Business-Supremacy Treaties (called "free trade")

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Business-Supremacy Treaties (called "free trade")

2016-03-17

Business supremacy treaties are designed to undermine democracy. They transfer power from states (which can be more or less democratic) to businesses (which don't try or claim to represent the public). The first method these treaties used was so-called "free trade": making it easy for businesses to move production from one country to another. This pressures countries to compete to offer businesses favorable conditions, such as low wages, poor benefits for workers, weak environmental protection, low taxes (meaning bad education, bad health care, crumbling and toxic infrastructure, and inadequate support for the young, old, disabled and unemployed), and the opportunity to ignore laws (lock fire escapes, steal workers' pay).

Since the 1990s, treaties have proceeded to direct attacks on democracy: authorizing other countries, or even foreign businesses, to sue a country in a special international court for failing to respect the supremacy of business. (When business are allowed to do this, it is called "ISDS", which informally stands for "I Sue Democratic States.") Under ISDS, if a country has a law to protect something important (such as the environment, endangered species, public health, workers' rights, or the general standard of living), the international court can label that a "barrier to trade" and impose fines. The country's "democratic" politicians will then almost certainly decide to eliminate that law. These treaties also frequently serve the interests of specific industries with harsh restrictions on citizens — for instance, requiring unjust copyright law.

To recover democracy, we must abolish the business-supremacy treaties. Big corporations are planning use ISDS clauses to sue many countries for taking Covid-19 emergency measures that cut into their profits. Governments may be able to argue that the losses were due to Covid-19 and its consequences, rather than to the government actions themselves. But that is not reliable. This page contains a list of ways business-supremacy treaties have done harm. Most of the items describe specific changes in laws or policies that were imposed through these treaties. Please email me at rms at gnu dot org if you know of other specific laws in any country, that tried to protect something more important than business profits, that were attacked using a business-supremacy treaty, or that were voted down on the grounds they would conflict with such a treaty.

Workers Rights

● Republican states are deregulating the use of teenage workers, allowing employers to make them do dangerous jobs or work so many hours that it cuts into their education. It's entirely congruent with the Republican philosophy that the wealthy should be able to pressure everyone else into something close to slavery. ● "Free trade" means clothing companies anywhere in the world get the benefit of the horrible working conditions in Burma. ● A Mexican worker lost both hands in an industrial accident, working for a contractor for a multinational brand. She was lucky to get help to sue for compensation, but lost the suit on a technicality. The article plays for us to sympathize more with her by mentioning that she had six children. It is irresponsible and harmful to have so many children, but a workers' family size is irrelevant to the issue at hand. The system that puts workers in danger of injury, then does nothing to compensate them, is wrong regardless of personal details. This is what "free trade" does: it enables the multinational to make countries compete to attract production by allowing the worst possible working conditions and workers' rights. Without "free trade", Mexico would have a real compensation system for accidents at work. An accident like this would have increased the company's insurance costs; knowing that, management would have maintained Machine 19 carefully and followed proper safety procedures, and the accident would probably not have happened.

Privatization

● After dictator Pinochet opened the door, Chile has privatized nearly all its water supply. Movements now push to take public control. They face a big obstacle in the various business-supremacy treaties that would enable the foreign investors to sue Chile for renationalizing the water supply.

Privacy

● The US Trade Representative claims that the European Union can't set its own data centers to protect privacy and block surveillance because that would violate a trade treaty. ● Bell Canada tried to insert a ban on VPNs into the new NAFTA. I appreciate the article, but it does wrong to refer to the practice of sharing copies as "piracy". Piracy means attacking ships, which is very bad. Sharing copies is good; what's bad is using legal or technical methods to prevent sharing. See this.

Environmental Harm

● The Tories arranged a business-supremacy treaty with the previous (planet-roaster) Australian government, and now want to ratify it without debate. Climate defenders are suing under another treaty to demand debate and examination of this agreement. Why doesn't the new Australian government insist on renegotiation? We must expect by default that any business-supremacy treaty is bad, but here's more about what's bad in this one. ● Business-supremacy treaties with ISDS clauses ("I Sue Democratic States") are becoming a big obstacle to laws to defend the climate from global heating. ● The company that proposed the Keystone XL planet-roaster pipeline is using NAFTA (the original version) to sue the US for 15 billion dollars for cancelling the pipeline. This exemplifies the danger of business-supremacy treaties such as NAFTA to efforts to save the world's ecosphere from fossil fuel. ●A US mining company is suing Colombia for establishing a national park that protects natural areas from toxic mining. ● When the people of Cochabamba rebelled against water privatization, Bechtel used a trade treaty to demand 50 million dollars as ransom for Cochabamba's water. Bechtel eventually dropped its case, under pressure from organized public opinion. That one victory doesn't make the treaty harmless: we can't always pressure all companies into dropping all such cases. Pressure from the World Bank was behind the privatization attempt. ● The lawsuit demanding a billion dollars for the rejection of Keystone XL is typical of what trade treaties do. Canada has suffered many such lawsuits. Businesses are trying to bully Germany into continuing to use nuclear power. Converting to renewable energy is a necessity. What would these companies do if there were a Fukushima-like disaster near their factories? Of course, they would demand to place the costs on others and not them, but even after achieving that, it would still hurt their production. When companies demand thier short-term interests override long-term needs, that makes them enemies of society. These companies deserve to be picketed in other countries. The WTO has ruled against various national and local policies (in several countries) that promoted local solar power business. Every such policy benefits the whole world, even though it benefits that nation or locality especially. ● The TPP would sabotage efforts to curb global heating in several ways. This is a natural consequence of the way it was drawn up. For each area of business, the US government asked the companies in that area what they wanted. The fossil fuel companies asked for policies that will help them. Fundamentally, control of greenhouse gas emissions is good for the people, so it's what democracy will do if it works right. The TPP and TTIP can sabotage efforts to avoid global heating disaster. ● A Canadian mining company is trying to use an existing corporate supremacy treaty to punish Romania for not authorizing a giant mountaintop removal mine. ● The WTO decided that protecting dolphins by allowing tuna cans to carry a "dolphin-safe" label is a forbidden "obstacle to trade". This stems from the wrong fundamental values of the WTO, which place business profit above everything important. The TPP would further strengthen the power of businesses to attack measures to protect the environment. ● The WTO ordered the US government to eliminate country-of-origin meat labeling, or face a fine of a billion dollars. Congress used the budget bill as an excuse to surrender to the WTO: it voted to eliminated country-of-origin meat labeling. Let's abolish the WTO instead. ● Washington State planned to legislate a ban on fish farms that hold non-native fish, because if the fish escape it can cause permanent ecological damage. In response, a Canadian company planned to sue using NAFTA. How the new business-supremacy treaty CETA would eliminate existing national regulations in Europe. It would oppress Canada as well. Canada agreed to a business-supremacy treaty with China that requires building the Unkinder Morgan pipeline. The penalty for not doing so could be even more billions than the cost of building the pipeline, and the government might pay it secretly. The Energy Charter Treaty, a business-supremacy treaty, threatens to make European countries pay hundreds of billions of dollars in "compensation" for taking explicit action to cut down on fossil fuels. When a treaty puts the business interests of private parties over the vital needs of society, that must make the treaty invalid. Ecuador has voted to affirm its constitutional ban on ISDS clauses, which I call "I Sue Democratic States" clauses. Some have criticized my term, saying that ISDS clauses are not specifically limited to democratic states. That is true — but in practice it tends to be democratic states that are targets for them. That's because the kind of law that foreign corporations target that way is a kind that tends to be passed by democratic states. Most dictators rarely pass laws that would make foreign corporations treat the populace better. Oil companies invented the ISDS clause ("I Sue Democratic States") decades ago, and are now using them to make countries pay dearly for their climate defense actions. If the fossil fuel companies insist on destroying civilization, the victims should not go down without a fight. To save millions of lives, war is justified.

Copyright

● Ecuador gave in to European bullying by accepting an unjust﹃free trade﹄treaty which includes heavy punishment for copyright infringement (and other things that are bad for Ecuador). ● After the "official" TPP text was posted, a sneaky one-word change was made that make the copyright provisions even nastier.

Pharmaceuticals

● Due to business-supremacy treaties, nearly all of the antibiotics used in the US are imported. This means we cannot rely on them to be made safely and correctly. In addition, disasters or disputes could entirely shut off the supply. That threatens US national security — and most other countries face the same security threat. ●A proposed business-supremecy treaty for Asia includes restrictions on generic medicines, and would stop India from providing many generic drugs to poor people in a number of other countries. It is a fundamental mistake to call these restrictions "intellectual property" because that leads people to confuse them with unrelated issues such as copyright law. Every time that term is used, it spreads confusion -- so please, don't use it! ● Big Pharma companies are trying to use ridiculous patents to crush generic drugs in India, but so far India has thwarted them. The only reason patents on drugs exist in India is that they were imposed by wealthy countries through a WTO treaty called TRIPES, the Trade-Restricting Impediments to Production, Education and Science. (The supporters of that treaty call it "TRIPS", but that acronym uses their propaganda term "intellectual property". Since that term spreads confusion, using it does harm; therefore I go out of my way not to use it. ) The supporters of that harmful treaty call it "TRIPS", which uses their propaganda term "intellectual property". Since that term spreads confusion, using it does harm; therefore I go out of my way not to use it. ● The European Commission is trying to cut off Indian generic drugs through a proposed trade treaty. ● GlaxoSmithKline announced it will not patent its new drugs in countries that are the poorest of the poor, such as Afghanistan, Rwanda and Cambodia. I wonder, though, whether this apparent magnanimity will have any practical effect. I don't think there are generic drug factories in countries such as Afghanistan, Rwanda and Cambodia. If the countries such as India that actually make generic drugs are not covered, if GSK continues using patents to prevent the manufacture of generic drugs in those countries, this gift will turn out to be an empty gesture. ● Even in Britain, drug companies sometimes demand prices so high that the medical system refuses to buy them. It's much worse in the US where Congress, corrupted by the drug companies, tied the government's hands about negotiating prices with the drug companies. The main reason drugs are so expensive is patent law, imposed by the WTO. This is one of many reasons we need to make big changes in the WTO or else get rid of it. However, the concentration of the drug industry, through many mergers, has given the drug companies greater clout (as has occurred in many other areas of business), and this contributes to the problem. We need to make big companies split up. My tax proposal would be one way to do that. The United States, European Union, United Kingdom, Canada, and Australia oppose the push for the WTO to waive patent restrictions and allow all countries to make and use Covid-19 vaccines without paying for the privilege. It is worth reminding people that the WTO is the reason why most countries allow medicines to be patented. That was a scheme to enrich big pharma companies at the expense of people who can't afford monopolistic prices for drugs. This system represents a decision to kill millions of people, and is one of the reasons why we ought to abolish the WTO. A special business supremacy treaty specifically for energy infrastructure has a ISDS clause. Under this treaty, countries must pay for permission to adopt climate policies that make foreign-owned fossil fuel infrastructure less useful. All business-supremacy treaties are instruments to crush democracy. Countries should refuse to sign them, withdraw from them, ideally join together to cancel them out entirely. For this treaty, one possible last-resort solution would be for countries to declare war on each other and bomb each other's fossil fuel infrastructure, disabling it from functioning. Then they could decline responsibility on the grounds that the damage was an act of war. I don't suggest bombing the power plant into rubble — that would cause pollution — just destroying some key part of it, without which it does not operate. Is this idea shocking? There are better ways to stop burning fossil fuels, but it is good to have this fall-back method if the others prove too difficult. Don't say it can't be done!

Limiting taxation of companies

● The UK has treaties with many very poor countries, limiting what taxes they can charge to UK companies.

Economic Issues

US proponents of these treaties claim their advantage is to boost exports. If they did that, that would not justify the harm they do to democracy. But they don't really boost exports anyway, not for the US. Even in the narrow terms of trade and "national interest", they are a bad deal. In general, US export growth has been low wherever the US has a "free trade treaty". Even when these treaties lead to economic growth, they assure the benefit will go to the rich; working people may become poorer all the while, as wealth and income become more concentrated. No wonder the think tanks that support the TTIP are funded by plutocrats as a form of "policy laundering". ● Another European proposal, the "Multilateral Investment Court", repackages ISDS in a slightly different way. The multinational corporations can afford to hire thousands of people to push these proposals: some to publish them, others to applaud them, and others to lobby for them. ● The "Investment Court System", or ICS, is a variation on the ISDS theme, differing in some details but just as harmful. ● Foreign companies could use the TTIP and other such treaties to forbid states from imposing new taxes. ● The TPP is harmful even if evaluated based on the "free trade" ideology. Part of the article uses the incoherent term "intellectual property". It is always a mistake, without exception, to group together copyrights and patents as if they were a single issue. And that term includes several other laws as well, each very different from the others. If you think they are similar, perhaps you don't know what they really do. While Obama claims that the proposed free exploitation treaties with Colombia and Korea would increase US exports, its own figures predict the opposite. ● On old-fashioned "national trade interests", the TTIP would be bad for Europe's small companies and good for US multinationals. ● The supposed "economic benefits" of the TTIP would amount to just 4 dollars per day per person in the US, and .2 euro per day per person in the EU. ● Joseph Stiglitz: US trade treaties would block developing countries from making offered outside investment benefit their people. ● Economists report on how a treaty to give foreign corporations more power, such as the TPP, can do economic harm. The US-Korea "free trade" agreement, if evaluated in the conventional terms of exports and imports, has been a big loss for US exports and US employment. After the US-Korea "free trade agreement", US exports to Korea have decreased and imports from Korea have surged. In terms of national competition, the agreement was "bad for the US". In those same terms, you could say it was "good for Korea." This is on top of the harm that the treaty does to both countries by undermining democracy. Walden Bello, cofounder of Focus on the Global South, summarizes how the WTO arranges﹃the corporate capture of international trade﹄based on an ideology disconnected from economic facts. Alleging that the UK-New Zealand business-supremacy treaty would cause economic losses and undermine climate defense. That's in addition to imposing a sort of race-based censorship.

Public Health

● *Case studies of some of the most expensive and outrageous ISDS attacks on public health, environmental, and other critical policies.* ● Supposedly leftist President Boric wants Chile to sign the TPP — which would eliminate Chile's right to regulate many areas of business and health. Fossil fuel companies use these business-supremacy treaties to attack measures for decarbonizing. Boric also wants Chile to sign the Energy Charter Treaty, a business-supremacy treaty designed specifically to interfere with measures to reduce use of fossil fuels. It is effectively a suicide pact. If you are in Chile, launch a fight against this absurd plan. ● The TTIP could force privatization one national health systems, in the UK and (I presume) in the rest of Europe. It could also stop the US from setting up a proper national health service, which it badly needs. ● The WTO demonstrated its contempt for human life by ruling against a US law to discourage flavored cigarettes that are attractive to teenagers. Although the US government did not give in on the ban, other concessions were made. ● Philip Morris tobacco company is trying to use the Switzerland-Uruguay free trade agreement to block smoking-reduction measures. Uruguay's laws are effective in lowering the rates of smoking. ● US exports and export policies encourage obesity; watch out for treaties with the US, since they could block measures to limit obesity. ● *Law Firms Are Recruiting Corporations to Attack COVID-19 Policies in ISDS "Corporate Courts."

Human Rights

● In the 1990s, Massachusetts passed a law to boycott companies that did business in Burma. At the time, the US had not yet adopted strong trade sanctions against Burma. Other countries called this a "non-tariff barrier to trade" and said it violated the World Trade Organization rules. Congress passed, and President Clinton signed, a law that prohibited states from adopting such boycotts: a victory for plutocracy over democracy.

Misc

● New Study Confirms: Private 'Trade' Courts Serve the Ultra-Wealthy. ● The harmful effects of 20 years of "free trade" treaties on the US. ● NAFTA has a special provision that says Canada cannot reduce its oil exports to the US. ● The predecessor of NAFTA already put business in the driver's seat so much that it blocked Ontario from adopting no-fault car insurance. NAFTA, which followed, did this even more. The TPP does it even more. The new NAFTA improves many specific points, but its fundamental effect is still to give businesses more power and democracy less power, and thus to transfer income from workers to business owners.