The carefully woven fabric is unraveling.
By Don Quijones, Spain & Mexico, editor at WOLF STREET.
A new survey conducted by YouGov for the Bertelsmann Foundation showed that only 17% of Germans believe the Transatlantic Trade and Investment Partnership (TTIP) is a good thing, down from 55% two years ago.
In the United States, only 18% support the deal compared to 53% in 2014.
Such low popularity ratings are an incredible feat for a trade agreement that until last year the public had barely even heard of, purposefully, even as it had been on the negotiation table for years, while the governments associated with it had expected to pass it with flying colors.
During his visit to Germany at the weekend, President Barack Obama tried to breathe life back into the deal, insisting that “the majority of people still favor trade” and “still recognize, on balance, that it’s a good idea.” While that may be so, TTIP, like the other alphabet-soup trade agreements, is not really about promoting trade; it’s about reconfiguring the legal apparatus and superstructures that govern national, regional, and global commerce, business and society, for the benefit of the world’s largest multinational corporations.
Obama could not have chosen a worse possible location to plug his sacred trade deal. Offering a quite visible contradiction to his rose-tinted interpretation of corporate-sponsored trade deals, tens of thousands marched against TTIP in the streets of Hanover on Saturday. Opposition to the trade agreement is also fierce among Germany’s Mittelstand (small and medium-size companies), which represent over 90% of firms in the country. A 2014 Commerzbank study found that only 15% of Mittlestand companies believe TTIP would be a good thing for their business.
Germany’s not alone. Across the old continent, public opposition to TTIP is swelling. Just in the past week three vital developments took place that spell even more trouble for the transatlantic corporatocracy.
1. “Incompatible with Democracy.”
The first blow came from UN human rights expert Alfred de Zayas, who in a hearing with the Council of Europe’s legal affairs and human rights committee on April 19 warned that the “private or semi-private settlement of disputes between investors and states,” at the core of these trade agreements, “is incompatible with democracy, the rule of law and human rights.”
De Zayas’ pronouncement comes hot on the heels of a hammer-blow ruling last February by Germany’s Association of Judges that not only is there no legal basis for an international investment court, but it would have no jurisdiction in any European country. As we reported at the time, the growing opposition to the idea of an Investment Court System (ICS) leaves the Commission’s trade representatives stuck in no man’s land:
Having as good as abandoned the deeply unpopular Investor-State Dispute Settlement (ISDS) and bet all its horses on ICS, it now has to find a third way that not only placates European policy makers who oppose ISDS but also appeases the demands of its negotiating partners and the corporate behemoths that have been pushing for this deal. And that is not going to be easy.
To make matters worse, a Freedom of Information request in the UK just led to the release of a 2013 risk assessment report commissioned by the Department for Business Innovation and Skills that shows that a TTIP agreement would pose “lots of risk and no benefit” to the British economy. “Ultimately, we conclude that an EU-US investment treaty that does contain ISDS is likely to have few or no benefits to the UK, while having meaningful economic and political costs,” the report said.
2. A Thousand-city Resistance.
This weekend the city of Barcelona played host to the first summit of European Cities Against TTIP. The event was attended by representatives of over 40 major European cities opposed to the trade agreement, including Vienna, Seville, Birmingham, Cologne and (irony of ironies) Brussels itself.
In the last year, more than 1,300 European municipalities have declared themselves “TTIP-free zones”. On the other side of the Atlantic, over 100 U.S. cities have declared their opposition to TTIP’s sister agreement for the Pacific region, the TPP, including New York, Seattle, and Miami.
In Europe, resistance to TTIP is not just growing at the municipal and regional level. The next month could see the election of the continent’s first openly anti-TTIP national government. In Austria, the EU Member State that was already most opposed to TTIP (according to the latest Eurobarometer survey, December 2015), voters just put into the presidential runoff vote two candidates who vehemently oppose the deal.
3. A $50 Billion Judicial Reversal.
The biggest blow to the transatlantic corporatocracy took place last Wednesday, when a Dutch district court overturned an award of more than $50 billion to former shareholders of the defunct oil company Yukos that Moscow was ordered to pay by a Hague-based arbitration panel in 2014. It was by far the largest award damages in the history of investment treaty arbitration.
The irony is that the original Yukos trial was an open-and-shut case of shareholder expropriation, albeit one with serious geopolitical connotations. In 2003, the Russian authorities arrested Yukos’s chairman, Mikhail B. Khodorkovsky, on charges of embezzlement, tax evasion, and money laundering and sold off his company piece by piece over the next several years. Much of it ended up as part of Rosneft, now the world’s largest publicly traded oil company.
The court in the appeals trial said that the panel of arbiters that had made the original award had “lacked jurisdiction” to do so, since although Russia had signed the international Energy Charter Treaty, it had not ratified it and so was not bound by it. According to Jeff Sullivan, a partner and expert on energy arbitration at the law firm Allen & Overy in London, Wednesday’s ruling was “a significant victory for Russia.’’
“Certainly the decision of the Dutch court will impact on the ability of Yukos shareholders to enforce the arbitration award in various countries around the world,’’ Mr. Sullivan said. The ruling also raises further questions about the role and jurisdiction of investor arbitrators in international trade law. Given that it is they who would be the front-line enforcers of trade agreements, this could be very bad news for TTIP’s architects whose dreams appear to be in the process of unraveling. By Don Quijones, Raging Bull-Shit
You know things are bad when even the firmest believers begin questioning their faith. That’s what’s happening in the EU, which faces a constellation of threats and challenges. Now even the staunchest Eurocrats are beginning to express doubts – amid fears of “further escape referendums.” Read… It’s Gotten So Bad in Europe, Even Eurocrats Begin to Worry
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TPP, TTIP, and TISA are blueprints for global corporate totalitarianism, essentially a giveaway of the planet to a handful of transnational corporations. The authors don’t work for you, and neither do the elected heads of state promoting them. They want to bleed you like a pig, no doubt using some sort of automated factory system. They don’t think of you as a person. They think of you as unprocessed Soylent Green.
One way or another you are doomed to a miserable thralldom under such corporations but you certainly do not want to accelerate the process. Until that time, teach every child you meet the importance of forgiveness. It’s your only hope of surviving their wrath once they realize just how badly you’ve screwed things up for them.
http://despair.com/collections/retired/products/mercy
Love your response
So Russia’s kleptocrat government ( read: Putin) a regime where all agree there is no law, stole Yukos from its owners and for this reason a transnational mechanism for righting such wrongs is a bad thing?
Nick, it seems as though you are missing the point? The fact that the process was undermined and has called into question the isds and it’s wider scope, is what the article, and the inspiring Mr Quijones, is alluding to. Whether this ‘political’ case is worthy of an international settlement, or not, has fuk all to do with whether Phillip Morris should have any right at all to sue (using some phony Hong Kong isds) Australia’s government for damages because our PARLIAMENT has legislated PLAIN PACKAGING!!! And that is just one of the plethora of outrageous examples.
PS Great news, Don!!! Love your work man.
Actually, this example is one of the few cases where international arbiters did some good, as no court in Russia would even move a finger to provide some sense of justice for the expropriated stockholders. So this example is a double-edged sword. It cuts both ways.
I think the reason DQ included it is to report a setback for the TTIP folks (and not to show whether overturning the arbitration ruling was good or bad).
Agreed, Wolf. There are always going to be exceptions to the rule. Just like there will always be moral relativism in the minds and ways of the elite (and their shills).
Not at all, Nick.
But the fact that even the case againt Putin’s Russia vs. Yukos — an “open and shut case of shareholder expropriation,” as I mention in the article — has hit the skids is indicative of the fact that things are not going at all well for the transatlantic corporatocracy.
What I didn’t mention in the article, and which I should have done, is that ISDS was originally conceived as a means of righting extreme injustices committed by governments — usually authoritarian governments with very weak private property rights and institutional protections — against overseas investors. And it was necessary. And to a great extent it worked.
The problem today is that the corporatocracy wants ISDS to serve as a means of safeguarding future corporate revenues (by effectively using taxpayers as permanent guarantors), in the process relieving themselves of the risk half of the risk/reward trade-off. In the meantime, they heap unbearable pressure on democratically elected governments to toe THEIR line on every vital issue of public interest that might threaten their profits, including access to clean water (arguably the most basic human right of all).
The irony is that by seeking cast-iron, taxpayer-backed guarantees for all their investments, the corporations behind the alphabet-soup agreements could end up losing the guarantees they already have. And the Yukos case COULD be an early indication of that.
… No, all do NOT AGREE, and I take exception to the Putin bashing. As a Canadian citizen, I am aghast of my governments sycophant relationship with THE EMPIRE south of us ( although Europe is but vassals as well). This once great country is under the control of neo-cons who politically ignore international law in the pursuit of their hegemony. How many wars and rebellions have they instigated in this new century alone, some based on bald faced lies (WMD anyone) ? No, Putin although not perfect, doesn’t bow to the exceptional nation and for this I give him some cred.
Bullwinkle, how many journalists critical of the government have been murdered in NATO countries vs. Russia over the past 15 years. That’s the calculus you need to start with when assessing who the real thug is. Everything else after that is fluff. A US-led NATO isn’t perfect, but it’s still the best we’ve got. There is no better justification for NATO’s continued existence than Putin’s continued existence.
And how did Khodorkovsky amass control of so much of Russia’s oil industry? He accumulated wealth and control during the post-USSR-collapse period when the rule of law had collapsed and the resources of Russia were up for grabs by oligarchs who used means fair and foul, including corruption and violence, to gain control of whole sectors of the country’s industries and resources. Researching this era and Khodorkovsky’s history could be enlightening.
You want “a transnational mechanism for righting such wrongs”. Some international investment agreements between a country’s government and an investor include arbitration agreements that attempt to protect the investor from expropriation. And the nations of the World have set up structures for settling international investment disputes. See ICSID, the International Centre for Settlement of Investment Disputes, a structure set up by governments to deal with claims of investors who say their investments were unfairly expropriated. ICSID just announced a ruling that Venezuela must pay $98 Million to the former owners of a ranch that the government expropriated. And a number of rulings by international arbitration panels have given compensation to oil companies whose investments were expropriated by the Chavez government of Venezuela, as another example of transnational mechanisms being available and effective for compensating investors whose investments were expropriated. So, various forms of “a transnational mechanism for righting such wrongs” already exist.
Now, as for TPP and TTIP:
The push for international trade agreements over the last 40 years has come from transnational corporations that have found an effective tool for disempowering national governments and their laws against criminal behaviour, their labour unions, labour laws. environmental laws, laws to protect public health and safety, tax laws. financial controls, and the ability of citizens and their lawyers to call businesses to account under tort laws.
International trade agreements were presented as a means to open foreign markets to trade, but became a means of moving production facilities from high-wage, highly-regulated countries to low-wage, low-regulation countries while retaining free access to markets in the high-wage countries. The move of manufacturing from the USA to Mexico, and then to China and east Asian countries is the result of NAFTA, GATT, WTO, etc. US workers have seen their high-wage manufacturing jobs disappear, while 96% of the goods WalMart sells come from outside the USA (92% from China). The USA continues to “enjoy” huge negative trade balances with China.
The TPP and TTIP attempt to take the next step in neutering national governments and transferring power to transnational corporations, by placing the power of private arbitration panels above the level of governments, and by specifying that any law or policy of a national government that would reduce or threaten the profits of a transnational corporation can be punished or struck down by an arbitration panel. In their wildest dreams, Hitler and Stalin could not have dreamed up a more effective means of taking over the World and removing all democratic power from each country’s citizens.
Thanks Al. More please.
Love this!!!!
I don’t see international companies “disempowering national governments and their laws against criminal behaviour, their labour unions, labour laws”. The reason companies seek to move to such places is because these laws and regulations do not exist or are less stringent in the new host country and the labour rates are lower, keeping in mind the fact that work follows the lower cost of labour and less regulation. The companies simply have to obey the more lenient laws and customs of the host country; these countries are eager to get the business and the work for their citizens; they also do not hesitate to vigorously enforce their local laws however less stringent they appear to be (relative to our standards).
Keeping employment and business at home would have been easy: just don’t regulate businesses to death and burden them with onerous taxes and excessive regulations and blame everyone else when the work leaves. Trying to convince our citizens to pay three times as much for the same products produced locally would never prove successful, and the complete collapse of union membership over the last couple of generations is further testimony to the fact that ordinary workers doing ordinary jobs realize that they have been priced out of the market. The first wave of relocation was to the Southern states from the North, thence overseas.
Now the final death blow to employment in this country is to raise the minimum wage to unrealistic levels while at the same time special interest groups attempt to project our employment standards and costs upon other nations.
Stripping away all the nonsense and propaganda, the opposition to TTIP, or any international trade agreement is simply an attack on lower-cost nations/workers to benefit high-cost nations and their workers (but not their consumers), i.e. economically mature and highly regulated nations. Returning to high and exclusionary tariffs would be their real objective. But notice also that the objective of every corporation is to increase efficiency and lower prices while the objective of labour ‘advocates’ is to reduce efficiency and increase costs, and of course, prices.
Right on Al and thank you Don.
That is exactly what Mr Quijones, myself and so many others have been trying to get REAL PEOPLE (mostly sheeple) to understand. This is about power to the corporate elite and their mercenary hoarded. It’s about empowering a completely ineffective technocracy to continue to function in the name of corporacratic totalitarianism. For further reading about how this cumbersome, monolithic technocracy has become so inefficient and ineffective as a ‘human’ organisation, for humans, please read the genius of John Ralston Saul – Voltaire’s Bastards.
I also recall that Spain had to sue Argentina for its expropriation of a company- I don’t remember which one but I’m sure M. Quijones knows of it since it falls in his geographic area of interest.
YPF, which was part of Spanish oil giant Repsol. When the Kirchner government (can’t remember which one) expropriated/renationalized the company, it provoked a veritable shit-storm here in Spain. If I’m not mistaken, the firm’s investors used an ISDS clause in Spain’s bilateral trade agreement with Argentina to sue the Kirchner government. I believe they eventually received a payout of over 5 billion dollars.
In other words, as Al Tinfoil notes, in almost all cases the mechanisms are already in place to “right such wrongs”. TTIP, TPP et al are all about taking the balance of power between corporations and nation states to a whole new level — one in which the corporations effectively usurp all sovereignty from the nation state.
As further evidence of this, check out this piece from today’s Guardian:
http://www.theguardian.com/environment/2016/apr/26/ttip-chevron-lobbied-for-controversial-legal-right-as-environmental-deterrent
“The carefully woven fabric is unraveling”
From your mouth to God’s ears.
Well, people are coming to a realization that the western elites have lead them into a blind alley, of which a major plank is global and regional trade agreements.
And I desperately wish it was intentional and part of a grand deception on their part, because that would make them at least remotely competent, but I suspect it was just a staunch belief in their own hubris.
Hubris or not..they will pay for their malfeasance eventually…..come hell or polluted water!
Those who negotiated the TTIP have missed a vital point: “selling” their treaty is a whole lot like trying selling customers a “mystery box” they can only open it after paying the full asking price in cash. No refunds.
The TTIP was negotiated behind closed doors and most of it is still shrouded in secrecy. Not even those who will live and die by it (medium sized companies) are allowed to know what the full contents are.
To this it must be added trust in governments in Europe has been on the wane for a few years now: in Germany Merkel’s popularity started to erode when she refused to act in the aftermath of the NSA scandal and has been steadily eroding ever since. Only lack of serious alternatives is keeping her coalition in power, as her once enviable approval numbers have been plummeting as steadily as German exports to China.
The EU, never truly popular unless it happened to pony up large cash subsidies with lax or no oversight, is now seen with widespread suspicion if not downright hostility.
To ask the European people to swallow up such a treaty at this very moment is a symptom of how detached the political and financial elite has become.
The present Socialist-led government in Portugal is unlikely to sign the TTIP without a lot of cajoling and downright threats. Spain has no government that can sign it off (unless Rajoy pulls yet another rabbit from his hat). Belgium’s government is always on the brink of disintegrating. Britain and Sweden have far bigger fish to fry right now. Next year France has a presidential election which will probably end up causing political mayhem at home and abroad for years to come. Only Italy and Germany are likely to sign on a no question asked basis… and Italy expects something in return that may not fly with German voters.
Make no bone about it: the TTIP will pass because this has already been decided. But it will end up as yet another handful of nails in the EU’s coffin.
Question: do the national governments of the EU need to pass TTIP, or is it simply a trade agreement between the U.S. And the E.U.?