Changing the "Free Trade" Consensus in Europe

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(Mehr Demokratie/Flickr)

By Tom Ladendorf

In the not-too-distant past, support for so-called “free trade” from the mainstream of the Democratic and Republican parties was a foregone conclusion. But this year, the free-trade consensus has come into serious question. Both “outsider” candidates in the U.S. presidential election made a major point of opposing free trade because of its effects on the working class, driving this issue into the national debate in a way no one would have predicted. Following Trump's election, many are presuming the much-discussed Trans-Pacific Partnership dead—although it remains to be seen whether Trump will actually deliver on any of his supposed “economic populism.”

In Europe, too, the consensus on free trade is facing serious challenges. Massive political pressure has been building in opposition to three trade deals, respectively known as TTIP, Ceta, and TISA. Actually, with the help of the organized opposition, that number appears to have fallen to just two. TTIP, which seeks to harmonize regulations between the US and EU, has “de facto failed,” according to German Vice Chancellor Sigmar Gabriel. In the end, the two parties couldn't unite on what the transatlantic standard of regulation would be, apparently because Europe refused to submit to lower American standards of regulation.

 And although Gabriel had previously asked for patience for his effort to set “ambitious standards for the environment and consumers,” lower American standards are precisely what organizers had feared. This threat, along with concerns about the inclusion of investor-state court systems that companies could use to sue states over potential lost profits, drove a geographically and politically diverse group together into a vigorous opposition. For instance, over 500 European political parties and civil society groups joined a “Stop TTIP” initiative that gathered over three million signatures expressing opposition to the TTIP negotiations. Supporting organizations include everyone from major left and ecology parties, to conservation groups, to music and film festivals.

More significantly, TTIP also drew its opponents into the streets, like the 30,000 that came to protest in Hannover, Germany before Obama came there for the opening of a trade fair in April, or the more than 150,000 that took part in Germany-wide protests in September. Meanwhile, there have been recurring protests in Brussels, the political and administrative heart of the EU, as well as other major European cities.

These protests against TTIP were also in opposition to Ceta, an agreement whose stated goal is the removal of tariff barriers between the EU and Canada. Of course, this deal also has a catch: opponents are concerned about its mildly improved (but still worrisome) version of investor-state courts and other measures that may lock in deregulation and privatization. Unfortunately for its opponents, Ceta was signed at the end of October, but that's not to say that the opposition didn't accomplish anything. Notably, when EU leaders were approving the deal, the Belgian region of Wallonia temporarily put the brakes on the process, easing up only when they were able to achieve concessions that include making the implementation of investor-state courts subject to approval by national parliaments.

In fact, the ratification process through which this approval will be decided was only added late in the process by an EU leadership facing heavy criticism for the undemocratic method it was using to push free trade. While the deal is on a much more certain footing than TTIP, the coming ratification process could last years and may still ultimately bring down the controversial investor court system it proposes. The opposition may have not brought Ceta down, but they certainly made sure that its implementation wouldn't be business as usual. And although it looks like the majority of the agreement will be going into effect, the fight is far from over.

The third deal in the pipeline, TISA, or Trade in Services Agreement, aims to expand—you guessed it—trade in services between 50 signatory countries which include the EU, US, Australia, and several Latin American countries. But many take issue with the means TISA employs to accomplish its goal. In particular, it relies heavily on measures that prevent the reversal of liberalizations and privatizations, while also inhibiting the implementation of new regulations that might advantage domestic companies at the expense of foreign ones. The deal has found many fans in the financial sector, who probably like that the deal may make size limits on banks illegal, as well as that it could hinder regulation of exotic financial products like the ones that caused the 2008 global recession.

Though there are many respects in which the details of TISA remain unclear—it's being negotiated secretly, with details emerging largely through leaks—it includes a lot of other things one might worry about, including measures that look to undermine the labor rights of certain migrant workers and others that threaten privacy rights by allowing data to move more freely across borders. Although the agreement is scheduled to wrap up by the end of this year, it hasn't faced the kind of widespread protest and criticism that changed the conversation on TTIP and Ceta. In the organized opposition to these deals, Europe has shown that it can stand up to undemocratic efforts to impose an elitist model of international trade. But if this is to be built upon, TISA will need to be opposed at the same time that protests continue into the Ceta ratification process.

In the US, neither TTIP nor TISA ever attained the kind of profile they have in Europe (or the kind TPP has in the US). Partly, this stands to reason: TTIP, after all, threatens to bring down European standards to US levels, and not the other way around. But other aspects of the deals, like locking in liberalization, deregulation, and privatization, as well as investor-state courts, could hurt Americans just as much as Europeans. Americans, like Europeans, should therefore be watching these deals with a critical eye—and standing in the way if they don't like what they see. While TTIP is off the table for now, it could well come back. Meanwhile, the end of TISA negotiations are right around the corner. In Europe and the US, the old consensus on free trade is falling apart, but it's far from gone; and we're the only thing that can prevent it from returning.

Tom Ladendorf is a member of Chicago DSA currently living in Cologne, Germany.

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