Trading for injustice

[originally published on]

The EU is working on developing free trade agreements with many countries of the world, from Canada possibly to ChinaQCEA (and others) have written about our concerns regarding special tribunals to protect investors whose profit expectations are undermined by legislation introduced by democratic governments. And we urge you to write to your MEP to reject the Comprehensive Economic Trade Agreement (CETA) between Canada and the EU.

Careening on

As I have mentioned before, the CETA must be ratified by the European Parliament, which has a greater role than it did before the Treaty of Lisbon. However, the current EU Commissioner for Trade, Karel de Gucht, has also stated that, “According to the Treaty [of Lisbon], the Council can sign a treaty and provisionally apply it, whereas the Parliament’s consent is only needed before the conclusion (“ratification”) of the Treaty. Provisional application is an accepted tool in international practice and is needed where quick action is imperative for both sides.”

The need for quick action may be understood differently: many commentators have pointed out that, conversely, there is a pressing need for action to be slowed down. The final text of CETA, which has been leaked, includes an Investor State Dispute Settlement mechanism. The timing of the announcement of the finalised CETA text makes it clear that the record-breaking 150,000 responses people sent in response to the consultation which closed in July, cannot have been adequately considered. A public consultation in a democracy is only worth the name if the responses are taken into account: otherwise, it is a token gesture which simply wastes the time of those citizens who participated.

No escape

QCEA has advocated for a sunset clause for Free Trade Agreements, such as CETA and the Transatlantic Trade and Investment Partnership (TTIP) currently being negotiated with the US. No sunset clause (an agreed time for review and renegotiation) is included in CETA. Page 500 includes an option to give six months’ notice to end the agreement (with 20 more years for ISDS). It sounds simple – but how workable is it, one wonders?

And how did we find ourselves in this situation – facing a huge trade agreement which could be implemented even before Europeans have agreed to it?

Like most holes in which we suddenly find ourselves, this one has been dug by not challenging our own assumptions about how the world works. Assumptions are something we take for granted as true: they help us by simplifying the world – and they hinder us by simplifying how we think about the world. One assumption that many people share is that trade and economic growth are inherently good. (A wonderfully lateral challenge can be found in this policy brief on green growth.) Another is that, if trade is good, more must be better. As Pavan Sukhdev pointed out in a thought-provoking lecture, no one is focussing on selling longevity, and this is one of the reasons our economic activity is sucking up natural resources. The European Commission has found ten benefits of trade but this is an oversimplification. Trade has many forms, and not all bring benefits. Some good impacts said to be from trade contradict others: the Commission says trade brings both more jobs and lower prices – one wonders from whence the funds come to pay workers a decent wage if the focus is on low prices.

Markets and trade

Trade at its most fundamental is an exchange of goods that permits one family or person to have a greater variety of food and items than they can produce themselves. It’s amazing how pervasive trade is as a concept in human societies. Even subsistence farmers who are accustomed to feeding their families from small plots of land, will trade to acquire other items, such as pencils and school uniforms for their children. Even the fabulously inventive young man who built a windmill at his home in rural Malawibecause he wanted to be able to do things at night (rather than sleep because it was dark), who scrounged the items from a junkyard, even he was benefitting from the side effects of trade, finding bolts and metal parts that eventually allowed him to construct his (first) windmill.

marketsmileTrade is a good thing, of course. I certainly wouldn’t want to have to live only on what can be grown in the cool, damp northern climes of Belgium, I can tell you! But problems start when trade becomes a stimulus pushing overuse of natural resources, and when the liberalisation of trade means that, for example, the push for cheap goods means people are not being paid adequately. What do we need all these goods for? Why do we push forward to consume, when we know we are borrowing from future generations’ well-being? Where else could we create subsistence for people, the ones who currently are being paid too little to manufacture items that society doesn’t really need?

Free trade agreements, such as the recently finalised – but not yet ratified – CETA between the EU and Canada, and the other agreements the European Commission is currently negotiating, are often justified with numbers of ‘more’. More trade, more economic benefit. But this does not seem to mesh with our knowledge that we are overshooting the earth’s resources.

The European Commission predicted, perhaps a tad optimistically, that CETA would increase trade between Canada and the EU by more than a fifth (22%). Is that absolutely more trade (do we need 22% more stuff?), or is it replacing trade with existing partners, with trade with Canada? Why Canada? We know that Canada is not a trustworthy partner in preserving the planet: it is exposing huge areas of boreal forest soil in its quest for tar sand oil, for example. Canada’s own government website notes ‘the growth of annual production of oil sands presents severe environmental challenges’. Why would the EU want to facilitate trading with a country which is said to have one of the poorest environmental records in the world – why direct our finances in trade to a country whose policies not only counteract the EU’s stated goals, but is threatening the future livability of our entire planet?


Update 23 September: The European Commission spokesperson says: “ISDS is no longer a sticking or stumbling block because we have an agreement here on ISDS which sets new high standards [in CETA] and addresses all concerns raised. So, also here, it is the end of the negotiations.”


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