The EU and TTIP – A Treaty Made in Hell!!

Posted by Mike Gold on Sunday, April 5, 2015 · Leave a Comment

“Fascism should more appropriately be called Corporatism, because it is a merger of State and corporate power.” Benito Mussolini

The Common Market, formed in 1957, originally consisted of 6 member states –- Germany, France, Italy, Holland, Belgium and Luxembourg.

The basis of the Common Market was the free movement of capital, goods and labour between the member states – the resulting free trade would increase the wealth of all its member states. However, economics is not an exact science – maybe not even a science at all – and theory doesn’t always translate into practice.

The basis for increasing wealth was that the abolition of import duties would reduce prices, and the subsequent increased consumption would be sufficient to offset the loss of import duties. It was also implied that the economic idea of competitive advantage would allow each country to specialise in what it did best.

The notion that independent states could form an economic union without political union was not new. In 1833, the German states (Germany was not a unified country until 1871) formed a Zollverein – a customs union – abolishing custom duties. The union lasted in various forms until 1919, and included some Nordic & central European countries.

If the Common Market had stayed a customs union, it might have been successful. But it didn’t. There are now 28 member states and 11 are Eastern European, previously part of the Soviet bloc. The reasons for the Eastern European states joining are more geo-political than economic and the result is the EU now has borders with Russia and some countries and many politicians openly want a Federal European State.

Neo-liberal economics now dominate the EU, and the free movement of capital and labour has become more important. Capital looks for the best returns, which invariably involves finding the cheapest labour, and the lowest safety and environmental standards. Manufacturing is moved to Eastern Europe or the third world, and goods are then shipped – at great environmental cost – to the first world, where manufactured goods have greatly reduced in price.

Not all ‘goods’ are manufactured (e.g. services such as hospitality, health and care, farming etc) and these cannot be shipped across Europe. This leads to cheap labour being recruited in Eastern Europe, mainly by gang-masters retained by British and other EU companies.

As a result, free trade has disappeared, and a quasi-totalitarian system taken its place. However, it is not governments who are running the system but corporations – multinationals and transnationals – mainly controlled by a small group of finance companies, many based in the US or a tax haven!

Whatever the intentions of the founders of the Common Market, and however it operated in the first years of its existence, there is only one certainty today. And that is that the EU is not a free market. In fact, it is not any sort of market in any real meaning of the word.

The Common Market has become an Uncommon Market, a monopolistic cartel making vast profits, avoiding tax and driving wages and conditions of employment lower and lower.

If, as expected, the EU/US Transatlantic Trade and Investment Partnership (TTIP) treaty becomes law, then the corporations will have completely taken financial control from elected governments. If a company thinks it has been treated unfairly in the awarding of contracts (including contracts for the NHS) it will be able to legally challenge any Government. But a legal challenge against the British Government, for instance, would not be held in a British court – but under an Investor States Deputes Settlement (ISDS) procedure, which is a tribunal made up of competition lawyers, and with no right of appeal.

There are already ISDSs existing under similar trade treaties such as the Trans Pacific Partnership (TPP) and there is the absurdity of Philip Morris, a tobacco company, suing the Australian government over the introduction of plain packaging for cigarettes

Many will ask how can governments allow this to happen, and why would they sign a treaty to transfer financial power to unelected corporations? Maybe Mussolini was right, and this is fascism or corporatism. Politicians, individually and collectively, have been converted to neo-liberal economics. Certainly, there appears to be a prevailing fundamentalist belief to support the current ethos that the state must have no power to regulate economic or financial activity or governance.

A simpler explanation could be that politicians want a very good pension when their political life is over, and the companies that will benefit from TTIP will always need ex-politicians who know their way around the seats of political power.

Voters in the EU and the US will not have any opportunity to vote on TTIP – it’s happening behind closed doors in Brussels and Washington. The politicians and the corporations believe that there is nothing ‘ordinary’ people can do to halt the progress of this capitalist, corporatist behemoth.

Capitalism and the mainstream political parties need to recognise the increasingly dire economic circumstances of millions of people, and the increasing inequality in our society. Or do they, too, from their lofty and wealthy positions, feel that the poor can always eat cake? If they do sign this treaty, the future could become an Orwellian nightmare for the rest of us.

This is a race to the bottom, and if the descent is not halted, eventually, something will have to give. It is always said that change happens when the existing order can no longer rule, and that is often when people do not have enough to eat. In that sense, the sudden appearance of food banks all over Britain may auger that change will happen.

When or what the catalyst will be, no one knows yet. But at some point in the future, the 99% will recognise the importance and reality of Shelley’s words: ‘Ye are many, they are few’.

The political system in Britain and in many other parts of the EU has fallen into total disrepute. What are our alternatives? Taking to the streets? Politicians and corporations should remember that many countries in Europe have a history of violent revolutions and counter-revolutions, when those in power have tried to create a society of such extremes. Even the English have executed a King!

Do you hear the sound of the tumbrels rolling towards the guillotines?

Michael Gold,

michael@radicalsoapbox.com

@radicalmic