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IBON PRIMER ON:

21ST CENTURY
FREE TRADE AGREEMENTS
TRADING AWAY OUR FUTURE
FOR CORPORATE PLUNDER AND PROFIT

IBON International
ISBN 978-971-9657-04-0
Copyright
@ IBON International 2015
Some Rights Reserved

IBON International holds the right to this publication. The publication may be cited in
part as long as IBON is properly acknowledged as the source and IBON is furnished
copies of the final work where the quotation or citation appears.

As an international NGO, IBON International responds to international demands

to provide support in research and education to people’s movements and grassroots
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IBON International initiates and implements international programs, develops and hosts
international networks, initiates and participates in international advocacy campaigns,
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Image Credits:
Gobierno de Chile
Paul S Allen
Fuzheado
 Table of Contents

Foreword v

Chapter 1: Imperialism and the WTO 1

Chapter 2: Beyond the WTO:

New Trade Agreements on the Rise 17

Chapter 3: Major Thrusts of the New FTAs 47

Chapter 4: Impacts and Consequences 73

Chapter 5: People’s Resistance 101

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 Foreword

New free trade deals across regions are being negotiated that will have
far-reaching implications for peoples in both the global North and South
and for the future of the world economy. But these deals will neither benefit
the democratic majority nor rescue the world economy in crisis.

These deals are in fact tailored to fit the ever expanding demands and
interests of big multinational corporations. These deals are often advertised
as “partnerships,” such as the Transpacific Partnership Agreement and the
Transatlantic Trade and Investment Partnership, but these deals are far from
partnerships of equals. They are being managed and directed by the global
corporate elites, the United States, and the European Union.

The new free trade agreements are being negotiated in secret. But
what exactly are they hiding away from public scrutiny? This new
IBON International primer reveals that advanced industrial countries are
attempting to revive their unfinished liberalisation and decontrol agendas.
These include new and expanded rules on services, regulations, competition,
investment, and investor protection. These policy proposals will lead to the
further concentration of wealth and power in the hands of big corporations
while rolling back the important gains achieved through people’s collective
assertion of their rights including policies to ensure workers’ welfare,
regulate corporate behaviour, and protect the environment.

Chapter 1 of the primer is divided into three major sections. Section

1 provides an historical account of the rise of the multilateral institutions
IMF, World Bank, and the World Trade Organisation and the rules they have
drawn to help shape and govern the global economy. Section 2 zeroes in
on the failed attempts of developed countries to expand the jurisdiction of
the WTO over new areas of and beyond trade. Section 3 documents the
undergoing impasse at the WTO negotiations and the internecine conflicts
between developed and developing countries.

vii
viii

Chapter 2 narrates the rise of bilateral and regional trade agreements

beginning with the Canada-US Free Trade Agreement (CUSFTA) and
the North America Free Trade Agreement. The chapter also serves as an
introduction to the so-called 21st Century free trade agreements, particularly,
TTIP, TPP, CETA, and TiSA.

Chapter 3 argues that the new free trade agreements are patchwork of
proposed deals negotiated by developed countries within the multilateral
trade regime and previous plurilateral and regional/bilateral free trade
agreements especially those spearheaded by the US. Five elements common
to these new free trade agreements were identified such as enhanced investor
rights, deregulation, privatisation, liberalisation, and capitalist expropriation
of the commons.

Chapter 4 describes the impacts and consequences of the new free

trade agreements and how these will lead to the erosion of people’s socio-
economic rights and liberties and the loss of credibility and independence
of governance bodies. It underscores the significance of these new trade
agreements being negotiated mostly by developed countries even for people
in countries that are not party to these negotiations.

Chapter 5 offers practical guides for activists to build broad and

effective strategies to defeat the new free trade agreements including points
for education and fostering awareness among sectors and communities;
building organisations and forging alliances; and conducting mobilisations.

The primer is being published to help organisations and movementsin

their presenteducation and campaign efforts against the new free trade
agreements. It offers in-depth analyses of contexts and features of the deals
to respond to the challenge of the general gap in public information given
the lack of public access to the texts. The primer is IBON International’s
contribution towards building a collective resistance against the new free
trade agreements in particular and against imperialist globalisation in
general.
 CHAPTER 1

Imperialism and the WTO

Today, new free trade deals are being fashioned that will position the
world’s superpowers and their transnational corporations at the centre of
their own strategically drawn up domains, traversing both sides of the pacific
to Eastern Europe. But far from being a means to open up the world to the
further intensification of trade and to free capitalism from its own fetters,
these deals, orchestrated primarily by US imperialism, will only lead to the
concentration of resources, wealth, and power into the hands of the narrow
global elite.

IMF-WB-WTO: Troika for Monopoly Capitalist Domination

Globalisation is not a new phenomenon. Beginning 16th century, major

mercantile powers such as England and Holland embarked on territorial
conquests in the Far East, the Americas, and Africa. These colonial projects
were propelled by capitalists’ need to constantly expand markets for
their commodities, secure sources of raw materials including minerals,
petroleum, and agricultural products, and gain the upper hand in competition.
Oftentimes, the conquest of these colonies was carried through the violent
repression of local peoples.

Towards the end of the 19th century, competition and the commercial
crises resulted in the concentration of capital and the emergence of
monopolies as the dominant force in the industrial capitalist countries.
Industrial capital merged with bank capital to accelerate the growth of
capitalism as never before. The export of surplus capital gained crucial
importance over the export of surplus commodities thus making the role

1
2

of finance capital decisive. International combines of monopolies (cartels,

syndicates and so on) arose. By the start of the 20th century, monopoly
capitalism or modern imperialism had completely divided the world.
Outside the imperialist countries, territories were divided into colonies,
semi-colonies and dependent countries. The division of the world among
great powers was achieved through the First and Second World Wars.

Multilateral institutions played an important role in shaping and governing

the global economic regime in this process. While imperialist states will
employ from time to time direct occupation and military intervention ‘to put
recalcitrant states into place,’ dominant powers have also exercised indirect
colonial (or neo-colonial) rule by ensuring the economic subjugation of
weaker countries. In the post-World War II era, multilateral institutions
dominated by imperialist powers perpetuated this economic subjugation of
the former colonies.

IMF-WB and Structural Adjustment Programs (SAPS)

The international institutions that came out of the Bretton Woods

conference in 1944 were the result of the attempt of the Allied Nations
to create a post-World War II economic system that was flexible, stable,
conducive to capitalist growth, and steered clear of the nationalistic pressures
that culminated in two world wars within a single generation (Balaam &
Veseth, 2000). These institutions were the International Monetary Fund
(IMF) and the International Bank for Reconstruction and Development
(IBRD, later known as the World Bank).

As a supra-national body, the IMF had two mandates: to regulate the

rates at which currencies were exchanged among member countries and
ensure international stability by making loans at times of crisis in member
countries balance of payments. To avail of IMF loans, governments would
need to adopt a set of economic policies and financial measures based on
what the IMF thought would promote economic stability, increasing the
government’s capacity to make interest and loan repayments. These policies
and measures appealed to the neoliberal version of neoclassical economics
that required reduction of tariff barriers on imports, increase in interest
rates to cool the economy and reduce inflation, and imposition of austerity
measures that cut back government services and remove state subsidies that
kept food prices low (Peet, 2003).
 3

The World Bank initially poured efforts on rebuilding the war-ravaged

economies of Europe following World War II by acting as a direct lender
for financing development projects. From the 1950’s onwards, the Bank
began providing “development lending” to developing and least developed
countries (LDCs) (Balaam & Veseth, 2000) (Hobden, 2002). In 1979, World
Bank president Robert McNamara announced that the bank should use
programme loans to induce ‘reforms’ in recipient countries. These reforms
meant adjustments in countries’ development patterns and economic
structures to promote export-orientation and trade liberalisation (Peet,
2003). Following the lead of its senior partner, the IMF, the World Bank’s
structural adjustment loans (SAL) aimed at correcting deeper structural
problems through provision of policy-based loans (rather than project-
based), extending over several years

Thus a division of labour between the IMF and the WB was achieved: the
Fund was a “balance of payments institution,” with a short-term orientation,
while the Bank, a development institution, had a long-term focus.

GATT/WTO and Trade Liberalisation

Another important institution that completes the troika of global

institutions to secure imperialist control is the WTO. The WTO is the
formal and institutionalised version of GATT signed by 23 governments in
1947. The US wanted a third international organisation to regulate trade to
complement the IMF and World Bank. The proposed organisation would
liberalise trade in the specific interest of large exporting corporations, with
the more general aim of creating a market-oriented, deregulated economy
that was favorable to large multinational corporations.

The GATT regulated trade in goods (physical commodities) using

negotiated principles of liberalisation, equal market access, reciprocity,
non-discrimination, and transparency. In short, it was an attempt to promote
the application of ‘free trade’ principles on a global scale. GATT provided
rules for much of the world trade from 1948 to 1994 (IBON Databank
and Research Center, 2005). In 1995, with the conclusion of the Uruguay
Round, GATT was replaced by the WTO, signifying a new era in world
trading history within a new era of neoliberal globalisation (Peet, 2003).

The WTO works within the neoclassical economics discourse

of liberalisation of trade or the freeing of international movements
4

of commodities, and recently services, from government control.

Liberalisation of trade from tariffs and other governmental restrictions will
allow multinational corporations to function more freely at the global level
and result to a more rapid economic growth that benefits all. The WTO has
continued and developed the fundamental principle of GATT that exported
goods should generally be free to enter into the importing country. Hence,
it gives a framework for negotiations on tariff levels (with the end-view of
totally eliminating tariffs), non-tariff barriers, and other areas previously not
covered by GATT.

Throughout its existence, the WTO has resulted in widespread removal

of protective barriers to international trade such as import bans, import
quotas, tariffs, and so on. It has also brought more and more countries into
this regime of international trade as well as subject heretofore protected
or unaffected sectors in various degrees such as agriculture, services,
and investment, customs procedures and patents. Among the major and
contentious agreements achieved by the WTO with the conclusion of the
Uruguay Round were the agreements on Agriculture, Trade-Related Aspects
of Intellectual Property Rights, and Trade-Related Investment Measures.

The Agreement on Agriculture (AoA) was the first multilateral agreement

dedicated to the agricultural sector. The agreement contained disciplines
on market access or import restrictions, domestic support or government
support to domestic producers, and export subsidy or government support
for export. This agreement has reduced tariff protections for small farmers,
a key income source in developing countries, while simultaneously allowing
rich countries to continue subsidizing agriculture at home by switching from
one kind of subsidy to another.

In response to the growing trend in trade in services, the WTO

promulgated the General Agreement on Trade in Services (GATS) to extend
internationally agreed rules and commitments into the international exchange
in services. The GATS foreshadows the many provisions pertaining to trade
in services under the new free trade agreements, including equal treatment
to trading partners on the principle of non-discrimination, national treatment
or the extension of the best treatment given to domestic service providers
to foreign service providers, weakening of government regulatory powers
including through legislation, regulatory codes, administrative decisions, or
even unwritten practices, and privatisation of state-provided services.
 5

The Agreement on Trade-Related Aspects of Intellectual Property Rights

(TRIPS) meanwhile provided for the protection of corporate intellectual
property. It addressed the applicability of basic GATT principles, together
with those already existing international agreements, to the provision of
intellectual property rights, enforcement of those rights, and multilateral
dispute settlement principles. The TRIPS became a component of the
Uruguay Round mainly through the lobbying of the US and its transnational
corporations, particularly the pharmaceutical industry and biotechnology.
The TRIPS exposed the dogma of ‘free trade’ espoused by the WTO as
one that promoted corporate rights, removed state intervention in trade and
investment, and protected corporate interests and property.

Finally, the Agreement on Trade-Related Investment Measures (TRIMS),

which dealt with investment measures thought to ‘restrict and distort’ trade,
was actually about deregulating investments and had little to do with trade.
It provided that no member should apply TRIMS inconsistent with GATT’s
provisions related to national treatment (local content requirements and
trade balancing requirements) and prohibition of quantitative restrictions on
imports and exports (trade-balancing requirements constituting restrictions
on imports, exchange restrictions resulting in restrictions on imports; and
domestic sales requirements involving restrictions on exports).

The Unfinished WTO Agenda for Monopoly Capital:

The Singapore Issues

Even at the very first Ministerial meeting of the WTO in 1996, Northern
governments led by the United States and the European Union were already
pushing to broaden the scope and increase the powers of the WTO. Behind
this agenda was the corporate push to include more non-trade issues in the
WTO such as investment, competition policy, government procurement, and
the removal of border regulations to trade. These four developed country
policy priorities formed part of the so-called Singapore Issues that were
drawn during the WTO Ministerial in Singapore in 1996.

According to Martin Khor, the common theme of the policy priorities

of the Singapore Issues was to enlarge the rights of foreign enterprises to
have market access to developing countries through their products and
investment; reduce to a minimum the rights of the host government to
6

regulate foreign investors; and prohibit government from measures that

support or encourage local enterprises (2003).

Investments

At present, the GATS and TRIMS provide foreign investors some

leeway in terms of entry and operations, but the full the liberalisation of
investments is not assured. Additionally, TNCs are not yet as fully protected
as they want to be.

On investments, the EU (supported by the US) pushed for the inclusion

of new trade rules to provide foreign investors new rights to enter countries
more easily and to operate freely (IBON Databank and Research Center,
2005). The European Commission proposed during the Singapore
Ministerial to negotiate a multilateral investment agreement and incorporate
such an agreement in the WTO.

Since the early 1980s, the US had been pushing for stronger rules on
investment. However, opposition from developing countries in the GATT
meant that full liberalisation could not be accomplished (Woolcock, 2003).
The US had more success in the North American Free Trade Agreement
(NAFTA) where it was able to clinch high standards of investment protection,
including against government regulation that denied investors the expected
benefits.

The pursuance of a multilateral investment agreement followed a two-

track approach. Negotiations on the Multilateral Agreement on Investment
(MAI) were initiated in the OECD in 1995, while the Multilateral Investment
Agreement (MIA) was proposed in the WTO.

Essentially, MAI sought to ease the movement of capital, both money

and production facilities, across international borders by restricting laws in
participating countries that were viewed as impediments to capital flow. It
also contained a provision for an investor-state dispute settlement similar to
NAFTA’s that granted investors the right to take legal action against national
governments and introduced a system of cash compensation for violations
of contract.

For proponents of MAI, a set of global rules governing investment

was urgent to lock in the liberalisation that had already taken place over
 7

the last two to three decades; protect the rights of investors to free, equal,
and safe access to markets; and resolve conflicts between governments
and transnational corporations. MAI would reduce the distorting effects of
policies such as the requirement for foreign firms to form partnerships with
local firms, or performance requirements which compel TNCs to respond to
a discipline other than that of market forces. Furthermore, MAI’s mandatory
and timely compensation for expropriation would serve as an incentive for
foreign investors in nations with less stable institutions (Sforza-Roderick,
Nova, & Weisbrot).

Opponents on the other hand contended that MAI would severely

restrict the ability of governments to shape investment policies to promote
social, economic, and environmental goals. MAI would provide binding
legal rights for corporations, but impose no binding obligations on them
with regards to labour rights, environmental standards, or anti-competitive
business practices (IBON Databank and Research Center, 2005). By
increasing the ability of investors to move production around the world,
MAI would promote a ‘race to the bottom’ wherein countries, in an effort
to entice foreign direct investment, would be pressured to lower living
standards and weaken, if not eliminate, regulatory regimes. Even regulatory
laws that were not in direct conflict with the MAI could be threatened by
an increasingly intense competition for capital (Sforza-Roderick, Nova, &
Weisbrot).

Competition

The EU pushed a new agreement restricting domestic laws or practices

in Third World countries favouring local firms on the basis that they were
inconsistent with free competition. For instance, policies that gave importing
or distributing rights to local business (including state-owned enterprises
and government-owned and controlled corporations) or practices among
local firms that allowed them to gain advantage in terms of marketing could
be challenged and imposed with corresponding penalties.

The EU contended that the WTO principles of national treatment

and non-discrimination should be applied on competition policy (IBON
Databank and Research Center, 2005). Foreign products or business should
be allowed to compete on equal terms with local firms. To achieve this,
policies that are pro-local would need to be phased out or eliminated. Even
state-owned enterprises or government-owned and controlled corporations,
8

which by default enjoy exclusive rights to trade, subsidies, and policy

favours, should be dismantled following free market precepts.

Government Procurement

The US demanded an agreement to liberalise government procurement

to give their companies equal access to the large share of the lucrative
business of providing supplies to and winning contracts for public service
projects in the Third World. At present, WTO members are allowed to
exempt government procurement from WTO market access rules, unless a
WTO member voluntarily joined the Plurilateral Agreement on Government
Procurement. Barely any developing country is a member, given that
developing countries have found it unacceptable to integrate government
procurement and its market access aspect into the WTO (Khor, 2003).

If an agreement on government procurement had pushed through as

developing countries wanted, government spending policies, decisions, and
procedures would have been subjected to the principle of national treatment.
That meant that government would no longer be able to give preferences
or advantages to citizens or local firms. Bids for supplies, contracts, and
projects (including privatisation deals) would have to be opened to foreign
corporations who should be provided with the same chances as locals. If
foreign firms thought that government decisions unfairly favoured local
firms, they could bring the matter to court in the WTO.

Trade Facilitation

This deal would supposedly make it easier for developing countries to

export to developed countries and vice versa. Trade facilitation refers to a
range of reforms (in policies, operating procedures, and infrastructure) to
reduce the complexity and costs of procedures in international trade: from
placing the order, to moving goods and services from the seller (exporter) to
the buyer (importer) and to making payments (IBON International, 2013).
The main objective is to make developing countries adopt the same rules
and procedures of developed countries.

Many underdeveloped countries opposed commitments on trade

facilitation because of grave concerns about spending scarce resources
and vulnerability to dispute proceedings. It ignored the disparity in
administrative, financial, and human resources between developed and
 9

developing countries (Khor, 2003). This would also largely benefit firms
such as the Societe Generale de Survaillance (SGS), a Swiss inspection,
testing, and certification TNC. Furthermore, some governments questioned
the need for new rules, while others believed that customs administration
was an issue that could be handled nationally (IBON Databank and Research
Center, 2005). Trade facilitation should not be the subject of legally-binding
rules and obligations in the WTO, for it would then impose obligations on
developing countries to take on programmes that they could not afford and
were not their priority (Khor, 2003).

Majority of the Third World countries opposed negotiations for

agreement on these four issues. However, developed countries were able to
come up with a compromise solution by creating working groups to discuss
them.

In 1997, the OECD MAI negotiations stalled and finally collapsed after
fierce opposition due to the combined critique of peoples’ movements, non-
government organisations, and some governments, most notably the French
and Canadian governments.

MIA likewise suffered some setbacks with a group of more than 20

underdeveloped countries led by India blocking a comprehensive agreement
on investment in the WTO. However, at the behest of the First World
countries, the WTO maintained a “working group” that would study the
relationship between trade and investments and effectively keep the issue
alive at the WTO (IBON Databank and Research Center, 2005).

Some level of progress was apparently made with regard to the issue
of trade facilitation after the Ninth WTO Ministerial in Bali in 2013 (see
below), but some developing countries, especially India, have reportedly
signified hesitance after an initial expression of support.

The Current State of the WTO

Recently, the multilateral trade regime has been undergoing an

existential crisis. The success of the GATT era has not been replicated.
Although the WTO has attracted many new members, including China and
Russia, negotiations are becoming more and more difficult for imperialist
10

powers to manipulate and control. Third World resistance as well as the

increasing influence of advanced economies from the Global South drive
geopolitical competition, threatening the dominant position of traditional
industrial powers.

The Doha Development Round

The WTO is currently attempting to finalise the Doha Development

Round (DDR) initiated in November 2001. A total of 159 countries
participate in negotiations covering trade in agricultural and industrial
goods, services, access to public procurement, and intellectual property
rights. Succeeding ministerial meetings were held in Cancun, Mexico in
2003, and Hong Kong in 2005. Related negotiations took place in Paris,
France (also in 2005), Potsdam, Germany in 2007, and Geneva, Switzerland
in 2004, 2006, and 2008.

Prior to 2001, developed countries called for another round of talks on

trade liberalisation during the Third Ministerial of the WTO in Seattle in
November 1999. This was met with massive protests by workers, farmers,
students, environmentalists, women’s groups, and the broad anti-capitalist
movements. Developing country representatives were as equally resistant,
voicing out their opposition to their exclusion from talks as the United States
and the European Union attempted to seal a mutual deal on agriculture. The
protesters successfully shut down the WTO meeting, forcing the negotiators
to relocate to Doha, Qatar. The protests in the Third Ministerial of the WTO
have become widely known as the “Battle in Seattle.”

Since its inception, the DDR negotiations have been marked with chronic
disaccord between member states. The most significant differences are
between developed nations led by the EU, the US, and Japan and the major
developing countries led mainly by India, Brazil, China, South Korea, and
South Africa. The starkest divisions are in the areas of agriculture, industrial
tariffs and non-tariff barriers, services, and trade remedies.

The DDR operates on the idea of a single undertaking, meaning

“nothing is agreed until everything is agreed” (McClanahan, 2012). If talks
in one of the many trade issues being negotiated hit an impasse, then the
whole negotiation cannot push through. In 2008 at a high-level meeting
in Geneva, they almost came close to closing a deal. However, after 10
 11

days, a disagreement surfaced between the US and India on rules governing

agricultural liberalisation.

Many from the developing world pushed for a review of the WTO
agreements in the Uruguay Round prior to a commencement in new
negotiations in other areas. Among their arguments were the detrimental
effects to developing countries of WTO policies including the TRIPS for
raising the cost of consumer products such as medicines, and hindering
innovation and technology upgrading; the TRIMS for prohibiting investment
measures such as local-content policy; and the AoA for allowing developed
countries to maintain their high protection through high domestic support
and tariffs while requiring the developing countries to liberalise their food
imports (Khor, 2007).

Unlike during the Uruguay Round negotiations, developing country

governments are under greater pressure from their citizens and therefore
more wary of making commitments in the WTO, especially considering:
(a) the perpetual nature of the commitments undertaken in the WTO and (b)
trade action by other members, if the member undertaking commitments
does not live up to its commitments (Naranayan, 2013). Because of this
awareness, developing countries try and resist pressures and unreasonable
demands that constrain their own development prospects.

The United States, the European Union, and other developed countries,
meanwhile, demanded greater access to developing countries’ industrial
sector while retaining some measure of protection for their agricultural
sectors. They also wanted to expand on the initial agreements in service
sector liberalisation established at the GATS. Developing countries were
not exactly enthusiastic about the tabled proposals since their potential
benefits were relatively small while the potential cost in terms of a loss
in sovereignty to deploy effective development policies were significant
(Gallagher, 2008). For developed countries, the perceived economic success
of the larger developing economies meant that it was time for them to step
up their role as trade liberalisers (Barbee & Lester, 2014).

Both sides have refused to resolve these differences; the WTO has so
far failed to come up with a comprehensive agreement. The DDR has been
stalled for 13 years as of this writing.
12

The Bali Package

With the bleak conclusion of the DDR, developed countries and

international financial institutions led by the IMF and the WB have used the
global financial, economic and food crises to pressure developing countries
to return to the negotiating table.

In December 2013, the Ninth Ministerial Conference of the WTO in

Bali, Indonesia arrived at a new trade package that formed part of the DDR.
At the start of the ministerial, some member countries and the civil society
pinned their hopes on the Group of 33 developing countries’ (G33) counter
proposals to turn the negotiations in favor of poor countries and sectors such
as farmers.

India at first declared that its food security was non-negotiable in its
objections to an agriculture provision that would conflict with its new food
security bill.

Cuba, together with Bolivia, Nicaragua, and Venezuela, meanwhile

insisted that the text relating to transparency and non-discrimination (the
US trade embargo against Cuba) had been omitted (Third World Network,
2014).

At the last minute, India and the Latin American countries backpedalled
on their positions. India eventually settled for a so-called “Peace Clause”
which allowed subsidies to farmers for a temporary period (Third World
Network, 2014). Cuba’s concern was addressed in the revised text of the
Bali Ministerial Declaration with the inclusion of a paragraph reaffirming
GATT’s non-discrimination principle.

The new accord included several best endeavour undertakings in terms

of issues pertaining to least developed countries in agriculture, but the most
important component of the approved Bali package was the agreement on
trade facilitation, one of the key demands of developed countries in the
Singapore Ministerial.

In practice, however, the deal was more favorable to developed

countries who have much stronger production and export capacities (IBON
International, 2013). First, the deal severely limited developing country
governments’ grain subsidies that developing countries need to ensure food
 13

stockholding programs, compromising their food sovereignty. Second, TFA

would simply mean that developing countries, whose fragile industries and
agriculture were already reeling from the impacts of unequal trade, would
be further weakened by the accelerated deluge of goods and services from
developed countries. It would require developing countries to implement
a set of rules reflective of the current trade facilitation practice of the
developed countries. The drafted and approved text of the Bali Package did
not require a change in law or regulations of the developed countries, “but
only in developing countries who in addition would incur some infrastructure
cost – with no benefit to them” (Third World Network, 2015). Additionally,
TFA would create new markets – in customs and shipment processing for
multinational corporations and would likely lead to the further privatisation
of ports, customs operations, and shipment processing.

After the Bali Ministerial Conference, the WTO talks are once again
on the edge. At the meeting of trade ministers of key WTO ministers in
Paris in June 2015, India expressed dissatisfaction over the slow progress of
discussions on the other elements of the Bali Package, including a permanent
solution to food security proposal and the development priorities of least
developed countries (Ganguly, 2015) such as a significant decrease or actual
scrapping of tariffs and improved market access measures for LDC exports.

Works Cited

Barbee, I., & Lester, S. (2014). The TPP and the Future of Trade
Agreements. Latin American Journal of International Trade Law, 207-
225.

Balaam, D. N., & Veseth, M. (2000). Introduction to Political Economy

(2nd Edition). New Jersey: Prentice Hall.

Gallagher, K. (2008). Understanding developing country resistance to the

Doha Round. Review of International Political Economy, 62-85.

Ganguly, A. (2015, June 3). Exclusive-India to voice concern over food

security at WTO meet. Retrieved June 21, 2015, from Bloomberg TV
India: http://www.btvin.com/news/read/news/1344/exclusive--india-to-
voice-concern-over-food-security-at-wto-meet
14

Hobden, S. (2002). The Developing World in International Politics.

In J. Baylis, & S. Smith, The Globalisation of World Politics: An
Introduction to International Relations, 2nd Edition. Oxford: Oxford
University Press.

IBON Databank and Research Center. (2005). WTO: Supreme Instrument

for Neoliberal Globalisation. Manila: IBON Books.

IBON International. (2013, December 8). IBON Int’l blasts WTO Bali
deal, calls for global fight vs new neoliberal offensive. Retrieved
from IBON International Web site: http://iboninternational.org/
article/2013/12/ibon-int%E2%80%99l-blasts-wto-bali-deal-calls-
global-fight-vs-new-neoliberal-offensive

IBON International. (2013). IBON Primer on the WTO ‘Bali Package’.

Quezon City: IBON International.

Khor, M. (2003, September 13). WTO “Singapore Issues”: What’s at

Stake and Why It Matters. Retrieved June 17, 2015, from Our World is
Not for Sale Web site: http://www.ourworldisnotforsale.org/en/article/
wto-singapore-issues-whats-stake-and-why-it-matters

Khor, M. (2007). The WTO’s Doha Negotiations and Impasse: A

Development Perspective. Penang: Third World Network.

McClanahan, P. (2012, September 3). Doha round trade talks - explainer.

Retrieved from The Guardian Web site: http://www.theguardian.com/
global-development/2012/sep/03/doha-round-trade-talks-explainer

Peet, R. (2003). Unholy Trinity: The IMF, World Bank and WTO. Manila:
IBON Books.

Sforza-Roderick, M., Nova, S., & Weisbrot, M. (n.d.). A Concise Guide

to the Multilateral Agreement on Investment. Retrieved June 15, 2015,
from Global Policy Forum: https://www.globalpolicy.org/component/
content/article/209/43215.html
 15

Third World Network. (2014, September 23). Should India sacrifice

agriculture for trade? Retrieved June 21, 2015, from Third World
Network Web site: http://www.twn.my/title2/wto.info/2014/ti140907.
htm

Third World Network. (2014, January/February). WTO conference

closes after adopting Bali package. Retrieved June 21, 2015,
from Third World Network Web site: http://www.twn.my/title2/
resurgence/2014/281-282/cover01.htm

Woolcock, S. (2003). The Singapore issues in Cancún: A failed negotiation

ploy or a litmus test for global governance? Intereconnomics, 38 (5),
249-255.
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 CHAPTER 2

Beyond the WTO: New Trade

Agreements on the Rise

Multilateral institutions were never envisioned to be the exclusive

medium through which trade liberalisation is facilitated. The WTO
negotiations deadlock raised the importance of other avenues for developed
countries and their corporations to pursue agendas that they have so far
failed to achieve through multilateral means. The new free trade agreements
are the culmination of the numerous attempts of imperialism to broaden
and deepen the scope of neoliberal free trade through bilateral, regional or
plurilateral channels.

Free Trade Agreements:

WTO-Plus Commitments,WTO-Minus Flexibilities

GATT acknowledged the forging of economic integration agreements

between countries and regions and anticipated that countries would negotiate
both “free trade areas” and “customs unions” in the context of trade in goods
(Barbee & Lester, 2014).

Regional free trade agreements (RTAs) are agreements that are signed
usually among neighboring countries, while bilateral free trade agreements
are agreements between two sides, where each side could be a country, a
trade bloc, or an informal group of country.

Regional and bilateral free trade agreements aim to eliminate tariffs,

import quotas, and preferences on goods and services traded between

17
18

member countries. By eliminating tariffs, member countries of an FTA are

exempted from the WTO’s Most Favored Nation (MFN) rule on tariffs.
MFN provides that a country having an MFN status may not be treated less
advantageously than any other country with MFN status by the promising
country.

WTO members are required to notify the RTAs in which they participate.
As of 7 April 2015, 612 notifications of RTAs (counting goods, services
and accessions separately) had been received by the GATT/WTO. Of
these, 406 were in force. These WTO figures correspond to 449 physical
RTAs (counting goods, services and accessions together), of which 262 are
currently in force (World Trade Organisation, 2015).

Regional and bilateral trade agreements provide developed capitalist

countries greater leeway as compared to those forged in the WTO to gain
market access from close trading partners and capture resources under terms
shaped and determined by their interests and without having to contend
with the lead advocates of the global South.

For developed countries, the deals forged in the WTO fall short of their
expectations. What the US has failed to accomplish in multilateral regimes
such as the use of the negative list approach, ratchet, standstill, future
proofing, and TRIPS-plus and TRIMS-plus proposals they are now more
likely to achieve via free trade agreements.

For example, in the negotiations leading to the adoption of the GATS

the United States strongly pushed for the negative list approach to cover
all sectors unless specifically identified for exemption. Most Southern
governments were opposed to the negative list approach and wanted
flexibility in determining which sectors to commit. The final GATS outcome
uses a hybrid approach to the coverage of sectors and measures, combining
features of both a “positive list” and “negative list” approaches. Even as
the passage of the GATS is a significant landmark for developed countries
pushing the liberalisation of services, that victory was yet incomplete as
it bears the mark of the pulling and tugging between the developed and
developing countries.
 19

Precursors to the New Free Trade Agreements

According to Jane Kelsey (2008), free trade agreements came in waves

corresponding to a critical juncture in the multilateral negotiations (pp. 50-
51).

The first wave saw the inclusion of services in bilateral trade treaties in
1987 with the Canada-US Free Trade Agreement (CUSFTA) and the services
annex to the Australia-New Zealand Closer Economic Relations Trade
Agreement (ANZCERTA). All the governments involved in the agreements
were leading proponents in GATS and used the bilateral negotiations to
develop proposals for the Uruguay Round. The content and architecture of
these agreements went further than the compromise that was the GATS in
1994.

The second wave was in the late 1980s when the Uruguay Round was in
paralysis. The US and Canada together with Mexico broadened CUSFTA to
launch the North America Free Trade Agreement (NAFTA).The agreement
came into force on January 1, 1994 superseding the Canada-United States
Free Trade Agreement.

NAFTA was a profound departure from basic FTAs at that time since
it went beyond reducing tariffs and import quotas. Tariffs within North
America were already very low at the time NAFTA was being negotiated (US
Congressional Delegation, 2003). The agreement focuses on giving privileges
and protection for corporations and investors. Beyond equal treatment for
foreign and domestic business, it also guaranteed corporations’ right to “fair
and equitable treatment and full protection and security” in accordance with
international law and required states to recompense investors for “directly
or indirectly” nationalizing or expropriating an investment or taking any
actions “tantamount to nationalization or expropriation” (American
Federation of Labor - Congress of Industrial Organisations, 2014, p. 3). The
enforcement mechanism for these rights was the powerful legal tool known
as the investor-state dispute settlement (ISDS), the precursor of the versions
of ISDS enshrined in other regional and bilateral free trade agreements
today.

NAFTA opened domestic regulatory actions to supranational challenges,

compelling states to protect intellectual property rights, establish rules for
trade in services including non-discrimination and right of access, and
20

restrict government requirements on procurement contracts (p. 3). What

used to be issues deliberated through public domestic processes such as food
safety, patents and copyrights, land use and natural resources, professional
licensing, government contracting and service sector regulations in areas such
as health care, financial services, energy and telecommunications became
subject to contestations by private foreign companies and settled before
private arbitration panels composed of three private (and unaccountable)
individuals.

Across the Atlantic, in 1993 the new European Union became a massive
internal market with free movement of goods, persons, services, and capital
(Kelsey, 2008). Although it has largely expanded from an FTA and customs
union to a single-market, limited membership monetary union, the European
Union (EU) is a strong example of a regional integration and economic
collaboration (Barbee & Lester, 2014). Currently the EU is the most highly
developed regional trading bloc, with 28 member states.

Australia, New Zealand, and Japan did not want to be left behind
(Kelsey, 2008). Australia initiated in 1989 series meetings of trade ministers
from Japan, ASEAN countries, US, and Canada. In 1994, the Asia Pacific
Economic Cooperation (APEC) set the goal of free trade and investment in
goods and services among richer economies of the region by 2010 and the
remainder by 2020.

These developments were interrupted by a lull in the mid-1990s with the

establishment of the WTO and with the US and EU focusing on the GATS
negotiations on telecommunications and financial services.

The current wave began in the late part of the 1990s coinciding with
the East Asian crisis, the collapse of the WTO ministerial in Seattle, and
the lack of progress in the Doha Development Round. These bilateral and
regional trade agreements are currently dominated by the United States and
the EU.

21st Century Free Trade Agreements: An Overview

Recently, regional and bilateral free trade agreements have emerged

as a way to overcome the WTO impasse and maintain the momentum for
 21

liberalisation. These new free trade agreements are being hyped as the gold
standard for 21st century agreements. In contrast with the deals concluded
at the WTO where developed countries’ proposals are constantly met with
resistance from unconvinced governments of developing countries, the new
free trade agreements provide ample elbow for developed countries and
their corporations to exercise concerted pressure to influence the adoption of
neoliberal economic policies in both developed economies and developing
economies(Gathii, 2011).

This section focuses on major trade agreements namely the Transatlantic

Trade and Investment Partnership (TTIP), the EU-Canada Comprehensive
Economic and Trade Agreement (CETA), The Transpacific Partnership
(TPP), and the Trade-in-Services Agreement (TiSA).

The Transatlantic Trade and Investment Partnership (TTIP)

The Transatlantic Trade and Investment Partnership (TTIP) is a

comprehensive bilateral trade negotiation being carried out – mostly in
secret – between the European Union and the United States. US President
Barrack Obama first made public the intention to launch TTIP in his State
of the Union Address in February 2013.

The US and EU together comprise 60% of the global GDP, 33% of

world trade in goods, and 42% of world trade in services. A free trade area
between the two would represent potentially the largest regional free-trade
agreement in history, covering 46% of world GDP (International Monetary
Fund, 2013).

U.S. investment in the EU is three times greater than U.S. investment in

all of Asia and EU investment in the United States is eight times than that
of EU investment in India and China together. Intra-company transfers are
estimated to constitute a third of all transatlantic trade. The United States
and EU are the largest trading partners of most other countries in the world
and account for a third of world trade flows (European Commission, 2015).

As officials from both sides admit, the primary goal of TTIP is not to
facilitate trade through removing tariffs between the EU and the US, given
the already low tariff barriers (under 3 per cent). The main thrust of the deal
is to remove or downgrade the regulatory barriers that limit the potential
profits of transnational corporations on both sides of the Atlantic.
22

EU-Canada CETA Comprehensive Trade Agreement

The Comprehensive Economic and Trade Agreement (CETA) is a

bilateral free trade agreement between Canada and the European Union.
Canada and EU announced in September 2014 the conclusion of the CETA
negotiations although the agreement is still waiting the approval of the
Council of the European Union and the European Parliament. If CETA is
approved, the agreement will begin to come into effect in 2016 at the earliest,
at which time two-way bilateral trade in goods and services is expected to
increase by 23 per cent or €26 billion and about 99 per cent of the tariffs
eliminated (European Commission, 2015). CETA is by far Canada’s biggest
bilateral initiative, and is expected to surpass NAFTA.

CETA built on the Canada-EU Trade and Investment Enhancement

Agreement (TIEA) that sought to move beyond traditional market access
issues such as trade and investment facilitation, competition, financial
services, e-commerce, science and technology, and regulatory cooperation.
The TIEA continued until 2006 when Canada and EU decided to suspend
negotiations. This led to negotiations on a Comprehensive Economic and
 23

Trade Agreement and went beyond the TIEA toward an agreement with
more ambitious scope.

The Transpacific Partnership (TPP) Agreement

The Transpacific Partnership or TPP is a proposed regional regulatory

and investment treaty. TPP involves countries including Australia, Brunei,
Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore,
the United States, and Vietnam. Advocates of the TPP say that it will set the
“glod-standard” for the 21st Century trade agreements going forward.

The proposed agreement traces its history in 2005 as the Trans-Pacific

Strategic Partnership (TPSEP or P4) and was initially composed of Chile,
New Zealand, Singapore, and Brunei. In September 2008, the US Trade
Representative announced that the US will negotiate entry into the P4
agreement, tentatively starting in March 2009. In November 2008, the
governments of Australia, Peru and Vietnam announced their inclusion
as well, while the Chilean and US governments have lobbied the Korean
government to also join. This raises the spectre of any “P4+” deal, now
dubbed a Trans-Pacific Partnership agreement (TPP), evolving into a
potentially APEC-wide, comprehensive free trade agreement, which the
Obama administration confirmed. Implementation of the TPP is a centerpiece
of the trade agenda of Obama as part of the US’ Asia Pivot.

According to estimates, the total GDP of the current TPP parties is

approximately $27.5 trillion, comprising 40 per cent of global GDP and
one third of world trade. Of this amount, the United States accounts for
approximately $15.5 trillion, or almost 60 per cent of TPP GDP. The United
States’ economic size and strategic importance for other TPP parties means
that its approach to the TPP will be the starting point for the negotiations
and will significantly influence the outcome.

Like TTIP, TPP is being negotiated in secret, so most information comes

from leaked documents. Unlike past trade agreements, the public is not
allowed access to the text. Legislators are only provided to see portions of
the text upon formal request, must not take down notes or reproduce copies,
and must not speak publicly about what they have read. In contrast, more
than 600 corporate advisors have access to the text on their computers in
live time as it is negotiated.
24

TPP Negotiating Parties

Country Status Date
Brunei Original Signatory 2005 June
Chile Original Signatory 2005 June
New Zealand Original Signatory 2005 June
Singapore Original Signatory 2005 June
United States Original Signatory 2008 February
Australia Original Signatory 2008 February
Peru Original Signatory 2008 February
Vietnam Original Signatory 2008 February
Malaysia Original Signatory 2010 October
Mexico Negotiating 2012 October
Canada Original Signatory 2012 October
Japan Original Signatory 2013 March
Taiwan Announced Interest 2013 September
Republic of Korea Announced Interest 2013 November
Source: Wikipedia

While the TPP is being negotiated as a trade agreement, however, only

5 out of the 29 chapters are traditional trade chapters. The rest include
policies that corporations have many times tried, but failed, to advance
through legislation on the national level and/or through the World Trade
Organisation

(WTO). Some of these include patent and property protections, financial

deregulation, greater legal standing for investors and corporations and
weakening of what are called state-owned enterprises.

The Trade in Services Agreement (TiSA)

The Trade in Services Agreement (TiSA) is a proposed international

trade treaty that aims at substantially liberalising the global investment
in and trade of services. Initially composed of 16 members, TISA has
expanded to include 24 parties. The negotiating countries are all World
Trade Organisation (WTO) members who represent most of the membership
of the Organisation for Economic Cooperation and Development (OECD),
 TPP Subject Headings
Market Access for Goods
Textiles and Apparels
Customs
Trade Facilitation
Sanitary and Phytosanitary (quarantine)
Technical Barriers to Trade (labelling and standards)
Trade Remedies
Subsidies
Government Procurement
Investment
Cross-Border Services
Financial Services
Telecommunications
E-commerce
Temporary Movement of Natural Persons
Intellectual Property Rights
Labour
Environment
Development
Trade Capacity Building
Competition
State-Owned Enterprises
Supply Chains
Transparency
Regulatory Coherence
Initial Provisions
Dispute Settlement
Exceptions
Final Provisions
26

The Corporate Lobbying for TPP. In February 2011 members

of the US Business Coalition for TPP wrote to the assistant to the
President for Economic Policy to highlight the high priority they
placed on “achieving a high standard, commercially meaningful
agreement through the Trans-Pacific Partnership”. The letter stated
that it was “vital to create new opportunities for our industries...in the
decades to come in the fast growing Asia Pacific Region”.

They went on to say “US leadership at the highest levels is needed

now to resist calls for the US to agree to lower standards, less market
access or loopholes that our countries can use to deny access to US
goods and services… The rules that the TPP sets now will set the
template for the US-Asia Pacific trading relationship for decades to
come”.

The letter demanded that market access should be comprehensive,

covering all sectors and sub-sectors and including all forms of trade,
both traditional and digital. Any agreement should also have ...”the
highest Intellectual Property protection in order to produce effective
and transparent enforcement of IP rights in the TPP countries”.

The corporates also wanted ...”strong investment protections,

market-access provisions and investor-state and state-to-state
dispute settlement to create the type of secure, predictable and non-
discriminatory legal environments for US investment abroad...”

The letter requested ...”timely, efficient, secure and safe movement

of goods and services across production and supply chains.” And
a TPP that would take on ...”regulatory barriers that intentionally
or inadvertently act as barriers to trade through the adoption of
commitments to maintain regulatory systems that are transparent,
effective, science-and risk-based, enforceable and mutually coherent”.
They also want to ensure that ...”state owned industries compete on a
level playing field with private and foreign companies”.

Finally the US Business Council for the TPP requests that “the
United States must seek high standards, strong protections and
 27

maximum market access for all key sectors of the US economy through
the TPP negotiations”.

This letter was signed by over 100 of the United States largest and
most powerful corporations, organisations and associations.

Lifted from TPPA: It’s (Not) Our Future, page 11. Retrieved June
26, 2015 on It’s Our Future NZ Web site: http://www.itsourfuture.org.
nz/wp-content/uploads/2012/09/TPPA-Booklet-1.pdf

plus eight developing countries. Together, they call themselves the “Really
Good Friends of Services (RGFS).” TiSA parties represent an enormous
services market with nearly 1.6 billion people and a combined GDP of more
than $50 trillion in 2013—nearly two-thirds of the world’s economy. In
2013, these countries exported more than $3.6 trillion in services.

As previously explained, GATS is the WTO treaty that was supposed

to extend the multilateral trading system to the service sector. With the new
developments in technological services, changing business practices and
deeper global integration, however, even the GATS was viewed as still too
limiting by developed countries in areas such market access, government
procurement of services, and non-discrimination in terms of full liberalisation
and deregulation of services. These provisions were strongly opposed at the
time GATS was being negotiated and some of them were ultimately not
included in the final outcome due to public pressure. The protests in Seattle
against the WTO Ministerial Conference of 1999 marked a high point of
public discontent.

Supporters of the TiSA are vocal about their frustrations with the slow
process of services liberalisation under the Doha round and they see TiSA
as the way to further liberalise services. Through the TiSA process, this
“coalition of the willing” hopes to circumvent the stalled Doha services
negotiations with the aim of creating a pro-trade liberalisation bloc within
the WTO.

The TiSA negotiations are framed within the corporate agenda of using
“trade” agreements as a scheme to make privatisation non-reversible, and to
28

Income Group Parties

Australia, Canada, Chile, Chinese Taipei, European
High Income Union, Hong Kong, Iceland, Israel, Japan,
Countries Liechtenstein, New Zealand, Norway, Republic of
Korea, Switzerland, United States, Uruguay.
Upper Middle
Income Colombia, Costa Rica, Mexico, Panama, Peru, Turkey
Countries
Lower Middle
Income Pakistan, Paraguay
Countries
Source: Wikipedia

push mergers and acquisitions and deregulation to ensure greater corporate

control and profit-making of national economies and the global economy.
The proposed agreement is the direct result of the systematic pressure
by TNCs in banking, energy, transport, communications, construction,
retail, engineering, water distribution, accountancy, marketing, publicity,
insurance, entertainment, museums, education, health, funeral services,
and other service sectors working through lobby groups such as the US
Coalition of Service Industries (USCSI), Team TiSA, and the European
Services Forum (ESF). The RGFS has already had extensive exchanges
about these disciplines, which would go far beyond the existing GATS.

FTAs in Context: Inter-Imperialist Competition for New

Opportunities to Plunder and Profit

Imperialist powers led by the United States, European Union, and

Japan and their corporations are currently hatching these new free trade
agreements to take the liberalisation agenda to greater heights. The new
free trade agreements will accelerate the process of transferring public
resources, assets, and the commons to corporate ownership and control that
has become one of the primary policies of global economic policy-making
since the ‘80s.
 Companies and Interest Groups behind the “Team TiSA”
COMPANY/INTEREST GROUP INDUSTRY
21ST CENTURY FOX Media
ACE GROUP Insurance
AFLAC Insurance
AIG Insurance
AMERICAN COUNCIL OF LIFE INSURERS Insurance
AMERICAN FARM BUREAU FEDERATION Agriculture
AMERICAN INSURANCE ASSOCIATION Insurance
AMWAY Transportation and Logistics
AT&T Telecom
BSA | THE SOFTWARE ALLIANCE Hardware
C&M INTERNATIONAL Commercial Services
CASSIDY, LEVY, & KENT Commercial Services
CHUBB CORPORATION Insurance
CISCO SYSTEMS, INC. Hardware
CITIGROUP Banking
COALITION OF SERVICES INDUSTRIES Services
CONSUMERS ELECTRONIC ASSOCIATION Electronics
COMPUTER AND COMMUNICATIONS
Telecom/Hardware/IT
INDUSTRY ASSOCIATION
COUNCIL FOR GLOBAL IMMIGRATION Commercial Services
COUNCIL OF INSURANCE AGENTS AND
Insurance/Financial
BROKERS
DELOITTE Finance
EBAY INC. Retail-Discretionary
EMERGENCY COMMITTEE FOR
Services
AMERICAN TRADE
EXPRESS ASSOCIATION OF AMERICA Transportation and Logistics
FEDEX Transportation and Logistics
GOOGLE Media
HP Hardware
IBM Technology Services
INFORMATION TECHNOLOGY INDUSTRY
Technology Services
COUNCIL
Source: Team TiSA Web Site
 Companies and Interest Groups behind the “Team TiSA”
COMPANY/INTEREST GROUP INDUSTRY
INTEL Semiconductors
JPMORGAN CHASE Banking
KING & SPALDING Commercial Services
KYLE HOUSE GROUP Commercial Services
LIBERTY MUTUAL Insurance
MANCHESTER TRADE Commercial Services
MASTERCARD Specialty Finance
METLIFE, INC Insurance
MICROSOFT Software
MOTION PICTURE ASSOCIATION OF
Media
AMERICA
NATIONAL FOREIGN TRADE COUNCIL Commercial Services
NATIONAL RETAIL FEDERATION Retail
ORACLE CORPORATION Software
PROPERTY CASUALTY INSURERS
Insurance
ASSOCIATION OF AMERICA
PRUDENTIAL Insurance
RETAIL INDUSTRY LEADERS
Retail
ASSOCIATION
SANDLER TRAVIS & ROSENBERG Commercial Services
SOFTWARE & INFORMATION INDUSTRY
Software/IT
ASSOCIATION
TECHAMERICA Software
TYCO Electrical Equipment
UNITED STATES COUNCIL FOR
Commercial Services
INTERNATIONAL BUSINESS
UPS Transportation and Logistics
U.S. CHAMBER OF COMMERCE Commercial Services
VERIZON Telecom
VISA INTERNATIONAL Specialty Finance
WAL-MART Consumer Staples
THE WALT DISNEY COMPANY Media
WESTERN DIGITAL Hardware
WHITE & CASE Commercial Services
Source: Team TiSA Web Site
 31

Many of the proposals in the new free trade agreements demand the
corporatisation of public assets and services and subjecting these to the logic
of the market. Broadly, these trade agreements carry out the privatisation
agenda through:

• Deregulation of public and private services by declaring domestic

regulations as trade distortions

• Equal access to private foreign service providers to public funding

for services

• Prohibiting governments from protecting public health and

environmental safety by controlling the number of service providers
in certain sectors

• Outlawing exclusive government provision on public services and

requiring compensation to private service providers for (potential)
profits lost

• Prohibiting governments from establishing or maintaining

requirements on working conditions for employees of contractors
providing services to the government

• Allowing foreign corporations and governments to challenge worker

health and safety laws, laws on staffing, professional standards,
and public interest regulations as barriers to trade (Citizens Trade
Campaign, 2015)

The political-economist and activist David Harvey uses the term

“accumulation by dispossession” to describe the plunder of the world’s value
– both human beings and nature – in the insatiable quest of capitalists for
profit. Accumulation by dispossession extends into current era of neoliberal
globalisation the understanding of how class distinctions in capitalism came
about with the expropriation of direct producers through the privatisation of
the means of production (tools, machineries, factories, and land) to create
a mass of people without any property or means except their labour power.
This process continues today with the privatisation of what used to be
public services into profit-making enterprises: water, education, and health
care; the use of the international credit system (especially the IMF/World
Bank) as a means of forcibly transferring wealth from the Global South to
32

the economies of the North; and the use of intellectual property rights to
commodify what was once knowledge held in common (for instance, land
and seeds).

Displacement of peasant populations and the formation of a

landless proletariat has accelerated in countries such as Mexico and
India in the last three decades, many formerly common property
resources, such as water, have been privatised (often at World Bank
insistence) and brought within the capitalist logic of accumulation,
alternative (indigenous and even, in the case of the United States,
petty commodity) forms of production and consumption have been
suppressed. Nationalized industries have been privatised. Family
farming has been taken over by agribusiness.
—Harvey, 2003

Another driving force propelling free trade agreements is the growing

importance of the service sector in the global economy. As developed
countries lose their comparative advantage in manufacturing, they are now
seeking to create new markets through services. Currently, services are the
largest and most dynamic component of developed countries’ economies.
For the OECD countries, services comprise 60 to 70 per cent of GDP.

Since the 18th century, the manufacturing sector has been the main driver
of economic growth for industrialised countries. However, by the 1960s
industrial capitalism started to unravel with large manufacturers from the
US and other wealthy industrialised countries transferring the low-value
parts of their production to poor developing countries. Industrial production
continued to integrate to take the best of raw materials, technology, low labor
cost, markets, and minimize competition. As the internationally integrated
and supply chains grow, core activities of production, consumption,
circulation as well as capital, labor, raw materials, management information,
technology, and markets become more organized on a global scale through
networks of linkages between economic agents. This transformation
gradually increased the economic significance and transformed the function
of services including transportation, communication, data exchange
and management, financial and technology transfers, warehousing, and
wholesale and retail sales. (Kelsey, 2008)

Big trade gains are being projected if the liberalisation of trade and
investment in services are successfully pushed (Hufbauer & Scott, 2013).
 33

For the United States, the current exports-to-sales ratio for tradable business
services is only 0.04; by contrast, the ratio is about 0.20 for manufactures. If
policy impediments to trade services were removed, facilitating an increase
in the exports-to-sales ratio to 0.10 – half the ratio for manufactures – US
business service exports would grow by $300 billion annually. Similarly,
world export of tradable services suggests trade gains of $1.1 trillion. Gains
of this magnitude would represent a 6 per cent increase in total world exports
of goods and services.

The table below shows the estimates of the payoff for OECD countries
from liberalising trade in services. Assuming an increase in the exports-
to-sales ratio to 0.10, OECD countries would see a total of $720 billion
potential export gains. The United States would see the largest share of
these gains, some 41 per cent or $296 billion new exports, followed by
Japan with 13 per cent or $92 billion new exports.

Combining all countries, this would translate to world trade gains of

around $1.1 trillion – over two-thirds of this acrruing to OECD countries.

A globalised service economy requires a global and uniformed legal

regime to facilitate its expansion. A logical target of powerful corporations
negotiating “trade in services” therefore are the laws, policies, and regulations
that govern services within a national border that service corporations view
as “barriers” to their expansion. This was confirmed by the WTO Secretariat
in its pronouncement that the aim of trade in services is to discipline the
regulatory powers of governments “because such a large share of trade in
services takes place inside national economies… its requirement will from
the beginning necessarily influence national domestic laws and regulations
in a way that has only been true of the GATT in recent years” (World Trade
Organisation, 2006).

According to Bronwyn Morgan, trade in services agreements are

examples of “meta-regulation” that seeks to regulate the process of
regulation itself, institutionalise pro-market governance, and embed it within
governmental policymaking (in Kelsey, 2008). These trade agreements
contain constitution-like characteristics and tie the hands of their successors
from exploring alternatives to regulate their countries’ services.
 Estimated export gains from liberalisation of services trade, 2010
Financial
intermediation, Estimated
real estate, value added Estimated
GDP ($
Country rental, and in tradable export gains3
billions
business services2 ($ ($ billions)
activities (per
1
billions)
cent of GDP)
Australia* 1132 32 356 21
Austria 377 24 90 5
Belgium 467 30 142 8
Canada* 1577 26 410 25
Chile 216 21 45 3
Czech
198 18 36 2
Republic
Denmark 312 27 84 5
Estonia 19 24 4 0
Finland 236 24 57 3
France 2549 34 867 52
Germany 3259 30 993 60
Greece 299 20 61 4
Hungary 129 23 30 2
Iceland* 13 37 5 0
Ireland* 205 28 57 3
Israel* 217 28 61 4
Italy* 2,044 28 580 35
Japan 5,488 28 1,534 92
Korea 1,014 19 193 12
Luxembourg 53 51 27 2
Mexico* 1,036 21 216 13
Netherlands 774 28 215 13
New
142 30 43 3
Zealand*
n.a. not available
Source: Hufbauer & Scott (2013). Payoff from the World Trade Agenda. Peterson Institute for International
Economics
 35

Estimated export gains from liberalisation of services trade, 2010

Financial
intermediation, Estimated
real estate, value added Estimated
GDP ($
Country rental, and in tradable export gains3
billions
business services2 ($ ($ billions)
activities (per
1
billions)
cent of GDP)
Norway 418 20 82 5
Poland 470 18 85 5
Portugal 227 23 52 3
Slovak
87 19 17 1
Republic
Slovenia 47 23 11 1
Spain 1,383 23 316 19
Sweden 462 25 113 7
Switzerland 529 23 121 7
Turkey 731 22 162 10
United
2,252 34 758 45
Kingdom
United
14,447 34 4,937 296
States*
OECD total 42,881 30 12,750 766
Rest of world
20,325 n.a. n.a. 363
total
World* total 63,136 n.a. n.a. 1,129
n.a. not available
Source: Hufbauer & Scott (2013). Payoff from the World Trade Agenda. Peterson Institute for International
Economics

A New Scramble for Territories

among the World’s Great Powers

The new free trade agreements being negotiated reflect the increasing
competition for economic and political hegemony across regions in the
world. Far from being means to open up the world to a further intensification
of trade and to liberate capitalism from its own fetters, these new free trade
36

agreements would carve up the world into two or more power blocs waging
economic war with another (Morley, 2014).

In the last 20 years, the EU’s share of world trade has slipped from
45 per cent to around 34 per cent and shows signs of further decline. It
is increasingly feeling the pressure of China’s productive boom and low
wages. This diminishing economic power is further exacerbated with the
EU’s declining political relevance as shown by its defeat in the Crimean
Peninsula crisis.

The United States current push for a free trade deal with the EU through
TTIP would see European capital wedded to that of the US in a common
front against China and Russia. For Western Europe, this is an opportunity
to relinquish its diminishing economic and political significance:

EU leaders see no alternative but to club together with the more

militarily powerful and politically unified US in order to negotiate
the choppy waters of a “pacific century” more successfully. From the
economic point of view, they also wish to use the TTIP not so much
as a source of general growth but as legal cover in their austerity
drive against the working class as they try to make European labour
as ‘efficient’ as Chinese.
—Morley, 2014

Not to be outdone, Russia is also making its own moves by establishing

the Eurasian Economic Union (EAEU). The treaty was signed on March 29,
2014 by Belarus, Kazakhstan, and Russia and came into force on January
1, 2015. Armenia joined on January 2, 2015 while Kyrgyzstan is expected
to join in May.

Patterned after the EU, it has a Moscow-based executive body, the

Eurasian Economic Commission, and a political body, the Supreme
Eurasian Economic Council, where member states’ leaders take decisions
by unanimity.

EAEU has free movement of workers and a single market for construction,
retail, and tourism. Over the next 10 years, it aims to create a court in Minsk,
a financial regulator in Astana and, possibly, to open Eurasian Economic
Commission offices in Astana, Bishkek, Minsk, and Yerevan. It also aims
 37

to launch free movement of capital, goods, and services, and to extend its
single market to 40 other sectors, with pharmaceuticals next in line in 2016.

Russia is currently preparing talks with EU leaders to persuade them to

dump TTIP over EAEU, saying that a new Russia-led bloc is a better and
more natural partner than the US (Durden, 2015).

The TPP is even more geopolitically driven than TTIP. According to

Salon.com TPP “is a core part of the “Asia Pivot” doctrine that has occupied
the activities of think tanks and policymakers in Washington.

The Asia-Pivot doctrine of the United States comes at a time when the
US is deeply embroiled in an imperial crisis brought about by its failed
occupation wars in the Middle East and the great recession following the
bursting of the housing bubble in the mid-2007.

In contrast, China is enjoying double-digit annual growth rates. It

escalated on a “Go Out” policy and struck trade and investment deals in
Africa. Even in Latin America, the US’ very own “backyard”, China has
become the region’s main trading partner and source of capital investment
in infrastructure to transport raw materials back to China (Chang, 2013).

In the international scene, China has earned the reputation as the

champion of developing countries. As one of the leading lights of the
Group of 77 developing countries (G77), China is looked up to as one of
the articulators of developing countries’ interest in the Doha Development
Round and in various climate summits. Paradoxically, writes Ashley Smith,
China herself is embroiled in numerous conflicts with other emerging powers
like Brazil whose manufacturing sector is increasingly being undercut by
Chinese exports. Nevertheless, China is continuously expanding its alliances
beyond those outside US’ orbit of influence to include those with which it
was economically integrated, like Japan among many others (Smith, 2013).

In response, in January 2012 US President Barrack Obama came up

with a new Defense Strategic Guidance entitled “Sustaining US Leadership:
Priorities for the 21st Century Defense.” He also announced shifting 60
per cent of US military resources from Iraq and Afghanistan to the Pacific,
deployed strategically to encircle China. With these moves, the US hopes to
reorient its strategic positioning in the region.
 39

To achieve this, the US is rallying countries in the region to form a

political bloc against China. The US maintains strong alliances with big
powers like Australia, Japan, and South Korea. It also possesses steadfast
supporters like Thailand and the Philippines while achieving breakthroughs
in diplomatic relations with India, Indonesia, and Vietnam.

The US is also out to woo countries out of China’s camp. It has ended
its decades-long policy of isolating Myanmar in an effort to sway the latter
to shift its economic and political loyalty to the US away from China.
Myanmar in response has suspended its contract with Beijing to build a
$3.6 billion hydroelectric project on the Irrawaddy River that would have
supplied power to China (Chanda, 2012). The US is similarly pursuing the
same strategy with Cambodia which for the last three decades has received
$2.1 billion in aid from China. In 2012, Cambodia received a total of $70
million in aid from the US to improve health, education, governance, and
economic growth. To symbolize the importance of winning over Myanmar
and Cambodia to the US side, Obama visited these countries along with
Thailand after his 2012 Presidential victory.

The US is also stoking the hostilities between China and various Asian
states. In the conflicts between China and various Asian states over strategic
islands in South and East China Seas, the US is projecting itself as a mediator
and as an ally of the lesser powers. The US is also using North Korea’s
nuclear program to retain South Korea which until recently was drifting out
of the US camp given its primary economic ties with China.

The US is also participating in multilateral bodies in the region including

the Association of South East Asian Nations (ASEAN), the Asia Pacific
Economic Cooperation (APEC), and the East Asia Summit.

Complementing US’ political muscle flexing is the expansion of regional

and bilateral trade deals to frustrate China’s economic integration of Asia. In
2011, it ratified the US-Korea Free Trade Agreement (KORUS). According
to the Office of the Trade Representative of the United States, the deal “is
a model for trade agreements for the rest of the region, and underscores the
US commitment to, and engagement in, the Asia-Pacific region.”

The TPP is the US’ most ambitious project to position itself as an

alternative hub to China. In a study commissioned by the US Department of
Defense, the Center for Strategic and International Studies (CSIS) reveals
 41

the inherently imperialist character of TPP saying that it “could form a

sustainable trans-Pacific trade architecture that sustains US access and
influence in the region. The US hopes eventually to transform this into its
own trade block, the Asia Pacific Free Trade Agreement. If it secures this, it
would be the biggest trade deal since NAFTA.”

China is ready to counter the US maneuverings with various bilateral

trade and multilateral trade deals. China, Japan, and South Korea are
attempting to set up the framework for a three-way trade agreement even as
political tensions remain high (Brereton-Fukui & Sekiguchi, 2012).

More importantly, China is pursuing the Regional Comprehensive

Economic Partnership (RCEP) as a counterweight to US’ TPP. The China-
led FTA includes Australia, Japan, India, South Korea, New Zealand, and
the ten ASEAN member countries. Several rounds of negotiations have
already taken place with virtually no public debate.

According to David P. Goldman, more and more prospective TPP

members are joining the China-led RCEP (2012). The primary reason for
this is the declining US influence in Asia and China’s rising importance.
China’s export to Asia jumped 50 per cent since their pre-crisis peak, while
export to the US increased by about 15 per cent. Chinese exports to Asia
amounting to $90 billion are three times more than its exports to the US.

In 2002, China imported five times as much from Asia as it did from the
United States. In 2012, it imported 10 times as much from Asia as from the
US. As a result, Asian currencies began trading more closely with China’s
renminbi than with the American dollar. According to Arvind Subramanian
and Martin Kessler:

A country’s rise to economic dominance tends to be accompanied by

its currency becoming a reference point, with other currencies
tracking it implicitly or explicitly. For a sample comprising
emerging market economies, we show that in the last two years,
the renminbi (RMB/yuan) has increasingly become a reference
currency which we define as one which exhibits a high degree of
co-movement (CMC) with other currencies.

The decline in US manufacturing and investments in high-tech, high-

value added industries providing the type of manufacturing Asian countries
42

Source: Australian Strategic Policy Institute

require in building their industrial capacity explains the US’ relative

diminishing economic presence in the region.

A number of analysts expect the RCEP to be more favourable to low and

middle-income countries in the region with fewer demands for deregulation
and slower reductions in trade barriers, particularly for least developed
countries.

Leaked text of RCEP proposals from Japan and South Korea, however,
cast into doubt RCEP’s claim as a more benevolent alternative to the US-led
TPP.

In February 2015, a leaked Japanese text (dated October 2014) proposed

monopoly protections beyond both the obligations of existing IP agreements
and IP laws of many RCEP countries. Controversial provisions include those
that seek to broaden and lengthen patent monopolies, extend restrictions on
the use of clinical trial data to support the marketing approval of generic
 43

China’s exports to Asia vs USA Chinese imports from the US and Asia

(source: Bloomberg)

medicines, and enable the seizure of generic medicines in transit, even those
only suspected of infringing IP laws in the transit country. On June 3 2015,
a leaked South Korean IP proposal added awarding of damages for patent
infringements determined according to the value asserted by the patent
owner (The Conversation, 2015).

Works Cited

American Federation of Labor - Congress of Industrial Organisations.

(2014). NAFTA at 20. Washington D.C.: AFL-CIO.

Barbee, I., & Lester, S. (2014). The TPP and the Future of Trade
Agreements. Latin American Journal of International Trade Law, 207-
225.

European Commission. (2015, April 22). EU - Trade - Canda. Retrieved

from European Commission Web site: http://ec.europa.eu/trade/policy/
countries-and-regions/countries/canada/

Gallagher, K. (2008). Understanding developing country resistance to the

Doha Round. Review of International Political Economy, 62-85.

Gathii, J. T. (2011). The Neoliberal Turn in Regional Trade Agreements.

Washington Law Review Association , 421-474.
44

IBON Databank and Research Center. (2005). WTO: Supreme Instrument

for Neoliberal Globalisation.Manila: IBON Books.

IBON International. (2013, December 8). IBON Int’l blasts WTO Bali
deal, calls for global fight vs new neoliberal offensive. Retrieved
from IBON International Web site: http://iboninternational.org/
article/2013/12/ibon-int%E2%80%99l-blasts-wto-bali-deal-calls-
global-fight-vs-new-neoliberal-offensive

IBON International. (2013). IBON Primer on the WTO ‘Bali Package’.

Quezon City: IBON International.

International Monetary Fund. (2013, February 13). Nominal 2012 GDP

for the world and the European Union. Retrieved from International
Monetary Fund Web site: http://www.imf.org/external/pubs/ft/
weo/2013/02/weodata/weorept.aspx?pr.x=33&pr.y=11&sy=2012&ey=
2012&scsm=1&ssd=1&sort=country&ds=.&br=1&c=001%2C998&s
=NGDPD&grp=1&a=1

Kelsey, J. (2008). Serving Whose Interests? The Political Economy of

Trade in Services Agreements. New York: Routledge.

Khor, M. (2003, September 13). WTO “Singapore Issues”: What’s at

Stake and Why It Matters. Retrieved June 17, 2015, from Our World is
Not for Sale Web site: http://www.ourworldisnotforsale.org/en/article/
wto-singapore-issues-whats-stake-and-why-it-matters

Khor, M. (2007). The WTO’s Doha Negotiations and Impasse: A

Development Perspective. Penang: Third World Network.

McClanahan, P. (2012, September 3). Doha round trade talks - explainer.

Retrieved from The Guardian Web site: http://www.theguardian.com/
global-development/2012/sep/03/doha-round-trade-talks-explainer

Naranayan, S. (2013, July 5). Analysis of the WTO Impasse and Issues
Facing the Bali Ministerial. Retrieved from South Centre: http://www.
southcentre.int/question/analysis-of-the-wto-impasse-and-issues-
facing-the-bali-ministerial/
 45

Sforza-Roderick, M., Nova, S., & Weisbrot, M. (n.d.). A Concise Guide

to the Multilateral Agreement on Investment. Retrieved June 15, 2015,
from Global Policy Forum: https://www.globalpolicy.org/component/
content/article/209/43215.html

Third World Network. (2015, April 20). South faces uphill fight on food
security, commitments on Bali decisions. Retrieved from Third World
Network Web site: http://www.twn.my/title2/wto.info/2015/ti150403.
htm

US Congressional Delegation. (2003). NAFTA at Ten: Journey to Mexico.

Washington D.C. : US House of Representative.

Woolcock, S. (2003). The Singapore issues in Cancún: A failed negotiation

ploy or a litmus test for global governance? Intereconnomics, 38 (5),
249-255.

World Trade Organisation. (2015, April 7). Regional trade agreements.

Retrieved from World Trade Organisation Web site: https://www.wto.
org/english/tratop_e/region_e/region_e.htm

World Trade Organisation. (2015, May 6). WTO and Government

Procurement. Retrieved from World Trade Organisation: https://www.
wto.org/english/tratop_e/gproc_e/gproc_e.htm
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 CHAPTER 3

Major Thrusts of the New FTAs

What are the major thrusts of the new free trade agreements? In what
concrete ways will the new free trade agreements lead to greater concentration
of resources, wealth, and power in the hands of imperialist nations and their
transnational corporations? How will the new free trade agreements violate
democracy and sovereignty of peoples in the Global South?

In this section, it is argued that the new free trade agreements are
patchwork of developed countries’ proposed deals negotiated within
the multilateral trade regime represented by the WTO and from past and
present plurilateral and regional/bilateral trade agreements especially those
spearheaded by the US. These new free trade agreements incorporate policies
to enhance investor rights, deregulation, privatisation, liberalisation, and
monopoly capitalist expropriation of the commons.

Expanding Set of Rights for Investors

The new set of rights and measures enshrined in the new free trade
agreements to protect foreign investments represents the general framework
of neoliberal globalisation that seeks to minimise and eliminate the hurdles
towards the full liberalisation of investment. The substantial aspects of
investment liberalisation and investor protection include the broadening of
the scope of investment and investors; non-discrimination; fair and equitable
treatment (FET); expropriation; and a legally binding instrument through an
investor-state dispute mechanism.

47
48

Broad definition of investors and investment

In the new free trade agreements, every kind of asset that an investor
owns or controls, directly or indirectly has the characteristics of an
investment. Included in such characteristics are the commitment of capital
or other resources, the expectation of gain or profit, and the assumption of
risk. An investor meanwhile is a Party, a natural person or an enterprise of
a Party, other than a branch or a representative office that seeks to make,
is making or has made an investment in the territory of the other Party. An
“enterprise of a Party” is an enterprise that is constituted or organised under
the laws of a Party and has business activities in the territory of that Party.

The definition of investment is “asset-based” which means it is based

on economic interests and values, not on enterprises. This definition
likewise covers debt instruments, interests from concessions and contracts,
intellectual property rights and claims to money or claims under a contract
having financial value (Krajewski, 2014).

A lasting interest in a foreign enterprise is not a necessary element of

investment. That means even short-term portfolio investments for speculative
reasons or sovereign debt instruments acquired by speculative investors fall
under this definition.

This intentionally broad meaning of the terms “investment” and

“investor” poses several problems. This would allow corporate attacks
on a wide array of non-discriminatory domestic policies before foreign
tribunals. This includes policies related to health, land-use, regulatory
permits, intellectual property rights, government procurement, regulation
of financial instruments such as derivatives, contracts to operate utilities
and more (Public Citizen, 2012). The vague use of the phrase “business
activities” can encourage “treaty shopping” and allow firms, even those
based on countries that are not party to the free trade deal, to exploit the
extraordinary privileges for foreign investors.

For instance, there are numerous oil and gas companies with headquarters
or offices in Canada that have begun conducting shale gas explorations in
Europe. Though these firms are not Canadian, a subsidiary based in Canada
would allow them to challenge fracking bans and regulations. Moreover,
it is easy for firms to change nationalities to take advantage of the CETA
(Eberhardt, Feodoroff, Lui, Olivet, & Trew, 2013). Similarly, German
 49

investors based in one of the countries signatory to the TPP could sue other
signatories in a foreign tribunal to demand compensation under this text.

In light of public criticism, some free trade agreements have modified

the application of this definition to enterprises with “substantial” business
activities. However, this is still very vague.The decision on whether the
activities of an enterprise are sufficient to turn the enterprise into an investor
of that country could be left in the hands of an investment tribunal. In fact,
the term “substantial business activities” was also present in many previous
free trade agreements as a measure against investors not based in a nation
in the pact from accessing the benefits of the deals. However, this proved to
be particularly not robust, as even having a staff person or two and a minor
paper trail in the claimed home country could pass the “substantial business
activities” threshold (Public Citizen, 2012).

Non-discrimination

Usually, investment protection chapters contain two principles of non-

discrimination: the most-favoured nation principle (MFN) and national
treatment. MFN compels parties to the agreement to treat foreign investors
of one country no more favourably than investors of the other party of the
agreement. National treatment, on the other hand, forbids more favourable
treatment of domestic vis-à-vis foreign investors. Already, we can clearly
see that non-discrimination is an extension of the MAI agenda related to
investments and competition.

Concrete experience of existing investment agreements has shown that

the standard of MFN treatment can be problematic. In the past, investment
tribunals have allowed investors to base their claims on more favourable
clauses in other investment protection agreements arguing that denying
this treatment would be less favourable compared to the treatment afforded
under the other investment chapter (Krajewski, 2014).

In 1996, a group of Malaysian investors called MTD decided to build

a whole new planned community outside of Santiago Chile. However, in
1997 Chile’s zoning authorities promptly started sounding concerns about
the ecological impact of the development. In 2004, an investor-state tribunal
ordered Chile to pay MTD an amount of nearly $6 million. The tribunal
based its conclusion on the so-called “fair and equitable treatment” provision
from Chile’s bilateral investment treaty with Croatia (Public Citizen).
50

In short, MFN treatment in the new free trade agreements would

broaden the scope of investment protection beyond the standards agreed
upon in the respective agreement (importation of standards) (Krajewski,
2014). Additionally, MFN would create a “dynamic ratcheting effect where
investor rights and state obligations extend far beyond what is in the financial
services and investment chapters of the agreement itself” (Kelsey, 2010).

Another problem that has been raised in relation to non-discrimination

is the issue of national treatment. This obligation covers the establishment,
acquisition, management, maintenance, use, enjoyment, and sale or disposal
of their investments in its territory.

Procurement can be an important development tool in supporting broader

policy objectives such as feeding programs, supporting local farmers,
small and medium enterprises, encouraging green energies, etc. According
to WTO, government purchasing make up 10 to 15 per cent of GDP in
developed countries (World Trade Organisation, 2015). Governments
typically are the single largest purchasers of goods and services in the
economy and because of the large amount of money involved, procurement
has become an important issue in most free trade agreements.

With national treatment integrated in the new free trade agreements,

elected governments down to the level of school boards must liberalise
procurement to corporations. Procurement typically would include major
construction and infrastructure projects, transit vehicles, food, and office
equipment.

Municipalities will be prohibited from favouring local companies, goods

or workers, unless specifically identified and protected in the agreement.
They will not be able to later craft and implement environmental or social
regulations that mayconflict with corporations’ “right to profit.” In sum,
this will overrule the right of future governments to make decisions in the
public’s interest.

Municipalities will face increased administrative costs including:

 51

• Providing the federal government with information and statistics

about procurement practices

• Publishing detailed announcements of intended procurements and

the issuing of tenders

• Providing unsuccessful bidders with sufficient time to appeal their

decisions

National treatment will limit even those that do not discriminate in favour
of local providers. Of particular concern for the provision of public services
is the prohibition on “monopolies” and “exclusive suppliers.” Included in
this scope are economic activities like the provision of electricity or water.

The CETA agreement maintained the vague wording of national treatment

exceptions for public services in NAFTA and GATS, while combining the
most far-reaching provisions of these agreements and extending them to
more areas. Like in NAFTA, the CETA chapter on investment includes a
broad definition of investments for which governments can be compelled to
pay monetary compensation if they lose an ISDS suit. Investors in NAFTA/
CETA do not only mean those who have existing investments but also those
who “seek to make” an investment.

CETA’s prohibition on placing limits on market access limits even those

that do not discriminate in favour of local providers. Of particular concern
for the provision of public services is the prohibition on “monopolies” and
“exclusive suppliers.” Included in this scope are economic activities like the
provision of electricity or water.

While CETA claims to exempt “activities carried out in the exercise of

government authority,” problems still arise since these activities are defined
as those “carried out neither on a commercial basis nor in competition with
one or more economic operators.” This exception is very narrow when one
considers, for example, public universities can be seen as competing for
students with private colleges.

By adopting a top-down structure where the default is the liberalisation

of all sectors unless explicitly excluded, public services are threatened.
This, combined with a “ratchet” mechanism that sectors that have been
52

committed to liberalisation cannot be wound back to their previous status,

ensures that liberalisation and deregulation remain permanent.

Fair and equitable treatment (FET)

Fair and equitable treatment (FET) is a traditional investment protection

standard present in virtually all investment agreements (Krajewski, 2014).
The application of this standard in previous investment dispute cases has
made it into an effective deterrent against domestic laws and regulatory
measures.

At the core of FET is the “legitimate expectations” which can be based

on the legal framework in general or on the behaviour of officials. Under
the FET, a tribunal “may take into account whether a Party made a specific
representation to an investor to induce a covered investment, that created
a legitimate expectation, and upon which the investor relied in deciding to
make or maintain the covered investment, but that the party subsequently
frustrated”.

This clarification is highly biased towards investors and a clear threat to

the rights of governments to regulate, and especially to alter and strengthen
regulatory approaches in response to changing circumstances, new
knowledge, investor behaviour, public perceptions of risk, and democratic
decision-making. It singles out the ‘legitimate expectations’ that investors
may hold for their investments as an interpretive issue that tribunals may
consider — even above issues relating to the public interest (Sinclair, Trew,
& Mertins-Kirkwood, 2014).

The financial regulations that some governments have put in place in the
wake of the global economic crisis of 2008 run the risk of being dismantled
and make national laws to embrace the extreme deregulation model that
caused the crisis in the first place.

FET will effectively forbid countries from banning risky financial

instruments such as derivatives that led to the $183 billion government
bailout of AIG. It will also ban the use of firewalls, capital controls, and
taxes on financial transactions. If governments are insistent, foreign firms
are empowered to directly attack them in foreign tribunals and demand
taxpayer compensation.
 53

Expropriation

In the past under domestic and international law, governments were

obligated to compensate for expropriation applied to the physical taking of
real property, for example, when a government has to expropriate a lot to
make way for road expansion. However, in the new free trade agreements
indirect expropriation has been added to cover actions by government that
merely reduce the value of a foreign investment (Public Citizen, 2012).

Indirect expropriation provision in investment agreements has been

invoked by corporations to require compensation based on the impact
of the government measure on the value of an investment, regardless of
whether there has been some appropriation of an asset by the government.
This goes against the existing practices of many nations that only provide
compensation in instances where an actual seizure of assets has transpired,
and not when an asset has been adversely impacted by a regulatory measure
or legislation (Public Citizen, 2012).

In 1996 the US Metalclad Corporation filed an investor suit against

the government of Mexico forclosing a waste treatment facility after a
geological audit indicatedsevere threats to the local water supply. The
investor tribunal ruled that the cancellation of a state-level zoning permit
constituted regulatory expropriation and ordered the government to pay the
companygovernment USD 16.7 million in damages.

William Greider reveals that the inclusion of “indirect expropriation”

in trade pacts was part of “a long-term strategy carefully thought out by
business” to re-define “public regulation as a government ‘taking’ of
private property that requires compensation” (2001). The consequences, he
continues, are vast:

Because any new regulation is bound to have some economic impact

on private assets, this doctrine is a formula to shrink the reach of
modern government and cripple the regulatory state – undermining
long-established protections for social welfare and economic justice,
environmental values and individual rights. Right-wing advocates
frankly state that objective – restoring the primacy of property
against society’s broader claims.
54

Investor-State Dispute System

Central to transnational and multinational corporations push for the

new free trade agreements is the private enforcement of foreign investor
privileges and rights through a mechanism called “investor-state dispute
system” (ISDS).

While provisions of an investment chapter in free trade agreements lay

down the terms whether or not national policies go against international
rules governing investment liberalisation, the dispute settlement provisions
determine whether such a violation can lead to a legally binding decision
(Krajewski, 2014).

Through the ISDS, foreign individual corporations and investors can

circumvent national courts and laws and directly sue governments to demand
taxpayer compensation for health, environmental, financial and other public
interest policies viewed as prejudicial to the corporations’ “expected future
profits.”

Prior to 1980s, dispute settlement in international investment agreement

was based on interstate proceedings. An investor’s options for remedy
were limited to one of the following: 1) negotiating directly with the host
government; 2) suing the host government in the sovereign’s own courts
where defences of sovereign immunity may be readily available; 3)
requesting the home government to negotiate diplomatically with the host
government; or 4) requesting the home government to espouse a claim on
their behalf before the International Court of Justice, provided the ICJ had
jurisdiction (Tietje, 2014).

In the 1990s, notably through bilateral investment treaties (BITs)

and NAFTA, state-to-state dispute settlement was replaced with a new
mechanism where foreign companies could lodge claims directly the host
state before an ad hoc tribunal (Krajewski, 2014). According to OECD’s
estimates, 93% of all existing BITs contain ISDS provisions (Tietje, 2014).

In 2012, UNCTAD reported 58 new cases which constituted the highest

number of known treaty-based disputes ever filed in one, confirming that
foreign investors are increasingly resorting to investor-State arbitration. In
66% of the new cases, respondents are developing or transition economies.
Majority of new cases (64%) originate from developed countries (United
 55

Nations Conference on Trade and Development, 2013). Medium and large

multinational companies account for 50% of claims (OECD, 2012).

Claimants have challenged a broad range of government measures,

including those related to revocations of licences, breaches of investment
contracts, irregularitiesin public tenders, changes to domestic regulatory
frameworks, withdrawal of previously granted subsidies, direct
expropriations of investments, tax measures and others (United Nations
Conference on Trade and Development, 2013).

According to the website ExposeTheTPP.org, tribunals have already

ordered $3.5 billion in investor-state cases under existing US agreements,
including payments over toxic bans, land-use policies, forestry rules, and
others.

Majority of cases have been brought under the International Centre for
Settlement of Investment Disputes (ICSID), the United Nations Commission
on International Trade Law (UNCITRAL), Stockholm Chamber of
Commerce, and the International Chamber of Commerce (United Nations
Conference on Trade and Development, 2013).

ISDS proceedings are shrouded in utmost secrecy. Tribunals are held in

private and the publication of awards is not mandatory. Information such
as the name of the complainant is not usually published (Krajewski, 2014).

The lack of transparency in proceedings is further compounded by the

selection and role of arbitrators. Each disputing party select one arbitrator
while a neutral chairperson is mutually agreed upon by the two. Arbitrators
are not permanent judges with fixed salary and personal independence but
are practicing lawyers, judges, diplomats, or members of the academe.
The highly specialised nature of the field, the number of individuals who
have gained significant experience in performing such function is limited.
According to one study, about half of all known cases were decided upon by
a group of only 15 lawyers (Corporate Europe Observatory, 2012).

The impartiality of the arbitrators has also been put into question by
many, as some arbitrators also serve as counsel for investors. This results to
conflicts of interests and an institutional bias of ISDS towards the investors
(Krajewski, 2014).
56

Known ISDS Cases

Source: UNCTAD 2013

Ordinarily, international law requires exploring local legal remedies

before an international court or tribunal can assume jurisdiction over cases.
This is still the general rule in proceedings before human rights courts such
as the International Court of Justice. This is done so as to allow the state to
rectify an international wrongdoing through its own legal system first before
turning to an international judicial or arbitral body (Krajewski, 2014).

This is not the case however with international investment law. Most
investment protection chapters do not require the investor to seek local
 57

remedy first before turning to an international judicial body. The very idea of
an ISDS is to provide investors a mechanism to directly enforce substantive
rights that does not rely on national judicial processes.

Several criticisms have been made regarding the pro-corporate bias

of ISDS and its detrimental implications to national and state sovereignty
(Corporate Europe Observatory, 2014).

Governments will have a hard time making new policies, as it will be

unpredictable how a tribunal will view these in relation to corporations’
claims to profit. In short, corporate interests will now define and shape laws
and policy-making of countries, and not people’s rights and welfare.

Countries’ judicial sovereignty will be reduced to zero, as investors

will opt to elevate cases to the international tribunal where their chances of
winning and payout are higher and more viable.

ISDS flouts the principle of equality before the law. While foreign
corporations will have access to this parallel legal universe that accords
them with judicial property protection, rights, and procedures, domestic
firms won’t.

While corporations can sue governments, governments cannot sue

corporations for their abuses and human rights violations. And since
governments cannot sue investors, this encourages arbitrators to side with
investors and come up with pro-investor rulings to attract more cases and
more income in the future.

Finally, there is no outside appeal or review by an independent court.

Decisions are final and binding and can only be annulled on extremely
restricted procedural grounds.

Corporate Invasion of Governments’ Policy Space

Regulatory coherence has a long “institutional pedigree” that can be

traced back to the neoliberal reform movement of the 1970s and 1980s.
The issue of coming up with border regulatory frameworks to facilitate
international trade and investment liberalisation is being tackled by
58

almost all major free trade agreements both as a stand-alone chapter and
also in different negotiating groups such as those related to sanitary and
phytosanitary standards and technical barriers to trade (Draper, Lacey, &
Ramkolowan, 2014).

Regulatory coherence targets the institutional and procedural approach

to domestic regulation. “Coherence” in this context means the internal
regulatory decisions and choices of the state achieved through imposition
of disciplines on its bureaucratic structure, decision-making processes and
criteria. In short, regulatory coherence interferes with governments’ primary
function of legislating rules on matters related to domestic public policies,
such as health and safety, environmental codes, labour regulations, building
codes, zoning, etc. These proposals are already outside the scope of trade
negotiations as they have been understood before and infringe on the right
of governments to structure their domestic bureaucracy and procedures.

In the context of TiSA negotiations, the National Retail Foundation, an

organisation that lobbies for transnational retail corporations, is expecting
the RGFS to “Work to ease regulations that affect retailing, including size
restrictions and hours of operation, that while not necessarily discriminatory,
affect the ability of large-scale retailing to achieve operating efficiencies…”
Wal-mart, for example, argues that TiSA should also include prohibitions
on restrictions on “geographic locations” on stores, challenging all local
government zoning authority (Gould, 2014).

Based on the leaked text on the TPP chapter on regulatory coherence,

national governments will establish a central formal body to coordinate
policy and decision-making processes of the entire governmental structure.
According to Jane Kelsey, this body will enjoy a superior status in the
hierarchy of the central government to coordinate, supervise, and critique
the work of other regulatory agencies to ensure good regulatory practices
(2011).

Regulatory Impact Assessment (RIA) will be used in developing

regulations. The US Government in a presentation to APEC stakeholders
defines RIA as a mechanism that “assesses the anticipated consequences of
a regulation and estimates associated benefits and costs.” While this sounds
benign enough, in fact RIA focuses more on the “burden” to business than
the public welfare.
 59

Australia, New Zealand, and the US already have a similar structure to

that proposed in the TPP. In the Australian ‘best practice guidelines’ it is
recommended that a range of feasible policy options must be considered
first, including self-regulation, co-regulatory, and non-regulatory options
and their benefits and cost assessed. This means that self-regulation and non-
regulation takes priority over government initiated policies or regulatory
codes. Moreover, it mandates that government action does not “overreach”
and that market intervention should not be misunderstood to indicate failure
of markets to deliver social or equity goal.”

This is similar to necessity testing: a priority agenda of corporate

lobbyists in the TiSA negotiations. The Global Federation of Insurance
Associations has declared that TiSA should require that universal service
obligations cannot be “more burdensome than necessary for the kind of
universal services defined by the member. Universal service obligations are
regulations requiring that the poor and hard-to-serve populations such as
residents of rural areas have access to services. A necessity test could make
regulations on universal access to services subject to a trade challenge if
there were alternatives that were less burdensome to business.

Dispute panels would weigh whether a government’s objective in

achieving universal access to a service was important enough to justify
how significant its impact was on trade. They would judge whether the
regulations were effective in achieving universal access. In addition, they
would decide whether there were alternatives that were less of a burden to
business and reasonably available that governments could have pursued.
Government regulations can fail a necessity test on any of these grounds.

Meanwhile, a measure being introduced in the TTIP is the so-called

“regulatory cooperation” (see table below). Regulatory cooperation is a
big business project. In 2012, Business Europe and the US Chamber of
Commerce conducted meetings with the European Commission to push their
proposals. Regulatory cooperation describes a process of aligning existing
regulations on both negotiating parties to ensure that goods produced on one
side can be exported to the other without additional requirements (Corporate
Europe Observatory, 2015).

“Regulatory cooperation,” however, is not simply alignment as this also

means the removal or downgrading of some of the social and environmental
standards that have been won by the collective assertion of people throughout
60

history, including labour rights, food safety rules (including restrictions on

GMOs), regulations on the use of toxic chemicals, data protection laws and
new banking safeguards that were introduced in light of the 2008 financial
crisis.

Because consensus on some contentious issues such as food safety,

chemicals, and financial regulation may not be arrived during the TTIP,
regulatory cooperation can provide flexibility for business groups and
regulators to set standards after the TTIP is agreed, in the long term and
without the benefit of public scrutiny.

The EU Commission uses the neutral term “stakeholder” to refer to

groups to be involved in regulatory issues. Stakeholders could include all
groups including trade unions, consumer groups, farmers, and environmental
groups, but also big business. This means yet another avenue for corporate
lobbyists to influence public policymaking.

Privatisation

In the 1990s, the emphasis in many countries was the privatisation of

SOEs. In the new free trade agreements, the focus seems to have shifted
more to levelling the playing field between public and private economic
actors and making SOEs adhere to corporate governance frameworks
(Draper, Lacey, & Ramkolowan, 2014).

In the context of TPP negotiations, the discipline on State-Owned

Enterprises (SOEs), according to Kelsey, is a United States initiative that
specifically contests China’s model of state-supported capitalism.

The discipline governing SOEs is based on the core concept of

“competitive neutrality” to promote efficient competition between private
and public businesses and ensure that state-owned enterprises or government-
owned and controlled corporations both operate on a level playing field
(Kelsey, 2012).

Competitive neutrality specifically targets the “advantages” enjoyed by

SOEs including access to low cost of capital through subsidised loans, low
interest rates, government bonds with implicit guarantees, favourable tax
 How Regulatory Cooperation Further Empowers Big Business

The analysis of Corporate Europe Observatory on the leaked text of the

proposed agreement sheds light on how regulatory cooperation will
provide business groups new tools to influence the outcomes of new and
current laws and regulations.

1.Early Information Businesses should be informed and involved

Planned Acts/Early in the planning and finalization of any new
Warning regulation or legislation that could impact
their operation and profit. Their input should
be taken into account when finalizing the
proposal.

2. Impact Assessments New regulations should undergo an impact

assessment that are primarily tilted towards
the interest of business, not citizens. New
regulation/legislation should assess:
• How it relates to international instruments
• How it took account the planned or
existing rules of the other Party
• How it will impact trade or investment

3. Regulatory A “regulatory exchange” or dialogue must

Exchanges take place if a party is unhappy with the effect
of a proposed rule on its trade interest

4. Regulatory A body responsible for regulatory cooperation

Cooperation Body (RCB) and in giving careful consideration to business
proposals on future and existing regulations
(Article 5). It will not only address new
regulations but also existing ones ensuring
that the whole process of convergence
between EU and US moves forward. It can
build on the work of sectoral working groups
where business has special access or simply
have business develop their own proposal.
Source: Corporate Europe Observatory (2015)
62

treatment, including lower transaction costs, protection from bankruptcy and

bailout support, preferential rates for utilities, such as electricity and water,
targeted infrastructure development, such as road and rail lines, government
procurement from SOEs and by SOEs, subsidies for operations, etc.

SOEs will be reorganized like they were private corporations. Board of

directors will be drawn from the private sectors and paid at private sector
rates. The chief executive will be appointed by and accountable to the board,
usually drawn from the private sectors and paid at private sector rates. He
or she will be the employer of all other staff, who are treated as private not
government employees.

The statutory framework of SOEs will set out the overriding objective
to act as a commercial business. Its responsibilities to communities and
employees will be subsumed under the commercial objective. Provision of
non-commercial activities will be contracted separately and funded on a full
cost recovery basis.

The core objective of competitive neutrality is to gradually strip state

enterprises of their integral public good. Social services provided by SOEs
will be eliminated if they are not profitable.

This is an effective strategy for preparing a given sector for increased

competition as a result of future trade liberalisation that has either been
committed to by the government in question or which said government intends
to commit to in the context of impending trade negotiations. Interestingly,
the gradual phasing out of SOEs or the removal of their privileged status has
been a consistent focus of WTO accession negotiations.

Intellectual Property Rights

The leaked chapters of TPP and TTIP pertaining to intellectual property

rights reveal the new stringent patent rules that will have far-reaching
implications across sectors. They contain provisions on copyright, patents
and trademarks with a view to strengthening corporate control over
knowledge at the expense of public access.
 63

Seeds

If successfully concluded, the new IPR rules will prohibit farmers from
saving and using seeds that have patented plant materials, even for their own
personal consumption.The new IPR rules would also bar breeders from using
plants seeds that contain patented plant materials to research and develop
new varieties. Most plant variety protection (PVP) systems allow farmers
to save and reuse seeds (for non-commercial purposes) and permit breeders
to use protected plant varieties to research and develop new varieties. In
contrast, patents on plant-related inventions may have few exceptions. This
spells conflict with the existing IP regimes of many negotiating parties and
may prove detrimental to the food sovereignty of their populations (Public
Citizen, 2014).

Medicines

The TPP chapter on IPR is poised to become the most dangerous trade
pact ever for access to medicines in developing countries. TPP is set to
impose intellectual property rules provisions that go beyond the parameters
of international agreements (e.g. Trade-Related Aspects of Intellectual
Property Rights or TRIPS) (Médecins Sans Frontières , 2013).

In the proposed provision, TPP will allow patenting of modifications of

old medicines (called “evergreening’), even in the absence of therapeutic
benefits. Some countries currently prohibit or limit evergreening as
this practice keeps medicines costly and delays the availability of more
affordable generics.

Patenting of medical methods such as surgical, therapeutic, and

diagnostic methods will also be required, a measure that could increase
medical liability and the costs of medical practice, reducing people’s access
to medical procedures.

Challenges to weak or invalid patents will also be restricted and

will only be entertained after patents have already been granted. Drug
companies constantly file patents on aspects of the same drug to avoid
generic competition for as long as possible. Therefore, prohibiting pre-
grant opposition will result to more expensive drugs and make it more
cumbersome to challenge weak or invalid patents.
64

Data exclusivity, meanwhile, means drug safety regulators will not

have access from existing clinical data to give market approval to generic
or biosimilar drugs. This will give medicines monopoly status even after
expiration of patents and further delay generic competition.

Most alarmingly, TPP will require the extension of patents up to 25

years to compensate for delays in the filing process. The extra years will
enable pharmaceutical companies to maintain a monopoly position and
keep charging high prices without generic competition.

Data Privacy

Under TPP proposal, Internet Service Providers (ISP) could be

compelled to spy on user activity, remove internet content, and cut people
off from internet access for common-generated content such as YouTube
clips from other videos even if for personal or educational purposes.
Downloading copyrighted materials for non-commercial purposes will have
corresponding fines. Creation and sharing of user-generated content will
face new barriers as copyright protections for corporate-created content will
be extended for a minimum of 120 years.

According to a leaked document from European Commission, TTIP could

reintroduce central elements of the Anti-Counterfeiting Trade Agreement
(ACTA) already rejected by the European Parliament in 2012. ACTA was
widely condemned across Europe as an attack against civil liberties. Like
the TPP, ACTA would have required internet serviceproviders to monitor
online activity and inform on anyone suspected ofinfringing copyright
provisions (Hilary, 2014).

The US is also pushing to retain the language to ensure “cross-border

data flows” that will inhibit foreign governments from keeping data
hosted domestically. According to the Office of the United States Trade
Representative web site, “requirements that support a single, global Internet,
including ensuring cross-border data flows, consistent with governments’
legitimate interest in regulating for purposes of privacy protection” is a top
priority of the Obama regime in its trade negotiations.

Meanwhile, the European Commission has already diluted EU rules on

data privacy in order to pave the way for regulatory coherence under TTIP.
 65

It will be recalled that in June 2013 former US National Security Agency’

and whistleblower Edward Snowden revealed the spying activities of the
US against several European governments. If this proposal pushes through,
it will be easier for NSA to install physical signal interception hardware or
software as servers will be closer and more accessible.

Liberalisation of Agriculture

A central goal of the new free trade negotiations is to circumvent the WTO
deadlock and take agricultural liberalisation further. But while their aim is
lowering tariffs in agriculture, they are also expanding “the protections for
investors over consumers and farmers and restricting governments’ ability
to use public policy to reshape food systems” (Institute for Agriculture and
Trade Policy, 2013).

For instance, the introduction of an ISDS mechanism will have impacts

on agricultural policies of countries. Governments (especially developing
countries with large agricultural base) will become vulnerable to dispute
cases from foreign agricultural firms if governments take any initiatives that
will be deemed as unfairly limiting foreign investors’ projected profits such
as implementation of import barriers to promote local agriculture. This has
already happened to Mexico under NAFTA when the Mexican government
implemented trade barriers to High Fructose Corn Syrup. Three foreign
firms in three separate cases sued the Mexican government in a dispute
panel, resulting to Mexico compensating the firms a total of $169.28 million.

Implications to food safety are also a huge concern for many consumer
groups. If past actions of the United States in other trade forums are to be a
reference as to what it is trying to negotiate in TTIP and TPP, there is a strong
basis to assume that it is also pursuing the same agenda of bringing food
safety standards in other countries to the least common denominator. US
consumer groups and Members of the US Congress have repeatedly raised
the alarm that TTIP and TPP would open the door to imported shrimps
from Vietnam without resolving questions surrounding their safety and the
environmental impacts of their production.

Stipulations imposed on investors requiring them to meet certain

specified goals with respect to their operations in the host country will
66

also be banned. With this restriction, countries will be limited in exploring

alternatives to reduce vulnerability to volatile movements in the international
markets and in building integrated local food systems.

New procurement rules will forbid governments from favoring local

suppliers over foreign companies in government contracts. They will also
forbid technical specifications in bids as these are viewed as barriers or
distorters not essential to supplying the good or service. Public programs
such as school feeding that require the use of sustainably produced local
food or food sourced from small-scale farmers can be deemed to unfairly
discriminate against foreign suppliers.

Locking-in liberalisation

The new free trade agreements contain clauses to ensure progressively

higher level liberalisation. These are especially relevant in relation to
negotiations for services liberalisation in TiSA, although some of the
elements of these clauses are also present in TPP, TTIP, and CETA. Most of
these clauses were US proposals in the GATT/WTO negotiations but failed
to be adopted because of opposition of developing countries.

Negative listing

The US pushed in the WTO the policy called “negative list” approach to
national treatment where national treatment obligations would automatically
apply to all measures and sectors unless a government explicitly exclude
them. Although the GATS ended up having some provisions that governed
all services, the US demand for a top-down agreement was rejected. Instead,
the GATS adopted a bottoms-up structure – a positive list approach – where
countries can pick which services they will commit to market access and
national treatment.

Most of the free trade agreements being led by the US use a negative list
approach to national treatment and market access. Parties will have to list all
the services they want to exclude from national treatment. Any public policy
that a government neglects to protect, even if mistakably, can be challenged.
 67

This top-down approach to national treatment and market access

especially has grave deregulatory impacts. Not only are countries compelled
to provide identical treatment to foreign and national companies, but they
also need to be given the same conditions of competition. This requirement
creates uncertainty given that it is not always well-defined when policies are
giving undue advantage to a company over another.

Standstill and ratchet

A standstill clause means that no new so-called “trade restrictive”

regulation could be introduced in sectors they have committed. For
example, if foreign companies were given with rights in operating in the
telecommunications sector, the new free trade agreements would lock-in
that right permanently. A ratchet provision, meanwhile, would mean that
all liberalisation that took place in a service sector subsequent to the entry
into force of the agreement would have to be retained permanently and
applied to all parties. For example, a country proposed to liberalise the sale
of cigarettes and loosened its restrictions on cigarette advertising. Labels,
use of explicit health graphics, and restrictions in TV advertisements have
been used by many governments to discourage its population from smoking
given the many ill-effects it can inflict on one’s health and the cost that
governments have to shoulder in terms of health care. If in the future a
country might want to reverse such a policy, it won’t be able to do so as every
step a country might take to liberalise cigarette sales would be permanent.

Future-proofing

Another key feature of the new free trade agreements is the requirement
that any new service must be completely and automatically covered by
market access and national commitment. This is particularly relevant in TiSA
negotiations. According to the Coalition of Services Industries Testimony,
“TISA should ensure that ‘any new services that become possible to trade as
a result of technological innovation in a covered category can be provided
without further negotiation.” A future-proofing clause essentially prevents a
government from deciding whether they want to nurture a national capacity
to develop service or have it provided by the government or non-profits.
68

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 CHAPTER 4

Impacts and Consequences

What is at stake for people in the Global South in these new

free trade agreements?

For the few developing countries involved, these new free trade
agreements would mean the further deepening and intensification of the
exploitative relations between the global North and South and the widening
of inequality between the two. Imported manufactured and agricultural goods
and services from developed countries at low or even zero tariffs would
destroy the agricultural sector and the fledgling small and medium firms and
ultimately any prospect of self-determined industrialization. Policy space
of governments and their ability to conduct regulations would be severely
restricted if not eliminated, giving foreign corporations unchecked access
not only to natural wealth and cheap labour, but also public funds and
government resources. Developing countries will be more vulnerable to the
contagion of the ongoing economic slump of US and European economies
with the increased exposure to toxic assets and investments resulting from
the liberalisation of banks and the financial sector.

The experience of Mexico in the North American Free Trade Agreement,

upon which most of the proposals in many current free trade agreements
have been modeled after, is a stark example of how developing country
economies would fare under these free trade agreements.

According to the Bureau of Labor Statistics, the average hourly wage

of Mexican manufacturing workers amounted to only $4.53 in 2011 (Perez-
Rocha & Rojo, 2013). In contrast, their American counterparts made
$26.87. Half of the new jobs created in the formal sector from 1993 to 2004

73
74

GDP per-capita, PPP

Source: The World Bank

lacked basic package of benefits like social security, annual bonus, and two
weeks of vacation leaves as mandated under Mexican labor laws. This was
the result of the economic strategy geared towards attracting manufacturing
jobs on the basis of low wages and minimal (if not zero) benefits.

Zepeda, Wise, and Gallagher (2009) noted that import competition of

corn products undercut producers and real prices dropped by 50 per cent after
Mexico accelerated liberalisation ahead of NAFTA’s schedule for sensitive
products. Because there were very few opportunities in the formal economy
for farmers displaced in the process, informal economy rose from 52 per
cent in 1992 to 57 per cent in 2004. Migration to the US also increased from
the pre-NAFTA figure of 350,000 to 500,000 by the early 2000s.

According to Perez-Rocha,

During NAFTA, Mexico has had the slowest rate of economic

growth than [with] any other previous economic strategy since
the 1930s. From 1994 to 2013, Mexico’s gross domestic product
per capita has grown at a paltry rate of 0.89 per cent per year…
During NAFTA, Mexico’s economy grew much slower than almost
every Latin American country. So to say that NAFTA has benefited
the Mexican economy is also a myth. It has boosted trade and
 75

investment, but this has not translated into meaningful growth that
generates jobs. One of the problems that NAFTA has generated is
basically an exporting economy for transnational corporations, not
for the Mexican industry per se.

NAFTA, he added, not only “flooded Mexico with imported corn and
cheap grains from the United States,” but “it also destroyed Mexico’s own
industries” (in Kolhatkar, 2014).

And as Mexico is tied intimately to the U.S.’ because of NAFTA, the

Great Recession of 2008 worsened the Mexican economy’s downward
trend, suffering more than any other country in Latin America (Weisbrot,
2014).

Jeff Faux (2003), narrated how under NAFTA Mexican banks were
privatised and opened to foreign ownership to make capital available for
domestic firms in domestic markets. Banks were sold off to crony capitalists
and when the Mexican peso collapsed a year after NAFTA was passed, these
were conveniently bailed out by the government with more than $60 billion
of taxpayers’ money. These banks were then resold by the cronies at a
handsome markup to foreign investors. An example would be the politically
influential investor Roberto Hernandez who bought Mexico’s second-largest
commercial bank for $3.2 billion and sold it to CitiGroup for $12.5 billion.

Almost eighty-five per cent of the country’s banking system was turned
over to foreigners, but lending to Mexican business dropped from 10 per
cent of the GDP in 1994 to 0.3 per cent in 2000. Foreign bankers’ priority
was to take in deposits and make high-interest rate consumer loans not to
develop Mexico’s internal economy (2003).

Risks for non-negotiating countries from the Global South

One important topic that has been left out in much of the discussions
is the repercussions of new free trade agreements to the rest of the world,
particularly developing countries. One reason for this gap is that most of
these agreements are mostly forged between parties coming from developed
countries. A few traditional trading partners of developed countries in
the developing countries are also included, but most are notably absent.
76

However, the peoples in the Global South have a lot to be concerned with
even as majority of the countries from this region are not party to the
negotiations.

As identified in Chapter 2, the main driver of current free trade

negotiations is the diminishing economic position of US and EU in world
politics. The US and EU aim to set the gold standard for all 21st century trade
agreements by imposing their conditions on other countries. If countries
would wish to join TPP or TTIP, they would need to adopt the existing
trade conditions instead of negotiating them multilaterally. According to
Sanya Reid-Smith of Third World Network, in trade clubs especially those
where the US is in, the US typically tries to “extract a high price” for late
joining countries (Rosa Luxemburg-Stiftung, 2014). In the WTO Accession
Process or in TiSA where permission of all existing members is required,
the US puts all kinds of demands, both trade and non-trade before a country
could be accepted. Similar tendencies can be seen in joining a US free trade
agreement where the US usually has a laundry list of all economic and
non-economic demands and policies that an applying country would have
to meet.

For instance, the TPP will be used to create new heightened global
enforcement norms. Non-TPP members will likely be asked to join TPP
as “a condition of bilateral trade agreements” or “be evaluated against the
TPP’s copyright enforcement standards” (Electronic Frontier Foundation).

Similarly, TPP’s SOE chapter specifically targets China and India which
are not participants to the pact. However, according to Elisabeth Drake the
TPP is viewed “an opportunity” to set SOE rules “that could eventually
form the basis for negotiation on the same issues with China” (in Kelsey,
2012).

In an event that the TPP and TTIP are successfully concluded, there is
a shared understanding that even as these negotiations have been conducted
outside the WTO auspices, the proposals will be brought back to the WTO
when the agreement attracts a critical mass for the stalled talks.

These new free trade agreements will not only become new platforms
for developed countries like the US, to revivify trade agendas that they were
not able to clinch within the multilateral trade system before. They will also
send the strong message that “economic and political liberalism remains
 77

the preferred and superior organizing principle for the 21st century” (Ham,
2013).

What are the impacts of these new free trade agreements on

people’s rights and well-being?

Governments and corporations are eagerly promoting the new free trade
agreements with promises of jobs, greater wealth and economic prosperity
even as they treat the entire process as a closely guarded secret and away
from public scrutiny. But these were the same promises that advocates of
CUFTA, CAFTA, and NAFTA made when they were trying to sell these
agreements to the public. Incidentally, the new free trade agreements
heavily borrow languages and terms from their predecessors, earning them
the moniker of “NAFTA on steroids.”

The concrete experiences of the world’s poor and working people

show that the new free trade agreements will not only deepen and intensify
poverty, dispossession, and inequality but will also rollback the hard won
progressive gains (or whatever that is left of them) of the working class and
the democratic majority during the last century.

Attacks on domestic agriculture and food sovereignty

The agriculture sector of developing countries is usually the most

devastated by free trade agreements. A significant number of the population
is involved either in subsistence or commercial agriculture. Without the
necessary protection against the deluge of cheap and subsidised agricultural
imports, imports from developed countries can easily undercut domestic
prices, putting many farmers from southern countries out of business. In
NAFTA, subsidized agricultural imports from the United States cost Mexico
one million jobs between 1991 and 2000 and an additional one million in
agriculture sector as a whole (American Federation of Labor-Congress of
Industrial Organisations, 2014).

Underpinning the idea of agricultural liberalisation is the fundamentalist

assumption that since developing countries are predominantly agriculture-
based, they wield “comparative advantage” over developed industrial
countries. According to this neoliberal development track, agricultural
78

liberalisation would scale up production of crops for export and increase

competition, which in turn would lead to enhanced quality and efficiency of
production and cheaper commodities for the poor.

In reality, agricultural liberalisation has caused many developing

countries to lose their food sovereignty. Free trade agreements have
drastically transformed developing economies that were once major food
producers into net importers of food from rich industrialized nations.
Indonesia and the Philippines, for example, were top exporters of rice before.
The drive for self-sufficiency of these countries in the past was intended
as a safeguard against their fast-growing populations and the fluctuating
prices of their commodities in the world market. With the shift towards
production for lower-value food grains for domestic consumption to cash
crops, however, these countries have now become the top importers of rice.

Aside from flooding the local markets with cheap imports from foreign
countries, the entry of unsafe food items because of the removal of proper
labeling and lax border controls is also a concern. Agricultural companies
for example will not be required to indicate whether their products were
grown using GMO or not. On the other hand, the increase in food imports
in the United States from Canada and Mexico caused by the implementation
of the NAFTA was accompanied by an increase in food-borne illnesses.
This purportedly stemmed from lax inspection of agricultural imports that
entered the US.

The existence of monopolistic agro-corporations in the sector is also

another challenge that the free trade agreements fail to recognise, according
to the Institute for Agriculture and Trade Policy (Kuhn-Hansen, 2013). In
the US, just four companies command more than 80 per cent of the meat
industry while in New Zealand, Fonterra controls 90 per cent of the dairy
industry. At the global level, Monsanto, DuPont and Syngenta combined
control 57 per cent of the commercial seed market while Wal-Mart dominates
supermarkets and retail supply chains in many countries. However, most
free trade agreements on the table only focus on distortions and subsidies
by state-owned enterprises (mostly those in developing countries), while
ignoring the vast economic power of agribusiness and corporations.

The pro-agro TNC bias of free trade agreements is further stressed in

the inclusion of TRIPS-plus proposals long been lobbied for by Monsanto
and Syngenta. The new free trade agreements will disallow farmers from
 79

exchanging, saving and selling protected seeds, effectively curtailing

farmers from cultivating and selling improved crops. One can just fathom
the disastrous impact of this proposal when one considers that in developing
countries,” informal seed systems often account for 98 per cent of seed
supply” and that worldwide, at “least 1.5 billion individuals depend on
small-scale farming for their livelihoods” (Public Citizen, 2014). IPR
restrictions on patented plant varieties will adversely impact people’s right
to food as seeds become costlier, which in turn will reduce the amount
of household income available for food, healthcare, or education (Berne
Declaration, 2014).

And even if farmers in developing nations increase their access to

protected plant varieties, according to UN Special Rapporteur on the
Right to Food Olivier De Schutter, such access may be disastrous to them
in the long run (2009). According to De Schutter, higher performance of
commercial seed varieties depends on inputs such as fertilizers and water
availability. Farmers may end up trapped in the vicious cycle of debt as
a result of a bad harvest and inability to payback their input loans. This
is especially true for cases when farmers have switched to monocropping
resulting to an initial increase in revenues in certain seasons but less stable
across the years. Additionally, commercial seed varieties may not be suited
to specific environments in which traditional farmers’ varieties may be more
appropriate.

The enhanced IPRs on plant varieties can reduce genetic diversity and
crop availability and threaten food sovereignty in developing countries
(Public Citizen, 2014). As it stands, very little research is being done
towards new varieties of crops vital to developing countries like tropical
maize, sorghum, millet, banana, cassava, groundnut, oilseed, potato or
sweet potato. The enhanced IPRs on plants may reduce genetic diversity
important to the socio-economic structure of developing nations. As De
Schutter reiterates, “The oligopolistic structure of (the breeders’) market
may result in poor farmers being deprived of access to seeds productive
resources essential for their livelihoods, and it could raise the price of food,
thus making food less affordable for the poorest” (De Schutter, 2009).

Attacks on workers’ and migrants’ rights

TPP, TTIP and TiSA are being sold by governments and corporations with
promises of jobs and prosperity on all sides of the border. But if the more than
80

twenty years of past free trade agreements are instructive, then the prospects
for millions of workers would be bleak. The new free trade agreements
will attack workers’ job security, wages and benefits, occupational safety,
and weaken worker’s rights in general. It will also encourage migration of
workers and promote discrimination against migrants and women workers.

For example, Jeff Faux (2013) revealed how NAFTA displaced workers
on both sides of the US-Mexico border, depressed wages, weakened unions,
and set the terms of the neoliberal global economy. NAFTA caused the
loss of some 700,000 jobs (3/5 of which or around 415,000 were in the
manufacturing sector) in the US as companies moved their production to
Mexico to take advantage of the low wages in the country’s maquiladora
zone. Workers who managed to find alternative employment ended up in
sectors like fast food and retail that pay lower wages and offer fewer benefits
(American Federation of Labor-Congress of Industrial Organisations, 2014).
Average wages for those who found work fell by 11% to 13% (Scott, 2011).

Such industrial shifts did not automatically spell a win for Mexican
workers, however. Although Mexico’s labor force increased by 9.8 per cent
between 1998 and 2007, the numbers could not compensate for the losses in
jobs in the agriculture which decreased by 23.97 per cent, from 7.5 million
people to only 5.7 million (Otero, 2011).

A similar scenario is bound to be repeated under TPP. Recently, Obama

and Nike promised the creation of around 10,000 jobs if TPP is approved.
But Lydia DePillis of the Washington Post contests this claim (2015). She
notes that Nike relies almost exclusively on foreign manufacturers for its
products and continues to go in the direction of more outsourcing with its
announcements of the closure of one of its plants in the US and replacing it
with production in Honduras.

NAFTA likewise increased corporations’ power to pressure workers to

accept lower wages and diminished benefits (Faux, 2013) causing a race
to the bottom. Workers were pitted against each other with corporations
wielding the suppressed wage levels of Mexican workers to lower the cost
of US labor. The shift in employment from high-paying manufacturing jobs
to low-paying service jobs increased the glut of workers seeking jobs in this
sector, leading to an overall wage stagnation (Public Citizen , 2013).
 81

Despite the decline, however, the gap between the typical American and
Mexican workers remains substantial, with Mexican workers continuing to
receive about 30 per cent of the wages that workers make in the United
States. Workers in the Mexican maquiladores (export processing zones),
many of which are women, suffered severe exploitation having no labor
rights, no health benefits, and working for as long as 12 hours. Women were
discriminated against by having to take pregnancy tests before applying for
jobs.

The increasing competition between workers from both developing and

developed countries will certainly favor corporate elites and enable them to
minimize social controls over markets for the protection of labour so profits
can be maximised. This process will diminish, if not ultimately reverse, the
gains made by the workers’ movement and trade unions on behalf of the
working class.

The free trade architecture of deregulation coupled with investor

protections will allow corporations to pressure governments to modify their
labour and social protection policies while blackmailing the governments
into giving corporations tax breaks and other subsidies. Using the carrot-
and-stick tactic, corporations can either entice governments with the
supposed jobs and taxes that their investments will generate or threaten to
file lawsuits or transfer their production to countries in the global South
where part of the countries’ “comparative advantage” selling point is the
repression of organized work force.

According to Robert Scott, under the NAFTA era, companies have

constantly made threats to close plants and move them abroad while
bargaining with workers over wages and working conditions, directly
impacting workers’ bargaining positions. Citing a 1992 Wall Street Journal
survey, Scott revealed that one-fourth of almost 500 American corporate
executives admitted that they were “very likely” or “somewhat likely” to
use NAFTA as a “bargaining chip” to press down wages. He also added that
more than 50% of all employers made threats to close all or part of their plants
during organizing drive. Plant closing threats in National Labor Relations
Board (NLRB) union certification elections “nearly doubled following the
implementation of NAFTA, and that threat rates were substantially higher
in mobile industries, where employers can credibly threaten to shut down or
move their operations in response to union activity”(The high price of ‘free’
trade: NAFTA’s failure has cost the United States jobs across the nation,
82

Trade Union Density

Unionization rates have declined in all three countries.

Source: Organisation for Economic Cooperation and Development

2003). As a result, union density in the three countries has rapidly declined
since the implementation of NAFTA.

Similarly, in New Zealand, the government changed its labour laws

upon being pressured by the Time Warner Company in filming “The
Hobbit” movies. In response to Time Warner’s ominous threat to shift
filming elsewhere, the government allowed the company to remove actors’
right to unionize, strike, and benefits such as holidays and sick pay.

Vietnam, one the TPP negotiating countries, is considered the low-cost

labor alternative even cheaper than Chinese workers. Independent labor
unions are illegal in Vietnam and workers are paid about one-third to one-
half of what Chinese workers are paid. The TPP would pit U.S. workers
against Vietnam’s underpaid and repressed workforce, perpetuating the race
to the bottom.

With the aggressive push of new free trade agreements to control

governments’ power to regulate, labour will be made to adopt to production
 83

flows as corporations deem it necessary even if it runs contrary to established

labor standards. This process is called labor flexibilization, a scheme by
which firms no longer commit to providing employees lifetime job security
and instead seek flexible employment relations that permit them to increase
or diminish their workforce and reassign employees with ease (Stone, 2006).

Capitalists have used various schemes to make labour pliable.

Compressed work-week, reduction of workdays, rotation of workers, broken-
time schedules, forced leave, and flexi-holidays have been implemented
to cut-down on the labor hours paid to workers and maximize capitalists’
profit accumulation. Work contractualization has served as capitalists’
legal smokescreen to further reduce the cost of labour and avoid paying
government mandated benefits usually provided to regular workers. Workers
have also been exposed to various health and safety hazards. Safety, health,
and living standard of workers have been undermined all for the sake of the
free movement of capital.

Likewise, the flooding of cheap manufactured imports into less

developed countries that lack the technology and finances to compete with
the subsidy given by the more developed countries to their industries and
sectors can destroy the local manufacturing industries and agriculture. This
will intensify rural-to-urban and international migration, as workers and
communities move from one place to another in search for new sources
of livelihood. This will create yet another set of compounding problems
such as brain drain, international security, overcrowding of urban centers,
food insecurity, downward pressure on wages, and even ethnic and racial
discrimination against migrant workers.

The massive losses of Mexico’s agriculture sector sparked unprecedented

migration of Mexican rural workers to the industrial zones in both United
States and Canada. According to Public Citizen, the annual flow of
immigrants from Mexico to the US more than doubled from the 1993 pre-
NAFTA level of 370,000 to 770,000 in 2000 corresponding to a 108 per cent
increase (Public Citizen, 2013). This created a large reserve of vulnerable
workers willing to accept low pay, further exacerbating the downward
pressures on wages.
84

Attacks against women

The new free trade agreements pose new threats to women and are
expected to reinforce patriarchy and accelerate the impoverishment of
women through more sophisticated and subtle forms of exclusion.

The destruction of livelihoods resulting from the liberalisation of

industries and agriculture will push more and more women in developing
countries into becoming informal workers such as subcontracted workers,
assistance in small family enterprises, ambulant vendors, street sweepers,
scavengers, and sometimes, prostitutes. These jobs offer precarious
employment status, low, irregular or no remuneration, little or no access to
social security or protection, and limited ability to organize to ensure the
enforcement of international labour standards and human rights” (Chant
and Pedwell 2008). They also face a number of serious health and safety
risks, including dangerous working conditions, gendered violence, and
susceptibility to HIV/AIDS.

Based on the report of the UN Human Rights Special Council, women

farm workers represent 20 to 30% of the approximately 450 million waged
agricultural workers. Majority of these women farm workers usually belong
to the “periphery” segment of the workforce made up of unskilled workers,
without a formal employment contract, and whose work is usually seasonal
or temporary.

With the establishment of international free trade policies, transnational

corporations can take advantage of the large reserve army of feminine labour.
Moving from the rural to urban areas or from poor countries to wealthier ones,
women will be forced to seek work as either documented or undocumented
migrant workers to perform production demands at any price. In developing
nations, women have been found by big transnational corporation to be a
cost-effective source of labour. The case of the maquiladora workers in
Mexico or the women workers in many sweatshop factories in South East
Asia demonstrates the point clearly.

Domestic work is an industry populated by women. Currently, there

are at least 53 million domestic workers worldwide, and 83% of domestic
workers are women. Domestic work is one of the major of drivers of
female migration in the world (Asia Pacific Forum on Women, Law and
Development 2010). As industries in the developing world crumble under
 85

market liberalisation and workers’ wages plummet to starvation rates, more

and more women will be under the pressure of taking up domestic jobs as
maids and caregivers in wealthier foreign countries.

Attacks against social services and public goods

The corporate attack against social services and public goods is a double-
edged sword that will undercut the financial capacity of governments to
answer to its human rights responsibilities to their constituencies while
pressuring the governments to open-up services to free market competition.

Unlike in the WTO/GATS rules where liberalised services must be

explicitly included in the country’s schedule of commitments, the new free
trade agreements take a much more aggressive approach in that all services
are included unless they have been specifically exempted in the negotiations.
Under CAFTA, Central American countries have left their service sectors
wide open for US corporations, while US trade negotiators only committed
what they had already agreed to under the WTO/GATS. This means that
while the US maintained protections for their service sectors, the Central
American countries exposed theirs, revealing the inherent disparities in
negotiations between poor and rich countries (James, 2011).

For many developing countries, trade-related public revenues are critical

sources for various public services to ensure macroeconomic stability and
promote outcomes such as poverty reduction and welfare-enhancing public
spending. According to the World Development Indicator trade-related
revenues (e.g. from import duties, export duties, tax on profits on exports,
etc.) across low and middle-income countries average from 3 per cent to
over 20 per cent of total public revenue (World Bank, 2013). The new free
trade agreements will eliminate a major source of government income by
eliminating tariffs. This will inevitably result in decreased social spending
on education, health care, and other vital social services and increased
pressure for governments to privatise.

The new free trade agreements also seek to drastically redefine the
meaning of trade to include a number of other activities such as services
traditionally delivered by the government, including education, health, water,
electricity, telecommunication, etc. These agreements will commoditize and
make social services tradable units for which foreign investors can compete.
Foreign investors will be assured of non-discrimination rights of most
86

favored nations and national treatment as well as the right to arbitration over
any dispute covered by the agreement. And because services are provided
through the market rather than through the state, the public becomes less
able to hold governments accountable

This will further heighten the vulnerability of the urban and rural poor,
indigenous peoples, women, youth, and other marginalised who could
have benefitted from some protection through access to social services,
utilities and infrastructure amidst the crisis and skyrocketing prices of basic
necessities.

For example, the residents of Buenos Aires, Argentina paid higher water
bills after the US water company Azurix took over the operation of the water
facility. When the local government attempted to regulate water prices,
Azurix with its King & Spalding law firm filed a lawsuit. The investor-state
tribunal decided in favor of the water company and awarded it $165 million
from the taxes of the Argentinean public.

The new free trade agreements will also endanger the rights of citizens
on access to education. This basic right and also a social service that
governments should provide will be for sale once corporations decide to profit
from it. Liberalising the education sector also raises questions on whether
the education system is producing graduates needed for genuine industrial
development, not just skilled labor for multi-national corporations. Already,
the Vietnamese government allows foreign investment in its education
sector to align it with large multinational corporations demand for cheap
skilled labour.

Attacks against public health

The new free trade agreements are set to pose new threats to public
health, especially for people in the developing countries. While big
pharmaceuticals are set to jack-up prices for vital medicines through patent-
monopolies, the health and safety of peoples and communities will be
greatly compromised as regulations to ensure corporate accountability and
behaviour are dismantled.

Generic competition, according to Doctors without Borders, is

important in reducing the prices medicines in poor countries (Médecins
Sans Frontières, 2013). International treatment initiatives such as the
 87

Global Fund to Fight AIDS, Tuberculosis and Malaria, UNITAID, and

UNICEF depend heavily on affordable generic drugs. Furthermore, generic
competition was instrumental in bringing down the price of the first
generation of antiretroviral medicines by 99 per cent and helping nearly 8
million people obtain HIV/AIDS treatment. The new free trade agreements
will weaken competition from generics by, among many other measures,
extending patent rights to big pharmaceutical companies for up to 25 years
and allowing them to continue charging artificially high prices for drugs.
With AIDS being the leading cause of death for women of reproductive age
globally and the discrimination against the LGBT community preventing
them from accessing live-saving medical care and services, costlier
medicines will result to more lives lost.

National and global governments’ efforts to regulate corporate actions

to ensure public health and safety will be imperiled by the set of extreme
foreign investor privileges and rights through the investor-state dispute
settlement mechanism.

For example, when Uruguay and Australia began implementing the

World Health Organisation’s Framework Convention* on Tobacco Control
to which it is a signatory including 167 other countries, including requiring
plain packaging and warning labels, Philip Morris filed an investor-state suit
against both countries.

Another case was Ethyl Corporation’s investor-state claim against

Canada when the latter decided to ban until further tests the use of
methylcyclopentadienyl manganese tricarbonyl (MMT), an anti-knocking
agent used to enhance engine performance but contains manganese, a
known human neurotoxin. On June 24, 1998, the NAFTA panel rejected
Canada’s claim, forcing the latter to reverse its ban on MMT and pay Ethyl
Corporation $13 million in legal fees and damages.

The new free trade agreements will also undermine food safety as
standards will be brought to the least common denominator and labeling

* The World Health Organisation’s Framework Convention on Tobacco Control aims to “to protect pres-
ent and future generations from the devastating health, social, environmental and economic consequences of
tobacco consumption and exposure to tobacco smoke by providing a framework for tobacco control measures
to be implemented by the Parties at the national, regional and international levels in order to reduce continually
and substantially the prevalence of tobacco use and exposure to tobacco smoke…”(World Health Organisation,
2003).
88

Source: Waning B, Diedrichsen E & Moon S. A lifeline to treatment: the role of Indian generic manufacturers in
supplying antiretroviral medecines to developing countries. 2010. Journal of the International AIDS Society, 13:35

policies could come under fire as trade barriers. Food imports will be allowed
if an exporting country claims that their safety regime is “equivalent” to the
importing country even if it violates the key principles of the importing
country’s food safety laws. This is tantamount to outsourcing domestic food
inspection to countries around the globe, placing the health of the general
public at risk.

Citing a 1994 study of Council for Agricultural Science and Technology,

Global Trade Watch noted that between 6.5 million and 81 million cases of
food-borne illness occurred in the United States annually, resulting to 9,000
fatalities. The number of food-borne illness stemming from fresh fruits,
vegetables and juices has increased dramatically over the last decade.

The spike in cases of food-borne illnesses can be linked to several

reasons: human behavior, industry, adoption of certain microbes, and the
increasing globalisation of the food supply. Researcher Nicols Fox concurred
to this observation, saying that “our food is only as safe as the country and
the environment it comes from....Trade is like a passport for pathogens.”
Since 1990, food-borne outbreaks in the United States from imported food
have included shigellosis from imported green onions, salmonella from
imported cantaloupe and imported alfalfa seeds, cyclospora from imported
raspberries and cholera from imported coconut milk.
 89

Attacks against the environment

According to scientific studies, in order to avoid catastrophic climate

change, 80 per cent of the world’s fossil fuels need to remain in the ground.
This is obviously counter to the interest of the fossil fuel companies. In
the new free trade agreements, corporations will be empowered to sue
governments for interfering with their business – whether it be due to the
enactment of carbon reduction goals or adopting environmental legislation.

In fact, previous trade deals have already led to lawsuits over fossil
fuels. In 2009, Swedish energy company Vattenfall filed an international
arbitration case against Germany over the construction of a coal-fired
power plant on the Elbe river (Friends of the Earth Europe, 2014). The City
of Hamburg laid down a number of environmental requirements for the
construction of the plant which were intended to protect the waters of Elbe
river. Vattenfall argued that the restrictions made the project unviable and
claimed damages amounting to €1.4 billion excluding costs and interest.
The City of Hamburg agreed to settle disputes with the company in 2011,
resulting to the lowering of environmental standards and issuance of permit
for the construction of the plant.

In another lawsuit, Lone Pine Resources, citing provisions contained

in NAFTA, sued the Canadian province of Quebec in 2013 for passing a
ban on fracking. According to the company, the ban cost them $250 million
(Nelson, 2015). The case is still pending.

The larger goal of the deregulation of environmental policies is to

provide large extractive industries unbridled access to natural resources of
peoples in the Global South. This will further deprive them the right to
use their own natural resources for economic development and render their
communities to environmental catastrophes.

As part of the NAFTA deal, the Mexican government amended the

country’s constitution in 1993 to allow open pit mining, foreign ownership
of companies engaged in natural resources, and the sale of protected
communal lands (Godoy, 2009). Canadian mining companies went on
a frenzyacquiring permit to mine gold and silver in Mexico including
the Canadian mining company Minera San Xavier. The local residents
protested, however, fearing that the mining operations will deplete and
poison the underground aquifer that people rely on for water supply. The
90

federal tribunal ruled that the mine should not proceed because it would
violate important environmental laws. However, the Mexican government
still allowed MSX to operate. After another series of legal battles and civil
disobedience actions, the Mexican government was forced to give in to the
people’s demands and closed the mine in 2009. In 2010, however, it was
found out the MSX has once again started its operations with the backing of
the Mexican officials and the Canadian embassy in Mexico.

Attacks against indigenous peoples

Indigenous peoples have suffered from a long history of dispossession

exploitation carried out by colonizers. In the era of neoliberal globalisation,
indigenous peoples find themselves on a face to face battle with new colonial
explorers – transnational corporations, investors, governments, multilateral
institutions – seeking to pillage and plunder their land and resources.

Foreign investors on agriculture and extractive industries encroach on

the ancestral lands and territories of indigenous peoples. Indigenous people
stand in the way of globalisation’s expansion; they occupy the last pristine
places on earth, where resources are abundant: forests, minerals, water, and
biodiversity. (International Forum on Globalisation, 2006). According to
estimates, as much as 50% of the gold produced between 1995 and 2015, and
up to 70% of copper production by 2020, will take place on the territories of
indigenous peoples. New trade and investments that have been put in place
demand the opening up of previously inaccessible territories to industrial
extraction of natural resources. As a consequence, indigenous populations
have been expelled from their ancestral domains, depriving them of their
living spaces, resources, and livelihoods in the name of economic growth.

In 1993, as part of the transition phase towards NAFTA, the Mexican

government pushed the repeal of the Article 27 protecting Indian territories
from sale or privatisation. As a result, the indigenous population in Mexico
was left unprotected from the loss of their remaining lands. Because of this,
the Zapatistas called NAFTA “a death certificate for the Indian Peoples
of Mexico.” On January 1, 1994, the day that NAFTA came into force,
the Zapatista National Liberation Army declared war on the Mexican
government storming and occupying four county seats in Chiapas, Mexico.
However, their rebellion lasted only 12 days as the ill-equipped peasants
were no match for the firepower of the Mexican army supported by the
United States. Amnesty International recorded gross violations of human
 91

rights during the 12-day war and years after. Arbitrary arrests, summary
executions, torture, and house-to-house raids were allowed by the Mexican
government to subdue any rebellion in Chiapas (Campbell, 1996).

Furthermore, the privatisation of basic social services such as health,

education, and other critical infrastructures will aggravate the marginalization
and exclusion of indigenous populations. Statistically, indigenous people
have poorer health, educational opportunities, and life expectancy.

The proposed enhanced rules on intellectual property rights will by and

large undermine indigenous people’s intellectual and cultural heritage. Big
corporations will acquire monopoly patents over life forms and life creating
processes as if they were novel or industrial innovations. TRIPS has already
impacted indigenous peoples in a negative manner. For example, Indigenous
Peoples have been cultivating and developing their local plant life for
centuries. Plant life is not supposed to be patentable, but pharmaceutical and
agrochemical companies have found a way to patent them by extracting the
elements of the plant’s genes and patenting the active ingredients (DeGeer,
2002).

Attacks against democracy and national sovereignty

On May 22, 2015, US President Obama was able to secure a fast track
authority from the US Senate. Behind the scenes, the world’s most well-
heeled multinational corporations have turned on the cash spigot to sway
US senators to approve the fast track bill. The fast track bill runs counter
to the principles of democracy and the separation of powers between the
different branches of the government. By limiting the Congress’ intervention
to simply reject or accept the president’s formulation of the proposed trade
agreements, the fast track bill impinges on the Congress constitutional
mandate to amend or reconstruct policies in a manner that reflects the will
of the people they represent (Firestone, 2015).

The fast track bill incorporates the secrecy of the negotiations, hiding
them from the public and providing no room for debate. The press and the
public still have no access to the texts of trade deals such as TPP, TTIP, and
TiSA even as negotiators are in a rush to conclude the deals that would have
tremendous impacts on our daily lives. Even some public officials such as
members of the Congress have very limited access to the texts. Congress
92

members can only see the text if they go into a private room to read it, and
they cannot take a phone or pen and paper with them.

First, the proposal towards regulatory cooperation or harmonisation

will result in the weakening of democracy and standards protecting the
public while giving big corporations and lobby groups ample opportunities
to influence the result of decision-making with even less public scrutiny
and accountability to citizens. Regulatory bodies or committees, which will
include private and unelected individuals such as technocrats and lobbyists
of major corporations, will enjoy superior status in the hierarchy of central
government (Kelsey, Preliminary Analysis of the Draft TPP Chapter on
Domestic Coherence, 2011). Parliaments and local government bodies
will be barred from being fully involved and public debate dangerously
hobbled. Proposals for regulation aimed at promoting public interest could
be stopped even before they are presented at the table for discussion, while
those lobbied for by powerful business interest could be presented as fait
accompli without room for any amendment. The voice of the governed and
their democratically elected representatives will be deemed irrelevant.

Second, the notorious ISDS is yet another fast track for corporations to
circumvent democratic processes and institutions, hamstring governments
from exercising their mandate to ensure peoples’ welfare and safety, and
violate national sovereignty of countries.

The ISDS is detrimental to the democratic policy space of governments.

To illustrate, every action of the central banks in every nation inevitably
results in losses to some corporations and gains for some. Central banks
however are mandated to make decisions based not on how a monetary
policy may impact individual companies, but on the economic and financial
wellbeing and prospects of the entire nation. If the new trade agreements are
passed, however, then the governments’ freedom of action is compromised
by providing ISDS tribunals with the authority to award lost profits to the
corporations that might be negatively affected by central banks’ policy
action.

Another example on how ISDS restricts the policy space of sovereign

governments is the case of the Saluka Investments, a Netherlands investment
company, filing and winning a $236-million investor-state claim against the
Czech Republic for not bailing out a private bank in which the company had
a stake, in the same way that the government bailed out banks in which the
 93

government had a major stake (ISDS Corporate Attacks, n.d.). Practically,

governments will no longer have any choice if a great financial crisis erupts
in the future but to bail out insolvent banks.

While the “positive power” to legislate laws is outside the scope of ISDS,
it has the power to “paralyze legislative action” by blocking legislation and
directing legislation away from certain alternatives that may be ruled out
by ISDS tribunals, thereby effectively undermining state sovereignty. This
negative legislative power accorded to ISDS tribunals directs and limits
the positive legislative powers of national legislatures, fuses legislative
and judicial functions, and breaches the separation of powers guaranteed
by national constitutions. Accordingly, this fusion is unconstrained because
it is an authority that could be applied in any relevant legislative matter
or government activity at all levels where corporations’ “expectation of
profits” may be concerned (Firestone, 2015).

Finally, national sovereignty will be subsumed under ISDS bodies

external to governments. The new free trade agreements do not provide a
clear legal provision allowing nations to regulate multinational corporations
and investors to protect general public welfare without the threat of an
investor-state suit.

Attacks against small and medium enterprises

The new free trade agreements are pro-business but not everyone in the
business sector is on board. In truth, only huge multinational corporations
are privy to the negotiations while many in the so-called “sustainable
business community,” including small and medium enterprises are left
out. Needless to say, opposition among the small and medium enterprises
against the new free trade agreements is strong. Francesca Rheannon argues
“The trade agreements are seen as threatening the very ability of sustainable
businesses to survive and thrive. In fact, many businesses are asking about
the proposed trade agreements, “Who are they actually good for?”(2014).

The question posed by Rheannon is especially urgent given that the

ongoing globalisation of neoliberalism, instead of creating democratic
“complete competition” between many small and medium enterprises
enjoying the “freedom of the market,” only the big corporations emerge as
winners. The market is only “free” for monopoly capitalists while everybody
else is “condemned to an existence of dependency (as enforced producers,
94

workers, and consumers) or excluded from the market altogether (if they
have neither anything to sell not buy)” (Werlhof, 2008).

This is the reason why small- and medium- enterprise groups are
insisting on the importance for business to account for externalities and
operate under rules to ensure equity, transparency, and accountability.
However, according to the groups co-founder and CEO of American
Sustainable Business Council David Levine, the new trade agreements are
“ripping apart the rules that actually create a fair and level playing field” and
gives “unfair competitive advantage to those with the deepest pockets and
the most political influence” (Rheannon, 2014).

A clear example of how the new free trade agreements will further
destabilize domestic small- and medium- enterprises is the new rule
requiring “national treatment” while banning performance requirements
on foreign investors or investments about use of locally produced goods
or services in government procurement. Executive Director of the Metro
Independent Business Alliance Mary Hamel is fearful that the policy would
choke off local procurement policies with municipal government:

We know that currently some of our government agencies do have

local procurement policies in pl ace or are considering them, so we
know that would put our businesses at a definite disadvantage. They
would undermine the work that we’ve done to impress upon our
elected officials how important it is to support these businesses and
in some cases give them preferential procurement policies and an
opportunity to get a foot in the door, for example, in some fields
that have been dominated by large multinational corporations. This
would take that opportunity away.
—Rheannon, 2014

It is misleading, however, to assume that mere restitution of “true and

fair” market rules would lead to a better functioning trade architecture. Anti-
trust rules have lost their potency since transnational corporations – not the
“market” as an anonymous mechanism or “invisible hand” – are the ones
setting the norms without any political control (Werlhof, 2008). Rules were
and continue to inform the current process of the concentration of capital
and the displacement of small business by big monopolies. Small, medium,
and even some bigger enterprises are pushed out of the market, forced to
 95

fold or swallowed by transnational corporations that have greater financial

power.

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 CHAPTER 5

People’s Resistance

People resistance against the corporate agenda

For the last 7 years or so, the world has been witness to massive protests
against the corporate attacks against people’s rights following the global
financial meltdown in 2008.

The revolutionary wave of demonstrations and protests against despotic

regimes in the Arab world signaled the advent of what is now called the Arab
Spring. Tahrir Square in Egypt was filled with millions of people standing
up against the widespread corruption, state brutality, low wages, and food
price inflation. In Bahrain, hundreds of thousands of protesters mobilized to
demand greater political freedom, equality, and human rights.

In Turkey, what was initially a protest against the government’s plan

to demolish the 75-year old Taksim Gezi Park and build a shopping mall
in its place instead was transformed into a popular democratic movement.
The demonstrators showed profound consciousness about the continued
adherence of the government to neoliberal policies that privatises the public
commons and sells government companies to foreign firms.

In Europe, fiery mass protests countered the austerity impositions of

the European Central Bank, the International Monetary Fund and the World
Bank in the region and the taxpayer-backed bailout packages handed by
governments to big banks and financial and business oligarchs. In Spain, 8
million indignados (indignant masses) filled Madrid’s central square Puerta
del Sol, calling for the rejection of the current political system, capitalism,
banks and political corruption.

101
102

In Greece, a huge protest movement was born in 2010 after then Prime
Minister George Paparendou enacted a series of austerity measures including
public sector pay cuts, pension reductions, and an increase in value added
taxes. The austerity measures were part of the neoliberal conditionalities
imposed by the EU Commission-IMF-European Central Bank (widely
referred to as the troika) on Greece in exchange of the bailout package
aimed at solving the government-debt crisis.

Actions ranged from demonstrations, strikes, sit-ins, occupations, to

civil disobedience that lasted until 2012. On January 2015, the dominance
of the austerity-oriented conservative parties was at last challenged by the
victory of a leftist anti-austerity party Syriza, raising a wave of hope across
Europe.

And finally, there was the Occupy Movement which spread in over
95 cities across 82 countries around the world was the pinnacle of the
people’s collective action the economic, political, ecological, and social
injustices happening today. The Occupy Movement highlighted how large
corporations and the global financial system control the world in a way that
disproportionately benefits a minority.

And today, the peoples’ struggles continue in the face of the neoliberal
assault of the EU and US through these new free trade agreements. All over
the world, civil society, grassroots organisations, unions, political parties,
and even some governments are conducting raising people’s awareness
and mobilizing them to action to expose and oppose the entrenchment of a
global trade regime controlled by a few rich countries and their transnational
corporations.

Last year in Guatemala, thousands of indigenous peoples, workers,

peasants, and women held demonstrations and pickets outside the Congress
and Constitutional Court in Guatemala City to press lawmakers and
President Otto Perez Molina to rescind the Plants Varieties Protection Bill
(known as the “Monsanto Law”).

The law provided transgenic seeds producerslike Monsanto and Syngenta

strict property rights in the event of possession or exchange of original or
harvested seeds of protected varieties without the breeder’s authorization. A
breeder’s right extends to “varieties essentially derived from the protected
 103

variety,” thus, a hybrid of a protected and unprotected seed belongs to the

protected seed’s producer (RT News, 2014).

Monsanto Law was an application of the international convention called

Union for the Protection of New Varieties of Plants (UPOV), a provision of
the 2005 of the Dominican Republic-Central America Free Trade Agreement
(CAFTA-DR) with five Central American countries (Costa Rica, El Salvador,
Guatemala, Honduras, and Nicaragua) and the Dominican Republic.

Their efforts have not been in vain. On Sept. 4th 2014 the Guatemalan
Congress finally repealed the bill.

On April 18th 2015, tens of thousands of protesters across different

countries around the globe poured out into the streets to protest the rigged
corporate trades such as TTIP and TPP. Called the Global Day of Action
against Free Trade Agreements, the event consisted of over 700 separate
actions, including rallies, marches, and public statements. The event could
mark what might have been the largest protest against free trade to date (RT
News, 2015).

In Austria, around 22,000 people marched in towns and cities against

TTIP which they believed would damage the country’s agricultural and
pharmaceutical sectors as well as consumers (Sandford, 2015).

In Germany, 200 demonstrations took place and were participated in

by thousands of people in the cities of Berlin, Hamburg, Frankfurt, and
Stuttgart. According to a recent poll from YouGov, opposition against TTIP
is highwith 43 per cent of the populationopining that the pact would be bad
for the country (Deutsche Welle, 2015).

Several thousand people also joined a rally against TTIP that took place
in Brussels. Parties and organisations like Podemos, Die Linke, and Syriza
joined the protest, as well as several unions. In Madrid, Spain, over 20,000
people came out to have their voice heard. Another 4,000 showed up in
Barcelona to protest against the proposed agreement (RT News, 2015).

In the US, people marched across dozens of cities from New York to San
Francisco to protest against outsourcing jobs, environmental, health, and
food safety(RT News, 2015).
104

Protest rallies against the TPP are also soaring. In March 2015, thousands
of people marched in 22 cities and regional centres in New Zealand for the
National Day of Action against TPP. It was the fifth of such event to be held
in the past year and followed demonstrations in 2012 and 2013. In Malaysia,
opposition against the US-led trade pact is gathering steam. In 2014, while
speaking at a town hall event in Malaysia as part of his Asia-Pacific tour US
President Barrack Obama, a group of protesters stood up in the audience
while silently holding anti-TPP placards (Democracy Now, 2014).

In Colombia, several thousand peasants and small-scale farmers have

marched through the streets of Bogota to defy their government’s free trade
with the European Union and the United States which were driving them
into bankruptcy.

In El Salvador, three municipalities through a historic popular community

consultation have banned Canadian Mining companies from conducting
operations in their communities (Cuffe, 2015). The municipal consultations
in El Salvador have been institutionalised as a way to exercise local and
participatory democracy.

For decades, Canadian mining companies have plundered the natural

resources of El Salvador. Local residents were evicted and displaced from
their homes to give way to gold mining projects. After decades of extraction,
the companies just walked away leaving rivers, groundwater, and lands
contaminated with toxic waste.

In response, local and national organisations engaged in various

activities including marches, rallies, and direct action and sabotage.
They successfully kicked out the mining companies, but they wanted a
legal framework to ensure that mining companies are kept out from their
communities permanently.

While corporate behemoths may appear formidable, the collective and

sustained resistance of the people is stronger. Strong peoples’ movement
remain a potent weapon to achieving economic justice, self-determined
development, and genuine justice, peace and democracy for the present and
future. As Noam Chomsky said,

“There are no magic answers, no miraculous methods to overcome

the problems we face, just the familiar ones: search for understanding,
 105

education, organisation, action ... and the kind of commitment that

will persist despite the temptations of disillusionment, despite many
failures and only limited successes, inspired by the hope of a brighter
future.”

What can we do to continue the fight?

It is imperative to increase the voice and strength of movements and

sectors opposing the new free trade agreements and heighten the ongoing
corporate takeover of the world’s resources, wealth, and future.

For this purpose, mass organizing and campaigning are vital so that
workers, peasants, women, indigenous peoples, migrants, small and medium
entrepreneurs, urban poor, youth and the rest of the democratic majority
are able to cohesively demand the rights pertinent to their livelihood, food,
wellbeing, health, and freedom. Lively campaigns around these issues would
not only heighten the pressure on local, national, and international governing
bodies, but would also be of critical strategic value in politicsing the people
to take part in a common platform to oppose imperialist globalisation and to
forge an alternative global economic system founded on economic, social
and environmental justice, solidarity, transparency and accountability to the
people.

Getting organized

The people’s power opposing imperialist globalisation must be built,

consolidated, and strengthened through the vast mass organisation of
workers, peasants, women, indigenous peoples, urban poor, migrants,
among many others.

Building Mass Organisations

1. Workers: Trade unions are the principal source of leaders and activists
of the anti-corporate trade movement. Neoliberal globalisation has
concentrated its most vicious attacks in weakening the strength and
power of the organized labour through various labour flexibilization
schemes. These anti-worker policies have resulted to massive
unemployment, declining wage and benefits cuts, and increased
106

vulnerability to exploitation.

Many unions most active in the anti-corporate trade movement

represent workers in industries that are trade-sensitive, such
as workers in industries involved in production for domestic
consumption and export. These workers have a direct interest
in the issue of market access under the bilateral and multilateral
trade treaties. They have direct knowledge on how corporate
free trade agreements could lead to the destruction of industries
leading to massive jobs losses, increased competition among
workers for a handful employment opportunities, and greater
leeway for capitalists to exploit and extract more profits from
their labour. These actual real life effects of free trade agreements
on workers and their families have hobbled trade unions’
opposition to neoliberal globalisation but they are also the source
of much of the analysis and critique against free trade.

Job loss is a critical issue for workers, but the new free trade
agreements are controversial also for other reasons. Regulatory
coherence, consumer safety, disciplines on SOEs, obligatory
ISDS, government procurement, and other new proposals
signify a looming corporate takeover of the service sector.
As such, public service unions are getting more and more
involved. They are apprehensive about the impacts the new free
trade agreements will have on their workplaces, wages, and
benefits.

The collaboration between industrial workers and workers in the

public service sector is essential to ensure the firm and strong
opposition movement against the corporate free trade agreements.

2. Rural Poor: The rural poor comprising small and landless farmers,
agricultural workers, women peasants and pastoralists, fisherfolks,
among others make up the main mobilizing force against the corporate
free trade agreements.

A key campaign issue for peasants is the liberalisation of

agriculture. The liberalisation agenda has been consistently
opposed by the rural poor sector in various campaigns against
WTO agreements such as the AoA, TRIPs, TRIMs, and GATS.
 107

So far, their efforts, in unison with the struggles of other sectors,

have resulted in the stalling of the WTO. However, imperialists
and their corporations have found new openings through regional
and bilateral trade agreements.

In the new free trade agreements, liberalisation of agriculture is but one

of the many dangerous policies that the rural folks confront. The new
free trade agreements constitute an all-sided attack against farmers’
livelihood: from IPR rules, government procurement, ISDS, trade
facilitation, consumer safety, competition rules, etc.

The rural poor are directly opposed to the political and economic actors
pushing for the new free trade agreements such as the agro-TNCs and
financial speculators. Hence, the stakes for the rural poor are clearly
high.

Farmers from TPP and TTIP parties such as Japan, Peru, Malaysia,
Australia, and Taiwan are scaling their actions against the free trade
deals through mass mobilisations, and pickets. Other small and
medium farmers’ think-tanks have come up with policy critiques
and advocacy positions to demand actions from their governments
and institutions against TPP and TTIP.

3. Women: The women’s movement has a vibrant and militant history

of fighting against neoliberal globalisation. As a sector intersecting
with other socio-economic formations, they have developed a unique
perspective on how neoliberal globalisation has profited from the
oppression and marginalization of women.

Today, the women are active in various movements campaigning

against the new free trade agreements. For example, the Breast
Cancer Action has come up with a statement against TPP. It also
railed on the TPP on issues relating access to medicines, fracking,
and toxic chemicals. The group denounced the agreement’s lack of
transparency with “no meaningful way (for) the public to provide
feedback or voice concern!” (Sartor, 2014).

4. Indigenous Peoples: Globalisation has undoubtedly created

innumerable negative repercussions for indigenous peoples, majority
of which are to be found in the Global South. As governments
108

of developing countries seal deals with corporations, western

governments, and multilateral institutions, indigenous peoples –
already in a disadvantageous position – stand to suffer the detrimental
consequences of these agreements.

In the era of neoliberal globalisation, indigenous peoples

find themselves on a protracted battle with new colonial
explorers – transnational corporations, investors, governments,
multilateral institutions – seeking to pillage and plunder
their land and resources. And indigenous peoples, having
fought many wars and struggles for their identity and survival,
refuse being pushed around.

Indigenous peoples have been very active forging alliances with

other anti-free trade movements to assert their right to land and
self-determination. Indigenous people in Latin America were a big
part in the success of the campaign to stop the passage of Monsanto
Law. They also strongly registered their voice in different climate
marches and forums. Recently, they have launched re-occupation
of ancestral lands seized by extractive mining corporations and
financial investors and speculators.

5. Migrants: Migrants are important forces in mobilising against the

corporate free trade campaign. Many of them were poor peasants and
workers driven to seek abroad because of the detrimental policies
of neoliberal trade. In their host countries, they face intense racial
discrimination, low wages, and precarious working conditions.

Migrants, therefore, are in a unique position to articulate among

workers and peoples of developed countries the plight of their
compatriots and the effects of neoliberal free trade in developing
countries. Global south migrants and peoples of developed
countries could forge unities and solidarities to exert pressure on
their respective governments and demand accountability for the
disastrous consequences of their trade and economic policies.

6. Urban Poor: The urban poor are living testament to the

failure of the neoliberal economic paradigm in delivering on
its promises of development and growth. The emphasis of
the new free trade agreements towards greater privatisation,
 109

financialisation, liberalisation, and deregulation will contribute

towards the mass explosion of population in the cities
and urbanisation.

Governments and authorities have constantly sought to exorcise their

dissenting presence. In the Philippines, urban poor communities
brave demolition teams in full battle gear as the latter attempt to
dismantle their homes and livelihood. In Cape Town, South Africa,
in response to government inaction to their plight, 200 protesters
occupied land in Khayelitsha, measured out plots, marked them
with wire and started digging trenches. In Rio, the favelas are rising
up to reclaim their dignity and rights even with the threat of violence
and death.

The urban poor movement is a significant force in mass protests

against neoliberal development policies. Their energies need to
be harnessed in building a popular movement against free trade
agreements.

7. Environmentalists: The demands of the environmental movement

are deeply entwined with the struggle against corporate-led
globalisation. From the climate change perspective, the new free
trade agreements will concentrate resources in the hands of the
corporate elite, further unsustainable production and consumption
models and drive the world towards planetary tipping points.
On September 21, 2014 around 400,000 people marched across
New York to demand global action against climate change. Many
prominent leaders of the environmental movement, including
Naomi Klein and Ilana Solomon, pointed out that stopping the new
free trade agreements such as TPP and TTIP is a crucial step towards
saving the planet (Dolan, 2015).

8. Consumers: Consumer groups are very concerned that under

the new free trade agreements food and water safety and
accessibility, health care and medicines, data and privacy will
be increasingly subordinated to the commercial convenience
of multinational corporations (Dolan, 2015).

Recently, consumer groups came out with strong statements
opposing TTIP and TPP. For example, Food and Water Watch
110

said that the new free trade agreements would increase the price
of basic commodities, weaken domestic laws, and increase the
financialization of nature. The group also explained that the deals
were “power grabs by corporations and their financiers” and would
undermine laws protecting the environment, regulating corporations,
protecting food safety, promoting renewable energy, and preventing
risky practices such as fracking. (Food and Water Watch).

9. Faith-Based Organisations: Faith-based organisations are

involved not only in humanitarian and mission work, but
increasingly, in broader social justice campaigns such as socio-
economic and cultural rights. “Anti-corporate globalisation
sensibilities pervade faith-based policy perspectives and
action agendas across a wide range of religions,” according
to Mike Dolan (2015).

For example, the Sisters of Mercy laid down their

objections to a TPP deal in 5 social impacts: immigration,
non-violence, anti-racism, women, and the earth.

The protestant United Church of Christ published a
statement in March 2014, denouncingthe free trade
agreements as schemes for corporate takeover of governance
and the global economy.

Recently, Catholic Church officials have issued criticisms against

free trade deals. In the WTO Bali Ministerial in 2013, Archbishop
Tomasi singled out TPP as the sort of trade deal that the Church
opposes. In Geneva, Peter Cardinal Turkson criticised the free
trade model for allowing tax evasion by large corporations while
exploiting workers and natural resources.

Alliance work

Groups working among their respective sectors should begin by

highlighting the particular ways the new free trade agreements will affect
them and aggravate the violations of their socio-economic rights and civil
liberties. Concrete study of the issues and problems they face is important
in crafting key messages and strategies that resound to their realities
and contexts. Establishing a working relationship with already existing
 111

organisations or community leaders should also looked into. But while

building sectoral resistance is vital, there is always the need to link and raise
efforts towards broad united mobilisations founded on a common demand
to defeat the new free trade agreements. Collective action is key to building
a popular counter-hegemonic pole to transnational corporate domination.

Organisations could also explore linking with government officials and

representatives in the legislature, official delegations to multilateral bodies
to build tactical alliances. Initiatives could take various forms from petition
signing, holding open forums and conferences, to visiting parliament
buildings for dialog with representatives. Local governments that have
started implementing local procurement policies to support “buy local”
campaigns should be identified for possible campaign cooperation. Unity
points in these tactical alliances could begin by emphasising how the new
free trade agreements will violate national and state sovereignty and hinder
them from representing their constituencies.

Organizers could also take advantage of engaging different official

multilateral bodies that express relatively more positive attitude and
openness towards civil society and peoples’ movements’ participation
and inputs. While the chance of influencing policy positions of officials in
these venues could prove to be difficult, if not remote, they are nevertheless
welcome occasions to bring the advocacy to a bigger platform and gain
supporters.

Finally, alliances between peoples from the global North and the global
South should be established and strengthened. While neoliberal apologists
are wont to talk about the supposed benefits of the free trade agreements
to both economies and people of developed and developing countries, the
reality is that these have led to a global race to the bottom, massive social
dislocation in the global North and South, and the weakening of public
interest laws meant to protect the people and the environment. Global
networks of activists should be forged to conduct globally-coordinated
actions and mobilisations.

Awareness-raising and mobilisations

The key elements of mass organisations and mobilisation of various

sectors are information-dissemination, awareness-raising, and campaigning.
112

Information dissemination: Nowadays, information travels faster and

wider with the use of online media. Different social media platforms are being
utilized by organisations to invite people to gatherings and activities and to
publicise news, educational materials such as primersand communication
materials like handouts, handbills, graphics, and comics.

The online watchdog Wikileaks has been most useful in publishing

the texts of the secret deals, which otherwise wouldn’t have been made
available to the public. It has also posted in-depth analyses and critiques of
the deals from activist organisations and think-tanks such as Public Citizen.

Websites and blogs have been put up by various anti-free trade

organisations and alliances where the latest news and updates on trade talks
and analyses can be accessed.

Videos of proceedings of forums and conventions of organisations on

the new free trade deals have been made available online so more and more
people from different parts of the globe could stay informed.

Activist briefings or regular national briefing calls and emails could also
be explored to update activists on the latest issues and action opportunities
(Dolan, 2015).Online media however should not be made as a substitute to
the much rigorous task of grassroots campaigning and organizing.

Educational programs: Mass-awareness programs need to be conducted

by organisations among the sectors and communities they work with. In
contrast withinformation dissemination, educational programs provide
exhaustive discussions of issues or policy, their global context, and their
fundamental roots.

Educational programs could take the form of a conference, forum, or

study sessions/series. IBON International conducts a seminar on neoliberal
globalisation that puts into the wider historical and political-economic
context the issue of free trade and its concomitant policies of liberalisation,
deregulation, and privatisation.

These educational efforts need to be conducted among trade unions,

farmers’ organisations, women’s organisations, indigenous peoples’
organisations, environmentalists, urban poor groups, human rights activists,
small and medium business associations, academics, and professionals to
 113

help in building a multi-sectoral campaign network to oppose neoliberal

globalisation.

Campaigning: Campaigns against the new free trade deals requires

using various forms of intervention and efforts that support and complement
each other.

A number of organisations have recently been focusing on indirect

actions through lobbying and policy advocacy. Lobbying and policy
advocacy involve exerting pressures on representatives and institutions
to reform or rescind official trade policies that lead to income inequality,
human rights violations, consumer danger, environmental destruction,
climate change, and loss of policy space and sovereignty. Lobbying and
policy advocacy contribute to broadcasting people’s positions and demands
in official halls and institutions. However, these are not sufficient and must
only be corollary to people’s direct action and mobilisation.

The struggle of the peasants, farm workers, and fisherfolk is already

bearing many victories. Numerous farmers have been able to resist
eviction from their lands, reduce the land rent or improve the conditions
of the farm workers. Others have organized land occupations. Protests and
demonstrations have greeted meetings of pro-imperialist organisations like
the WTO. Some have even carried out an organized uprooting of GMO
crops that would spell their enslavement to big agro-TNCs like Monsanto
and Syngenta.

Workers have launched numerous strikes, sustained campaigns on

political education, various forms of protests to drumbeat their unequivocal
opposition to imperialist globalisation. Workers led the Battle of Seattle
against the WTO and the protests against the World Economic Forum
in Australia and Switzerland. These showcased the effectivity and the
potential of globally-coordinated actions by workers, in alliance with other
democratic forces of society.

Similarly, there is an upsurge in organising and mobilisations among

health workers, consumer groups, public school teachers and staff, and
government employees to end privatisation of services and policies such as
public-private partnerships.
114

Identifying key players who are pushing for the new free trade deals
and neoliberal globalisation is similarly important. Creating campaigns to
expose neoliberal policy institutions and actors can have a major impact on
pushing back anti-people policies and trade agreements.

Multinational/Transnational Corporations: Multinational/Transnational

Corporations are the most aggressive and vocal promoters of the new free
trade agreements since they are the foremost to reap the profits and benefits
from such. Examples include, WalMart, FedEx, IBM, JP Morgan & Chase,
UPS, and Verizon. Resistance: Peoples against Transnational Corporations
is a network of people’s movement and civil society organisations that aims
to promote popular resistance against imperialism and TNCs. The network
shares information on TNC abuses and sipports and coordinates peoples’
struggles on the ground.

MNC/TNC Lobby groups: TNCs and MNCs have formed various

coalitions and deployed interest and lobby groups like the US Business
Coalitions and Team TiSA to pressure trade officials, government leaders,
and global institutions. Through the corporate media, they publish articles and
advertisements to shift public opinion in favor of the free trade agreements.

The State: The state is the key implementor of decontrol under neoliberal
globalisation. Contrary to some notions, the state has not weakened or
lost significance; it simply shifted focus supposedly along the policy of
neoliberalism to provide political and military protection to the state but
also to assure greater economic support and opportunities to monopoly
corporations. The state, therefore, remains a critical target independently in
advocacy and struggles or in conjunction with particular struggles against
corporations (Tujan, 2001):

• Developed country governments like the United States of America,

the EU, and Japan have consistently been the primary movers
pushing for neoliberal policies such as AoA, TRIMs, TRIPs, and
GATS. And now, outside of the multilateral trade regime, they are
negotiating bilateral and regional trade and investment agreements
in an attempt to expand agreements to yet more areas other than
those covered in the WTO.

• People’s movements and civil society need to pressure developing

country governments to take on their people’s demands in trade
 115

negotiations. While developing countries have generally been defiant

against developed countries’ maneuverings, their consistency is
suspect, as exemplified by their flip-flopping positions during the
WTO Ministerial in Bali.

WTO and International Financial Institutions (IMF-WB): The WTO,

IMF, and WB are the supreme instruments for global corporate domination
as show by their checkered histories. These institutions lack transparency
and are plagued with credibility and accountability challenges. Developed
countries continue to wield asymmetrical power in decision making. These
institutions have also proved to be vulnerable to corporate lobby groups.

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