Monday, April 03, 2023
Why the new trade deal is bad for the UK
Following my rant on Friday about the new Indo-Pacific trade pact and the British public not being allowed to vote on it, I was interested in this article by Nick Dearden in the Guardian, which seems to reinforce my point.
Dearden claims that this trade deal is so contentious that it united Donald Trump, Hillary Clinton and Bernie Sanders in opposition to US membership, and that in signing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Britain has ditched environmental standards, signed up to terms that will undermine British farmers, and left us open to being sued by multinational corporations in secretive courts. And all for no real economic benefit:
The deal began life as the Trans-Pacific Partnership or TPP, a last gasp of hyper-globalisation. Alongside its ill-fated sister deal, TTIP (Transatlantic Trade and Investment Partnership), it aims to lock participating countries into rules that prioritise pro-market, corporate interests. The corporate power grab was then sold to a sceptical public as a way of containing China’s economic power, by surrounding that country in a sea of neoliberal trade.
But, like TTIP, the deal sailed into strong anti-globalisation headwinds. In the US, the last thing the public wanted was more outsourced jobs, longer and more fragile supply chains, and further power vested in the hands of big business. The 2016 presidential election was the death knell for US membership.
When the US withdrew, a few contentious parts of the deal were placed on ice – including rules that would have handed even more power to pharmaceutical monopolies to set medicine prices. But there is much to dislike in what remains of what became known as the CPTPP.
The most pressing issue reported from the talks is that Britain has been forced to lower environmental standards as a condition for entry to the deal. Palm oil plantations in Malaysia are a driver of deforestation, threatening biodiversity including the survival of orangutan populations. European tariffs on palm oil aim to stop deforestation, but the UK is understood to have agreed to scrap the tariffs as a condition for entry into the Pacific deal, in effect reneging on deforestation pledges made at the UN climate conference in Glasgow.
But it gets worse, because the Pacific trade deal isn’t a one-time set of rules, but rather gives corporate lobbyists permanent power to force governments to lower standards over time. The whole point of the CPTPP is to get countries to recognise standards as equivalent to each other – and to accept imports even where there are real differences in standards.
Britain still endorses the precautionary principle, which places the burden of proof on the producer of a product to demonstrate that it is safe. Most signatories to the Pacific trade deal do not, and there will be inevitable pressure to accept food containing pesticides that have been outlawed here, antibiotics in livestock farming or hormone-treated beef.
But nothing better displays the heavy bias towards big business interests than the corporate court system at the heart of the CPTPP – an international arbitration system that will allow corporations to sue the British government for treating them “unfairly”.
Fairness, here, is highly subjective. Corporate courts are increasingly used to challenge all manner of climate action, and Canadian companies are particularly aggressive users of the system, having brought 64 cases against governments. One such ongoing case sees Colombia being sued for $700m for daring to restrict gold mining operations on environmental grounds, by a Canadian company that didn’t even have all the permits needed to mine, and had had its environmental impact assessment rejected.
In another, more famous, case, a Canadian corporation is suing Biden’s administration for $15bn for cancelling the Keystone XL pipeline, which would have carried environmentally devastating tar sands oil from Alberta to the US. Canada is a signatory to the CPTPP.
And all of this in the absence of evidence that the deal will boost jobs or growth. By the government’s own estimates, the deal will add a mere 0.08% of GDP after running for about 10 years – a number so small as to be meaningless in the uncertain world of economic predictions.
As Dearden says, in order to prove we’ve taken back control, we are, in reality, relinquishing it as quickly as possible, while the parliamentary committee able to properly scrutinise treaties like the CPTPP was abolished last week.
Dearden claims that this trade deal is so contentious that it united Donald Trump, Hillary Clinton and Bernie Sanders in opposition to US membership, and that in signing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Britain has ditched environmental standards, signed up to terms that will undermine British farmers, and left us open to being sued by multinational corporations in secretive courts. And all for no real economic benefit:
The deal began life as the Trans-Pacific Partnership or TPP, a last gasp of hyper-globalisation. Alongside its ill-fated sister deal, TTIP (Transatlantic Trade and Investment Partnership), it aims to lock participating countries into rules that prioritise pro-market, corporate interests. The corporate power grab was then sold to a sceptical public as a way of containing China’s economic power, by surrounding that country in a sea of neoliberal trade.
But, like TTIP, the deal sailed into strong anti-globalisation headwinds. In the US, the last thing the public wanted was more outsourced jobs, longer and more fragile supply chains, and further power vested in the hands of big business. The 2016 presidential election was the death knell for US membership.
When the US withdrew, a few contentious parts of the deal were placed on ice – including rules that would have handed even more power to pharmaceutical monopolies to set medicine prices. But there is much to dislike in what remains of what became known as the CPTPP.
The most pressing issue reported from the talks is that Britain has been forced to lower environmental standards as a condition for entry to the deal. Palm oil plantations in Malaysia are a driver of deforestation, threatening biodiversity including the survival of orangutan populations. European tariffs on palm oil aim to stop deforestation, but the UK is understood to have agreed to scrap the tariffs as a condition for entry into the Pacific deal, in effect reneging on deforestation pledges made at the UN climate conference in Glasgow.
But it gets worse, because the Pacific trade deal isn’t a one-time set of rules, but rather gives corporate lobbyists permanent power to force governments to lower standards over time. The whole point of the CPTPP is to get countries to recognise standards as equivalent to each other – and to accept imports even where there are real differences in standards.
Britain still endorses the precautionary principle, which places the burden of proof on the producer of a product to demonstrate that it is safe. Most signatories to the Pacific trade deal do not, and there will be inevitable pressure to accept food containing pesticides that have been outlawed here, antibiotics in livestock farming or hormone-treated beef.
But nothing better displays the heavy bias towards big business interests than the corporate court system at the heart of the CPTPP – an international arbitration system that will allow corporations to sue the British government for treating them “unfairly”.
Fairness, here, is highly subjective. Corporate courts are increasingly used to challenge all manner of climate action, and Canadian companies are particularly aggressive users of the system, having brought 64 cases against governments. One such ongoing case sees Colombia being sued for $700m for daring to restrict gold mining operations on environmental grounds, by a Canadian company that didn’t even have all the permits needed to mine, and had had its environmental impact assessment rejected.
In another, more famous, case, a Canadian corporation is suing Biden’s administration for $15bn for cancelling the Keystone XL pipeline, which would have carried environmentally devastating tar sands oil from Alberta to the US. Canada is a signatory to the CPTPP.
And all of this in the absence of evidence that the deal will boost jobs or growth. By the government’s own estimates, the deal will add a mere 0.08% of GDP after running for about 10 years – a number so small as to be meaningless in the uncertain world of economic predictions.
As Dearden says, in order to prove we’ve taken back control, we are, in reality, relinquishing it as quickly as possible, while the parliamentary committee able to properly scrutinise treaties like the CPTPP was abolished last week.
