October 2016        

Weaponising trade

Eoghan M. Ó Néill

Trade, we are told, is the antidote to war; and “free trade” will prevent wars and allow for civilised human interaction between states.
     Or so goes the myth. But the history of trade has not been one of civilised human interaction and exchange, as we have been led to believe. Rather than being free, trade has a history of violence and threats. The plunder of the Americas (which provided the resources for kick-starting the Industrial Revolution), the rape of Africa, the notorious East India Company and the gunboat diplomacy in the far east all attest to the barbaric history of imperialist trade.
     In modern times the imperialist core continues to use trade as a weapon for coercing other nations. The World Trade Organisation, the IMF, the World Bank etc. have all played their role in ensuring that the not-so-free trade is conducted to the benefit of the imperialist core. In recent years we have seen the iron fist of the EU Commission, the EU Central Bank and the IMF fall on peripheral states such as Greece, Ireland, Italy and Portugal, forcing them to toe the neo-liberal line.
     The current suite of trade agreements—TTIP, CETA, TTP, and TISA—have less to do with trade than with cementing and expanding imperialist hegemony while opening up new markets to imperialist penetration. In doing so they are not only backed up with the military power of the imperialist centre, especially the United States, but are themselves being used as weapons in the imperialist geopolitical game.
     President Obama’s principal adviser and spokesperson on international trade and investment, Michael Froman, has stated that “by leading on trade, we can promote a global order that reflects both our interests and our values.” In that one sentence he sums up the real purpose of trade in the twenty-first century.
     While we are encouraged to view trade from a micro-economic viewpoint, concentrating on the specifics of the benefits that it promises for our economy, such as trade balances, strong GDP, jobs, etc., rarely are we encouraged to view it through the wider macro-economic lens, which presents a less idyllic picture. Never are we invited to consider the geopolitical vista and its implications, often expressed in savagery and barbarism.
     All the current trade agreements are part of a suite of geopolitical manoeuvres designed as much to counter any threat to the imperialist core as they are to promote its hegemony.

TTIP and CETA

TTIP and CETA are proposed trade agreements between the United States and the EU (TTIP) and between Canada and the EU (CETA). The negative economic effects of these proposed agreements, particularly the negative impact on workers, have been discussed in earlier articles. While it is correct to concentrate on these negative effects it is also important to understand the geopolitical agenda that is behind them.
     TTIP and CETA did not arrive out of the blue. They have been lobbied for by transnational corporations and negotiated not by national governments but between EU autocrats and the US government and Canadian government, respectively. As with the other trade agreements, TISA and TTP, they are designed to promote imperialist hegemony over national economies, to attack workers’ rights, and to counter the threat to the core imperialist states from emerging powers such as the BRICS countries.
     TTIP and CETA are specifically designed to counter the advance of Russia, which has put forward the idea of a Eurasian trade zone, stretching from Shanghai to Lisbon. Though capitalist in nature, the Eurasian trade zone still threatens the imperialist core, on two grounds.
     Firstly, it has the potential of creating a new power centre that could challenge the imperialist core of North America, the EU, and Japan. Secondly, it challenges the neo-liberal orthodoxy by presenting a Keynesian economic approach, which would threaten the neo-liberal mantra of “There is no alternative,” even within the capitalist fold.
     Setting aside the difficulties and contradictions that the Eurasian trade zone and reheated Keynesianism have, it is important to recognise that this and the attempt by China to develop similar zones in the east, and China’s ambition for a “Silk Roads” arrangement with Europe, alongside the development of the BRICS economies, pose a threat to the imperialist core.
     The United States also has more prosaic reasons for using TTIP to thwart Russian economic development: energy markets. At present Russia supplies Europe with the bulk of its oil and gas needs. More than 90 per cent of Russian gas exports and 80 per cent of its oil exports go to Europe. The United States would like to replace a huge chunk of those sales with American shale gas, and to establish American fracking corporations in Europe, to exploit European resources. TTIP and CETA are the vehicles that will deliver that.
     It is for these reasons that the United States and the EU have directly involved themselves in Ukraine. In 2015, giving a lecture in the Harvard Kennedy School, the EU commissioner for trade, Karel De Gucht, stated that in his opinion “Putin’s dream of a Eurasia Economic Union is partly at the origin of the Ukraine crisis.” The previously elected government of Ukraine had rebuffed overtures by the EU and seemed to be edging towards the Russian Eurasian trade zone. Given the size and location of the Ukrainian economy, this would have been a major setback to the imperialist core. Furthermore, the main energy pipelines from Russia to Europe run through Ukraine.
     In 2013 the US assistant secretary of state for European and Eurasian affairs, Victoria Nuland, stated that the United States had given €5 billion to the Ukrainian opposition, thereby financing the overthrow of the elected government and its replacement with a pro-western neo-liberal government that is keen to do the bidding of the United States and the EU.
     They continue to give military support to Ukraine. In 2015 the United States launched a 1,100-mile military convoy through eastern Europe, intended as an undisguised threat to Russia.
     TTIP has been described by the US ambassador to the EU, Anthony Gardner, as the economic equivalent of NATO, a view that was echoed by Hillary Clinton until she decided she didn’t like TTIP any more. No wonder the Russians are worried. Gardner has gone on to say that “there are geostrategic reasons to get this deal done, and every day I am reminded of the global context of why we are negotiating TTIP.”
     Karel De Gucht also stated that it is necessary for the United States and Europe to join together “in order to push back against the alternative models and systems represented by countries such as China and Russia. A successful TTIP would give the US a better chance of influencing the global benchmarks of the future.”
     The ratification of both TTIP and CETA would have serious implications for Russia. It would undermine its trade with the EU, not only in energy but also in other commodities. It would further isolate Russia from the imperialist-dominated markets, the intention being to pressure Russia into opening up its economy to the imperialist states and to treat it as a subject state rather than a major power. Russia’s ambassador to the EU, Vladimir Chizhov, has stated that “TTIP and TPP would leave important countries, like mine, China, India—the well-known economies—outside of these arrangements that would cover two-thirds of world trade.”

TPP

“We have to make sure America writes the rules of the global economy, while our economy is in the position of global strength . . . Because if we don’t write the rules for trade around the world, guess what—China will.” This statement of President Obama betrays the fact that the concern of the United States is not with “free trade” but US hegemony, and any threat that might challenge American economic domination of the region.
     The Trans-Pacific Partnership must be viewed through that lens and seen not so much as a trade agreement as a strategy for defending core imperialist hegemony, by neutralising the threat to that hegemony from the rising power of China and the other BRICS countries. Should they prove successful in stemming the rising tide of BRICS, they will seek to bend those economies to the imperialist needs of the triad of core imperialist states.
     TPP and the other trade agreements are not about decentralisation in globalised production but the centralising of economic power, and the transfer of wealth from the periphery to the imperialist centre and from workers to the capitalist class. This is the purpose of TPP: firstly, to isolate China and the other BRICS economies, to undermine China’s economic growth, to remove Chinese regulation on transnational outsourcing into China, to open up the core industries, service sector and Chinese raw materials, and to bring China fully into the capitalist fold by leaving the door open to Chinese membership of TPP, and, secondly, to reorient the regional economies away from China and towards the imperial centre.
     The director of the APEC Research Centre in Shanghai, Cai Penghong, has stated: “It seems that the US is using the TPP as a tool as a part of its Asia Pacific Strategy to contain China.”
     John Ross, in his Realities Behind the Trans-Pacific Trade Partnership, argues that the TPP aims “to reorient trade discussions in the Pacific away from the most dynamic market, China, to the less dynamic one of the US by setting terms which exclude China.”
     The United States has used TPP to target core Pacific Rim economies, including Japan, Australia, New Zealand, Canada, Chile, Peru, Mexico, and Singapore, along with a number of ASEAN economies, such as Viet Nam, Brunei, and Malaysia. In the case of Viet Nam, for example, the United States is demanding that it reduce its reliance on textiles made in China, in return for preferential access to the American market. As the United States and Mexico are both large textile-producers, Viet Nam would have to obtain its fabrics from those countries rather than from China. This exemplifies the US imperialist strategy of disrupting China’s growing trade relations with its Pacific neighbours. As Stephen Gowans states, “the TPP isn’t as much about free trade as it is about restricting trade and investment within a US-dominated bloc.”
     The United States has also stepped up its military threat in the region with the despatch of guided-missile destroyers to the South China Sea, the latest event being in October 2015. Even US comments on TPP have been loaded with military innuendo. For example, the US secretary for defence, Ashton Carter, said in April that the TPP was “as important to me as another aircraft-carrier . . . It would help us promote a global order that reflects both our interests and our values.”
     An off-the-cuff, spur-of-the-moment remark, you might think; except that this is not the only time senior US politicians have spoken of these “trade agreements” in military terms. The securitisation of such agreements was also voiced by a former US assistant secretary of state for Western Hemisphere affairs, Thomas Shannon, who stated: “We have worked through the Security and Prosperity Partnership to improve our security co-operation. To a certain extent, we’re armouring NAFTA [the North American Free Trade Agreement].”
     The “Security and Prosperity Partnership” negotiated by the NAFTA states resulted in an augmented US military presence in Mexico. With these as a template, it is a certainty that “trade agreements” such as TTIP and TTP will become securitised. Tensions in the South China Sea and naked imperialist aggression in Ukraine would provide the opportunity for imperialist military deployment under the cover of these “trade agreements.”
     TPP has the potential of seriously damaging the Chinese economy, and thereby undermining the other BRICS economies. The Peterson Institute for International Economics in Washington estimates that TPP will “cost China about $100 billion a year in lost exports.”
     Between them, TTIP, CETA and TTP will dominate the world economy. Their existence will force the hand of developing countries to accept TISA, at present under negotiation under the umbrella of the World Trade Organisation. The huge weight and power of these agreements will give the economies of the global south little choice but to bow to such demands and further open their economies to imperialist avarice.
     The sheer size of these trading blocs, TTIP, CETA, and TPP, will undermine the development of capitalist alternatives, such as BRICS, and secure power within the imperialist triad of North America, Europe, and Japan.
     In Ireland we have a chance to put a halt to these geopolitical stratagems, or at least to slow them down. We can demand a referendum on both CETA and TTIP, and by voting them down we can strike a blow against imperialist ambitions for a world economy made in their image and to their advantage.

Home page  >  Socialist Voice  >  October 2016  >  Weaponising trade
Baile  >  Socialist Voice  >  Deireadh Fómhair 2016  >  Weaponising trade