A global day of action against rigged trade agreements


Civil society organisations and trade unions are taking part in a global day of action against free trade and investment agreements on 18 April.

The frustration is understandable. The explosive proliferation of trade agreements in the last two decades has reshaped the global economy. Production processes have been outsourced and today’s modern factory often comprises many production facilities across the world.

Multinational enterprises now tend to focus on the high value-added processes of design, marketing and branding while offshoring all other labour- and time-intensive processes.

For this reason, the so-called 21st century trade agreements are not about trade but about harmonising regulation.

Business claims that harmonising regulation will allow them to ‘create’ more wealth, and this is almost correct.

But wealth from trade is not created anew; wealth from these new agreements is mostly diverted.

In addition, as things stand, wealth is not shared but accumulated by those who are already rich.

Without global, enforceable sustainability rules in place, supply chains allow companies to outsource corporate responsibility, together with production.

Leading enterprises claim that they cannot be held legally liable for shortcomings that occur in other companies further down the supply chain.

But the term ‘shortcoming’ acts as a euphemism for slavery-like conditions and child labour in the production of goods, the dumping of harmful chemicals in rivers and the exploitation of local communities.

Investment agreements complement trade agreements in that they provide capital complete freedom of mobility and increasingly worrying privileges.

Investment agreements allow access for private foreign investors to non-transparent and unaccountable tribunals, in an arbitration procedure named ‘investor- to- state dispute settlement’ (ISDS).

For instance, in particularly egregious case, the war-torn government of Libya was recently forced to pay US$935 million to a Kuwaiti investor who planned to invest US$5 million in Libya.

The investor transferred only 0.1 per cent of the amount but the tribunal gave an award that included lost profits of 99 years.

With the number of cases increasing in the recent years, ISDS has become a very pervert form of lottery.

Meanwhile, the investment agreements do nothing to promote and facilitate job-creating investment.

Most of them do not include a single sentence on long-term responsible investment but lengthy articles on the protection of investment – that’s ISDS.

There a few bright exceptions with agreements which aim to genuinely promote investment without granting unnecessary privileges to corporations. Among them are the model investment agreements of Brazil and South Africa.

But most new trade and investment agreements put too much at stake.

Various analyses suggest that they open the doors to the privatisation of public services, and impose strict rules on state-owned enterprises.

And, as if we have learned nothing from the financial crisis, these trade agreements will further deregulate financial markets, leading to more bubbles, more bursts and more crashes.

Although world leaders pledge to eliminate diseases as part of the globally-agreed Millennium Development Goals and brand-new Sustainable Development Goals, these agreements will increase the protection of pharmaceutical patents and monopolies, making medicine unaffordable for the many.

Internet freedoms and online privacy are also in jeopardy.

For understandable reasons, these agreements come in shiny wrapping paper, topped with colourful ribbons. Based on their own research, advocates claim that these agreements will create millions of new jobs.

But the economic modelling used to arrive to these conclusions is suspect.

These claims were debunked in an independent study that focused on the impact of the Transatlantic Trade and Investment Partnership (TTIP) agreement.
The study projects a loss of 600,000 jobs in the European Union alone.

The Global Day of Action against free trade and investment agreements aims to raise awareness of these complicated deals and form a democratic opposition to the increasing corporatisation of the global economy.