( Comments due by Oct. 5, 2014 )
The dispute over the planned TTIP transatlantic free trade agreement between the European Union and the United States goes far beyond the treaty itself, the reason being the tradition in which TTIP is grounded.
It is merely the most recent acronym in a constantly expanding family of abbreviations, its best known members including GATT, TRIPS, GATS, MAI, ACTA, CETA and TPP*.
The kinship between these and other international agreements of the past quarter century is obvious from a number of common factors.
More than forty years have passed since the collapse of the Bretton Woods system for the regulation of international capital transactions.
Since then, the belief in free trade has dominated not only economic scholarship, but also economic policy in practice. This has led to growing inequality and numerous economic and currency crises.
Instability has become a permanent state. These consequences, and the fact that protectionist China and Lula da Silva’s free-trade-sceptical Brazil have managed to become industrial nations, have done nothing to alter the dominant free trade dogma.
The lack of theoretical prerequisites for a “comparative advantage” of international trade relations such as full employment and the absence of capital mobility have not led to a rethink.
Following the abandonment of the Bretton Woods coordination, international treaties have been used to implement free trade policy as extensively as possible. Once again, we can see – as Karl Polanyi described it in The Great Transformation – that the establishment and intensification of market relations is a politically motivated project.
One of the reasons for the popularity of international agreements is the possibility for discreet negotiations. Consultations and resolutions on free trade agreements are undertaken in elite circles and arranged outside the daily business of parliamentary politics.
Diplomacy, expertocracy and corporate lobbyism dominate the formulation of international agreements.
Liberated from already much maligned party politics and without direct democratic control, the stakes are hammered in in the field of summit diplomacy. It is only at the very end, once all the important decisions have been taken, that national parliaments give these agreements their blessings.
The task of the elected democratic organs is thus essentially that of adopting secretly negotiated contracts into national law.
For the financial big-hitters of corporate lobbying in particular, international free trade agreements offer the perfect stage. They are practically handed a one-stop-shop for their interests, and they profit from a favourable emphasis on the relevant agendas.
The strong focus on trade, economic and investment issues, for instance, means that subjects such as human rights, environmental protection and cultural policy are considered and discussed solely from this perspective.
In the context of TTIP, for example, references are made to “non-tariff barriers” inhibiting trade when discussing various social, environmental and human rights standards, or a “cultural exception”, meaning provisions for the promotion of cultural tradition and diversity.
Of course, such an approach will not necessarily lead per se to a levelling of these types of standards – however, the practical implementation dominated by corporate lobbying generally has exactly this consequence.
The kinship in terms of content and form between TTIP and its aforementioned predecessors makes the agreement an un-dead treaty returned from the grave.
Zombie clauses such as investment protection measures, which did not make their way into previous agreements due to widespread resistance, have reappeared in and around the TTIP negotiations. We are looking at a “recurring dynamic of progressing liberalization projects, their partial weakening after protests, and their repeated adoption” (Oliver Prausmüller and Alice Wagner, Reclaim Public Services, 2014).
A straightforward rejection of TTIP or even of individual clauses and regulation areas is therefore not a sustainable strategy, but merely fights the symptoms.
Equally, turning our backs on multilateralism and returning to our national comfort zones is of just as little use. What we need instead is an end to this type of agreement developed under the banner of free trade and under exclusion of the public.
What we are lacking is ecological, social, cultural and tax-justice agreements drawn up with broad democratic participation.
Free trade could well be a subject in this context, for instance as a non-tariff barrier inhibiting justice.
*GATT stands for General Agreement on Tariffs and Trade (and led to the foundation of the World Trade Organization); TRIPS is a separately negotiated treaty in the GATT context on Trade-Related Aspects of Intellectual Property Rights; GATS stands for General Agreement on Trade in Services; MAI stands for Multilateral Agreement on Investment (an ultimately failed attempt at a multilateral investment protection agreement); ACTA for the failed Anti-Counterfeiting Trade Agreement; CETA stands for Comprehensive Economic and Trade Agreement (between Canada and the EU); TTP refers to the Trans-Pacific Partnership, a free trade agreement between states in the Asia-Pacific region.
What I was able to comprehend from the following blog post is that the European Union and the United States are currently discussing agreements for international trade without including the parties at hand that will be affected by these trade agreements. Zombie clauses that were speculated over before, and dismissed because of widespread resistance are still floating about and being looked over, even though the parties do not want them to go into effect. What is being made clear is that the TTIP is a zombie agreement, and that the United States, as well as the European Union are only looking for what agreements will benefit them the most rather than the businesses the agreements made will affect.
ReplyDeleteThe Transatlantic Trade and Investment Partnership, like many of the other acronym partnerships, lives under the guise of multilateral economic growth, however this will likely only result in an ominous increase in corporate power. As this blog post says, "For the financial big-hitters of corporate lobbying in particular, international free trade agreements offer the perfect stage. They are practically handed a one-stop-shop for their interests, and they profit from a favourable emphasis on the relevant agendas." This TTIP deregulation could create a breeding ground for corporate disregard for the public's expenses, and only concern for their profits. For example, one of the "zombie clauses," such as the Investor-State Dispute Settlement (ISDS) would allow for a corporate-specfiic legal system that gives said corporations almost free reign that falls outside of national laws. As the post says, "Zombie clauses such as investment protection measures, which did not make their way into previous agreements due to widespread resistance, have reappeared in and around the TTIP negotiations."
ReplyDeleteI would like to say that TTIP tries to survive under the economic growth of other treaties. Campaigners protest it by claiming that it is a zombie trade agreement by thinking that it is a massive transfer of power to transnational corporations. People protest against this trade agreement between US and EU because it seems like a threat to public services, environment food, privacy and democracy. There will be increase in corporate power, so people are against it. Hundreds of people have signed petitions for full transparency on the negotiations and they just oppose this trade agreement because of its devastating consequences. It may seem that there will be economic growth and job opportunities but it also represents corporate Trojan horse deregulating, liberalizing and privatizing.
ReplyDeleteInternational agreements have had the power to promote economic growth for local economies and its producers. Agreements as such has to be drawn up and mutually agreed upon by trading nations before an international agreement can go into effect. As the article says “ one of the reasons for the popularity of international agreements is the possibility for discreet negotiations, consultations and resolutions of free trade agreements are undertaken in elite circles” in the long run, free trade can cause “growing inequality and numerous economic and currency crises” Corporate lobbying is a significant factor in the composition of international agreements since corporations are only looking at acquiring contracts that would bring them the most financial gain. Too many international agreements only focus on monetary gain for all parties involved without even considering the human, social, and ecological issues of international trade agreements.
ReplyDeleteTrade agreements are popular simply because they allow for the possibility for discreet negotiations to be made. Hiding behind the fact that this trade agreement will result in large economic growth, the TTIP agreement is the perfect stage for discreet negotiations and corporate lobbyism to take place. A large transfer of power to corporations is expected upon its approval.
ReplyDeleteThe article states that interests of "financial big-hitters of corporate lobbying in particular" which is simply earning substantial profits, are favored over human rights, environmental protection and cultural policies. As a result many people have protested against the trade agreement. What makes the TTIP a zombie agreement, however, is that within the agreement, clauses known commonly as "zombie" clauses, from previous agreements have resurfaced and made their way into the negotiations of the TTIP. There is a huge blatant disregard for the publics interest. As the article states "what we need..is an end to this type of agreement developed under the banner of free trade and under exclusion of the public."
I found the article a little confusing and wrong on several levels.
ReplyDeleteThe most general flaw is assumption that TTIP would be a free trade agreement. The author says “international treaties have been used to implement free trade policy as extensively as possible.", however such statement is an oxymoron in a way. In theory it is impossible to implement a free trade by intervention. It would be the lack of intervention (or tariffs or laws or treaties) that would result in an international free trade. A free trade treaty would not have several hundred pages.
I would agree that “One of the reasons for the popularity of international agreements is the possibility for discreet negotiations. Consultations and resolutions on free trade agreements are undertaken in elite circles and arranged outside the daily business of parliamentary politics.“ and that "Diplomacy, expertocracy and corporate lobbyism dominate the formulation of international agreements." which just supports my previous point.
TTIP is covering issues such as the environment, GMOs, IP, Internet security, etc. Using it in an argument against a free trade is nonsensical.
Additionally, I wonder why the author says that “The lack of theoretical prerequisites for a “comparative advantage” of international trade relations such as full employment and the absence of capital mobility have not led to a rethink.”
The law of comparative advantage has no such prerequisites.
The Transatlantic Trade and Investment Partnership seems as though it is promoting something that would benefit society, however, in practice this has not proven to be the case. As the article has stated, since the collapse of the Bretton Woods system, free trade has been a popular idea in policy making. This however seems to have only decrease the balance of the global economy. These agreements do not appear to be beneficial for the general public and seem to only satisfy the "financial big-hitters" involved. As the article states: "We are looking at a recurring dynamic of progressing liberalization projects, their partial weakening after protests, and their repeated adoption," the constant revival of these forms of agreements seems to be a problem. They neglect any form of societal benefit and only feed the players on top. In reference to the article: "What we are lacking is ecological, social, cultural and tax-justice agreements drawn up with broad democratic participation."
ReplyDeleteI think your views are true. It is clear that this trade agreement does not good. The balance of global economy decreases because of this. As you note financial big hitters benefit from this but what about the rest of the society? Societal benefits should not be ignored.
ReplyDeleteThe United States and European Union are creating a false impression that the Transatlantic Trade and Investment Partnership is beneficial and necessary for economic growth. However, as many of my classmates have stated, this is clearly not the case as this agreement will benefit nothing more than large corporations.
ReplyDeleteThere is shared disapproval for any type of Free Trade Agreement as they tend to evade any outside parties which in turn will inevitably lead to court proceedings. This particular agreement is not an exception and with its discreet negotiations, it seems that the two aforementioned parties are only circumventing important issues that relate to the agricultural, environmental and health sectors, to name a few. This agreement is nothing more than a ploy to boost financial gain for corporations.
This agreement will ultimately upset the already imbalanced world trading. It will produce a deep strain on outside countries (most likely under/developing countries) while expanding the wealth of developed counties. According to Economist Jacob Viner, a lack of trading barriers will only increase trade if imports from outside parties are replaced by cheaper produced goods from the parties involved in the agreement. This will then result in trade diversion, according to Viner, in which the agreed parties will have the comparative advantage of the outside parties, even if the outside parties can produce these goods and services more efficiently. How will society benefit from this?
For this agreement to work, the United States and European Union needs to emphasize on society's issues.
I unfortunately had a very hard time making sense of this article. While I did some background research on the TTIP agreement, I found myself lost in several of the statements in the article above. I did not get a cohesive feel for the argument being made because I felt that the issues and topics mentioned surrounding the agreement were very brief and not explained very well. However, after reading an article on slate.com by Matthew Yglesias called “Getting in Bed With Europe” that outlines why this new trade agreement between the US and European Union is so important, and what the overall goals of the agreement are, I had a much better sense of the topic. One major benefit of a TTIP agreement between the EU and US is the eventual possibility of a set of standard product regulations for the marketplace that covers about half of the world’s total GDP. Yglesias explains that many large companies and corporations including car manufacturers, and pharmaceutical companies have to undergo review and analysis by both the US and the EU in order to be approved for distribution on the market. However, with new TTIP negotiations, the US and EU could save a lot of money by having companies be inspected by one agency that shares a standard set of regulations and would be passed for a product to be sold in both markets. Not only could this amount to “an economic boost of more than $100 billion a year for the US and somewhat more than that in Europe” but it would also boost consumer trust and certainty in the products sold all over North America and The European Unions. The blog article discusses the potential to develop more universally sound “non-tarriff” barriers for trade regulations that protect “human rights, environmental protection and cultural policy”. I think this is an amazing aspect of the TTIP agreement because it marks a huge step toward global protection of rights. As we have studied thus far this semester, the affects of globalization and international trade are baffling, which makes it imperative for different nations to work together for mutual benefit. Of course there are concerns to the realistic expectations of what the TTIP agreement for the US and EU can accomplish, and concerns for the two parties having agendas, I think the mere fact that negotiations like this exist is a great sign for the future of our world economy.
ReplyDeleteLink to the aforementioned article: http://www.slate.com/articles/business/moneybox/2013/06/ttip_transatlantic_trade_and_investment_partnership_would_create_the_biggest.html
Since I was not too familiar with the workings of the Trans-Atlantic Trade and Investment Partnership (TTIP), I found myself doing some additional reading to get me up to speed. The TTIP is definitely a landmark treaty that will have many important repercussions on the economy of the US and EU, but also on the global economy as well. There are several reasons why closing a free trade agreement would be preferable, though. Bilateral liberalization is more likely to gain political support than unilateral market opening. Reducing barriers to trade, while resulting in more economic efficiency and ultimately increasing the available income on both sides of the Atlantic, may cause short-term adjustment costs. If two countries achieve greater economic integration, each of them would specialize in the productive processes at which it is comparatively more efficient. At the same time, the industries that are comparatively less efficient will suffer and there may be closings or layoffs. Therefore a strong political effort is required to smooth the transition. Moreover, mutual market opening entails larger opportunities and gains. While many free trade agreements are usually made to reduce tariffs and introducing protection for a number of areas like intellectual property, the TTIP seems to focus on removing regulatory and other non-tariff barriers. Negotiators are going to have to reach an agreement on many specific details such as reducing the average level of tariffs. If the United States and the European Union can agree on a comprehensive set of liberalization measures, this can create a major precedent in the history of trade negotiations. Trade is supposed to make countries more prosperous and their economies more resilient. Hopefully the TTIP can succeed in doing so.
ReplyDeleteThe article talks about a proposed transatlantic free trade agreement between the EU and the United States, the TTIP, which may mimic other previously failed trade agreements. Although the TTIP promises to stimulate the economy in both regions, many fear that the because of corporate lobbying big businesses stand to gain a lot more than the average person. The author of the article argues that the discreet negotiations taken place in elite circles about the proposed agreement may disregard the public’s true interest. The author writes that “the strong focus on trade, economic and investment issues, for instance, means that subjects such as human rights, environmental protection and cultural policy are considered and discussed solely from this perspective”. This suggests that free trade stands to exchange potential social growth for potential economic growth. I think that this article fails to address any of the potential advantages from the TTIP. The TTIP could possibly build an already strong relationship between the US and EU, and possibly help the US’s struggling exports. I think with more transparency the TTIP could help each country find their comparative advantage. I believe that completely abandoning international trade agreements would do more harm than good especially when developing nations are becoming more influential.
ReplyDeleteIn this article, there are many premises that the author presents as reasons why the TTIP agreement will not do what it is intended to do. The author brings up, specifically, the likeness of the TTIP agreement to those that have been rejected in the past. Also, the author notes that international agreements, like this one, tend to benefit high up people and organization, not your average citizen, because of the often secret meeting that they have to get them done. This allows the agreement to be less scrutinized than it would be if it were domestic. Unfortunately, this article only shows the negatives to this agreement. I do, however, agree that there should be transparency in these situations, and getting average people involved and interested should help.
ReplyDeleteThis article is based on the European Union and American agreement under the Transatlantic Trade and Investment Partnership. In this article the reason behind the failing partnership is discussed. There is increased discussion about traditional importance such as human rights and culture which vary by nations and locations. I agree with the author of this article that the rejection of TTIP is not a solution of the problems arising. Both sides of the coin needs to be seen. I think the main issue is the collapse of Bretton Woods system which should be brought back and be enhanced so that there is less inequality. The involving parties should a discussion and possibility new boundaries concerning the international trading system.
ReplyDeleteThe TTIP is the trade union federations that together represent tens of millions of workers. But this will only happen if the agreement is negotiated in an open manner, ensures that corporations cannot override governments and threaten the public good, promotes workers' rights and social justice and in all other ways puts people before profits. This system is more humanistic and gives the opportunity for businesses around the world. This can give more governments their power back instead of corporations that only strive for money. The AFL-CIO and the ETUC have published a set of guidelines that they hope will put negotiators on the path toward creating shared prosperity for workers worldwide. If the TTIP meets these principles, the federations are committed to campaigning for its ultimate adoption. If these principles are overlooked, the federations warn, and negotiators risk a trans-Atlantic campaign to defeat it. Standards for democracy shouldn’t be different because the TTIP is a “trade” agreement. A fair economy for all is on the line and the risks are too high for workers to be shut out of the decision-making process.
ReplyDeleteFirst of all I read through article try to figure out what TIFF is and I failed. After the research and the reread of the article. I figured that TIFF is a treat agreement in order to strengthen the economy activity between the states and European continent. But knowing that player on the both side of the table are not labor intensive but capital intensive economy. There are not much comparative advantage to worth trade between these two. But it is sure a good way to prevent from the economic influence from the developing countries.
ReplyDeleteWhat the TIFF looks like they are doing is making it easier for North America to have cheaper products than other countries. If we make the barrier to entry harder for other nations to import to our country we can make the cost of their product higher than the ones we have here in our own country. This could help make a rise in the economy and put a lot of our unemployed people back to work and stop countries from outsourcing because of cheaper labor.
ReplyDeleteWhile reading the article, I found myself fairly confused and could not make a great understanding of it. What I did get from it though was that the collapse of the Bretton Woods caused more inequality in the international trade between the European Union and the United states. The TTIP is a trade union that represents millions of workers and if the agreement is not negotiated properly, it will definitely hurt the public and in doing so, hurts the workers and only help the companies that solely want money and not employee security.
ReplyDelete