Academic warns of a ‘furnace of ultra-neoliberal free trade deals’ after Brexit

This is part 1 of a 2 part interview with political analyst Tim Coles. Part 2 focuses on post-Brexit threats faced by the NHS.

The UK looks set to crash out of the EU without a deal in October, threatening to open the economy up to a form of disaster capitalism that could make Margaret Thatcher look like a socialist.

At this point in time, it’s crucial that the public can see through the smoke and mirrors surrounding international trade deals – deals that tend to harm the public while benefiting big corporations. So The Canary spoke with political analyst Tim Coles about his recent book Privatized Planet: Free Trade as a Weapon Against Democracy, Healthcare and the Environment. In the book, Coles explains the harsh reality behind seemingly harmless ‘free trade agreements’ (FTAs), and discusses Brexit in its historical context.

How free is free trade?

The notion of free trade, on the face of it, sounds fairly harmless. Since the momentous Battle of Seattle in 1999, however, an international push-back has raged against FTAs; the anti-globalisation movement has been a constant thorn in the side of their proponents.

The Canary asked Coles who tends to benefit most from FTAs, and who loses the most. He responded:

First of all, we should remember that ‘free trade’ is a propaganda term. Often the texts of ‘free trade’ deals consist of articles designed to privilege foreign (mainly US) corporations over domestic ones (‘national treatment’), to privatize public services under the pretext that public ownership is a hindrance to corporate competition, and allow for arbitration, meaning that corporations can sue governments (‘investor-state dispute settlements’).

Not much is ‘free’ in these arrangements. Notice also that my summary says little about trade; such deals are more concerned with investor-rights protections and undermining international labour and health and safety laws.

He continued by speaking about transparency, and the dubious legality of holding trade “discussions” before the UK has formally left the EU:

We should remember who drafts and implements ‘free trade’ arrangements and for what purpose. Consider the current US-UK deal being negotiated in secret. I filed a Freedom of Information request a couple of years ago to find out what, precisely, was being negotiated by then-trade secretary Liam Fox. I was told, correctly, that under EU law the UK is not allowed to negotiate such deals until it has officially left the EU. End of story. Now, however, Boris Johnson’s negotiators are ‘in discussion’ with Team Trump regarding an FTA. They appear to be breaking the law. Where’s the line between discussion and negotiation?

While FTAs benefit corporations, Coles continued, “the biggest loser is society at large”:

these misleadingly-named investor-rights arrangements, negotiated in secret, apparently in violation of international law, profit the CEOs and shareholders of transnational, often US-based, corporations.

The biggest loser is society at large, including workers who risk lower pay and compromised health and safety, governments who have the threat of corporate lawsuits hanging over them, and the environment which suffers from corporate plunder. They also feed far-right narratives: that ‘globalists’ and ‘immigrants’ are ruining our lives.

Neocolonial instruments

In Privatized Planet, Coles explains how trade deals are often used to advance the ‘national interest’ of powerful countries at the expense of economically weaker states. The Canary asked to what extent post-colonial powers – like the US or the UK – have used trade deals to prolong unequal patterns of economic relations. Coles continued:

I think the underlying assumption is correct: that these are neocolonial instruments. Many of the peoples of so-called ‘third world’ countries are abused by such arrangements and consider them to be neocolonial. After the Second World War, the US, with help from Britain, established the Bretton Woods system of regulated capital. The US dollar was, and remains, the global reserve currency, giving the US Treasury and private banks unparalleled advantage over the rest of the world.

Coles referred to India, which is already suffering severe climate-breakdown-related droughts and possible future famine:

With regards to Britain, a clear case is India’s gradual drive from a state-capitalist, post-colonial economy to a more neoliberal one, or ‘shining India’ as it was called by champions of big business… This was done, in part, via the UK’s Department for International Development, which is sold to the British public as an ‘aid’ agency.

Over the last couple of decades, India has dropped some of its state protections and accepted international capital investment, hence the mass-opening of call-centres and giant US tech firms. Keeping in mind that a quarter of India’s population goes hungry—about 250 million malnourished people—WTO rules make it ‘unlawful’ for India to save food in preparation for famine, as this supposedly creates artificial food-price inflation, which the WTO regards as unfair competition.

That’s just one example. Others include the fact that FTAs allow for giant corporations to protect their intellectual property rights for, say, antiviral drugs… A few years back, the British media made a big fuss about ‘Somali pirates’, but these international systems institutionalise and rationalise the mass-piracy of the ‘third world’.

Drawing a line from the EU to Brexit

The EU and Brexit, Coles argues in the book, are two sides of an “elite driven” coin. The EU is elite-driven “liberal internationalism”, while Brexit is “conservative nationalism”.

The Canary asked to what degree the neoliberal character of the EU created the economic conditions that led to Brexit and the re-emergence of nationalism across Europe. He responded:

The effects of ‘liberal internationalism’ and ‘conservative nationalism’ are largely the same for working people, and for the obvious reason that both are driven by concentrated, private interests. They are both concerned with maximising corporate profit. The debate among factions of the ruling classes concerns how best to achieve that end. Brexit is the perfect example.

The modern European Union (post-Maastricht 1992) was founded as a neoliberal project… [but] the people behind Brexit are ultra-neoliberals. They want to rip up the EU’s meagre financial services regulations, which were imposed after the crash of 2008, and go full-steam ahead with financial services-based ‘free trade’ deals.

Looking forward

Caught between a neoliberal rock and a hard place, Coles continued by proposing international workers’ solidarity as a solution:

The solution is cross-border workers’ solidarity and a push to democratise the EU, not to close borders and erect barriers to genuine trade. For a while, this seemed possible with leftish parties coming to power in Greece, Spain and potentially the UK under Corbyn. Syriza’s selling out of Greece to the US-led International Monetary Fund only gave succour to the hard-right narratives. In essence, Brexit is like jumping out of the frying pan of a neoliberal EU into the furnace of ultra-neoliberal ‘free trade’ deals.

The people who understand this, like Nigel Farage (the alleged ‘conservative nationalists’) are skilled at manipulating significant numbers of working-class people who, quite rightly, feel undermined by the EU and its ‘liberal internationalist’ supporters. The hard- and far-right parties do not attack international capitalism, which is the real root-cause of workers’ misery. They and their followers are happy to blame the most vulnerable elements of society, who are themselves also victims of neoliberalism.

To distort a popular saying, it seems international capital got halfway around the world before international labour had a chance to get its shoes on. And if workers are to buy Farage’s chauvinistic nationalism, the labour movement may not get moving at all. In this sense, Coles’ new book is important reading for anyone interested in arresting the onward march to unfettered global capitalism.

Featured image via YouTube – Sky News