In recent history, only nation states had the attribute of
sovereignty, the power to govern a defined area, to make laws and exercise
force in defence of perceived interests. Now what is called “corporate sovereignty” is assuming a
superior position in the political hierarchy.
A little-discussed concept on this side of the Atlantic, it
first saw the light in the North American Free Trade Agreement (NAFTA) between
the United States, Mexico and Canada which came into effect in 1994. Under
NAFTA, corporations were given some political powers to challenge national laws that, according to them,
infringed the agreement.
Now the Obama administration is pushing for a view of
corporate sovereignty that is so broad that its implementation would make
national governments totally subordinate to the demands of the 100 powerful
transnational enterprises who dominate global trade.
American officials are insisting on the incorporation of
corporate sovereignty into two trade treaties currently under negotiation – the
Trans-Pacific
Partnership (TPP) and the Transatlantic Trade and Investment Partnership
(TTIP), currently being negotiated in secret between the US and the European Commission.
The latter is also known as the Transatlantic Free Trade Agreement (TAFTA).
As we have pointed
out already, under TTIP, harmonisation of EU-US regulations will be
designed to ensure a race to the bottom. America’s refusal to ratify key international
standards and conventions would be replicated in Europe, adding to the
intensity of conditions resulting from the recession.
In order to boost transatlantic trade, TTIP would remove
environmental protection – including the European “precautionary principle”
approach. Recently agreed restrictions on fracking could be overturned.
National encouragement favouring local production would be outlawed. Resistance
to GM foods would be defeated.
Essentially, under TTIP, corporations would be allowed to
sue governments if they felt they were being obstructive. Naturally, the negotiations
don’t actually use the term corporate sovereignty, preferring instead “investor-state
dispute settlement” (ISDS).
The European Commission has put together a "factsheet" that, says Techdirt,
a leading group blog site which reports on economic policy issues, makes a
false equivalence between the right of states to regulate and the need to
protect investors. The factsheet is a long-winded defence of ISDS. Techdirt’s
analysis notes:
“In essence, it's a kind of syllogism: investment is
critically important for the EU economy; investors needs corporate sovereignty
guarantees to protect their investment; so TAFTA/TTIP must contain ISDS to ‘attract
and maintain’ foreign investment – in this case, from the US. The clear
implication is that without corporate sovereignty, US investors will be
reluctant to put their money in Europe, and vice versa.”
Next week in Brussels, an alliance of Belgian citizens,
farmers, NGOs and trade unions have called for a blockade
of the EU summit on December 19 against austerity and the “attempt to give corporations the keys to
Europe” through the new EU-US trade deal. In Westminster, there is a conspiracy
of silence about the further diminishing of parliamentary democracy that is at
stake here.
Green MP Caroline Lucas has published a motion warning
of the dangers from the TTIP. As of today, only 14 of parliament’s 650 MPs had
signed support, and just eight those are from Labour!
Techdirt’s analysis talks of the need to “preserve the
sovereignty of nations, and prevent them becoming the object of multi-billion
dollar lawsuits”, as
is happening currently under other trade agreements like NAFTA, while the Democracy
Centre warns that TTIP will create "a privatised justice system
for global corporations".
However, sovereignty effectively passed from states to
corporations during the capitalist globalisation process that took off in the
late 1980s. A handful of transnational firms control the global economy while
even fewer have the financial system in their grasp. They are more powerful than
governments which is why parliaments do their bidding.They already sue governments around the world.
So we have arrived at a corporatocracy. Representative
government is a toothless tiger, shorn of its bite and subservient to powerful
interests. TTIP will roll on despite protests and we can only stop this
destructive process if we have democratic ownership and control of both the
political and economic systems. Let’s aim to replace corporate sovereignty with
a people’s sovereignty.
Paul Feldman
Communications editor
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