Children are protected from danger by their parents. The UN has recognised a principle called the responsibility to protect. So what is wrong with protectionism?
It is by shielding vulnerable sectors of the economy from competition that countries develop. This method has been used extensively in Europe and North America in the past; yet the rhetoric from our modern leaders indicates it is sinful for governments to nurture infant industries and prevent them being submerged by global corporations.
Brazil’s president Dilma Rousseff is expected in Brussels this week for two “summits”: one with the EU’s political representatives; the other with its business elite. More than likely, both events will hear pleas for “protectionist” urges to be restrained.
Inevitably, the objective of introducing a free trade agreement between the EU and Mercosur – the common market banding together Brazil, Argentina, Uruguay and Paraguay – will be a dominant theme at these meetings. Talks about framing such an accord have been conducted – with interruptions – since 1995 and, despite occasional predictions that a deal is on the horizon, none appears imminent. For a start, the enthusiasm for an agreement expressed by the European Commission is not shared by governments in France, Ireland and some other EU countries worried about pitting their beef industries against increased imports from South America.
Rather than taking on the meat industry in this continent, Karel de Gucht, the EU’s trade commissioner, has blamed Argentina for the deadlock. Speaking in April, he described the Buenos Aires government as the “great obstacle” towards reaching an agreement. “Argentina’s protectionism is creating problems and they are making our exporters nervous, especially in the automotive industry,” he said.
Bid to privatise water
If several of the Union’s own leaders are hostile to these trade talks, then who is pushing for them to succeed? In 2004, the European Services Forum (ESF) told Pascal Lamy, then the Union’s trade chief, that Mercosur countries must be willing to open their economies more to foreign firms. The ESF gave a list of the sectors it wanted liberalised: financial services, telecommunications, maritime transport, computer technology and “environmental services”. Almost certainly, environmental services was code for water, as one of the ESF’s members Veolia is eyeing private water contracts throughout the world. Water privatisation has proven catastrophic in Latin America. In the mid-1990s, the World Bank gave Bolivia a loan on the condition it would sell off public water utilities in its main cities. The result was that the poor were unable to afford clean water. By 2005, the cost of having proper water and sanitation in a La Paz household came to $450; to fork out that amount a worker on the minimum wage would have to put aside his or her entire pay for a nine month period.
But, of course, the realities of life in impoverished barrios will not be exercising the minds of the executive types in Brussels’ Palais d’Egmont, where the EU-Brazil business summit is taking place. The association of European chambers of commerce (Eurochambres) has a leading role in this jamboree. Almost a year ago, its secretary-general Arnaldo Abruzzini gave a grim warning about the consequences of the talks with Mercosur failing: “If we don’t reach agreement, China will overtake the EU [in its business with South America].”
Ah yes, the spectre of Red China. Ignore, please, the obligatory references to “shared values” like human rights and democracy when Rousseff meets EU bigwigs. The real agenda here is beating the Chinese.
Lust for resources
Energy is of critical importance in this race. The business summit will be taking stock of what has happened since the European Commission recommended forming a “strategic partnership” with Brazil in 2007. The Commission’s paper stated that Brazil has “huge natural resources” and that while it’s already a “major investment hub” for European companies, it will “offer major additional openings”. Biofuels were identified as an area where Brazil and Europe can cooperate more closely, given that the Commission is determined to press ahead with increasing the use of food crops to power cars. Findings by the Commission’s own in-house scientists that biofuels are not a solution to climate change have been glossed over. Instead, the Union’s most senior officials are more eager to please Repsol, the Spanish energy firm that is active in the Mercosur-EU Business Forum, one of the participants in this week’s summit.
Luiz Inácio Lula da Silva made some appalling decisions as Brazil’s president. Last year, he promised the French arms industry $6 billion in immediate contracts, money that should have been used to combat poverty. Yet he should be praised for overruling a patent on efavirenz, an AIDS treatment drug, in 2007, to ensure that affordable generic versions of the medicine would be provided to those who needed them.
If the EU has its way, Brazil would be restricted from putting public health before the commercial interests of pharmaceutical giants in the future. The Commission wants strict rules on intellectual property included in a free trade agreement so that generic medicines won’t be as readily available.
The agreement coveted by the EU is often compared to the Free Trade Area of the Americas that the US wanted to introduce. Luckily, that initiative was killed off six years ago because it encountered massive public opposition. The challenge is to encourage the same level of opposition to an equally ruinous EU-Mercosur accord. Corporations should not be granted planning permission to turn South America into their private playground.
●First published by New Europe, 3 October 2011
Showing posts with label European Services Forum. Show all posts
Showing posts with label European Services Forum. Show all posts
Monday, October 3, 2011
Friday, October 29, 2010
Corporate power bleeds Canada dry
Barely noticed by most media outlets, top corporations are finding ways to assert their control over policies nominally designed to serve public interests. Unglamorous trade talks between the European Union and Canada offer a prime example of the headway they are making. Since their launch in Prague last year, these negotiations have largely followed an agenda drawn up by the European Services Forum (ESF). Bringing together Goldman Sachs, IBM, Vodafone and Deutsche Bank, the ESF is determined to usher in a trans-Atlantic investment regime where elected institutions play second fiddle to unaccountable chief executives.
The forum’s principal recommendation is that an EU-Canada trade deal should be modelled on the North Atlantic Free Trade Agreement (NAFTA). More specifically, it wants chapter 11 of NAFTA to be copied and pasted into an EU-Canada accord. That chapter facilitates private firms to sue any of the three governments that signed NAFTA – the US, Canada or Mexico – if obstacles to making profits are encountered. The courts of arbitration provided for by the chapter can issue legally binding verdicts after hearings held in camera. If the ESF has its way, firms would also be able to put the European Union in the dock.
The likely implications of the ESF’s demands can be foreseen by examining the case law for NAFTA. When an American waste management company called Metalclad was ordered to cease building a toxic dump in Mexico during the 1990s, it initiated proceedings against the Mexican government. Even though there were sound reasons – for protecting human health and preventing soil and water pollution - why Metalclad had been told to stop work on a site that was already contaminated, a NAFTA tribunal found that Mexico had failed to ensure there was a “clear, transparent and predictable framework for foreign investors.” And so Metalclad was awarded almost $17million.
The EU-Canada talks cannot be viewed in isolation from a discussion taking place among Brussels officials about how imports of tar sands from the Canadian province of Alberta should be regulated. Last year a European Commission paper proposing revisions to an EU fuel quality law stated that petrol derived from tar sands would have a 20% greater effect on the climate than conventional petrol. But this warning was removed from later versions of the paper after Ross Hornby, Canada’s ambassador to the EU, objected. Hornby signalled that Canada would retaliate if a “barrier” to trade in tar sands was erected.
Should the EU-Canada trade deal be tailored to satisfy big business, Shell and other energy companies could litigate against measures that impede them from selling tar sands. And so the EU would be giving its tacit blessing to the large-scale vandalism being planned in Alberta, where an expansive boreal forest – one quarter of the world’s remaining undisturbed forest – is under threat. Operations that encroach into this ecosystem will not only harm bears, caribou and lynx but the First Nations communities, who are already suffering heightened incidences of cancer because of exposure to naphthenic acid, a constituent of petroleum that becomes concentrated in the hot water required to process tar sands.
Similarly, it is conceivable that Europe’s restrictions on genetically modified (GM) foods could be one of the first targets of aggrieved corporations once the EU-Canada deal comes into effect. Whereas the planting of GM crops can only be authorised in the EU after their probable ecological consequences have been assessed, the safeguards in Canada are considerably less robust. Last year SmartStax, a new corn designed by Monsanto and Dow Chemicals to resist a variety of different pesticides, was authorised in Canada without having to go through the health and environment checks required in Europe.
As its contribution to the trade talks, Monsanto’s Canadian subsidiary has advocated that the EU and Canada would recognise each other’s standards, rather than having to introduce anything more rigorous than those currently in place. This position has been endorsed by the Canada Europe Roundtable for Business, an influential lobby group in both Brussels and Ottawa.
The strategy being pursued by the captains of industry is all the more troubling, when one considers that they are sneakily trying to attain objectives that have been rejected by separate international fora. In a triumph for the so-called anti-globalisation movement, the Multilateral Agreement on Investment (MAI) was shelved in the late 1990s. Discussed at the level of the World Trade Organisation, that treaty was also designed to give corporations the power to counter green or social rules they regarded as pesky.
Recently, however, a letter signed by prominent writers and activists such as Naomi Klein, Susan George and José Bové (now a French MEP) dubbed the draft EU-Canada agreement a “carbon copy” of the MAI. Both contain the same “judicial monstrosity”, the letter noted.
Often the EU’s representatives seek to portray themselves as slightly more progressive than their north American peers by bragging of how they have set deeper targets for greenhouse gas reductions or of how they are committed to maintaining a “social market” economy. Yet in reality, they are just as ideologically blinkered as Stephen Harper and his right-wing government in Canada. It was the European side, for example, which insisted that public procurement markets at both federal and provincial levels in Canada should be opened up to European competitors. Although Canada’s 10 provincial governments were not party to the NAFTA talks, they are participating in the trade discussions with the EU.
In the past few weeks, the EU has complained about entirely reasonable efforts by the Montreal authorities to ensure that new trains for its subway were made in Quebec. If the EU’s arm-twisting pays off, it will be illegal for such tenders to contain “buy local” caveats in the future, while a range of other vital services – including healthcare and water – will be opened to competition. Michael Moore’s film “Sicko” indicated that politicians across the political spectrum in Canada regarded access to affordable healthcare as a basic right. That right would be harder to protect once the business of keeping people alive is handed over to the private insurance industry.
The EU-Canada talks should be viewed against the backdrop of the wider external trade policy being pursued by the European Commission. In 2006, Peter Mandelson, then the EU’s trade chief, published a strategy known as Global Europe. It committed the Union to attack relentlessly any obstacles encountered by corporations doing business abroad. Brussels officials have had no qualms about seeking counsel from some of the least ethical players in the marketplace. When the Commission held a conference in 2008 to evaluate the first two years of Global Europe, the vehicle-maker Caterpillar was invited to thunder against air pollution standards it felt should not apply to its products. None of the conference speakers saw fit to query if Caterpillar, provider of the specially designed bulldozers that Israel uses to demolish Palestinian homes, was a suitable source of advice.
During November, a follow-up paper to Global Europe will be published by the current EU trade commissioner Karel de Gucht. It is expected that this will recommend sticking to the objectives set by Mandelson, though to enlarge the geographical focus of trade policy. With a free trade agreement with South Korea in the bag though encountering difficulties winning approval from the European Parliament) and one with India likely to be clinched next year, the European Commission is eyeing potential deals with China and Japan.
Heedless to regional variations within its negotiating “partners”, the EU has been striving to ram through a series of largely identical trade deals. At the behest of the pharmaceutical industry, it has been pressurising India into imposing patents on medicines in a way that would jeopardise its status as a leading manufacturer of generic drugs for the world’s poor. Some African governments, meanwhile, have accused the EU of trying to bully them into accepting liberalisation plans they regard as inimical to their economic development. And the Union has gone ahead and finalised a free trade agreement with Colombia, despite receiving voluminous evidence from human rights watchdogs documenting how the Bogota authorities have connived in numerous violent attacks on trade unionists.
Back in 1999, protesters fighting the ‘Battle of Seattle’ raised many awkward questions about how the rules of world commerce had been rigged to benefit the super-rich. Global trade talks have been at a standstill for most of the subsequent decade, yet that doesn’t mean the rigging has stopped. Rather, it is taking place in a greater number of venues, making resistance to it increasingly difficult, yet no less urgent.
·First published by openDemocracy (www.opendemocracy.net), 29 October 2010
The forum’s principal recommendation is that an EU-Canada trade deal should be modelled on the North Atlantic Free Trade Agreement (NAFTA). More specifically, it wants chapter 11 of NAFTA to be copied and pasted into an EU-Canada accord. That chapter facilitates private firms to sue any of the three governments that signed NAFTA – the US, Canada or Mexico – if obstacles to making profits are encountered. The courts of arbitration provided for by the chapter can issue legally binding verdicts after hearings held in camera. If the ESF has its way, firms would also be able to put the European Union in the dock.
The likely implications of the ESF’s demands can be foreseen by examining the case law for NAFTA. When an American waste management company called Metalclad was ordered to cease building a toxic dump in Mexico during the 1990s, it initiated proceedings against the Mexican government. Even though there were sound reasons – for protecting human health and preventing soil and water pollution - why Metalclad had been told to stop work on a site that was already contaminated, a NAFTA tribunal found that Mexico had failed to ensure there was a “clear, transparent and predictable framework for foreign investors.” And so Metalclad was awarded almost $17million.
The EU-Canada talks cannot be viewed in isolation from a discussion taking place among Brussels officials about how imports of tar sands from the Canadian province of Alberta should be regulated. Last year a European Commission paper proposing revisions to an EU fuel quality law stated that petrol derived from tar sands would have a 20% greater effect on the climate than conventional petrol. But this warning was removed from later versions of the paper after Ross Hornby, Canada’s ambassador to the EU, objected. Hornby signalled that Canada would retaliate if a “barrier” to trade in tar sands was erected.
Should the EU-Canada trade deal be tailored to satisfy big business, Shell and other energy companies could litigate against measures that impede them from selling tar sands. And so the EU would be giving its tacit blessing to the large-scale vandalism being planned in Alberta, where an expansive boreal forest – one quarter of the world’s remaining undisturbed forest – is under threat. Operations that encroach into this ecosystem will not only harm bears, caribou and lynx but the First Nations communities, who are already suffering heightened incidences of cancer because of exposure to naphthenic acid, a constituent of petroleum that becomes concentrated in the hot water required to process tar sands.
Similarly, it is conceivable that Europe’s restrictions on genetically modified (GM) foods could be one of the first targets of aggrieved corporations once the EU-Canada deal comes into effect. Whereas the planting of GM crops can only be authorised in the EU after their probable ecological consequences have been assessed, the safeguards in Canada are considerably less robust. Last year SmartStax, a new corn designed by Monsanto and Dow Chemicals to resist a variety of different pesticides, was authorised in Canada without having to go through the health and environment checks required in Europe.
As its contribution to the trade talks, Monsanto’s Canadian subsidiary has advocated that the EU and Canada would recognise each other’s standards, rather than having to introduce anything more rigorous than those currently in place. This position has been endorsed by the Canada Europe Roundtable for Business, an influential lobby group in both Brussels and Ottawa.
The strategy being pursued by the captains of industry is all the more troubling, when one considers that they are sneakily trying to attain objectives that have been rejected by separate international fora. In a triumph for the so-called anti-globalisation movement, the Multilateral Agreement on Investment (MAI) was shelved in the late 1990s. Discussed at the level of the World Trade Organisation, that treaty was also designed to give corporations the power to counter green or social rules they regarded as pesky.
Recently, however, a letter signed by prominent writers and activists such as Naomi Klein, Susan George and José Bové (now a French MEP) dubbed the draft EU-Canada agreement a “carbon copy” of the MAI. Both contain the same “judicial monstrosity”, the letter noted.
Often the EU’s representatives seek to portray themselves as slightly more progressive than their north American peers by bragging of how they have set deeper targets for greenhouse gas reductions or of how they are committed to maintaining a “social market” economy. Yet in reality, they are just as ideologically blinkered as Stephen Harper and his right-wing government in Canada. It was the European side, for example, which insisted that public procurement markets at both federal and provincial levels in Canada should be opened up to European competitors. Although Canada’s 10 provincial governments were not party to the NAFTA talks, they are participating in the trade discussions with the EU.
In the past few weeks, the EU has complained about entirely reasonable efforts by the Montreal authorities to ensure that new trains for its subway were made in Quebec. If the EU’s arm-twisting pays off, it will be illegal for such tenders to contain “buy local” caveats in the future, while a range of other vital services – including healthcare and water – will be opened to competition. Michael Moore’s film “Sicko” indicated that politicians across the political spectrum in Canada regarded access to affordable healthcare as a basic right. That right would be harder to protect once the business of keeping people alive is handed over to the private insurance industry.
The EU-Canada talks should be viewed against the backdrop of the wider external trade policy being pursued by the European Commission. In 2006, Peter Mandelson, then the EU’s trade chief, published a strategy known as Global Europe. It committed the Union to attack relentlessly any obstacles encountered by corporations doing business abroad. Brussels officials have had no qualms about seeking counsel from some of the least ethical players in the marketplace. When the Commission held a conference in 2008 to evaluate the first two years of Global Europe, the vehicle-maker Caterpillar was invited to thunder against air pollution standards it felt should not apply to its products. None of the conference speakers saw fit to query if Caterpillar, provider of the specially designed bulldozers that Israel uses to demolish Palestinian homes, was a suitable source of advice.
During November, a follow-up paper to Global Europe will be published by the current EU trade commissioner Karel de Gucht. It is expected that this will recommend sticking to the objectives set by Mandelson, though to enlarge the geographical focus of trade policy. With a free trade agreement with South Korea in the bag though encountering difficulties winning approval from the European Parliament) and one with India likely to be clinched next year, the European Commission is eyeing potential deals with China and Japan.
Heedless to regional variations within its negotiating “partners”, the EU has been striving to ram through a series of largely identical trade deals. At the behest of the pharmaceutical industry, it has been pressurising India into imposing patents on medicines in a way that would jeopardise its status as a leading manufacturer of generic drugs for the world’s poor. Some African governments, meanwhile, have accused the EU of trying to bully them into accepting liberalisation plans they regard as inimical to their economic development. And the Union has gone ahead and finalised a free trade agreement with Colombia, despite receiving voluminous evidence from human rights watchdogs documenting how the Bogota authorities have connived in numerous violent attacks on trade unionists.
Back in 1999, protesters fighting the ‘Battle of Seattle’ raised many awkward questions about how the rules of world commerce had been rigged to benefit the super-rich. Global trade talks have been at a standstill for most of the subsequent decade, yet that doesn’t mean the rigging has stopped. Rather, it is taking place in a greater number of venues, making resistance to it increasingly difficult, yet no less urgent.
·First published by openDemocracy (www.opendemocracy.net), 29 October 2010
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