Few assumptions go as unquestioned in economic theory than that free trade is beneficial for all involved. Yet civil society has long recognised the problems this assumption gives rise to: environmental degradation and climate change, seen merely as externalities within the mainstream, are threatening our very existence. Human and labour rights violations at the far end of the commodity chain can’t escape our attention in the time of globalised information flows.
It is often assumed that there are no alternatives to free trade, and the proponents of this ideology find it easy to use that to silence critics. Simply disagreeing with something that for those in power seems like a law of science hardly gets you very far, however well-founded that criticism may be.
This is why a document published last year by a wide range of civil society organisations is of such utmost significance: the Alternative Trade Mandate (ATM) maps out an alternative trade policy for the EU.
“We are regularly portrayed as being ‘anti-trade’ and ‘anti everything that gives people a good life’. Which is nonsense of course as we want the vast majority to have a better life. But that means showing that the economy can be run in a different way – it doesn’t have to be about cut-throat competition, sweatshops and a race to the bottom,” says Nick Dearden, director of World Development Movement, one of the member organisations of the Alternative Trade Mandate Alliance. “Trade, for instance, can actually help smaller producers and enhance workers rights and so on. But it needs to be done in a totally different way and the goal is improving people’s lives not improving big business profits.” He reminds, that despite this vision of trade being very far from what we have now, countries like Bolivia and Ecuador are already experimenting with such trade relations.
Principles of the Alternative Trade Mandate
The Alternative Trade Mandate is built on the principles of transparency and democratic participation. It was drafted by nearly 50 civil society organisations around Europe — from farmers groups and trade unions to women’s rights and faith groups — and clearly states that it is not a finished document but rather an invitation to join the debate.
In many ways, the ATM reads like a mirror image of the TTIP (Transatlantic Trade and Investment Partnership) that is currently being negotiated between the EU and the US. The negotiations are held in secret, not even government officials from EU member states are allowed unlimited access to documents and parliamentarians from EU states are not given information of the demands of the US. This is despite the all-encompassing nature of TTIP: if realised, it would affect every aspect of life from health and education to food and intellectual property rights and open new sectors to competition.
No wonder then that an increasing opposition describes the free trade agreement as the corporate takeover of democracy: as John Hilary, director of the NGO War on Want, explains in a briefing by Rosa Luxemburg Stiftung: “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.”
In contrast, the alternative vision for trade seeks to elevate human rights as well as labour, women’s and indigenous rights above corporate interests and wants European trade policy to respect the rights of countries and regions to develop local and regional over global trade — significant not only on EU level but even more so for developing countries that for decades have suffered deindustrialisation as result of international pressures to rely on exports of commodities of little added value. Indeed, the ATM also explicitly calls for fair distribution of income within global value chains. It also demands certain sectors to be excluded from trade negotiations, be they public goods such as health, water and education or the financial industry.
Policy recommendations: Food and climate
The Alternative Trade Mandate is, however, not only a set of noble principles. The greatest achievement of the document is that it offers concrete policy recommendations on issues such as food production, raw materials, the financial industry, sharing the burden of climate change, protecting public services and using public procurement as a tool for social promotion.
One of the key concerns of the #noTTIP campaign is that the trade agreement would erode European regulations for food safety to boost the market for US products. This could lead to the spread of GMO products to Europe as well as enable currently banned or restricted imports such as beef produced with growth hormones or poultry treated with chlorine.
Currently the difference between EU and US regulations on food and chemical safety is the ‘precautionary principle’. In Europe the public is protected from suspected harm and the burden of proof lays with the producer of a substance, whereas in the US new chemicals and production processes can be rolled out until a regulator proves them harmful. While the TTIP seeks to remove these kind of ‘barriers’ in the name of regulatory convergence, the ATM puts this principle at the heart of trade policy.
But it also questions our trading system’s entire approach to food and views it as a right, not a commodity: the idea behind the alternative vision for trade is that of food sovereignty, the right of communities to determine their own food systems.
Rather than distorting prices and forcing trading partners to reduce tariffs through free trade rules, the EU should support developing countries protecting their markets from cheap imports. It should also become more self-sufficient in protein and oil crops and eliminate imports of biofuels, among other things; furthermore, all environmental, social and animal welfare costs should be reflected in consumer prices.
Another crisis that the Alternative Trade Mandate seeks to tackle through lessening the reliance on corporate solutions is climate change. It recognises international trade and investment agreements as “a driving force behind the growth of energy-intensive industrial sectors and the expansion of intensive agriculture”, especially biofuels. Instead, the EU needs to increase investment in green technologies and change the intellectual property rights framework that currently prevents the spread of low-carbon technologies to poorer countries. The ATM also calls for binding and more stringent energy saving targets and the dismantling of the Emissions Trading Scheme. Again, this stands in stark contrast to the TTIP that would prevent the EU from meeting its current carbon reduction targets.
Jobs, labour rights and human rights
The European Commission has confirmed in an Impact Assessment Report (March 2013) that the TTIP is likely to bring “prolonged and substantial” dislocation to European workers as companies would source goods and services from the US where labour standards are lower. In addition to job losses, there are concerns that labour standards such as collective agreements would be harmonised with the US.
The Alternative Trade Mandate Alliance’s vision is completely the opposite. More than just protecting existing jobs in Europe, it supports the “globalisation of decent work”: guaranteeing that European corporations enable collective organising and protect labour rights in all countries they do business in. It also wants to give the EU power to hold corporations legally accountable for the consequences of their operations, be they wherever. This is necessary to stop the current race to the bottom on labour rights that puts “workers virtually everywhere in competition with each other”. In practice, it would force European companies to compensate for tragedies such as factory collapses and oil and chemical spills they now largely get away with.
States’ responsibilities on their borders would also change drastically under the policy proposed by the ATM: it demands the EU to “reinforce customs’ services so as to effectively track and seize goods made by child and forced labour”, whereas to “guarantee the free movement of persons and the application of working and contractual conditions of the destination countries, if more favourable than those of origin.”
Where could an alternative approach to trade take us?
The idea that trade could be about the exchange of goods and promoting development goals rather than the thrive for corporate profits is, sadly, a radical one. In addition to being important for the sake of climate and human rights, an alternative vision for trade could serve as a stepping stone to a more radical overhaul of our economic system. Could it lead to an economic system that more broadly was driven by social justice and wellbeing for the many rather than profits for the few?
“Trade is one aspect of the bigger picture and we need to use the economy as a tool to giving people power over their lives and societies. Trade can do this by, for instance, promoting the interests of small producers and creating regional networks to allow them to wean themselves free of dependence on big business and Northern markets. But it’s absolutely vital to say that trade isn’t always the answer. Communities, countries, regions, need to develop economic systems which meet their own needs as a priority, and which do that in as democratic and equal a way as is possible, respecting the earth’s limits,” Nick Dearden says.
The ATM clearly fits with other ideas that have become popular among social movements in Europe such as reclaiming the commons or co-operatives. Although it does not mention these, it advocates for de-commodification of public goods and greater democratic participation in economic decision-making, which can be seen as stepping stones to more profound restructuring of ownership and production. The focus on distribution rather than profits could also easily fit with the de-growth paradigm that puts sufficiency ahead of efficiency.
Dearden, too, sees more just trade rather as part of the solution than an end goal: “When building a better economy, you can never look at trade as the answer. And to get to this place you need to do a load of other stuff too: take public control of the financial sector and de-financialise the global economy, break the stranglehold of big business on all manner of basic resources from food to energy, democratise public control of these things, implement an immediate transition to a low carbon economy… It’s a massive agenda. But the problems we face are bigger still, so we have no choice.”
The greatest achievement of the Alternative Trade Mandate is undoubtedly that it shows it is possible to start that transition.