It would seem that the EU's trade deal with Canada has stalled at the final hurdle, unable to secure support from the little known Belgian regional parliament in Wallonia. This matters, a lot.
Superficially this trade deal appears to be about making trade easier, and for years that has been a relatively easy idea for any politician to sell. The removal of trade barriers would, it was always argued, increase growth and so employment and well-being. This was a core idea at the heart of the Washington Consensus, that delivered neoliberalism around the globe.
The problem was, as has now been realised, that even if tariff free trade did deliver growth (and that was open to question in some cases) it was also apparent that the benefits were not equally shared. Data in the disparities of income growth in society over the last thirty or more years are now well known: most benefits have gone to a few. This leaves obvious questions for many on the benefits of growth.
But the failure to deliver fair income distribution is not the only reason for doubt. Trade deals have facilitated the free flow of capital as well and it is now well known that free flows of capital when labour is relatively immobile (by choice, admittedly, but for very strong social reasons that destroy the myth that we are purely economic beings) means that labour loses out not just to capital but to other labour. Disruption to domestic markets as cheap import substitutes become available has been a feature of modern economic history and hollowed out economies are the consequence, with social stress following.
The loss to capital has a third dimension: under modern trade deals the right to profit is being enshrined in agreements so that the ability of governments to intervene in markets is being restricted by a corporate right to compensation if they do, with that right being upheld by secretive courts. This is not, then, capital versus people, but capital versus the state in action: democracy is being put at risk by these deals,
Last, we should not forget the tax angle: someone has to make good the loss of tax revenues that trade deals involve and that is rarely, if ever, business. So ordinary people pay.
These realities are now being appreciated. And Wallonia, to its credit, has said no to the Canadian trade deal as a result. My instinct is that the era of the trade deal is over, at least with the EU. The chance of consensus on agreements in their current proposed form has gone. As this suggests another nail has been out in the coffin of neoliberalism no one should mourn.
But what of post Brexit Britiain then? Trade deals of any sort seem less likely now, especially if the voices of regional parliaments are heard. And this may be a good thing: there is no certainty that they will really help the UK if offered in the form most supposedly pro-market politicians now favour.
So how can this be reconciled with wanting to stay in the EU, as I have made clear that I do? The answer to that is pretty easy to offer. The EU for all its faults, and there are many, mostly but not entirely relating to the free movement of capital, is not just a trade deal. It has offered personal freedom of movement. It has protected employees as well as businesses, even if not always equally. It has embraced a tax policy, again if not always optimally. The reality is then that the EU has had sufficient compensations within it to make a trade deal tolerable. New bipartisan trade deals have no such compensation. That is why we should be delighted if their negotiation fails. That will be a blessing for us all in the end, and we need to take those where we can find them.
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http://www.ase.tufts.edu/gdae/Pubs/wp/16-03CETA.pdf
Thanks
Richard
Your ‘Data in the disparities of income growth in society over the last 30 or more years are now well known: most benefits have gone to a few’. Goes to the heart of the general dissatisfaction with main stream political parties.
Why would most people continue to vote for these so called centre parties who have presided over and abetted this pernicious process over the past 30 years? Turkeys – Christmas!!
And yet, in many ways, the mainstream parties and media still dont get it. Read Rawnsley, Clegg, The Tories, The Times or listen to the BBC, Marr or Neil or whatever.
Keep up the good work Richard, I despair otherwise.
Regards
I will keep going
Just don’t read Janan Ganesh in the FT this morning, defining liberalism in ways I cannot recognise
This is also quite interesting on the TPP (Trans-Pacific Partnership):
http://www.huffingtonpost.com/dean-baker/the-tpp-and-free-trade-ti_b_12628906.html
One of my fears wrt the lack of economic capability in our political class is that they are too easy to fool and partisan (and some are personally compromised with conflict of interest) when it comes to any negotiations between the wants of business vs. the needs of the populace at large and responsibilities of the state.
If that £66bn black hole in the revenues does start to materialise, I can see them agreeing to ANY deal just to appear, prior to the next election, to be doing something to ‘safeguard Britain’s future’ or other BS term.
Is it possible Richard that they could do a set of (CETA/TTIP type) deals under which, if a number of corporations then exercise their ‘rights’ to profit, could result in the bankrupting the state & allowing life to become intolerable for its citizens – ie rampant fracking/ pollution/ no safeguards re foodstuffs, air quality etc? Could it really become that extreme?
There comes a point where consent is withdrawn
If the “trade” deals were as benign as “they” told us, the trade-deal talks would not be held in secret.
Obviously, they were, and are, not benign but yet another corporate cancer they tried to unleash upon populations.
My personal thought is that corporations should be broken up, by force if necessary.
More attention, MUCH MUCH more, should be focussed upon the politicians and other who tried to force these deals through.
‘especially if the voices of regional parliaments are heard’. I can’t see Theresa May ‘listening’, she told the Tory conference “Wales would not get a Brexit opt out”. Although Carwyn Jones’ (Labour and Welsh Assembly leader) timid response yesterday was “he believed the UK Government would listen to the devolved administrations”. Sturgeon’s response was robust yesterday, that May must respect the ‘Remain’ vote of Scotland. These are interesting political times, unfortunately failure of CETA is not the demise of neoliberalism, it is simply morphing into a new beast. The toolkit developed is still in place and functioning for the Establishment to use and confuse.
May’s actions though seem to me to herald the demise of the UK, under her authority. I think it is one of her tactics to undermine the regional assemblies as part of her Govt’s [unknown] Brexit plans.
Regional government has always an exercise in blame passing to the Conservatives
I can buy or sell freely with someone in Birmingham or Athens, but not in Toronto.
How is that good for me, or the person in Toronto? Surely we’re both worse off.
Of course you can take with Toronto
There may be a tariff though
Just as there might be a freight charge
So?
It seems that they are trying to push the lesser known TiSA through by the end of the year. TiSA encompasses the same countries as TTIP and TPP combined, and cover the same sort of regulations but more so. My fear has always been that TTIP and TPP were Trojan horses that would divert attention away from CETA and TiSA.
I hope not
Thanks for the warning
I cannot find back the link I found a year ago that clearly showed a major push by US corporations to establish Canadian companies at that time, and the premise of the article was that this gave the US a foot in the door with the CETA agreement lest the TTIP protocol failed.
I shall continue looking but my garden shed is tidier than my hard drive.
I am also bristling with indignation that the Wallonians are getting all the stick over binning CETA in the media, who steadfastly ignore the fact that millions of signatures have been appended to at least 5 petitions on the subject of TTIP and CETA being blocked. I know its 5 because I signed every one
The 2 biggest are here
https://secure.38degrees.org.uk/ttip-eu
and here
https://stop-ttip.org/
and they add up just shy of 7 million signatures
(Yes they both contain many names duplicated, but its still 7million times people could be bothered to make themselves heard.
All the UK press and the BBC have ignored this fact completely….its all those bloody Wallonians fault.
It’s at times like this where you can clearly see what drives such damaging deals – the need to meet and exceed investor’s expectations that seem to be put before anything else and legally underpinned as well.
Globalisation has not really increased competition – it actually reduces it by undermining one set of producers – resulting in their withdrawal from the market – leaving others (fewer) to dominate and then set prices. It seems that modern business operates by defeating the competition.
I honestly believe that if the issue of investor demands could be addressed we might end up with more genuinely reciprocal trade deals instead of the ‘beggar they neighbour’ deals that will continue to bang at our doors.
So what is your fourth para, the one on free movement of capital and of labour, suggesting?
Are you suggesting limits of free movement of capital? Then spell it out.
Or are you suggesting that more free movement of labour is the answer to cheap imports undermining jobs? If so are you suggesting freedom for workers here to move to Romania, or China? Or for cheaper labour to come into the UK?
Which, or both, are you promoting? Neither will maintain working conditions or jobs here.
Your last paragraph, about EU compensations, is at odds with the fact that these are EU trade deals, and a lot of those EU ‘compensations’ have been quietly slipping away in preparation for the trade agenda – something of which you seem unaware.
I think you are blinded by an ideology in which you are one of the winners and where you neither go near any of the losers nor are touched by such issues.
One day when you can debate without imposing your assumptions on everyone else I will engage
That day has clearly not arrived as yet
It looks as if a compromise has been reached https://www.theguardian.com/world/2016/oct/27/belgium-reaches-deal-with-wallonia-over-eu-canada-trade-agreement
I’m not sure I understand what is in the fine print.
It seems the secret court system remains open to question
I guess that’s useful
But I would have preferred no compromise at all, I admit