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No Ordinary Deal

March 21st, 2012

Max Weber once described politics as the slow boring of hard boards, and this is an apt description of the continuing efforts of the advocates of a globalised capitalism to grind down all the obstacles that might be posed by democratic government.

The dominance of global capital has been greatly enhanced by trade agreements such as those establishing the World Trade Organization. But, over time, the WTO has been less and less able to avoid public scrutiny and popular resistance. Moreover, it has an unfortunate tendency to stick to the rules even when US business doesn’t like the outcome. So, we’ve seen a steady shift to bilateral deals, in which the US can dictate the terms.

The Free Trade Agreement with Australia was one example. But, as the case of the AUS FTA showed, things don’t always work perfectly. The US pharmaceutical industry, which had hoped to destroy Australia’s pharmaceutial benefit scheme (PBS), made only marginal progress, and attempts to encode the content of the failed Multilateral Agreement on Investment

The “Trans-Pacific Partnership” now being negotiated between the US and a number of countries on the Pacific Rim represents something of a pivot. From the US viewpoint, the basic idea is to combine all the bilateral agreements on a “levelling up” basis, wiping out all the concessions made in individual deals.

Surprisingly, the Australian government is showing some resistance to  US attempts to bypass Australian courts in favor of investor-friendly arbitration. I contributed to a book on all this, called No Ordinary Deal. I’m not sure if it’s available outside Australia (previous link) and NZ  but it’s well worth reading if you can get it.

My main point was that the political climate is at least as important as the legal text – the retreat of the WTO from its anti-environmental stance of the 1990s (exemplified by its equivocal endorsement of the legality of border tax adjustments in the context of carbon pricing) is one example, as is the case of the PBS in Australia

 

Posted via email from John’s posterous

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  1. paul walter
    March 21st, 2012 at 15:27 | #1

    The instance mentioned in the Age seems the commercial equivalent to the situation with the US soldier who massacred sixteen people in Afghanistan, the other week.
    If an Afghani had tried something similar in the US, he wouldn’t have returned home to face trial before a Taliban court, but the US soldier is removed for the scene and the victims of his crime to the US. No doubt he will end up doing soft time in an US army operated mental institution, while the loose screws are tightened up, but little substantial help will go to grieving families of the people, mostly kids, he killed.
    Right at the end of the thread starter, Prof Quiggin draws attention to improved concern for environmental factors. The example of LYNAS’s rare earths processing plant, shifted to heavily populated Malaysia, away from the source of the rare earths in WA out in the desert, which you would have thought was also a good place for processing of minerals and storage of toxic waste, comes to mind.
    Was the apparently slip-shod, gerry-built plant in Malaysia built only to duck health and safety issues that would require a relatively small financial remedy here?
    If the US drugs manufactures are imbued with the same mentality, it would be likely they are concerned about removing higher standards elsewhere, as was pointed out back half a dozen years ago as to AUSFTA and the problem Australia’s better health system posed, by example, for them as to their rigging of the market at home.
    So they haul a local health service up before an arguably biased or even bought-off Clarence Thomas type court and get it turned into an industry where profit for alien influences supercedes the right of a community to establish effective health care, as money needed for the system is also siphoned off by rent seekers posing as pharmaceuticals developers?

  2. Freelander
    March 21st, 2012 at 16:01 | #2

    Background on the guy is that he was no angel. He had a $1.5 million judgement against him for fraudulent activities while a stockbroker, had assaulted someone and been made to go on an anger management course. In the US he is being portrayed as a good man who simply cracked, but bad behaviour and anger problems, pre-dated his military service. If he had killed sixteen in the US the media story would have been different, but it wasn’t in the US, and they weren’t US citizens so I guess it was just fine. Some Afghani witnesses are saying it wasn’t just one person. Don’t hold your breath for a proper investigation.

    Just another “No ordinary deal” for a citizen of the ‘exceptional’ country. Exceptional justice for a citizen of the exceptional empire.

  3. Chris Warren
    March 22nd, 2012 at 06:53 | #3

    Globalised capitalism and free trade are complex emotional issues. The United States is using APEC to secure its economic ‘lebensraum’ given that:

    The huge and growing markets of the Asia-Pacific already are key destinations for U.S. manufactured goods, agricultural products, and services suppliers

    Plundering the rest of the world is the only way American capitalism can maintain its (remnant) stability, and the real aim for this Trans Pacific Partnership is headlined as:

    INCREASING AMERICAN EXPORTS, SUPPORTING AMERICAN JOBS

    The bottom line is that there is a vast difference between free-trade theory and fair-trade practice. British and American wealth has almost entirely been based on savage unfair trade with Australia being dragged-up in the economic slipstream.

    Australia is probably hoping that if we assist the United States our economy will benefit.

    US statement is here: http://www.whitehouse.gov/the-press-office/2011/11/12/fact-sheet-united-states-trans-pacific-partnership

  4. Troy Prideaux
    March 22nd, 2012 at 08:29 | #4

    @Chris Warren
    The Australian proponents of the US-Au FTA signed back in 04 were questioned a few years ago about the clear imbalance of trade flows and the alarming rates of such that resulted after the deal was signed. The best response they could muster up was “well, we realize the numbers don’t look pretty, but we really need to wait 10 years for the virtues of the deal to be fully realized” (to paraphrase).
    Well, we’re not far away from that 10 years and from what I’ve seen, the holistic numbers aren’t showing signs of their tea leaf cosmic prophecies transforming in to anything other than more macroeconomic rationalistic fertilizer that again, disadvantages Australia.

  5. Rob
    March 22nd, 2012 at 10:25 | #5

    Somewhat related: I recently saw the film “Rip: A Remix Manifesto” which was excellent. It touches upon the US moving away from manufacture of physicals toward IP, and the enforcement of IP laws through FTAs such as AUSFTA (and how that’s not working out so well).

    Check it out:
    http://ripremix.com/

  6. J-D
    March 22nd, 2012 at 10:44 | #6

    It looks as if the end of the last sentence of the third paragraph has got lost in transmission.

  7. may
    March 22nd, 2012 at 13:05 | #7

    not really on topic but a bit strange.

    yesterday i tried to reach your site from a public library and found the site was blocked.

    any idea why?

  8. Troy Prideaux
    March 22nd, 2012 at 15:01 | #8
  9. Freelander
    March 22nd, 2012 at 19:13 | #9

    An interesting thing about site blocking software is that some of the makers/providers of such software like to add there own blocks for political or religious reasons. When I worked for a government entity,the nanny software they purchased liked to block another government entity, the Human Rights Commission. Good reason to not let the censors get a foot in the door.

  10. Ikonoclast
    March 23rd, 2012 at 06:53 | #10

    @Freelander

    Of course capitalism wants to block human rights. That’s how it works. The first right it blocks is the worker’s right of access to the whole value of his/her own labour.

  11. Freelander
    March 23rd, 2012 at 07:25 | #11

    Those benefiting most from capitalism are not the only ones with a strong urge to censor, or with undisguised contempt for the.very. concept of human rights, sadly.

  12. Graeme Bird
    March 30th, 2012 at 15:04 | #12

    It has to be grudgingly admitted that these alleged “free trade deals” have had much success in alleviating poverty in places like India and China. But as each year passes we see where these pacts are headed. Just as the anti-democractic EU was spawned by an alleged “free trade deal” we see that this is really a power grab by the moneyed interests that hide behind government. These are cronytown deals.

    A good country, whose policies inspire a high savings rate, and who can thereby more or less guarantee trade surpluses, should extend unilateral free trade, out of a sense of goodwill. But these government-to-government crony-sponsored deals are an attack on our sovereignty, and something that we must learn to get by without.

  13. Alan
    March 30th, 2012 at 17:50 | #13

    @Ikonoklast

    Can you be seriously suggesting governments of your ideological tradition have an enviable human rights record?

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