Ten years ago, the tobacco industry was formally identified as the enemy. The World Health Assembly approved a resolution stating that cigarette makers have operated with “the express intention of subverting the role of governments” in implementing policies designed to reduce cancer deaths.
An illustration of just how dangerous that industry is came in February 2010, when Philip Morris International sued Uruguay over graphic new health warnings on cigarette packets. Philip Morris was able to take this action under the provisions of an investment treaty between Uruguay and Switzerland. Like many similar agreements, that one allows corporations to take an entire nation to court if they encounter obstacles perceived as damaging to their profitability.
This kind of litigation could become commonplace if Karel de Gucht, the EU’s trade commissioner, has his way.
He appears determined to seize on provisions in the Lisbon treaty that give the European Commission responsibility for negotiating investment deals with foreign countries. India is likely to be a test case. De Gucht is hoping that he will wrap up talks on a free trade agreement with New Delhi this coming February. According to a paper drawn up by EU officials, such an agreement “shall provide for the progressive abolition of restrictions on investment, with the aim to ensure the highest level of market access and provide protection for investors and investments of both parties.”
In other words, de Gucht wants clauses in the agreement that would allow corporations sue India or the EU in the way that Philip Morris is suing Uruguay. The recent history of investment treaties has shown that because they allow for company-state arbitration, health, environmental or labour standards can be challenged on the grounds that they restrict investment. Vattenfall, the Swedish firm, is invoking a 1994 energy treaty to sue Germany over its decision to abandon nuclear power.
Making a killing
Philip Morris, incidentally, views the EU-India trade talks as an opportunity to make a killing (literally).
I have seen a copy of a letter sent to the European Commission in March 2010 signed by Kristof Doms from Philip Morris’ Brussels office and Jack Bowles, who represents British American Tobacco, Imperial Tobacco and Japan Tobacco International. The two men lamented that India is a “virtually closed market” because it applies high taxes on imported cigarettes. “In order to open the Indian market for cigarettes manufactured in the EU,” the despicable duo urged the Commission to insist on a free trade agreement that would remove all import duties they now have to pay in India.
Irrespective of whether these peddlers of disease get their way, there are strong reasons to fear that a free trade agreement will harm India’s poor.
Karel de Gucht and his team should read two important new documents.
The first one is a report published by the UN’s working group on human rights in India earlier this month. It gives an overview of the human rights situation in India, stating that the planned free trade agreements threatens the rights to health, food and work for much of the population. While that comment is directed at India’s trade agreements in general, the report zooms in on the one under negotiation with the EU, predicting it “would cut tariffs to zero for key sectors that support many producers and workers, thus exposing them to highly competitive international markets.”
The second paper de Gucht should study is a “right to food impact assessment” on the likely consequences of a trade agreement between the EU and India. It was prepared by the Third World Network, an Indian veterinary organisation called Anthra and the German anti-poverty group Misereor, among others.
This study emphasises that de Gucht is under a legal obligation to respect human rights. Despite its numerous flaws, the Lisbon treaty does at least require that trade policy upholds rights of both a social and economic nature and a civil and political one.
So when trade with India is being discussed, de Gucht is obliged to recall that India is not simply a land with 55 dollar billionaires, it also has an estimated 224 million people living in chronic hunger. One of the enormous paradoxes of India is that food producers are themselves frequently vulnerable to food deprivation. About 70% of Indians depend on agriculture as their primary source of livelihood.
The impact assessment indicates that India’s dairy and poultry farmers would struggle to cope if they had to compete with cheap imports of European meat and milk products. Such farmers typically have to borrow for feed and other essentials and pay back their loans at high interest rates, making them dependent on getting reasonable prices. Women involved in small-scale agriculture would have to cut down on vital sources of nutrition like rice if their incomes were to decline, the assessment stated.
De Gucht is hoping that India’s middle class will flock to supermarkets owned by Carrefour and Tesco as a result of a free trade agreement. Those supermarkets tend to favour better-off farmers when buying food, meaning that they will bring no benefit to India’s poor. And the arrival of giant stores will surely be bad news for the family-run shops and street hawkers that form the backbone of the Indian economy.
Christmas is supposed to be a season for caring. As de Gucht tucks into his Yuletide dinner, I hope he will feel some remorse about the suffering he is trying to inflict on India.
●First published by New Europe, 19 December 2011.