Page 1

Campaign briefing

Profiting from people and planet How new trade deals threaten democracy, development, public services and the environment December 2013 Since 2005, world trade talks have been stalled. The 159 member countries of the World Trade Organisation (WTO) have been unable to agree how to trade together. Brazil, Russia, India, China and South Africa (known as the BRICS) have challenged the power of the EU, US, Japan and Canada to determine international trade. Large groups of countries from the global south have rejected the priorities of richer countries. Despite the financial crisis of 2007 and the sovereign debt crisis in the EU plunging the world into recession, twice, there was no consensus to seek economic recovery through the WTO’s trade agreements.

Countries keen to negotiate trade agreements, including the UK, have carried on outside the WTO. These deals are shrouded in secrecy and the most aggressively neo-liberal of any trade deal to date. They are designed to boost global trade by profiting from new markets in public goods and services; restricting the authority of governments; and removing regulation designed to protect people and the planet From 3 to 6 December 2013, the World Trade Organisation is again holding world trade talks. The talks mark a renewed determination for neo-liberal trade agreements. Photo: Corporate Europe Observatory

Campaigning against free trade agreements

How to recognise a trade agreement Types of trade agreement •• Multilateral: Negotiated through the WTO and involving all WTO member countries. For example, the General Agreement on Trade in Services (GATS) •• Plurilateral: Negotiated by large groups of countries, through their governments. For example, the Trans-Pacific Partnership (TPP) •• Bilateral: Negotiated by two parties (EU countries negotiate trade together as a single group) For example, the EU-Colombia trade agreement

There are many similarities between different trade agreements. Fundamentally, trade agreements seek new markets where corporations can trade goods and services. The WTO has facilitated negotiations which have identified entirely new markets, such as intellectual property. It also tries to eliminate differences between countries in how they trade in goods and services to enable corporations from different countries to enter markets where they were previously excluded. Much of the rhetoric around trade agreements focusses on their fairness and the role they play in levelling the field for all corporations to compete. However, trade agreements are better understood as tools for creating free markets, a key component of neo-liberal ideology. These are markets where corporations can profit, free from obstacles such as regulation to protect local jobs, companies and services;


Photo: El Turbión

Trade facilitation is about cutting red tape at borders to make trade more efficient. Key concerns are whether Least Developed Countries (LDCs) can afford to pay for implementing this and if this agreement marks an expanding remit for the WTO. Agriculture covers many issues but the key proposal is to change the existing Agreement on Agriculture to address the needs of the global south. The proposal seeks permission to support subsistence farmers through government procurement of food, which the current agreement does not allow. International development issues run through all the deals. However, there is a set of issues (about duties and quotas, cotton and services) to benefit LDCs which have been previously agreed through the WTO but have not been implemented Earlier in 2013 Colombian peasants blockaded roads to protest against cheap imports caused by EU and US trade agreements

regulation to protect health, safety and the environment; publicly provided goods and services; and shared non-tradable public goods, such as common land and knowledge. Many new trade agreements even remove the possibility of governments’ changing the status quo, regardless of public policy priorities, in case this adversely affects the profits of corporations in the future. It is difficult to define trade because neo-liberal trade agreements seek to trade in anything and everything in order to profit from them. There are agreements concerning food, water, shelter, energy, health, education, land, transport, communications and knowledge . It is also difficult to understand the implications for many trade agreements because they are negotiated in secret, usually without scrutiny from elected representatives. Governments and corporations argue that trade agreements are beneficial, beyond the shareholders of corporations, because of the prosperity that trickles through the economy and the jobs that trade provides. Although these claims are frequently exaggerated, there is little doubt about the profit that can be made. However, the devastating structural adjustment policies of the 80s and 90s, which were implemented in many countries of the global south, provide considerable evidence of the failure of neo-liberal policies to improve livelihoods, health and education, infrastructure, or even domestic businesses. People around the world are protesting about current neo-liberal trade agreements because they do not benefit ordinary people or improve equality, justice and poverty.

Current trade deals WTO ministerial meeting, December 2013 After several years of impasse, the aim of the 2013 ministerial meeting is to demonstrate that the WTO can facilitate multilateral trade agreements. The issues on the agenda are trade facilitation, agriculture and development .

Transatlantic Trade and Investment Partnership (TTIP) The EU and USA began negotiations in July 2013 on a new bilateral trade deal to improve trade at a time of low national growth rates. TTIP aims to align trading practices in the EU and USA; improve competition between EU and US corporations to reduce the prices of goods and services; and create more jobs from new trading opportunities. Critics argue that TTIP’s impact on growth and job creation is exaggerated. But of greater concern is that TTIP is designed to make profit from reducing hard won regulation designed to protect the environment; health and safety; and livelihoods. Public services, including education and health, are vulnerable to increased liberalisation and privatisation through TTIP. Financial regulation to protect society from reckless financial institutions could also be removed as a barrier to trade. This could reverse the hard won victories that WDM campaigners look set to secure

World Trade Organisation (WTO) Created in 1995 159 member states, including the UK Led by Roberto Azevêdo (Director-General) Based in Geneva, Switzerland Responsible for world trade negotiations, enforcing trade agreements and handling trade disputes EU countries negotiate together as a single group Famous for trade agreements including the General Agreement on Trade in Services (GATS), Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the failed Multilateral Agreement on Investment (MAI) widely criticised for a free trade agenda and excluding the interests of countries in the global south.


Photo: WDM

In 2003, WDM members dressed to represent some of the services threatened by GATS - schools, health, water. The protest called for the EU to halt its involvement in negotiations on the General Agreement on Trade in Services (GATS) at the World Trade Organisation (WTO)

on food speculation and are currently calling for on investments in fossil fuel extraction. Just in case citizens and governments realise retrospectively how bad TTIP could be, it also includes provisions to maintain the status quo by allowing corporations to sue governments which implement policy changes that could adversely affect the profits of corporations. Known as investment treaties, these have already been used by utility companies to sue Argentina for over a billion dollars for freezing energy bills; and by a Canadian company to sue El Salvador for ÂŁ315 million for refusing permission to dig a gold mine. TTIP is being driven by senior politicians, including UK Prime Minister David Cameron. For this reason, negotiations must take place before the UK General Election in May 2015 and while Barack Obama is US President.

Trade in Services Agreement (TISA) In 2012, 47 countries (27 of them in the EU) began negotiating to liberalise and deregulate services. Specifically the deal seeks to give foreign corporations access to domestic markets and restrict national, regional and local governments’ ability to regulate in the public interest. TISA is likely to include investment rules to allow corporations to sue governments which implement policy changes in the future that could adversely affect their profits. Services is a broad category and includes many public

services, such as health, education, water and sanitation, as well as others like finance and banking, transport, retail, construction, energy, communications and insurance. A multilateral agreement on services already exists in the WTO. The General Agreement on Trade in Services (GATS) is an ongoing framework for negotiating the liberalisation of services. GATS has been highly controversial because of its impact on the provision of public services and the restrictions it places on governments, in particular those in the global south which want to nurture domestic businesses. As a result talks have stalled. TISA is driven by countries impatient for further liberalisation of services, including the UK. They are negotiating outside of the WTO and if a deal is struck, TISA could be used to push other countries to liberalise their services sectors.

Trans-Pacific Partnership (TPP) The TPP negotiations began in 2008 between 12 countries in North America, Latin America, Australasia and Asia. Although it is yet to be finalised, TPP is a particularly aggressive free trade agreement. It targets intellectual property, public services and government procurement, in the same way as other trade agreements. But it goes further by committing countries to liberalising all services, unless they are specifically excluded. It is not easy to carefully define services, with the purpose of excluding them. It is impossible to protect future services which have not yet been developed.


Photo: Trade Justice Movement

Make your voice heard Tens of thousands of UK citizens have campaigned to expose the dangers of trade agreements, such as the General Agreement on Trade in Services in 2000 and the Multilateral Agreement on Investment (MAI) in 1998. Together we stopped the MAI negotiations and protected some public services from GATS.

What is the alternative? The WTO and free trade agreements, such as TTIP, TISA and the TPP, are failing people and the planet. They must be replaced with a system which disciplines corporations and provides countries with the policy space to pursue a positive agenda for sustainable development, public services, job creation, food sovereignty, access to affordable medicines and global financial stability.

It is time for local and national community organisations, environmental campaigners and trade unions to campaign together to do it again on TTIP, TISA and the TPP. The UK government and others are trading away public goods and services; the authority of governments; and regulation designed to protect people and the planet in exchange for corporate profits. The World Trade Organisation Ministerial meeting in December 2013 must not be a launch for more neoliberal free trade agreements.

Find out more: www.tjm.org.uk The Trade Justice Movement is a coalition of over 60 organisations concerned with trade justice, including trade unions, aid agencies, environment and human rights campaigns, Fair Trade organisations, faith and consumer groups. Together, we call for trade justice - not free trade - with the rules weighted to benefit poor people and the environment. www.corporateeurope.org Corporate Europe Observatory is a research and campaign group working to expose and challenge the privileged access and influence enjoyed by corporations and their lobby groups in EU policy making. www.world-psi.org Public Services International is a global trade union federation dedicated to promoting quality public services in every part of the world. To find out how you can campaign on trade issues, and win justice for the world’s poor please visit www.wdm.org.uk/trade or call 020 7820 4900 The World Development Movement campaigns against the root causes of poverty. Working in solidarity with activists around the world, we oppose injustice and challenge the policies and institutions which keep people poor. World Development Movement, 66 Offley Road, London SW9 0LS t: 020 7820 4900 e: wdm@wdm.org.uk w: www.wdm.org.uk

TRADE BF 01 1213

Take action

Profiting from people and planet  

How new trade deals threaten democracy, development, public services and the environment

Profiting from people and planet  

How new trade deals threaten democracy, development, public services and the environment