The Alternative Debunk: Trade, sovereignty and the World Trade Organisation

There is a line of thinking that runs, 'the real obstacles to trade in the twentyfirst century are no longer tariffs, but non-tariff barriers'.

It is a view that has been expressed by Jacob Rees-Mogg, Brexiter and Tory backbencher, as part of his reasoning for Britain leaving the EU. Breaking these non-tariff barriers, as luck would have it, was also the founding mission of the World Trade Organisation (WTO).

If non-tariff barriers are an obstacle to the UK economy and trading on WTO terms would put us at the heart of an organisation working to undo them, it seems like a simple enough equation. It would appear to be a marriage of supreme convenience.

That view is, however, put to us by Britain's conservative and far-right establishment. That means it requires scepticism and further examination. So what are we missing?

Well, the first thing to note is that there is nothing simple about trade. Trade branches out into all aspects of international relations, domestic lawmaking and standards regulation, and as such encroaches on national sovereignty. And negotiations can take years.

The second, is that the 'non-tariff barriers' being referred to here are domestic laws and standards, created by sovereign parliaments and assemblies to regulate how things are made and sold in their jurisdictions - as well as subsidies favoured sectors.

Going blindly down the road that leads to the untrammelled trade that would-be barrier-breakers like Mogg would like, could lead to a place no one pursuing greater sovereignty had ever considered ending up. So let's be clear about where that road leads.

Background: Barriers to Trade

Historically, the old barriers were taxes - known as tariffs - put on imports. They would produce revenue for the national coffers and protect domestic production. Economics is never simple though, and tariffs were deeply entwined with foreign wars and domestic unrest.

Competition between nations over resources - resulting a mad scramble to occupy and to exploit, to invade and to seize valuable territory, even from neighbours - was the driving force behind war, colonialism and imperialism.

In Britain, the old barriers of tariffs mixed in a toxic brew with aristocratic landownership. The result was landlords with collosal power to inflate prices at the cost of middle class merchants and the working class who could barely afford the cost of bread.

That led to the Anti-Corn Law League, of which liberal free traders Richard Cobden and John Bright were leading activists, which in the 1860s fought to undo taxes on corn imports that poured subsidies into the pockets of landlords and starved ordinary people.

The Anti-Corn Law League eventually won out, but their campaign didn't bring a permanent change of mindset. Rather they influenced the Liberal Party, who continued to vie for power with the Conservatives who supported the system of tariffs.

While Britain went back and forth, other countries such as Germany and the United States used tariffs to protect their domestic industries from foreign competition - trying to catch up and compete with the British Empire, whose colonies allowed for the casting of a far wider net in which to find resources.

The international ramifications of this inward-looking national-oriented system were disastrous. On the foreign front, war between countries as they scrapped for resources. On the domestic front, poverty and civil unrest. It took two world wars, and the rise of democracy for that message to sink in.

Bretton Woods: Peace Through Interdependence

After the Second World War, delegates and economists from around the world gathered in Bretton Woods, New Hampshire, to figure out how to achieve a lasting peace. What they struck upon was the core of what the free traders had been arguing for a century: interdependence.

The result was the General Agreement on Tariffs and Trade (GATT), the International Monetary Fund (IMF), unprecedented international cooperation and the largest surge in world economic growth in history as the Western economies recovered, interwined in peace.

From the 1940s through the 1970s, tariffs were cut and cross-border movement and free access to resources flourished. The predecessors to the European Union were founded on ending the French and German fight over access to, and control of, the Rhine Valley's resources.

Government intervention went hand in hand with this system. It was necessary to ensure tight regulation internationally and to correct market imperfections domestically - most recognisably in the form of the welfare state, aimed at ensuring citizens' economic wellbeing.

There were consequences, good and bad. International cooperation was joined by deep domestic links between states, industries and unions that played it's part in a prosperity that was more widely shared than ever before. Inequality was lower. The wealth gap narrower. Opportunity for social mobility was tangible.

And yet the deep corporate-state links meant that collusion was substantial, while international cooperation gave rise to multinational corporations - businesses with a power that reaches beyond the limitations of national jurisdictions.

WTO: Drive for Efficiency

At the end of the 1970s, stagflation brought to an end the soaring economic growth of the era. Global growth hit a wall that capitalism has been trying to find a way around ever since.

The next phase for trade would be driven by the overthrow of the careful system of controls and regulations. The Bretton-Woods system had fostered within it the huge multinational corporations that now, as growth stagnated, threw their weight behind the Reagan-Thatcher system and the deregulation boom.

It was struck upon that, even with tariffs world wide brought down to historic lows, there were yet other barriers to doing business that might be limiting growth. Beginning with the Uruguay Round of negotiations, the drive was now achieve maximum global efficiency through the elimination of non-tariff barriers.

The GATT was superseded at this point by an organisation founded on and dedicated to achieving these goals - these new underlying principles. This was the World Trade Organisation, the WTO.

If Bretton-Woods and the GATT was about achieving peace through interdependence, achieved by a gradual reduction in tariffs, then the purpose of the Uruguay Round and the WTO was to take that interdependence and use it as leverage to eliminate non-tariff barriers and pursue market efficiency.

As with the Bretton-Woods model, there were consequences. One of the most obvious impacts has been the global stagnation in wages for low-skilled workers in the new era - with labour embattled, their hard won rights being undermined and squeezed.

Not all of this is the result of globalism. But the benefits were not widely enough shared, technology undermining rather than enhancing workers' security, and gains were often made through doors being opened to exploitation. Income inequality accelerated.

In the now

The body known as the World Trade Organisation is the arch-mover of globalism. A forum for diplomats and lobbyists, it is where the negotiations are done for deals that break down not only borders, but the so-called non-tariff barriers - in reality, domestic laws and standards that protect the quality of products.

The groups of elite Brexiters, most of them very wealthy, who are selling the idea of leaving the EU on WTO terms, have hitched onto the back of the campaign for national sovereignty. But leaving on WTO will do nothing to enhance sovereignty in terms that most people would recognise.

Within the EU, the UK has a say alongside other members on how it interacts with each of them and how it's domestic standards and regulations are set, while also having a say on how the whole EU bloc interacts with trading partners around the world.

Exiting the EU will downgrade the trading relationship between the EU and the UK. And if the UK reduces it's standards to attract new trade with other non-EU countries, it will make it harder to trade with the EU - as most of the EU's trade barriers depend on products meeting their high internal standards.

Any change of policy will require long term negotiations with the more than one hundred and fifty WTO members - all of whom will want their say to prevent their own trade being adversely affected. And let's not forget the WTO mission to reduce non-tariff barriers.

The drive to align standards within the EU has been one of getting countries to agree and enforce the highest common denominator. On the outside, the only 'advantage' to be gained is through the pursuit of the lowest common denominator on standards.

Whether it's the banning of plastic packaging to regulations about what chemicals can be used in the production of food, from the regulation of working conditions to the terms upon which businesses can receive subsidies or support - there is money to be made by opening the doors and lowering regulations.

But the reality of trade on WTO terms means few countries actually negotiate on their own. Most have spent decades building mutually beneficial deals and blocs - like EU - to increase their influence and reinforce their position to protect domestic conditions.

Switzerland and Canada have spent the better part of twenty years trying to negotiate their trading relationships with Europe. And the North American countries - USA, Canada and Mexico - have been back and forth over how to organise their trade for mutual benefit.

Even at present in America, their far-right President upset and forced a renegotiation with the countries neighbours by trying to reestablished protective tariffs to favour domestic production - a move that hurts trade partners and pours money into the pockets of the wealthy domestic business and land owners.

In such a complex web of negotiations, the confrontational approach of Brexiters and their supporting organisations - like the IEA - who have argued for ligitigation at the WTO to force the EU to lower it's standards, is unlikely to win the UK any allies.

In the future

The WTO was established in 1995 as the product of the Uruguay Round as the forum for negotiating global trade and as an arbiter for settling trade disputes. It has been the forum where successive agreements have been negotiated to reduce countries' tariffs and pursue deregulation of domestic standards.

In pursuing those goals the WTO has been accused of undermining the sovereignty of member nations with it's rules - much like Brexiters have loudly and virulently alleged of the EU project.

People who supported Brexit have hoped the UK might use it's historic influence protect some domestic sectors, but any such provisions would immediately irk other WTO members whose export opportunities would be limited.

The reality is that a No Deal Brexit, exiting onto WTO terms, does nothing to improve Britain's sovereignty. It means trading much as we do now, but without our open access to the Single Market - and the investment boost that gives us - and any EU specific deals through which we had previously enjoyed trading access to third party countries.

The main possible benefit would be, as Rees-Mogg himself has claimed, would be in slashing trading tariffs - ostensibly, it would seem, with the US, India and China. But the only way that would have any impact would be if our non-tariff barriers - our food standards, for instance - where lowered substantially as well.

And allowing our domestic policy to be driven, slashed, by the demands of overseas corporations who want to pour lower standard goods into the UK - likely undermining domestic businesses - is unlikely to be seen as an increase to national sovereignty.

If Britain could even manage to unilaterally start slashing it's tariffs and standards to attract America and Chinese suppliers - over likely objections and litigation in the WTO - the cheaper supplies would be of much lower quality, taken on at the cost of major damage done to domestic supply chains.

The post-war world has achieved interdependence on an historic scale. It cannot now be undone. Our predecessors choose to give up total sovereignty for that interdependence and the peace it brought. No one should be under any illusions: an exit from the European Union on WTO terms is another aggressive step into, not away from, globalisation, which does not restore sovereignty.

As we stand our sovereignty is pooled. We take part in building a consensus in Europe that affects our domestic laws. The future under a WTO/Hard Brexit will not restore sovereignty, and may even instead undermine it as domestic laws are driven by what opportunity it sells to our trade partners. These are the extremes of what is on offer when discussing Brexit. Neither will turn back the clock.

Carillion: When private service providers keep proving so inept and unethical, how can we be asked to back privatisation?

Photograph: Future site of the Library of Birmingham, from 2009, by Elliott Brown (License) (Cropped)

Carillion, a services behemoth, has collapsed. With it, it takes billions in government contracts and puts tens of thousands of jobs at risk. The construction and services company accrued £1.5bn in debt - of which £600m was owed to it's pension fund.

Fortunately, despite Carillion's own recklessness, the Pension Protection Fund (PPF) has stepped in to assure workers that their pensions will be protected - despite the complete failure of the company to meet it's commitments to workers.

However, numerous government projects, and smaller businesses to whom Carillion outsourced work, face an uncertain future. A result of what David Lammy described as, "privatise profits when things go well and nationalise risks so the taxpayer picks up the bill when things go wrong".

This government has tried to convince us of, or slip past us, a privatisations agenda, trusting private companies in the public sector. But how cane we back privatisation, when private sector providers keep proving so inept and unethical?

Carillion is not the only major private concern, even in the past year, to go bust and to do so revealing a massive pensions deficit - having taken profits for executive pay, but left workers' futures in peril, in what must surely be a major ethical breach.

When the steel industry nearly collapsed with the Tata Steel decision to close it's plants, workers' pensions were a huge block on a deal to save the industry. Incoming buyers did not want to take on responsibility for the pensions.

The unwillingness of private sector companies to take up their responsibilities in this case left workers with steel pensions in uncertain circumstances, where they have been prey to financial advice groups - now under investigation over their predatory behaviour.

The thing is, the government isn't just pushing privatisation for services, but for things like social insurance and pensions. It wants us all to do these things on personal, private terms, rather than in big collective government funds.

Yet, how can we trust the government's much vaunted workplace pensions scheme, when private companies treat workers' pensions as the first thing to drop when their isn't enough money for every commitment the company has made.

And what about Virgin? A global corporation that bitterly scraps for government contracts, even to the point of suing commissioners when they don't get them - suing parts of a cherished health service in financial distress. It was later awarded a huge contract, to much public outcry.

The government must now move to salvage what it can of Carillion, nationalising projects and departments to keep their vital work going and keep people employed. But what shape that takes is yet to be seen.

The speculation is that the government will continue to it's neoliberal trend of nationalising failure and debt, while returning the profitable parts to the private sector for executives to enjoy the benefits.

It would be refreshing to see something. Like the private sector picking up the tab for it's colossal failure? Yeah, right. Perhaps less fanciful would be consolidating parts of Carillion into a cooperative, run by it's workers?

As a cooperative, the still functional, still profitable parts could serve workers. The profits would deliver dividends for the workers, that would be of direct benefit their communities.

Whatever the government chooses to do, take note. This is one of those 'true colours' moments, where the rhetoric is paper transparently thin and the tropes are well known, enough to allow us to see what the governing party really values.

Macron and Popularity: The President of France has yet to win a sceptical public back over to the political process

Photograph: LEWEB 2014 Conference - in conversation with Emmanuel Macron by LE WEB (License) (Cropped)

The victory of Emmanuel Macron attracted the attention and plaudits of centrists across Europe, desperate for a way out of the slump that has undermined social and liberal democratic parties. But the talk in many countries of needing their own Macron and En Marche is all just buying into a myth, because the rise of Macron was an illusion.

Reports this last month talked of Macron and his government already facing a decline in public support. But what those reports ignore is that support was never that high in the first place - the election landslide was more due to the electoral system than a swell of support.

Macron's movement was perhaps well organised or made a particularly well tailored pitch, but En Marche mostly benefited from a system that favours voters' picking their least worst option - which served En Marche who were the heirs of the collapse in the credibility of the centre-left and centre-right.

Macron took just 24% in the full field first round of the Presidential vote, and La Republic En Marche took 32% on a first round legislative election turnout of just 49%. These numbers delivered political power, but not broad public support or high approval. There was no rising wave, just a window of opportunity.

The problem for Macron is not that he has been discredited, but that he has yet to win voters back to the political process. Taking power on the support of a quarter and a fifth, his approval ratings will begin low, with scepticism high and everything to prove.

Turning political power in decent approval ratings was never something that was going to happen overnight. The pledges of Macron were built around big promises with no easy solution, like cleaning up politics.

The difficulties faced by Macron and En Marche were underlined when, within the opening weeks of his new office, his MoDem political allies and their leader Francois Bayrou were hit by corruption investigations.

The other big promise Macron made was to reform France's labour laws, famous for their scale and complexity. It is an issue on which there is a clear public support for action, but no real consensus on what action.

Macron has his own ideas, but has set about a negotiating strategy, rather than trying to force it through. Even trade unions have gotten around the table for talks - with the two of the largest unions even declining to take part in protests against any watering down of labour protections.

While the left under Jean-Luc Melenchon and the union CGT push for protests and strikes, Macron's consensus approach with no legislative surprise has got enough of the key players involved to reduce action to the harder left organisations that media find it easier to discredit.

But the dissatisfaction with politics in France is too broad to be convincingly reduced to the bellyaching of the radical left. And despite the lean times and discrediting of the centre, neither the radical left nor the far right have taken a decisive advantage.

The people of France are not itching to rise up for either extreme, but nor have they fallen back in love with the Republican centre. Macron was never the unquestioned messiah and he has yet to win the public over.

The election results showed all of this. The approval ratings just confirm it. The task ahead of Macron is to rebuild the Republic and he has no gordian solution. A facsimile of Macron in another country would face the same problems.

Macron's ascendency is not the revival that liberals crave, nor are his low approval ratings the death knell of moderate-led reformist capitalism for which socialists are straining their ears. Macron got enough support to get through the door.

But to stay there, Macron and En Marche must win people back to the political process. Sure, his failure to reengage people would be a blow to neoliberals trying to cling to power. But it would be just as bad for progressives of all stripes, for whom public faith in democracy and a politically active and interested people are a cornerstone.

Pay Cap: Hammond focus on 'overpaid' public sector workers is just a distraction from Tories failing those in private sector

Photograph: NATO Summit Wales 2014 by the Foreign and Commonwealth Office (License) (Cropped)

After a month of being pummelled over the issue, the Chancellor Philip Hammond tried to reframe the issue of public sector pay cap debate. The core of Hammond's approach was to draw a comparison.

That comparison says that workers in the public sector have it good compared to what those in the private sector were dealing with. Don't be fooled. The Tory angle on public sector pay is a distraction. One that covers for the party's failure to deliver for private sector workers.

In the private sector, low pay and precarity prevail. Working poverty is a reality in 2017.

And the Tories response is to using poor conditions in the private sector to justify undermining conditions in the public sector. And, in time, be sure that pitting workers against one another in envy will be turned back to the further diminishing of the conditions of those in the private sector.

The Conservatives do continue to speak of these restraints on pay, and low pay, as if they are temporary. A part of a restructuring process. But their intended solutions stink of permanence or a lack of vision that narrows their view to piecemeal policy solutions.

For instance, when Justine Greening, the Education Minister, addressed a social mobility conference. She told them that the government's plan was to tailor education towards giving people the high-level skills they needed to achieve their own advancement.

She promised a meritocracy. A system that rewarded hard work with advancement.

But that pledge is belied by the economy under the Tories. Yes, unemployment is down according to statistics (with some glaring flaws). But it isn't a coincidence that unemployment is down while self-employment, second jobs and precarity are all on the rise.

It is something that can be seen clearest in those places where Thatcher's dismantlement of the public sector industries hit hardest. Having skills and the will to work hard isn't enough. Social mobility begins with money. With huge, long term investment.

It isn't enough to pursue personal empowerment, expanding knowledge and skills, if they're are rendered impotent by their environment. Putting achievement down to personal work ethic is an evasion. An excuse not to reform. There can be no piecemeal solutions.

Only holistic, joined up approaches will make a difference. Only coordinating trade unions and worker's rights, a universal welfare settlement that counters precarity, and tackling the cost of living - and many other aspects - will address the deep problems in Britain.

And the Conservatives that have shown this is not, and will not, be their approach. To them, it appears, the struggle - held at bay by 'dependence creating' community support - carries a moral worth.

The world of work is changing. Perhaps even making towards its end. For progressives, an ideology that praises an anxious, desperate struggle for being a test of moral character is not a safe framework for ushering in that future.

It is even less so in the hands of a party that excuses how it has failed private sector workers by stirring up discontent with public sector workers - and who wish to further deconstruct safety nets even as working poverty spreads still in 2017.

Hammond's distraction just papers over the cracks. Punitive action against public sector workers does nothing to improve the conditions in the private sector. The problems of the day call for progressive solutions, with long term investment backing efforts to fight anxiety and build far more life security into working life.

Progressives need to focus on the future: The first priority is guaranteeing basic rights

Night falls at the European Court of Human Rights in Strasbourg. Photograph: European Court of Human Rights by Francois Schnell (License) (Cropped)

The referendum is over and Brexit has won. It might have been a flawed way to settle a dispute, with an awkward result that has split the country nearly completely in two, ensuring an outcome that will not be representative. But progressives have to push on.

The necessity now is to focus on future. Leaving the EU will leave holes in our rights protections, and the Left needs to give consideration as to how to plug the new gaps. That means getting behind a push for new rights protections above and beyond just legislation.

As the Labour Party's senior Brexiter Gisella Stuart was keen to remind us all during the referendum campaign, the UK certainly does have rights legislation of its own - gathered in a long history of campaigning and political reform (ITV News, 2016; ITV, 2016).

"It's been strong trade unions and strong Labour government which have produced that. If you look at any of the rights which we have, either started here or are better here. It is a nonsense to think that the EU protects us from ourselves."

The traditional approach of the Left, as Stuart alluded to, is to rally a movement, in this case the labour movement and unions, to build and maintain majority pressure for new rights and ensure the vigilance to watch over previous gains. That might be described as the 'democratic' approach.

What this approach is not, is a substitute for guaranteed rights - inviolable by the state, with the individual holding the legal power to challenge the state where it infringes upon their essential rights. Such protections are the 'liberal' approach.

In the referendum campaign, these two approaches - one democratic, one liberal - where presented to us as opposed to each other. The liberal guarantees where presented as unnecessarily safeguarding against ourselves, as an undesirable restraint on majority power.

Yet the point of both democratic and liberal protections is to check the abuse of power. Democracy holds individuals in positions of authority to account - as Tony Benn put it, "What power have you got? Where did you get it from? In whose interests do you exercise it? To whom are you accountable? And how can we get rid of you?". Liberalism complements it by holding the majority to account, protecting the individual, or minorities, from the wrath of the many.

Combined together, the democratic approach with the liberal, provides an intricate web of protections ensuring progress made, opening up liberties and removing barriers, cannot be lightly undone - or casually put aside in a moment in which they are considered an obstructive inconvenience.

With Britain's exit, the protections for the individual provided by the EU's social chapter - negotiated and enforced across all of the EU's member states in cooperation, presented - will be withdrawn. That creates a large hole in the UK's rights protections.

That hole could be widened by an ending of the UK's commitment to the European Convention on Human Rights (ECHR) - put at risk in the UK by Brexit, thanks to leading Conservatives like Theresa May, seemingly likely candidate to run against Boris Johnson to be the successor to David Cameron as leader of the Conservatives, expressing a loathing for the ECHR and a wish to withdraw the UK from it (Asthana & Mason, 2015).

For progressives, this marks out clear territory. On the one hand there is a need to reinforce that which the EU's social chapter previously protected - particularly the rights of women and of workers - and on the other to ensure protections remain in place for essential human rights. These hands must work together.

The only current effort to provide some kind of domestic level of protections had been the Conservative promise to introduce a British Bill of Rights. Yet that effort has never fully materialises, and what information has come out of the process has been roundly criticised.

Bella Sankey, Director of Policy at Liberty UK, stressed that 'British' Bill of Rights proposals represented a fundamental diminishment of the protections of our basic rights and put the most vulnerable at risk (Sankey, 2016, Sankey, 2014)). The Conservatives bill risks creating tiered rights, that fail the universal test and hand powerful vested interests the right to decide whether an individual should be protected by human rights, in order to make a crudely naked nationalist pitch.

Sankey goes on to argue that the 1998 Human Rights Act, which set the stage for British judges in British courts to rule on human rights claims domestically, is still the far superior protection. That makes defending the UK's place upholding the ECHR essential.

As for workers' rights - in Europe covering everything from maternity leave to fair treatment for part time workers (Inman, 2016) - it has long been an aim of the Conservatives to 'repatriate' powers over employment legislation, what the Tories call the EU's bureaucratic red tape (Syal, 2013).

Apparently to help reduce costs for businesses, the Conservatives have said they want to cut back these restrictions. What they don't disclose is that most of these 'restrictions' were basic workers' rights, public health & safety standards, and legislation designed to ensure the common market could function as easily as possible by all businesses working according to the same harmonised expectations - basically helping to maximise marketability.

Outside of the EU's system of mutual guarantees, covered in legislation applying to all member states, workers fall back to trusting to the reliability of political parties and movements to be a bastion for their rights at work.

Under Britain's first-past-the-post electoral system, that has meant clinging to Labour even as the party has drifted to the right and accepted the neoliberal consensus. That simply trammels voters, restricting their freedom to choose - as splitting the vote between other parties, in pursuit of other objectives, would risk letting down the guard protecting workers, preventing voters holding parties like Labour to proper account.

The situation calls for a solution that gives people reassurance that their rights at work have protections even when absolute vigilance isn't possible. To that end, the next step for workers rights should be a charter that, either by international treaty like the ECHR or under the domestic protection of the Supreme Court, guarantees employment rights beyond simple majority influence.

Beyond the reach of the EU and European rights protections, the ability of citizens to hold governments to account is reduced to a desperate struggle - between Unions and employers, and for voters between their ideals and pragmatic necessity in their choice of political parties. The UK's time in Europe has shown a glimpse of how things might be done better, that the fear and tension that comes with the uncertainty of whether your rights will survive the next election or cabinet whim could be reduced.

The task ahead of progressives now is to think constructively about the future and build a consensus to set basic rights, in Britain, in adamant.