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Friday, June 27, 2014

The Great Transatlantic Market

Three weeks ago, as I was boarding a plane home from France, I bought Le Monde diplomatique, a weekly digest of extensive commentaries on world events put out by France's leading newspaper.  Most of the issue, as it turned out, was devoted to something I had never heard of called the Great Transatlantic Market.  I read nearly all of it.  I was stunned, not only by what I read, but by how little I knew about it--essentially, nothing. According to Uncle Google, the New York Times has run only one story about it, and that was a year ago.

The Great Transatlantic Market is a sweeping trade agreement being negotiated among the European Union, the United States, and Canada.  It represents another step forward for neoliberalism, apparently, designed to remove existing barriers to the flow of both goods and capital across the North Atlantic.  Like NAFTA and other similar agreements, it will be embodied in a treaty.  Although many people do not realize it, treaties, duly signed and ratified, trump laws passed by national legislatures. That presumably is why the Founding Fathers demanded that they be ratified by two-thirds of the Senate.  This one, if it comes to fruition, will have an impact comparable to the New Deal--but in a reverse direction.

Essentially, it seems, the projected treaty would take away most governmental power to regulate wages, hours, and the operation of financial institutions.  It would make it difficult to ban the importation of products deemed hazardous, or even to impose new environmental regulations.  And indeed, Le Monde informed me, treaties already exist among various countries that allow corporations to claim hundreds of millions of dollars or euros in damages if national regulations can be shown to have cut into their profits.  These claims are settled by arbitrators, not by ordinary courts.  In short, the GTM threatens to impose something like the regime that the US Supreme Court established 120 years ago in the United States, a paradise for free enterprise which no one has any standing to challenge.   It has been endorsed by President Obama, but no one in the United States seems to be paying the slightest attention.  Among other things, it would in effect roll back most of the regulation of the big banks that has been passed since the 2008 crisis. (An English version of one of the key articles can be read here.)

Let's return for a moment to Strauss and Howe, who argued that every eighty years, a generational shift leads to a fundamental change in national and world order.  In our current case, the shift was from the GI Hero generation (Presidents Kennedy through Bush I, although Carter is arguably a *Silent), to Boomers (Bill Clinton, who gave neoliberal international economic policies their first big push, and George W. Bush.)  The creation of our new order has accelerated since 2000, when Bush managed to prevent a recount in Florida and steal the election.  He continued the deregulation of our economy, destroyed the tax base of the federal government, vastly increased our defense and intelligence establishment, and involved us in endless wars in farflung nations.  Barack Obama has done nothing to reverse any of this. Like the decline of the power of the federal government after 1876, it's a bipartisan project, with similar consequences.

This appears to be another huge step in the same direction.  To be sure, in no major country on earth, that I know of, has the political system put up much of a struggle against increasing inequality and the increasing power of financial institutions.  But this treaty, if consummated, will drastically limit the power of national governments for a long time to come and leave the peoples of the world quite defenseless against corporate power.  France, at least, still has a leading newspaper that will devote eight full pages of fine print to these issues. The United States does not.  The general decline of newspapers, the rise of cable news, and the popularity of opinion-based internet sites has reached a point where nearly all Americans are completely ignorant about major political and economic questions.

The American people, polls show, have grown astonishingly skeptical about foreign intervention.  This is not a bad thing.  Events in Iraq, upon which I shall eventually comment, illustrate how hard it is for us to use American power to do anything but harm.  But powerful interests are very attuned to our relations with other economic powers, and how they can be used to shape our economic future.  This began, at the latest, with NAFTA, and this is merely the next step.  It will be interesting to see how it goes.


CrocodileChuck said...

You read the proposed trade agreement correctly.

The Atlantic version is a clone of its Pacific stablemate, currently at an impasse in a number of asian countries whose memory of the '97 Financial Crisis is recent enough to question dozens of its sweeping blows to national sovereignty.

The author evinces a realisation that there are no substantive differences between the USA's two political parties, particularly as regards prosecuting the neoliberal economics project to insane & grotesque ends.

Welcome to the club.

Bozon said...

Great observations.

"Essentially, it seems, the projected treaty would take away most governmental power to regulate wages, hours, and the operation of financial institutions. It would make it difficult to ban the importation of products deemed hazardous, or even to impose new environmental regulations."

This part, it seems to me has already been mostly made a fait accompli by our trading and financial globalization since about 1930. It sort of started during and after WWI, which was just 100 year commemorated, by Wilsonian initiatives.

We had had large trading and financial transnational interests, mostly Western, before that time, but they were held in somewhat better check by existing Western political institutions.

Faux, who is a globalist socialist I believe, has called the American bipartisan establishment, and its globalist CEO counterparts, the Party of Davos.

All the best

DAngler said...

Recent rulings by SCOTUS make it clear that now all three branches of U.S. government are firmly in the hands of neoliberals.

We have no real news media. They too belong to big business.

The Internet was the last big hope, and it is coming under the control of big business too. Something like 97 percent of the commentary to the FCC favors net neutrality, and the commentary has been so prolific their websites have had trouble handling it. Nonetheless, the FCC is proceeding as fast as it can towards tiered rates -- which will effectively throttle the voices of anyone other than the largest businesses.

To put it succinctly, the marriage between big business and American government is complete. We feared Communism, but it is Fascism that has taken us.

tructor man said...

Why is it that we haven't heard about this from the USW, UAW, IBEW, not to mention the many liberal enviro-ecology groups? Were is Elizabeth Warren, Hillary Clinton, or other contenders on this?
Is it over for the United States and the vision of our forefathers?

Energyflow said...

Why a new trade agreement? The USA is doing the same thing in the pacific and with EU simultaneously. GATT isn’t enough. They want to tie their military post WWII allies closer to them. Particularly EU countries threaten to form a separate and independent bloc with its own military and foreign policy and reserve currency. The USA has to undermine this by controlling its trade and other laws which are formed in Brussels. They are also trying simultaneously to undermine the growing economic cooperation of EU with Russia. USA is showing a sort of massive jealousy and possessiveness. They don’t want EU to become independent or to turn away to other partners, Japan and Korea either to China and the ASEAN peoples.

Free trade serves a legitimate purpose certainly for some companies who are tightly woven with each other like certain automobile companies, to reduce costs. On the other hand it is a Trojan horse to dilute cultural protection and to destroy jobs. For example the Chinese subsidize and protect their market and then export solar cheap. The First World clothing manufacture died because of cheap Chinese labor costs. In Europe the common market and the Euro set up a serious discrepancy in Europe. The southern countries went bankrupt as they were not fiscally strict or as productive as the northern countries so that low interest rates led to massive bubbles.
The free trade zones with USA create a larger distortion. If EU has to support pensioners and pay unemployment benefits and health care costs through taxes and the USA has different costs or an overbloated Military then free trade is ignoring basic differences. For example all the factories in USA land where unions have no say, in the South, with NAFTA in Mexico, etc. Health care costs and tax differences are exploited in the EU. Delaware is an example in the USA and Ireland in Europe.

Mourned_Cause said...

Wanted to share this;


Eventually, I really do think the collapse of Authority will lead to an apocalypse from "many causes," as individual risks accumulate into societal collapse.

I do think Humanity will survive, and reconstitute itself, but still...this is just...awful.

Jim Rush said...

Professor Kaiser:

I am really interested in the subject but am amazed at the almost complete lack of written information available.

Can you suggest any other keywords or sources we can use to research this?


Jim Rush

Simple Mind said...

"the revolving door payoffs for the members of the US Trade Representative’s office must be really juicy for them to be so eager to engage in treason"

See http://tinyurl.com/mea7tox