similarly, more than 57 thousand US manufacturing facilities have gone, either through bankruptcy or through off shoring and outsourcing. Moreover, NAFTA and other FTA's have substantially added to income and wealth inequality in the US. While high income earners have seen their take of the national product grow year-on-year to reach the unprecedented levels of today, the US middle classes have over that same period seen their incomes remain stagnant or even decrease. Another effect of NAFTA has been massive dislocation among Mexican peasants, providing an endless stream of illegal immigrants moving into the US to man the increasing number of McJobs generated by the industrialized US food industry. And, as Naomi Klein, has demonstrated in her new book, This Changes Everything, NAFTA has proven incompatible with local democracy. Canadian subsidies for green energy were successfully attacked by US energy giants as 'market distortions' under the ISDS-procedures of NAFTA. 

Same story with the European Single Market. Research by Jason Beckfield of the University of Chicago has shown that market integration under the Single Market has had a substantial effect on Europe-wide socio-economic inequalities: almost half of the increase in income inequalities in the EU since the early 1990s can be attributed to the Single Market. The explanation is twofold: the integration of countries with diverging income levels results in downward pressure on average wages in 'expensive' countries. And market harmonization results in legal attacks on labor rights ('negative integration', see below), creating a rapidly expanding army of precariously employed. Moreover, as research by Genschel, Kemmerling and Seils has shown, the logic of the Single Market has overcome coordinative logics in the sphere of tax competition and has resulted in increased tax competition between member states, declining fiscal contributions from (large) corporations, increasing tax burdens for citizens and poorer quality of public services.

Finally, as the German political scientist, Fritz Scharpf, has been arguing in a series of books and papers, the Single Market is intrinsically incompatible with the moral precepts of democracy. Because European law takes precedence over national law, the Single Market Act of 1985 in fact implies that everything -- national exceptions and subventions as well as national sovereignty -- has to bow before the radical neoliberal interpretations that the European Court of Justice has given to the 'four freedoms' (of capital, labour, goods and services). In the words of Scharpf:

In substantive terms this meant that all European law and its judicial interpretation would gain constitutional priority over the laws and constitutions of member states. In other words, political objections to legislative harmonization could be and were bypassed by the Court’s capacity to disallow national regulations and practices which, in its interpretation, were constraining undistorted competition and the free movement of goods, services, labor, and capital (i.e., “negative integration”) (see here for paper).

As soon as an FTA is constitutionalized, its implementation is no longer a matter of politics (who gets what, when and how) but becomes a matter of legal enactment, turning the agreement into a veritable machine for neoliberalization. Scharpf correctly has called this a 'coup d'etat'.

TTIP means, just as NAFTA and the Single Market (and any other FTA), a new constititution with just two clauses: (1) government of , by and for large corporations, and (2) one euro, one vote. And should hence require broad citizen involvement and parliamentary supermajorities.

Democraticide, that's the real problem with TTIP.