An Attack on the Working Class

Transatlantic Trade and Investment Partnership

Translation of “TTIP: Ein Angriff auf die Arbeiterklasse,” first published in German in January 2015

Since July 2013, the EU Commission, U.S. government officials and industry lobbyists have been negotiating a free trade agreement between the European Union and the United States. This is significant for two reasons. First, it will lead to the creation of the largest capitalist free trade zone on the planet and, second, it is an attack on a wide range of political and social gains previously won by workers on both sides of the Atlantic.

What is the TTIP?

The Transatlantic Trade and Investment Partnership (TTIP), also known as the Trans-Atlantic Free Trade Agreement (TAFTA), is being negotiated behind closed doors. Free trade agreements between economic regions are routine for global capitalism, but the TTIP clearly has other objectives. There are already strong trading links between North America and the EU even without this new agreement. Over half of U.S. overseas investment goes to the EU, which in turn is the biggest foreign investor in the U.S. with 71% of the total.

“TTIP is correctly understood not as a negotiation between two competing trading partners, but as an assault on European and US societies by transnational corporations seeking to remove regulatory barriers to their activities on both sides of the Atlantic.”
—John Hilary, The Transatlantic Trade and Investment Partnership, p.8

“It is true that there are many FTAs [free trade agreements], but the planned TTIP would have a unique and enormous weight and expresses a clear claim to a leading role in the global economy. The old metropolises – the U.S. and Europe – want to use the TTIP and TPP [Trans-Pacific Partnership] agreements to stabilize their large but declining influence and make their dominance incontestable.”
—Conrad Schuhler, “TTIP must be prevented – and we can do it,” Das Blättchen No. 17, 18 August 2014

The U.S. and EU still account for 46-50% of global GNP, a third of world trade and 65% of foreign investment, but their share is shrinking. Since 2008, crises in the Eurozone and the global economy have done a lot of damage in Europe and the U.S., while the proportion of world trade accounted for by the so-called BRICS countries (Brazil, Russia, India, China, South Africa) has steadily risen.

Why so secret?

When extracts from the TTIP treaty text were leaked on the internet (www.ttip-leak.eu) there was a storm of protest. The secrecy surrounding the agreement is difficult to explain if the aim is simply to improve economic relations between the U.S. and the EU.

The national parliaments of affected countries and even the European Parliament have been shut out of the process. The control of information regarding the negotiations is reminiscent of a spy movie. In Brussels there is a special TTIP reading room in which a select group, only a few of whom are MEPs, can read the minutes of the negotiations. There is concern over American dominance of the TTIP process.

The forces behind the TTIP must have known that this stealthy implementation would be criticized for shortcutting bourgeois democratic principles such as parliamentary approval of legislation. But many well-meaning critics of this secrecy are naive about the “democratic” character of capitalism. It is an illusion that the parliaments in which politicians seek night and day to push the agendas of their respective parties could have any fundamental objections to the TTIP. Many politicians from the Greens and the Social Democrats, and even sections of the Left Party, are upset that the corporations and their lobbyists do not trust them to persuade the victims of capitalism to accept further reductions in their living standards.

Secret negotiations usually mean cover ups. We demand public access to the TTIP negotiations although we have no illusions that the parties involved will openly admit their plans to attack workers in the U.S. and Europe. Their preference is for the mass of the population to be kept in ignorance, for they fear that if their machinations were revealed it could spark resistance and jeopardize the entire project. Best to keep the lies and exploitation under cover of darkness.

Such bourgeois methods starkly contrast to the policy of the Soviet government after the 1917 October Revolution. The first successful proletarian revolution opened a path for humanity to transcend the odious practices of capitalism. In one of its first measures, the government led by Vladimir Lenin declared the practice of negotiating secret diplomatic treaties null and void. The “Decree on Peace” issued on 26 October (8 November) 1917 states:

“The government abolishes secret diplomacy, expressing, for its part, the firm determination to carry on all negotiations absolutely openly and in view of all the people. It will proceed at once to publish all secret treaties ratified or concluded by the government of landlords and capitalists from March to November 7, 1917. All the provisions of these secret treaties, in so far as they have for their object the securing of benefits and privileges to the Russian landlords and capitalists – which was true in a majority of cases – and retaining or increasing the annexation by the Great Russians, the government declares absolutely and immediately annulled.”
—“Treaty of Brest-Litovsk, 1918”

Investor protection

A central plank of the TTIP is the introduction of Investor to State Dispute Settlement (ISDS), a form of guarantees for investors, into U.S.-EU trade relations. ISDS gives corporations the right to argue their cases (including private complaints) before international arbitration tribunals whose hearings are conducted in secret – rather than before national courts – when disputes arise. ISDS proceedings are extremely expensive – estimated at around $US 8 million per case – which excludes all but large corporations. While circumvention of bourgeois-democratic standards is not unusual, this is a particularly scandalous proposal.

ISDS procedures have been used by the imperialist nations in other trade agreements to ensure that companies operating in countries with little or no central government control can assert their interests – i.e., so that plundering of the neocolonies can proceed more smoothly. Neocolonial regimes which attempt to resist imperialist exploitation can be thwarted by means of ISDS arbitration procedures.

“ISDS procedures are first and foremost insurance for international investors against social revolutions and political upheavals. So it is not surprising that among the first countries in the dock are Argentina, Ecuador and Venezuela which have seen privatizations reversed and companies nationalized.”
—Conrad Schuhler, op cit

We have already seen examples of how investor protection is used to override decisions made by national governments. For instance, the Swedish energy company Vattenfall is currently suing the German government for 3.7 billion euros, because its nuclear power plants at Krümmel and Brunsbüttel will be shut down earlier than expected due to Germany’s decision to phase out nuclear power. Vattenfall is basing its claim on a 1994 agreement containing investor protection clauses. Another example of the impact of ISDS is neocolonial Ecuador which in 2012 had to pay $U.S. 1.77 billion plus interest to the American Occidental oil corporation for cancelling its operating contract.

International arbitration tribunals can be used to neutralize the rulings of national courts in various ways. Of course, in capitalist countries the “common good” of the bourgeoisie is the highest legal principle, which is why it is illusory to imagine that the legal system can be neutral, fair or independent. But even so, big business has now found it necessary to override this bourgeois democratic instrument, presumably due to increased competition among multinationals and their countries of origin. ISDS arbitration de facto undermines the normal criteria of bourgeois justice. For example, there is no provision for appealing a tribunal’s decision, and the appointment of arbitrators is haphazard.

We have no illusions in bourgeois courts and judges. But there are many laws in capitalist countries that directly result from earlier struggles of the workers’ movement. For example, statutory sick pay in Germany was won in a 1956 strike that lasted 114 days, longer than any other for half a century. We must defend such historic gains of the labor movement.

A current example in Egypt shows that investor protection is not only aimed at overriding bourgeois democracy but also represents a direct attack on concessions to the working class. Veolia, a French corporation, is seeking damages from Egypt because the government attempted to link wages to inflation which damaged Veolia’s profits and led to the cancellation of a waste disposal contract.

11 October 2014 – protests by the friends of ‘smart capitalism’

The European day of action against the TTIP on 11 October 2014 exposed the reformist notions of those who uphold the “good capitalism” of the petty bourgeoisie against the “evil capitalism” of the transnational corporations.

Many of the specific criticisms of the TTIP made by Attac and other endorsers of the 11 October 2014 protest are valid. However, in the final analysis their objective is simply to create a nicer sort of capitalism:

“We call for a fundamental change in trade policy. The economy has to serve people, and not vice versa! Human rights, democracy and the environment must be put first instead of corporate profits. On October 11th we are going to protest together against the sell-off of our public property, democratic achievements, social and environmental standards!”
—www.attac-netzwerk.de

Capitalism serves the interests of capital. Human rights, democracy and environmental protection, as well as the quality of life of the international working class and those excluded from the labor market, depend on international class struggle, not on moral appeals against such things as free trade agreements. In lamenting the difficulties faced by small and medium-sized businesses under the TTIP, Attac fails to recognize that global competition is an essential element of capitalism or acknowledge that sheltering national economies from multinationals means protectionism. Free trade and protectionism are simply the two sides of the same capitalist coin.

A cause célèbre among anti-TTIP campaigners is the use of chlorine in chicken processing. In the U.S. slaughtered chickens are dipped briefly into a chlorine bath in order to kill germs. The European Union allocates E-numbers to authorized food additives, and chlorine dioxide is designated E926. Until 1957 it was approved in the Federal Republic of Germany for bleaching flour. It has also been used in the treatment of poultry, meat, fish, fruit and vegetables and the disinfection of drinking water. In 2008 the possibility of its use with poultry was discussed at EU level but was rejected by the Council of Ministers. In 2009 the United States brought a complaint over this before the Dispute Settlement Body of the World Trade Organization.

But the EU has its own skeletons in regard to the environment. Europe’s biosphere is being damaged by capitalist commodity production; its air, water and soil are being contaminated by pollutants. Current environmental standards have not removed harmful substances such as dioxin-like PCBs (polychlorinated biphenyls) in foods, nor have they avoided contaminated eggs nor prevented the introduction of cattle infected by BSE (bovine spongiform encephalopathy). The idea that all U.S. standards are below those of the EU is an increasingly common amalgam of anti-Americanism with illusions in the EU. The regular operation of capitalism – whether in the EU or the U.S. – seeks to maximize profits regardless of the dangers to people or the environment.

DGB and SPD – a comprehensive betrayal

Some elements of the SPD (Social Democratic Party of Germany) have raised criticisms of the TTIP in similar terms to those of the October 2014 protests. To head off this criticism, DGB (German Trade Union Confederation) chair Reiner Hoffmann and SPD leader Sigmar Gabriel put out a joint statement in support of the TTIP:

“Trade talks between the two major economic areas, the USA and EU, which are paving the way for a free trade agreement, provide an opportunity to intensify bilateral trade relations and at the same time to make them fairer and more sustainable. The agreement could also help to promote fair and sustainable trade rules globally and set standards. The point is to enable more prosperity to actually reach broad sections of the population, improve economic, social and environmental standards, and create fair competition and good working conditions.”
—Reiner Hoffmann and Sigmar Gabriel, “Transatlantic Trade and Investment Partnership (TTIP): demands in relation to the free trade talks between the EU and the US with reference to sustainability, workers’ rights and the provision of public services”

The idea that the TTIP could bring “prosperity” to the working masses is about as realistic as the existence of Santa Claus. Workers’ conditions will continue to fall if the capitalist wish list contained in the TTIP is implemented. Concessions won through collective bargaining could be challenged by arbitration tribunals on the grounds that wage increases or other gains could reduce company profits. It is hardly surprising that DGB leaders are only proposing a few petty changes to the TTIP and have abandoned their earlier posture of flat rejection of the whole project. The union leaders feign resistance and put forward a few criticisms only to maintain the support of the rank and file.

It is only logical, in a system where the profit motive is paramount, that appeals for justice fall on deaf ears. A serious critique of the TTIP must go beyond particular manifestations of capitalist irrationality and instead encompass a comprehensive rejection of the entire system of exploitation and a determination to fight the capitalist system as a whole.