"Major potential trade deals, such as the proposed Transatlantic Trade and Investment Partnership between Europe and North America, are at risk of falling through," he writes. "As of early December," he reports, the TTIP negotiations "have resumed, but the prospects for a
deal remain highly uncertain."
That sounds like a cause for celebration to me, based on what we've heard is being cooked up for us in the secret negotiations over the TTIP and its evil twin, the Trans-Pacific Partnership (TPP).
I was thinking as I read Kurlantzick's piece that the current vocabulary of neoliberalism that has become so widely embedded in writing and discussion about international trade because center-left parties in the US and Europe have happily adopted it rather than challenging it, can actually be pretty arcane to readers assigning more common-sense meanings to words.
Here are some examples from Kurlantzick's piece:
Protectionism: People generally have a sense of what that is, barriers to products or money coming in from other countries put up to protect some domestic constituency. In the language of neoliberalism, though, "protectionism" is the worst cuss word. Even capital controls to prevent the fabled "bond vigilantes" from wrecking your country's currency or economy count as "protectionism" in this conceptual world, and therefore are evil by definition.
State capitalism: Almost as much of a cuss word as "protectionism." This is when a country owns a company as public property, as with Gazprom in Russia, PDvSA in Venezuela or, as of this year, YPF in Argentina. Protecting national sovereignty, preventing irresponsible practices by private corporations, revenue for other kinds of development: in the neoliberal worldview, none of them remotely justify the evil of "state capitalism."
Giant state-owned companies: Another way to use the "state capitalism" cuss word adding a little dramatic emphasis
Free trade: Equals goodness. Means removing barriers to capital flows across borders, lowering wages, getting rid of unions, overriding national laws on consumer and environmental protections, lowering taxes on corporations and the wealthy (preferably to the vanishing point)
Economic integration: Removing barriers to capital flows across borders, lowering wages, getting rid of unions, overriding national laws on consumer and environmental protections, lowering taxes on corporations and the wealthy (preferably to the vanishing point)
Globalization: also equals goodness; requires removing barriers to capital flows across borders, lowering wages, getting rid of unions, overriding national laws on consumer and environmental protections, lowering taxes on corporations and the wealthy (preferably to the vanishing point) to maximize goodness
Giant state-owned companies: Another way to use the "state capitalism" cuss word adding a little dramatic emphasis
Political leadership: Doing what international corporations want. Also has variations, such as strong leadership, responsible leadership, etc.
Populism: Not doing what international corporations want. Also a cuss word.
The global trade agenda: Removing barriers to capital flows across borders, lowering wages, getting rid of unions, overriding national laws on consumer and environmental protections, lowering taxes on corporations and the wealthy (preferably to the vanishing point)
Credibility on trade: Removing barriers to capital flows across borders, lowering wages, getting rid of unions, overriding national laws on consumer and environmental protections, lowering taxes on corporations and the wealthy (preferably to the vanishing point). See also: political leadership.
Dynamic: What an economy becomes when it removes barriers to capital flows across borders, lowers wages, gets rid of unions, overrides national laws on consumer and environmental protections and lowers taxes on corporations and the wealthy (preferably to the vanishing point).
Fostering interdependence: Removing barriers to capital flows across borders, lowering wages, getting rid of unions, overriding national laws on consumer and environmental protections, lowering taxes on corporations and the wealthy (preferably to the vanishing point).
As you see, there are some redundancies in meaning among these words and phrases.
Kurlantzick gets several of these words loaded with occult meaning into one notable paragraph:
Far from creating a long tail, globalization and the Internet have instead made economies of scale more important to companies’ survival. That has prompted consolidation in industries from telecommunications to oil to mining, allowing many of these industries to become dominated by giant state-owned companies from countries such as China, Russia, and Brazil. These state-owned enterprises are hardly forces for free trade: They often crush entrepreneurs in their own societies, and they often push for protectionist barriers, not against them. [my emphasis]When you translate into more everyday language, you get:
Far from creating a long tail, Goodness and the Internet have instead made economies of scale more important to companies’ survival. That has prompted consolidation in industries from telecommunications to oil to mining, allowing many of these industries to become dominated by the Evil Ones from countries such as China, Russia, and Brazil. These Evil Ones are hardly forces for Goodness: They often crush the Good Ones in their own societies, and they often push for Evil Things, not against them.Who says economics isn't a morality play?
The kinds of trouble neoliberal trade treaties can cause is illustrated in this New York Times report by Sabrina Tavernise, Tobacco Firms’ Strategy Limits Poorer Nations’ Smoking Laws 12/13/2013. Tobacco consumption has been falling in wealthier nations, so the tobacco companies want to sell more cigarettes in less developed countries. And when some countries try to restrict smoking, the companies have started to use the option they have under so-called "free" trade treaties to deter them. "The industry is warning countries that their tobacco laws violate an expanding web of trade and investment treaties, raising the prospect of costly, prolonged legal battles, health advocates and officials said."
... tobacco opponents say the strategy is intimidating low- and middle-income countries from tackling one of the gravest health threats facing them: smoking. They also say the legal tactics are undermining the world’s largest global public health treaty, the W.H.O. Framework Convention on Tobacco Control, which aims to reduce smoking by encouraging limits on advertising, packaging and sale of tobacco products. More than 170 countries have signed it since it took effect in 2005.Treaties approved by the Senate have a legal force equal to the Constitution itself in the US; they even override the text of the Constitution, i.e., they have the force of Constitutional Amendments. So we should expect our elected officials from the President on down to take the part of the general public and not business lobbyists in considering trade agreements like TTIP and TPP. (Yes, I know how otherworldly that sounds!)
More than five million people die annually of smoking-related causes, more than from AIDS, malaria and tuberculosis combined, according to the World Health Organization.
Alarmed about rising smoking rates among young women, Namibia, in southern Africa, passed a tobacco control law in 2010 but quickly found itself bombarded with stern warnings from the tobacco industry that the new statute violated the country’s obligations under trade treaties.
“We have bundles and bundles of letters from them,” said Namibia’s health minister, Dr. Richard Kamwi.
Three years later, the government, fearful of a punishingly expensive legal battle, has yet to carry out a single major provision of the law, like limiting advertising or placing large health warnings on cigarette packaging.
Kurlantzick makes an intriguing argument that I've not seen put this way before about the immediate future of international trade:
The belief that trade flows would inevitably increase was based on two assumptions: Emerging markets still had huge space to expand, and new technologies would make businesses more interconnected. These ideas still power reports such as HSBC’s forecast. But they appear to be wrong. Today’s technological advances don’t necessarily lead to economic integration. The latest breakthrough in manufacturing, 3D printing, makes it easier for companies to keep their design and initial production work in-house and cut out suppliers—which reduces trade, because it removes incentives to outsource later rounds of manufacturing overseas. The coming breakthrough in many science-based industries — such as synthetic biology, in which living forms are created from strands of DNA — will similarly create pressure for companies to keep operations in-house. Already, many corporations are coming home: Cross-border investment inflows fell by 18 percent in 2012 and probably will drop again in 2013.I don't know how well-founded that may be, but it's made me curious about the argument.
This, on the other hand, apparently relies on a code I haven't cracked yet:
Over the past 60 years, at least one major economy was able to take the lead in advancing the global trade agenda. Today, however, every prominent trading economy is too consumed by problems at home. Weakened by the shaky rollout of health-care reform, President Obama faces a hostile Congress that has little inclination to support either the administration’s proposed free-trade agreement with Asia, called the Trans-Pacific Partnership (TPP), or a U.S.-European trade pact. China's top leaders are still trying to consolidate power and address domestic challenges such as land reform. Britain is consumed with austerity, Japan is embarking on contentious economic reforms, and Germany is constrained by its history and Berlin’s consensual politics. Reports of U.S. spying on top European leaders have caused politicians across the European Union — already skeptical of a trans-Atlantic trade zone because of concerns that many European industries would be swamped — to call for trade negotiations with the U.S. to be cut off. [my emphasis]This reads weird to me. In this case, "one major economy" presumably means the United States, so why not just say that?
Is there a clear majority in either House of Congress against the TTIP and TPP already? I seriously doubt it. I doubt even more how firm that theoretical opposition will remain when and if the things are signed and business lobbyists go to work on the Congress about the virtues of
China's leaders don't have time to pay attention to international trade? Seriously?
And however much "Germany is constrained by its history and Berlin's consensual politics," that hasn't prevent Chancellor Angela Merkel from imposing a ruinous austerity policy on several of her eurozone partners that benefits Germany at the expense of imposing prolonged depression conditions on those partners. That should be a reason for other countries to distrust Germany on economic matters. But shyness due to its "its history and Berlin's consensual politics" hardly seem to be serious concerns in that regard.
All of that may just be Kurlantzick's way of saying that the US so far hasn't been able to get its way on either treaty, both of which are still under negotiation. But why the strange circumlocutions if that is the real point?
Tags: angela merkel, austerity economics, eu, euro, european union, neoliberalism, tafta, tafta, trans-atlantic free trade agreement, trans-atlantic trade and investment partnership, trans-pacific partnership, tpp, ttip
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