Currently discussions are taking place between the EU and the United States to ‘agree’ a trade treaty (TTIP), along side a similar treaty with Canada (CETA). The issue is that such trade agreements are going too far and making the world a less reasonable and less democratic place. These treaties are not about opening up international trade, they aim to restrict it, though removing control over laws and regulations from the democratic control of people. Laws and regulations are the oil that keeps society running. They are vital to industrial and post-industrial economies.
A pre-industrial economy is largely based on self sufficient communities where almost all goods and services are produced locally by the community for the community. Excess production is then traded with other communities for luxuries. In such a society there is no real need for laws and regulations, the community polices itself, it is essentially an anarchy.
With industrialisation, comes specialisation, a community specialises its production, increasing efficiency and quantity of production, it then trades almost of of its production to fund buying in its other needs. With such a system , laws and regulations are needed as there is no longer a community based based system ensuring standards, rules are required to ensure trade is fair. A community is generally happy with this arrangement as the overall quality of life improves.
Furthermore, it becomes more efficient to standardise, the apply the same regulations and standards across wider economic areas, to include more and more communities. Often the best standards aren’t adopted, but there is nonetheless a net benefit to every participating community. The gain from adopting the standard is greater than the benefit of maintaining a local standard. Such a system works because it is consensual, a community voluntarily gives up some of its local decision making for a net benefit, it accepts and adapts to the new standards. Rules also ensure the environment is protected, that communities have such things as safe water to drink and access to facilities.
The problem with international trade agreements, such as GATT, TTIP and CETA is that communities have no say, no opt out in the standards set by such arrangements. There is no democratic control if changes in rules or standards start to lead to the net detriment of a community. Essentially there is a trust that standards are acceptable to a community. However if an outside body, or the effect of a trade arrangement, changes the standards in a way unacceptable to a community, the community is left in a difficult position. Accept the changes to standards, but resort to local production to maintain the standards the community wants, effectively decreasing the production capacity of the community. Its a step backwards in the world economy. The standards, the regulations, the laws are no longer the oil that keeps society going, but something every individual has waste time and thus productivity finding ways to work around the rules, in effect the standards become worse than having standards in the first place.
Then there is ISDS, a system of international courts where corporations can sue governments if it enacts rules that can be established as being detrimental to access to markets for international corporations. for a government to adapt regulations to suit a changing world, it may have to pay a fine to the corporation, so governments will tend not to change regulations. The result being that the regulations become meaningless.
Historically ISDS clauses were placed in international trade agreements to prevent governments exploiting a foreign companies investment by ceasing assets or changes the terms of an agreement. This justification does not apply to the EU, Canada or the US, which already have domestic court systems to prevent such arbitrary decisions. ISDS in TTIP or CETA can only work against democracy, or the will of people in communities.
For example, food regulations, to a large degree regulations exist to ensure that any food you buy is safe to eat, or has a label to tell you that the product is Kosher, Halal, GM-free, free-range, etc informing you that you can eat such a labelled product. So, if this trust in regulations is lost, people will no longer be happy to buy food (or indeed any product) from all over the world, but individually seek to find producers they can trust locally. Its just a massive retrograde step. It’s creating an anarchy on a global scale, without the benefit of policing by the community of the world.
What is especially worrying is that these problems are well known, especially the lack of democratic accountability, but the political establishment has done nothing to address these concerns. Democracy has to work from the bottom (the people who live in communities) upwards, with law making powers given to the centralised establishment rather than the other way around. rather than be imposed from a centralised establishment, a top-down approach is profoundly undemocratic, it’s essentially the feudal system the world had thought it had seen the last of. All the gains that society has made on the last two centuries will be lost unless these arrangements are halted and power returned to the people, democracy.