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EXCLUSIVE: Leaked Documents from Secretive Meeting of Global Bankers at the 2013 International Monetary Conference (IMC)

EXCLUSIVE: Leaked Documents from Secretive Meeting of Global Bankers at the 2013 International Monetary Conference (IMC)

By: Andrew Gavin Marshall

6 March 2014

The International Monetary Conference (IMC) is an annual gathering of roughly 200 of the world’s most influential bankers who meet in private with some of the leading finance ministers, regulators and central bankers of the industrial world. The meetings have been ongoing from 1954 until present-day, and have been influential forums for discussion, establishment of consensus, and the articulation and formation of policy related to global economic, financial and monetary issues.

The following document which I obtained is the program for the 2013 IMC meeting which took place in Shanghai, including the list of events and speakers at the annual gathering. Among the participants and speakers at the June 2013 International Monetary Conference (IMC) are some of the world’s most influential private bankers, including: Baudouin Prot (Chairman of BNP Paribas), Douglas Flint (Chairman of HSBC), Axel Weber (Chairman of UBS), Jacob A. Frenkel (Chairman of JPMorgan Chase International), Jamie Dimon (Chairman and CEO of JPMorgan Chase), Jürgen Fitschen (Co-Chairman of Deutsche Bank), John G. Stumpf (Chairman and CEO of Wells Fargo), Francisco Gonzalez (Chairman and CEO of BBVA), and Peter Sands (Chief Executive of Standard Chatered.

Since the IMC took place in Shanghai, it also drew some notable names from the elite within China, including: Hen Zheng (Member of the Political Bureau of the Communist Party of China – CPC – Central Committee and Secretary of the CPC Shanghai Municipal Committee), Jiang Jianqing (Chairman of the Industrial and Commercial Bank of China), Shang Fulin (Chairman of the China Banking Regulatory Commission), Tian Guoli (Chairman of the Bank of China), and Zhou Xiaochuan (Governor of the People’s Bank of China, China’s central bank).

Zhao Xiaochuan was not the only central banker present at the meeting, however. Also present were: Mario Draghi (President of the European Central Bank), Jaime Caruana (General Manager of the Bank for International Settlements), and Janet Yellen, who was then the Vice Chair of the Federal Reserve Board, now the Chair of the Federal Reserve System.

Download the full program here: International Monetary Conference 2013 Program

 

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State of Europe: How the European Round Table of Industrialists Came to Wage Class War on Europe

 

State of Power 2014: The Transnational Institute

By: Andrew Gavin Marshall

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Originally posted at the Transnational Institute, 21 January 2014

In its third annual ‘State of Power’ report, TNI uses vibrant infographics and penetrating essays to expose and analyse the principal power-brokers that have caused financial, economic, social and ecological crises worldwide.

In my contribution to the ‘State of Power’ report (and in cooperation with Occupy.com), “State of Europe: How the European Round Table of Industrialists Came to Wage Class War on Europe,” I examine the role of a major corporate interest group in shaping the policies of the European Union.

From the introduction:

“Founded in 1983, the European Round Table of Industrialists (ERT) quickly became – and today remains – one of the most influential voices of organized corporate interests in Europe. Not quite a lobby, not quite a think tank, the ERT is an action-oriented group made up of roughly 50 CEOs or Chairmen of Europe’s top industrial corporations who collectively push specific ideologies, pressure political elites, and plan objectives and programs designed to shape the European Union and the ‘common market’. 

The past thirty years of the ERT’s existence has revealed it one of the most influential organizations in Europe, widely known to the EU’s political, technocratic, and financial elites, holding regular meetings, dinners, and social events with prime ministers and cabinet officials of EU member states, as well as the leadership of the European Commission itself. In the wake of the European debt crisis of the past several years, the ERT has again been at the forefront of shaping the changes within the EU, promoting austerity and structural reforms as the ‘solution’ to the debt crisis.

As through their three-decade history, the Round Table today continues to promote the ideologies and interests of corporate and financial power at the expense of the interests of labour and the population more widely. This paper aims to examine this highly influential group in order to shed some light on an organization very well known to those who make the important decisions within the EU, yet largely in the shadows to those who have to suffer the consequences of those decisions.”

To read the full essay on the ERT and the European Union, click here.

To review and access all of the reports which contributed to the TNI ‘State of Power’ report, click here.

 

Global Power Project: The Group of Thirty, Financial Crisis Kingpins

Global Power Project: The Group of Thirty, Financial Crisis Kingpins

By: Andrew Gavin Marshall

25 February 2014

The following article was originally posted on 18 December 2013 at Occupy.com

Following parts onetwo and three of the Global Power Project’s Group of Thirty series, this fourth and final instalment focuses on a few of the G30 members who have played outsized roles both in creating and managing various financial crises, providing a window on to the ideas, institutions and individuals who help steer this powerful global group.

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The Assassin of Argentina

Prior to 2008, one of the most notable examples of a highly destructive financial crisis took place in Argentina which, heavily in debt, faced a large default and was brutally punished by financial markets and the speculative assault of global finance, otherwise known as “capital flight.” Less known in the story of Argentina’s 1998 to 2002 economic catastrophe was the significant role played by just one man: Domingo Cavallo.

A longtime member of the Group of Thirty, Cavallo formerly served both as Governor of the Central Bank and Minister of Economy in Argentina. He has been referred to  by Pulitzer Prize-winning economic researcher Daniel Yergin as “one of the most influential figures in recasting the relationship of state and marketplace in Latin America.”

Between 1976 and 1983, Argentina, ruled by a ruthless military dictatorship, was marred by excessive human rights abuses and persecution of intellectuals and dissidents during the so-called “Dirty War” in which as many as 30,000 people were killed or disappeared . The terror was reminiscent of nearby Chile, where a coup that brought dictator Augusto Pinochet to power in 1973, with the help of the CIA, provided a petri-dish experiment in the implementation of neoliberal “reforms.” It was Chile’s dictatorship that set the example, and Argentina’s soon followed.

In a 2002 interview, Domingo Cavallo noted that, “The experience of Chile during the ’80s was very instructive, I think, for most Latin American economies, and many politicians in Latin America, because Chile was successful by opening up and trying to expand their exports and in general their foreign trade and getting more integrated into the world economy… And of course we used, particularly here in Argentina, the experience of Chile to go ahead with our own reforms.”

Asked about the association between economic “reforms” in Chile and the ruthless dictatorship that implemented them, Cavallo explained, “There were discussions on the feasibility of implementing market reforms in a democracy. But in 1990… the first democratic president after Pinochet maintained the reforms and also tried to improve on them [and] it was demonstrated that itwould be possible  to implement similar reforms under a democratic regime.”

What specific reforms was Cavallo referring to? Under Argentina’s military dictatorship, Cavallo served for one year as Governor of the Central Bank in 1982, where he was responsible for implementing  a state bailout of corporations and banks. After, Cavallo returned to academic life. But all that changed with the election of Carlos Menem in 1989, who served as president until 1999. In 1991, Menem appointed Cavallo as Minister for Economy, a position he held until 1996.

Cavallo led the neoliberal restructuring of Argentina: pegging the Argentine peso to the U.S. dollar, trying to reduce inflation, undertaking massive privatizations while opening up the economy to “free trade,” and deregulating financial markets. The New York Times in 1996 heaped praise on Cavallo for his “constructive” role in leading the economy “back to vitality and international respectability,” despite the fact that his reforms “brought high unemployment  and painful reductions in social programs.”

Another NYT article credited Cavallo for the “stability” brought to Argentina through his “economic miracle,” while noting, without irony, that Cavallo’s miracle had “left million of Argentines… without a safety net” and with record-high unemployment, the emergence of urban slums, abandoned street children, over-crowded food banks, homeless shelters in churches, and even some people who were forced to eat cats in desperation. The “miracle” was so great, in fact, that despite all of the so-called stability it facilitated, President Menem ultimately dismissed Cavallo to the jubilation of tens of thousands of protesters in the streets. Though the people were pleased, financial markets expressed their disapproval .

With multiple economic and financial crises erupting around the world and in neighboring nations, Argentina, which pegged its currency to the U.S. dollar, found it could no longer compete. The touted neoliberal reforms were taking a toll as the country plunged into recession. Menem was replaced in 1999 by President Fernando De la Rua, who quickly sought support from the IMF to help repay the country’s debts owed to foreign – largely American  – banks.

But Cavallo wasn’t out. In 2001, he was re-appointed as the country’s Minister of Economy just in time to receive emergency powers enabling him handle the country’s ongoing financial crisis that he helped to create . At that point, financial markets felt Argentina could not be trusted to repay its debt and the IMF refused to provide further loans, on the basis that the country had not implemented enough neoliberal reforms to meet its demands. The economy crashed and the “much-hated” Cavallo had to resign, as did the President, who fled by helicopter from the Casa Rosada as Argentines protested en masse .

Even the Federal Reserve Bank of San Francisco noted in 2002 that there was “some truth” to the view that “Argentina’s debt position would have been sustainable if only market uncertainty had not triggered a crisis.” But, it added, had Argentina made the effort asked of it to reduce its debt, it could have avoided  “potentially destabilizing shifts in market sentiment.”

Domingo Cavallo

Domingo Cavallo

America’s Crisis-Causers

The role played by former Federal Reserve Chairman Alan Greenspan in creating the conditions that led to the 2008 global financial meltdown is known to many. What is less known is that Greenspan, too, is a former member of the Group of Thirty. Greenspan did not work alone, of course, in his efforts to deregulate the financial system and spur the growth of the derivatives markets, which laid the groundwork for the worst financial crisis in modern times. Larry Summers, who then served as deputy secretary and later Secretary of Treasury under Bill Clinton, was also very helpful in this regard. Summers, too, is a current member of the Group of Thirty.

Currently serving as President Emeritus and as a professor at Harvard University, Summers was the former director of President Obama’s National Economic Council from 2009 to 2011. Previously, he was President of Harvard (2001 to 2009) and, prior to his positions during the Clinton administration he was Chief Economist at the World Bank (1991 to 1993). Currently, Summers is a member not only of the G30 but of the Council on Foreign Relations, the Trilateral Commission, and he was also a member of the Steering Committee of the Bilderberg Group.

While Chief Economist at the World Bank, Summers signed an infamous 1991 memo in which it was suggested that rich countries should dump their toxic waste and pollutants in the poorest African nations — because by the time the toxins spurred the growth of cancer in the local population, they would already statistically be dead due to already high mortality rates. The memo noted : “I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.”

When Summers later went to work for the Clinton administration under Treasury Secretary Robert Rubin, he along with Rubin and Fed Chairman Greenspan formed the “Three Marketeers,” as Time referred to them, dedicated to  “inventing a 21st century financial system” where they placed their “faith [in] financial markets.”

In the final two years of the Clinton presidency, Summers served as the Treasury Secretary alongside his deputy and protégé, Timothy Geithner, another member of the G30 who would go on to make a mark on the financial crisis — largely by convincing President Obama to bail out the Wall Street banks that crashed the economy, with zero penalty to them. Under the Obama administration, Summers served for nearly two years as Chair of the National Economic Council and was a highly influential policymaker . In 2009, he had spoken at the highly influential ultra-conservative think tank, the Peterson Institute for International Economics, where he explained the administration’s approach to the economic recovery, noting that , “Our approach sought to go as much as possible with the grain of the market” as opposed to regulating markets.

When Summers left the Obama administration in late 2010, he returned to Wall Street and made a fortune  working for the hedge fund D. E. Shaw & Co. and Citigroup. This past summer, he was considered Obama’s favorite pick  to replace Ben Bernanke as Fed Chairman, but faced such stiff opposition within the Democratic Party that he withdrew his name, leaving Janet Yellen – the Vice Chair of the Fed and herself a former member of the Group of Thirty – to step in .

What we see, in this analysis of the Group of Thirty, are the connections between those in positions of power to respond to and manage economic and financial crises, and those in positions of power who created such crises. Naturally, as well, the G30′s membership includes numerous bankers who, as fortune had it, shared handsomely in the profits of those crises. Put simply, the G30 can be thought above all as an exclusive club of financial crisis kingpins. And it is a club, no doubt, that will continue to play a significant and not altogether helpful role in global financial management for years to come — or until something is done to stop them.

Andrew Gavin Marshall is a 26-year-old researcher and writer based in Montreal, Canada. He is project manager of The People’s Book Project , chair of the geopolitics division of The Hampton Institute, research director for Occupy.com’s Global Power Project and the World of Resistance (WoR) Report, and hosts a weekly podcast show with BoilingFrogsPost .

Global Power Project: The Group of Thirty, Architects of Austerity

Global Power Project: The Group of Thirty, Architects of Austerity

By: Andrew Gavin Marshall

Originally posted at Occupy.com

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The Group of Thirty, a preeminent think tank that brings together dozens of the world’s most influential policy makers, central bankers, financiers and academics, has been the focus of two recent reports for Occupy.com’s Global Power Project. In studying this group, I compiled CVs of the G30′s current and senior members: a total of 34 individuals. The first report looked at the origins of the G30, while the second examined some of the current projects and reports emanating from the group. In this installment, I take a look at some specific members of the G30 and their roles in justifying and implementing austerity measures.

Central Bankers, Markets and Austerity

For the current members of the Group of Thirty who are sitting or recently-sitting central bankers, their roles in the financial and economic turmoil of recent years is well-known and, most especially, their role in bailing out banks, providing long-term subsidies and support mechanisms for financial markets, and forcing governments to implement austerity and “structural reform” policies, notably in the European Union. With both the former European Central Bank (ECB) President Jean-Claude Trichet and current ECB President Mario Draghi serving as members of the G30, austerity measures have become a clearly favored policy of the G30.

In a January 2010 interview with the Wall Street Journal, Jean-Claude Trichet explained that he had been “involved personally in numerous financial crises since the beginning of the 1980s,” in Latin America, Africa, the Middle East and Soviet Union, having been previously the president of the Paris Club – an “informal” grouping that handles debt crisis and restructuring issues on behalf the world’s major creditor nations. In this capacity, Trichet “had to deal with around 55 countries that were in bankruptcy.”

In July of 2010, Trichet wrote in the Financial Times that “now is the time to restore fiscal sustainability,” noting that “consolidation is a must,” which is a different way of saying austerity. In each of E.U. government bailouts – of which the ECB acted as one of the three central institutions responsible for negotiating and providing the deal, alongside the European Commission and the IMF, forming the so-called Troika – austerity measures were always a required ingredient, which subsequently plunged those countries into even deeper economic, social and political crises (Spain and Greece come to mind).

The same was true under the subsequent ECB president and G30 member, Draghi, who has continued to demand austerity measures, structural reforms (notably in dismantling the protections for labor), and extended support to the banking system, even to a greater degree than his predecessor. In a February 2012 interview with the Wall Street Journal, Draghi stated that “the European social model has already gone,” noting that countries of the Eurozone would have “to make labour markets more flexible.” He meant, of course, that they must have worker protections and benefits dismantled to make them more “flexible” to the demands of corporate and financial interests who can more easily and cheaply exploit that labor.

In a 2012 interview with Der Spiegel, Draghi noted that European governments will have to “transfer part of their sovereignty to the European level” and recommended that the European Commission be given the supranational authority to have a direct say in the budgets of E.U. nations, adding that “a lot of governments have yet to realize that they lost their national sovereignty a long time ago.” He further explained, incredibly, that since those governments let their debts pile up they must now rely on “the goodwill of the financial markets.”

Another notable member of the Group of Thirty who has been a powerful figure among the world’s oligarchs of austerity is Jaime Caruana, the General Manager of the Bank for International Settlements (BIS), which serves as the bank for the central banks of the world. Caruana was previously Governor of the Bank of Spain, from 2000 to 2006, during which time Spain experienced its massive housing bubble that led directly to the country’s debt crisis amid the global recession. In 2006, a team of inspectors within the Bank of Spain sent a letter to the Spanish government criticizing then-Governor Caruana for his “passive attitude” toward the massive bubble he was helping to facilitate.

As head of the BIS, Caruana delivered a speech in June of 2011 to the assembled central bankers at an annual general meeting in Basel, Switzerland, in which he gave his full endorsement of the austerity agenda across Europe, noting that “the need for fiscal consolidation [austerity] is even more urgent” than during the previous year. He added, “There is no easy way out, no shortcut, no painless solution – that is, no alternative to the rigorous implementation of comprehensive country packages including strict fiscal consolidation and structural reforms.”

At the 2013 annual general meeting of the BIS, Caruana again warned that attempts by governments “at fiscal consolidation need to be more ambitious,” and warned that if financial markets view a government’s debt as unsustainable, “bond investors can and do punish governments hard and fast.” If governments continue to delay austerity, he said, the markets will have to use “market discipline” to force governments to act, “and then the pain will be large indeed.” In further recommending “structural reforms” to labor and service markets, Caruana noted that “the reforms are critical to attaining and preserving confidence,” by which, of course, he meant the confidence of markets.

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The ‘Academic’ of Austerity: Kenneth Rogoff

Kenneth Rogoff is an influential academic economist and a member of the Group of Thirty. Rogoff currently hold a position as professor at Harvard University and as a member of the Council on Foreign Relations. He sits on the Economic Advisory Panel to the Federal Reserve Bank of New York, and previously Rogoff spent time as the chief economist of the IMF as well serving as an adviser to the executive board of the Central Bank of Sweden. Rogoff is these days most famous – or infamous – for co-authoring (with Carmen Reinhart) a study published in 2010 that made the case for austerity measures to become the favored policy of nations around the world.

The study, entitled, “Growth in a Time of Debt,” appeared in the American Economic Review in 2010 to great acclaim within high-level circles. One of the main conclusions of the paper held that when a country’s debt-to-GDP ratio hits 90%, “they reach a tipping point after which they’ll start experiencing serious growth slowdowns.” The paper was cited by the U.S. Congress as well as by Olli Rehn, the European Commissioner for Economic and Monetary Affairs and one of Europe’s stalwart defenders of austerity, who has demanded the measures be instituted on multiple countries in the E.U. in return for bailout funds.

Google Scholar search for the terms “Growth in a Time of Debt” and “Rogoff” turned up approximately 828 results. In 2013, Forbes referred to the paper as “perhaps the most quoted but least read economic publication of recent years.” The paper was also cited in dozens of media outlets around the world, multiple times, especially by influential players in the financial press.

In 2012, Gideon Rachman, writing in the Financial Times, said Rogoff was “much in demand to advise world leaders on how to counter the financial crisis,” and noted that while the economist had been attending the World Economic Forum meetings for a decade, he had become “more in demand than ever” after having “written the definitive history of financial crises over the centuries” alongside Carmen Reinhart. Rogoff was consulted by Barack Obama, “and is known to have spent many hours with George Osborne, Britain’s chancellor,” wrote Rachman, noting that Rogoff advised government’s “to get serious about cutting their deficits, [which] strongly influenced the British government’s decision to make controlling spending its priority.”

The praise became all the more noteworthy in April of 2013 when researchers at the University of Massachusetts, Amherst, published a paper accusing Rogoff and Reinhart of “sloppy statistical analysis” while documenting several key mistakes that undermined the conclusions of the original 2010 paper. The report from Amherst exploded across global media, immediately forcing Rogoff and Reinhart on the defensive. The New Yorker noted that “the attack from Amherst has done enormous damage to Reinhart and Rogoff’s credibility, and to the intellectual underpinnings of the austerity policies with which they are associated.”

As New York Times columnist and fellow G30 member Paul Krugman noted, the original 2010 paper by Reinhart and Rogoff “may have had more immediate influence on public debate than any previous paper in the history of economics.” After the Amherst paper, he added, “The revelation that the supposed 90 percent threshold was an artifact of programming mistakes, data omissions, and peculiar statistical techniques suddenly made a remarkable number of prominent people look foolish.” Krugman, who had firmly opposed austerity policies long before Rogoff’s paper, suggested that “the case for austerity was and is one that many powerful people want to believe, leading them to seize on anything that looks like a justification.”

Indeed, many of those “powerful people” happen to be members of the Group of Thirty who are, with the notable exception of Krugman, largely in favor of austerity measures. Krugman himself tends to represent the limits of acceptable dissent within the G30, criticizing policies and policy makers while accepting the fundamental concepts of the global financial and economic system. He commented that he had been a member of the G30 since 1988 and referred to it as a “talk shop” where he gets “a chance to hear what people like Trichet and Draghi have to say in an informal setting,” adding, “while I’ve heard some smart things from people with a role in real-world decisions, I’ve also heard a lot of very foolish things said by alleged wise men.”

Andrew Gavin Marshall is a 26-year old researcher and writer based in Montreal, Canada. He is Project Manager of The People’s Book Project, chair of the Geopolitics Division of The Hampton Institute, research director for Occupy.com’s Global Power Project and World of Resistance (WOR) Report, and hosts a weekly podcast show with BoilingFrogsPost.

Global Power Project: The Group of Thirty and the “Good Discussion” They’re Still Having

Global Power Project: The Group of Thirty and the “Good Discussion” They’re Still Having

By: Andrew Gavin Marshall

Originally posted at Occupy.com

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The Group of Thirty (or G-30) describes itself as “a private, nonprofit, international body composed of very senior representatives of the private and public sectors and academia,” which “aims to deepen understanding of international economic and financial issues, to explore the international repercussions of decisions taken in the public and private sectors, and to examine the choices available to market practitioners and policymakers.”

Its membership consists of roughly thirty major figures in the global financial world, from central banks, academia, international institutions and major private financial institutions. These figures hold regular meetings, conduct research and produce highly-influential reports through various “working groups,” providing a forum for top policy makers and private sector market “actors” to meet and hold discussions, while helping shape consensus and give recommendations to policy makers on issues of finance and governance.

This institution, though not widely discussed, is enormously influential. And here’s why.

The history of the Group of Thirty goes back to the Rockefeller Foundation, which provided the organization’s initial funding. In its 1978 annual report, the Rockefeller Foundation – which represents the interests of highly centralized corporate and financial power – recalled that it was created in 1913 as a response to “the Populist assault on the massive concentration of wealth in the hands of few.” (Annual Report, 1978, Rockefeller Foundation.)

The 1978 report noted that a former managing director of the IMF, Johannes Witteveen, “agreed to assume the chairmanship of a Consultative Group on International Economic and Monetary Affairs made up of leading bankers, officials, economists, and businessmen from the developed and developing world.” The objective of this group was, the report stated, was “to help analyze, through scholarly inquiry and international consultations, some of the vexing economic and monetary problems facing the world today, and to make their findings widely known.”

The Rockefeller Foundation expressed a keen interest in structuring the global economic and monetary issues of the day, noting that: “The international economic system is not functioning well – as evidenced by slow economic growth, persistent unemployment, and high inflation in many countries, growing skepticism about the capacity of floating exchange rates to correct imbalances of payments, increasing fears of protectionism, and relatively little progress in meeting the needs of developing countries and the quarter of the world’s population that is very poor.”

Thus, the Foundation laid the groundwork for what would come next, by continuing “to concentrate on international economic policy and made plans to bring together a group of experts who will explore the functioning of the international economic system. Beginning with the subject of international monetary problems, the group intends to clarify the issues, identify policy choices for governments, and assess the consequences of alternative policies and institutional arrangements.”

What emerged was the Group of Thirty, originally named the “Consultative Group on International Economic and Monetary Affairs,” which was to function as a think tank, lobby/industry group and, ultimately, a consensus-building institution for the global elites – to ensure that they stayed that way.

The 1979 annual report of the Rockefeller Foundation noted that the Group of Thirty “began an ambitious program of research, study group analyses, and plenary meetings for the purpose of seeking ways to improve the functioning of the international monetary system.” (Annual Report, 1979, Rockefeller Foundation.)

Fast forward more than three decades and the Group of Thirty remains a highly influential organization in matters of global financial governance. Members of the G-30 have included notable figures such as Josef Ackermann, Pedro Aspe, Alan Greenspan, Andrew Crockett, and the newly-anointed Chair of the Federal Reserve System, Janet Yellen.

The Association for Financial Professionals wrote in 2005 that, “over nearly the past three decades, one thing that has remained continuous in the hurly-burly changing landscape of international economics has been the influence of the Group of Thirty,” which it described as “something of a high-powered global economic think tank.”

Gerd Hausler, an official at the IMF and former Governor of the German Bundesbank, stated: “What makes the G30 unique is that it has very senior people there… It recruits members from the central banks and private companies [to get them] sitting together and mulling ideas at a high level.”

Geoffrey L Bell, who founded the organization at the invitation – and with the money – of the Rockefeller Foundation, commented, “The idea of ‘30’ was to have a good cross-section of people from around the world… but not so many that you couldn’t have a good discussion.”

In March of 2009, the Financial Times published a list of “the 50 people likely to be the most influential in shaping the world debate” on “tackling the many problems” of the global financial and economic crisis, “and charting a course through them to a new world order.”

The article noted that, “networks and institutions will matter as much as individuals,” and in particular it referenced the Group of Thirty as “one interesting connection between these players,” with 11 of the 50 individuals selected on the list being members of the G-30. Four years after the list was published, the number of its individuals who were also members of the G-30 increased to 14.

One of those is Jean-Claude Trichet, the former President of the European Central Bank and current Chairman of the Group of Thirty. Upon assuming his role as chairman in 2011, Trichet stated: “This is a time of exceptional challenges to the global economic and financial system, and the G30 will continue to make significant contributions to the policy debate and enhance understanding of the critical paths to stability and to economic growth.”

As Chairman of the G-30, Trichet also sits as the Honorary Governor of the Banque de France (the French central bank), which he used to direct from 1993 until 2003, when he became President of the European Central Bank (ECB), a position he held through 2011. Trichet was also previously a director of the French Treasury and the former chairman of the Paris Club, from 1985 to 1993. While he was President of the ECB, he also served as a member of the board of directors of the Bank for International Settlements (BIS) and as president of the Global Economy Meeting of Central Bank Governors at the BIS from 2002 to 2011.

Today, Trichet holds a number of other highly influential positions. Apart from being Chairman of the G-30, he sits on the board of directors of the Peter G. Peterson Institute for International Economics, he is on the board of the European military contractor EADS, and he is chairman of the board for the influential European think tank BRUEGEL. Trichet is also, importantly, a member of the Group of Trustees in the global bank industry lobby known as the Institute of International Finance (IIF). He is additionally the European Chairman of the Trilateral Commission and is a member of the Steering Committee of the Bilderberg Meetings.

Jacob A. Frenkel, the Chairman of the Board of Trustees of the Group of Thirty, is also a member of the Executive Committee of JPMorgan Chase, and Chairman of JPMorgan Chase International, while also sitting as a member on the International Council of the bank. Frenkel was the Vice Chairman of American International Group (AIG) from 2004 to 2009, during which time it received its mega-bailout from the Federal Government. He is also a past Chairman of Merrill Lynch International from 2000 to 2004.

Prior, Frenkel was the Governor of the Bank of Israel from 1991 to 2000; Economic Counselor and Director of Research at the International Monetary Fund (IMF) from 1987 to 1991; David Rockefeller Professor of International Economics at the University of Chicago from 1973 to 1987; former editor of the Journal of Political Economy; and previously a member of the International Advisory Board for the Council on Foreign Relations.

Currently, Frenkel is a member of the board of directors on the National Bureau of Economic Research (NBER), as well as a member of the Trilateral Commission and the International Advisory Council of the China Development Bank. He too sits on the board of the Peter G. Peterson Institute for International Economics, and is a member of the Economic Advisory Panel of the Federal Reserve Bank of New York, as well as the Investment Advisory Council to the Prime Minister of Turkey. Frenkel is also on the board of directors for Loews Corporation.

This is but a brief introduction to the Group of Thirty, its members, and its influence, which will be elaborated upon in future installments of the Global Power Project. Stay tuned for the second part in the series next week.

Andrew Gavin Marshall is a 26-year old researcher and writer based in Montreal, Canada. He is Project Manager of The People’s Book Project, chair of the Geopolitics Division of The Hampton Institute, research director for Occupy.com’s Global Power Project and the World of Resistance (WoR) Report, and hosts a weekly podcast show with BoilingFrogsPost.

Introducing the Global Power Project

Introducing the Global Power Project

By: Andrew Gavin Marshall

Originally Posted at: Occupy.com

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We live in an interdependent world, where nations are increasingly eclipsed in size and wealth by the major banks and transnational corporations which have come to dominate the global economy.

Royal Dutch Shell has more money than all but the top 22 countries on earth. Supra-national and international institutions like the European Central Bank and IMF punish the populations of Greece, Spain, Portugal, Italy and Ireland into poverty and conditions of exploitation. Banks and corporations make record profits while poverty soars, debts increase and hunger spreads. Half the world’s population lives on less than $3 per day, over 1 billion people live in slums, and a global land grab coupled with a six-year-long global food crisis is pushing populations off their land and into deeper poverty and extreme hunger.

Western governments impose “austerity” at home while waging wars and supporting dictatorships abroad. Across the Arab world populations have been in revolt, labor unrest in South Africa reveals the persistence of economic apartheid, and popular resistance has exploded across southern Europe, while student uprisings have shaken Britain, Chile, Quebec and Mexico.

Indigenous peoples in the western hemisphere are mobilizing and resisting the destruction of the natural world, from Ecuador, Brazil, Guatemala and Mexico to Canada. The Occupy Movement emerged as a reaction to the rapacious system of global power that has impoverished the world, devastated the environment, waged wars and, in the past few decades, emerged as a highly integrated global class of oligarchs.

It is within this context that Occupy.com is beginning a research project to examine the networks of global power and how they operate, providing a resource to activists and others who wish to engage in opposition to the global power structures as they currently exist. This initiative is the Global Power Project.

The aim of the Global Power Project is to map the connections between the world’s dominant institutions of power, by examining the relationships and points of cross-over among the individuals who direct these institutions. The institutions that will be examined include the major banks, central banks, oil companies, mining corporations, media conglomerates, major think tanks, foundations, university boards and other international organizations.

The aim is to expose not only the revolving door between government and private institutions, but to name names and directly call out the global elite based on their affiliations and networks of influence.

The first installment of the Global Power Project will examine six major American banks: JPMorgan Chase, Goldman Sachs, Bank of America, Wells Fargo, Morgan Stanley and Citigroup. Executives, board members and major advisers to these institutions will be studied, with information drawn from their official CVs, biographies, published interviews or financial publications, and collected into a detailed appendix outlining the individuals’ past and present affiliations with other dominant institutions of power.

This includes examining the links between those who manage the big six banks and government agencies, universities, think tanks, foundations, international organizations, the media, multinational corporations and other organizations. From the data collected, we will be able to draw conclusions about the networks of influence and the shared leadership positions that enable these banks and bankers to wield significant influence over other institutions.

This is not a study of economic dependence or the investments made by banks. It is a study of the social organization, interaction and integration of national and global elites. Instead of viewing institutions as separate entities, and often in opposition to one another as it is commonly suggested, the Global Power Project will seek to document the increasingly globalized connections that bind the financial and political elite, and to expose this highly integrated network of individuals spread across an array of institutions both national and global.

The Global Power Project does not adhere to a particular ideological view, philosophy or dogma. Rather, it focuses on the facts: by examining the connections, affiliations and cross-memberships through which elites govern our dominant social, economic and political institutions. From this research we hope to offer a clearer understanding of the current networks and structures of global power, which can serve as an invaluable resource for those seeking to study, understand, expose or challenge those existing structures.

The initial, forthcoming installment in the Global Power Project will focus on the major Wall Street banks, studying their executive leadership, members of the boards of directors, international advisory boards and other key officials operating within those institutions.

Keep a lookout and spread the word. The mapping of networks of global power is about to begin.

The Great Corporate Colony: Welcome to Canada Inc., A Subsidiary of the American Empire & Co.

The Great Corporate Colony: Welcome to Canada Inc., A Subsidiary of the American Empire & Co.

By: Andrew Gavin Marshall

Canada's Foreign Minister John Baird (left), Prime Minister Stephen Harper (centre), and Chinese Premier Web Jiabo (right). Photo from the Globe and Mail.

Canada’s Foreign Minister John Baird (left), Prime Minister Stephen Harper (centre), and Chinese Premier Wen Jiabao (right). Photo from the Globe and Mail.

 

The following is a sample from the first volume of The People’s Book Project, a crowd-funded initiative to produce a series of books studying the ideas, institutions, and individuals of power and resistance. Please consider donating to help the Project come to fruition.

As one of the most resource-rich countries on earth, and the largest single trading partner with the United States, Canada is strategically positioned to influence the changing nature of global power structures. Do we support – and siphon our resources for the benefit of – the American Empire, co-operating in the wholesale plundering of the world, the oppression and impoverishment of peoples, destruction of global ecology, all for the benefit of an increasingly small class of global corporations and banks… Or, do we become independent and free? Canada’s Prime Minister Stephen Harper once said, “You won’t recognize Canada when I get through with it.” With multiple “free trade” agreements under way, expanded corporate rights, expropriation of vast amounts of natural resources, Canada is becoming one of the world’s foremost corporate colonies, unrecognizable from what Canadians once imagined our nation to be.

The Plundering Potential of Resource Wealth

Canada is the second largest country by landmass in the world, after Russia, and with roughly 10% of the population of the United States, it is also one of the most resource rich countries on the entire planet. Looking at a list of the ten most resource-rich nations on earth (determined not by the multitude, but rather the ‘market value’ of the resources they contain) is rather revealing. At number ten, and in descending order is: Venezuela, Iraq, Australia, Brazil, China, Iran, Canada, Saudi Arabia, the United States, and Russia. Canada has one of the largest oil reserves in the world after Saudi Arabia and Iran (though these are largely located in the difficult-to-extract Alberta tar sands), as well as having some of the largest mineral resource deposits in the world, with the second-largest proven reserves of uranium and the third largest amount of timber.[1] According to Statistics Canada, the nation’s natural wealth tripled in value between 1990 and 2009, then valued at $3 trillion, largely due to the increased price of oil.[2]

In June of 2012, the United Nations released a major report in which it established a new index to account for and define ‘wealth’ beyond mere reports of GDP. Termed the “Inclusive Wealth Index” (IWI), it determines national wealth based upon three types of assets: “manufactured” (machinery, buildings, infrastructure, etc.), “human capital” (the population’s education and skills), and “natural capital” (land, forests, fossil fuels, minerals, etc.). The study, Inclusive Wealth Report 2012, analyzed 20 different countries, and was intended to take into account depleting resources and sustainability for future generations when determining a nation’s real wealth. While GDP growth has taken place in China, the U.S., South Africa and Brazil, these nations have significantly reduced their natural capital. Between 1990 and 2008, the “natural capital” of the United States declined by 20%, 17% for China, 25% for Brazil, and 33% for South Africa. In fact, 19 out of the 20 countries studied showed a decline in natural capital, offset only by an increase in human capital (education and skills).[3]

Human capital is based upon the average years of schooling, wages that the country’s workers can demand, and how many years they are expected to work before they retire or die. With this measurement, human capital amounts to the largest percentage of a nation’s wealth (except for Nigeria, Russia, and Saudi Arabia), accounting for 88% of Britain’s wealth and 75% of America’s.[4] Canada is of course included among the 19 countries with rapidly declining natural capital.

Canada’s Minister of Natural Resources Joe Oliver spoke to a gathering of Canaccord Genuity Corporation (a financial services conglomerate) in Toronto in September of 2012, where he explained that Canada’s “tremendous natural wealth” included “huge capacities and reserves of energy, including the third-largest proven oil reserves in the world,” as well as “tremendous hydroelectric capacity, massive tracts of forests and an abundance of minerals and metals.” He added, however: “it’s not enough to have the resources… You have to do something with them.” Oliver listed some of the many resources which Canada has and produces in abundance: oil, natural gas, hydroelectricity, uranium (second largest producer in the world), more than 200 mines turning out more than 60 minerals, “including more potash than anyone else,” as well as aluminum, cobalt, diamonds, nickel, platinum group metals, titanium concentrate, tungsten, chromite, the second-largest exporter of primary forest products, and is the “biggest exporter of wood pulp, newsprint and softwood lumber.” The resource sector, explained Oliver, “is the cornerstone of our economy, our long-term prosperity and our quality of life.”[5]

Oliver explained that the energy, forestry, metals and minerals industries accounted for roughly 15% of Canada’s nominal GDP, the “direct contribution” to the Canadian economy, while the indirect GDP (taking into account “goods and services purchased from other sectors – construction, machinery and equipment, business and professional services”) takes the number up to roughly 20%. The key areas and industries are oil in Alberta, forestry in British Columbia, potash and uranium in Saskatchewan, mining in Ontario and hydro-power in Quebec. Oliver told the assembled crowd in the heart of Toronto’s finance industry that there was “about $650 billion invested in over 600 major resource projects currently underway in Canada or planned in the next 10 years.” He added: “Countries in the Asia-Pacific region are especially hungry for the energy and minerals and metals and forest products they need to fuel their growth and build a better quality of life for their citizens.” There were, he acknowledged, still inherent problems with the global economy which could effect this outlook, but suggested that what the Canadian government can – “and is doing – is establish a competitive business climate so the private sector can capitalize on our enormous potential.” In other words, the Canadian government will establish a highly protective and subsidized market for multinational corporations to more effectively plunder the natural resources.[6] All for altruistic intentions, of course!

Canada’s highly influential big business dominated think tanks have not been far behind in promoting resource plundering by multinational corporations. The Conference Board of Canada published a report in June of 2012 arguing that “Canada’s trade strengths are concentrated in industries that extract natural resources and process raw materials,” including agricultural and food products, minerals and metals, forest products, and electricity exports. In the report, Adding Value to Trade: Moving Beyond Being Hewers of Wood, Michael Burt wrote: “These industries rely heavily on natural resource wealth such as land, water, forests, and mineral products. The abundance of these resources gives Canada a robust comparative advantage in the industries that extract and process them.” Thus, it would be desirable to promote the “development and use of our natural resources, and industries that support the primary sector are competitive with world standards.”[7] The board of directors of the Conference Board of Canada includes executives and/or board members of the Business Development Bank of Canada, EPCOR Utilities, CGI Group, GE Canada, Canada Post Corporation, TransAlta Corporation, ICICI Bank Canada, Cisco Systems Canada, Desjardins Group, IBM Canada, Shell Canada, Xerox Canada, SaskTel, SaskPower, and John Manley, the President and CEO of the Canadian Council of Chief Executives (CCCE), the main business interest group in Canada, made up of the top 150 corporate CEOs in the country.

In October of 2012, the Canadian International Council (CIC) – the Canadian counterpart to the Council on Foreign Relations in the U.S. – published a report entitled, Becoming a Resource Superpower, in which the author, Madelaine Drohan (the Canada correspondent for The Economist) argued that, “without strong leadership and collaboration we risk losing an opportunity to become a real resource superpower.” A series of recommendations were laid out, including the possibility of establishing a sovereign wealth fund (SWF) to pool and invest money made from resources, encouraging the provincial and federal governments in Canada to “stop treating” revenue from resources “as income to be spent and start treating them as capital to be saved or invested.” In other words, the money made from resources should not go back to benefit Canadians, but rather be used to exclusively benefit the investor class.[8]

Other recommendations focused on expanding the relationship between government, business, and academia (as if we don’t have enough of this already): “To do this, federal and provincial governments must concentrate their funding for research and development on collaborative projects between groups of companies and academic institutions.” Another recommendation focused on expanding “trade” networks and energy customers, specifically in the Asia-Pacific, noting: “Canada should focus on negotiations involving the largest possible number of countries, such as the Trans-Pacific Partnership, and look beyond China so we do not repeat the error of putting all our eggs in one basket.” The report then recommended the government to establish highly protectionist trade agreements for corporations, writing: “Government can help companies plug into global value chains by removing impediments and securing the right trade and investment deals.” By definition, that is the opposite of “free trade,” which is why it is important that we call it “free trade,” when in actuality, it is highly protectionist, involving state intervention designed to undermine the ‘market’ and give corporations a subsidized advantage, thus, undermining competition. The last major recommendation was for federal, provincial, and territorial governments to “collaborate on a national blueprint for resource development that identifies the gaps to be filled – including in infrastructure, environmental protection, trade diversification, education, immigration, technology, and supporting sectors – and sets out how to address them, with achievable goals and deadlines.” In other words, massive state-capitalist planning and plundering is required.[9]

The board of directors of the Canadian International Council (CIC) includes the president and CEO of the Canadian Chamber of Commerce, Chair of the Atlantic Council of Canada, Raymond Chrétien (nephew of former Prime Minister Jean Chrétien), while the chief sponsors of the CIC include: Bennett Jones, Power Corporation of Canada (owned by the Desmarais family, Canada’s Rockefellers), the Royal Bank of Canada, AGF, Barrick Gold, BMO Financial Group, Sun Life Financial, Scotiabank, and TD Bank. So naturally, it has everyone’s interests at heart, and by ‘everyone’, I mean, everyone that matters to the investor class (i.e., the investor class).

So, as Canada increases production of oil from Alberta’s tar sands, the government is seeking to expand the major pipelines to the coast in the hopes of acquiring China as a major trading partner, instead of just the United States.[10] Canada sits atop “unknown quantities” of natural gas reserves, what The Economist calls an “unconventional bonanza,” adding: “Just as the 20th century was the age of oil, the 21st could prove to be the century of gas.”[11] However, in August of 2012, Canadian Prime Minister Stephen Harper declared that Canada’s future economic hopes depend upon the natural resources of the Arctic, which has been the focus of a new global grab for resources since the Arctic ice has begun to break up more rapidly. On a visit to the region, Harper stated, “Obviously, there is a tremendous economic opportunity here. The fact that we are attracting investment not just domestically, but from around the globe speaks very highly to the future.” As revealed by documents released to the press, in late 2011, the Mining Association of Canada was lobbying the Environment Minister Peter Kent “to change regulations and allow non-metal mines, such as diamonds, oilsands and coal, to discharge potentially polluted water under federal guidelines.”[12]

In other words, now that the ice is breaking and resources are being readied for plunder, the major mining conglomerates want the government’s permission to treat the Canadian environment the way they treat the environment in the rest of the world, notably, in poor, conflict-ridden countries like Colombia and the Democratic Republic of Congo. After all, what is plundering without the added bonus of environmental devastation? It’s not just a matter of extracting and exploiting all available resources, from which to gain massive profits, but it’s also important for corporations to destroy the surrounding environment so that little, if anything, can flourish and replenish. That is plundering at its most profitable. In October of 2012, it was reported that Canada was going to claim ownership of a massive size of undersea territory in the Arctic, larger than the size of the province of Québec, and roughly equal to 20% of the country’s surface area.[13]

In 2013, Canada will begin chairing a two-year term of the Arctic Council, a grouping of eight nations working together to manage the development of the Arctic as an economically and strategically important global region.[14] With the opening of new and large opportunities for economic exploitation and resource plundering, the states with territory in the Arctic have become increasingly aggressive in their military posturing in the region, “increasingly designed for combat rather than policing,” according to a study by the Centre for Climate and Energy Solutions. The report noted: “Although the pursuit of co-operation is the stated priority, most of the Arctic states have begun to rebuild and modernize their military capabilities in the region.”[15]

Canadian Prime Minister Stephen Harper had been publicly making aggressive statements about competition in the Arctic, particularly in relation to Russia. In private, however, Harper had been making different claims. As revealed by Wikileaks, Harper expressed the message to the Secretary-General of NATO that there was no real military threat in the Arctic, instead expressing the perspective that, “Canada has a good working relationship with Russia with respect to the Arctic, and a NATO presence could backfire by exacerbating tensions.” Harper added, according to the released cables, “that there is no likelihood of Arctic states going to war, but that some non-Arctic members favoured a NATO role in the Arctic because it would afford them influence in an area where ‘they don’t belong’.” All the public statements and aggressive military stances in the region have, however, helped to sway public opinion into believing that there is a “security or sovereignty threat to the northern border,” and thus justify increased expansion into the region for exploitation. The issue is not one of security, but of securing resources (for corporations, no doubt). One released cable from 2009 relayed this point accurately, noting that Canada’s defense plan to build six Arctic Patrol ships for the navy was “an example of a requirement driven by political rather than military imperatives, since the navy did not request these patrol ships. The Conservatives have nonetheless long found domestic political capital in asserting Canada’s ‘Arctic Sovereignty’.”[16] By the summer of 2012, the aggressive rhetoric had essentially vanished, and Harper’s missions to the Arctic were entirely diplomatic and aimed at exploiting the region’s vast natural resources.[17] The Obama administration has also identified the Arctic as “an area of key strategic interest.”[18]

Canada For Sale: “Free Trade” Fanaticism

Canada has been pursuing a vast array of so-called “free trade” agreements with specific countries around the world, as part of the overall program of plundering resources and giving multinational corporations unprecedented control over society. Since the 1988 Canada-U.S. Free Trade Agreement and the 1994 North American Free Trade Agreement (NAFTA), Canada has pursued agreements with several countries, including Israel, Jordan, Chile, Costa Rica, Colombia, Honduras, Panama, Peru and is in talks with the European Union and Japan, as well as China and India.[19]

On August 15, 2011, the Canada-Colombia Free Trade Agreement – a highly protectionist corporate-driven agreement (like all “free trade” agreements) – came into effect. The agreement was reached in 2008, receiving “royal assent” in 2010, and is sure to benefit major corporations and help finance a state which is responsible for the greatest human rights violations in the Western Hemisphere. Canada’s top five exports to Colombia include wheat, newsprint and paper, machinery and equipment, dump trucks as well as beans, peas, and lentils. Colombia’s top five exports to Canada include coal, coffee, bananas, fuel oil and cut flowers (note: this list excludes illicit trade products like cocaine, of which Colombia is a major global exporter).[20]

As critics of the deal pointed to Colombia’s record on human rights abuses, Stephen Harper commented, “No good purpose is served in this country or in the United States by anybody who is standing in the way of the development of the prosperity of Colombia,” by which he means to say that human rights are irrelevant so long as multinational corporations are making large profits. And indeed, policies fit that paradigm very well. Harper added: “Colombia is a wonderful country with great possibility and great ambition. And we need to be encouraging that every step of the way. That’s why we have made this a priority to get this deal done. We can’t block the progress of a country like this for protectionist reasons.”[21] In this sense, the word “protectionist” refers to any impediments, regulations, or barriers to the unhindered exploitation and plundering of a country by multinational corporations. When agreements are protectionist in favour of corporations, securing and enforcing their unhindered monopolization of markets and exploitation of resources, this is called “free trade.”

With more than 70 Canadian corporations in Colombia, from oil and mining to finance, the agreement will open up more access for major companies. For those who mention human rights abuses, Harper had this to say: “I think there are protectionist forces in our country and in the United States that don’t care about development and prosperity in this part of the world. And that’s unfortunate.” Chris Spaulding of Talisman Energy, a Canadian corporation doing business in Colombia, commented that, “It’s very business friendly. They want foreign investment. The labor force is very good. The resources are there.”[22]

According to the Globe and Mail, Colombia has “near bullet-proof potential for rapid growth,” due to low wages, abundant resources, and with the return of “order” (a euphemism for state oppression and control), though the country still has a high murder rate, five times the rate of the United States. Colombia not only signed a free trade agreement with Canada, but also with the U.S., and has received top rates from the World Bank for fostering a good “business climate.”[23] Scotiabank, one of Canada’s big five banks, made a $1 billion purchase of a 51% stake in Colombia’s fifth largest bank, Banco Colpatria.[24] Rick Waugh, the CEO of Scotiabank, declared that, “Colombia is very important to us.”[25]

Toronto-based mining company Gran Colombia Gold Corp has been seeking to remove an entire town, a 500-year old community, to make way for an open-pit mine. When the Colombian government was preparing to displace the town, villagers in the community formed a committee to defend themselves. One of the organizers, a local priest, Father José Reinel Restrepo, publicly denounced the plan to move the town for the benefit of a foreign corporation, even giving television interviews in which he denounced “Canadian imperialism.” He explained: “If they are going to drive me out of here, I would tell them they would have to expel me by way of bullets or machetes – but they can’t oblige me to leave.” Four days later, Father Restrepo was shot dead while traveling to visit his family.[26]

Colombia has a long history with powerful business interests allying themselves with paramilitary outfits to “silence opponents and displace rural populations living atop natural resources.” Under the guise of the “war on drugs,” Colombia’s military, with billions in “aid” from the United States, has co-operated with big business interests and criminal paramilitary groups, purportedly to fight rebel groups (notably FARC), but mostly to clear rural communities to allow for corporate plundering of the resources upon which they sit. In recent decades, some four million people have been displaced by such actions, leaving the country with Latin America’s “most inequitable distribution of wealth.” On top of that, Colombia is a major narco-state, with state, paramilitary and rebel groups all participating in the massive cocaine trade. Many historians have described Colombia as “the world’s most enduringly violent country,” with over five decades of constant internal warfare. With over 20 major Canadian companies holding major investments in Colombia, it’s no wonder that the World Bank rated the country as the best investment climate in Latin America.[27]

The brand of “order” that the government of Colombia has enforced in recent years represents a continuation of the policies of several administrations before it. The human rights and humanitarian crisis in Colombia is “staggering in scale,” with millions displaced, killed, tortured, raped, kidnapped or “disappeared,” more than 280,000 people had to flee their homes in 2010 alone. State, paramilitary and rebel groups have all routinely been accused of vast human rights abuses and war crimes. While the new government of President Santos promised to prioritize human rights when he came to power in 2010, the reality, according to Amnesty International, was that “threats against and killings of leaders of displaced communities and of those seeking the return of lands misappropriated during the conflict, mainly by paramilitary groups, have increased during the Santos government.” In criminal investigations of human rights abuses, witnesses, victims, lawyers, and judges have continuously been threatened or even killed. Threats and murders have also increased for human rights activists, trade unionists, and community leaders.[28]

Canadian law demands that the government table a human rights report for Parliament on the impact of the Canada-Colombia Free Trade Agreement. Instead of submitting the report, the Canadian government decided, in May of 2012, that it would not even adhere to Canadian law, and refused to submit any such report, instead stating that it would produce a report for May of 2013. With more than 259,000 people displaced from their homes in Colombia in 2011 (on top of the 280,000 displaced in 2010), human rights abuses and war crimes will continue, with the tacit (and perhaps active) cooperation of Canadian corporations, notably mining companies. The Canadian government has effectively given the green light for such abuses to continue. While Colombia’s Constitutional Court identified 34 Indigenous nations in the country that were in “grave danger of extinction,” Canadian indifference continued. Alex Neve, the Secretary General of Amnesty International Canada declared that, “Canada must not turn its back on the human rights crisis in Colombia for yet another year… The crucial question that should not be postponed is what role is Canadian investment playing with regard to this emergency?” Neve added: “Failure to carry out a full impact assessment violates Canada’s responsibility of due diligence under international law and denies Canadian corporations working in Colombia the information they need to avoid implicating themselves in grave human rights violations.”[29]

The website for the Canadian ministry for Foreign Affairs and International Trade declared that the Canada-Colombia FTA provided “a key boost for Canadian companies in five important sectors: agriculture, information and communication technologies, mining, oil and gas, and services.” Noting that Canada’s interest in the narco-state was “growing strongly,” the ministry website added that Colombia had “undergone important economic and legal reforms, spurring democracy and global direct investment.” The business climate, it declared, was “now stable and predictable, making Colombia a secure business partner and a solid investment destination.”[30] With that in mind, Canada’s Defence Minister Peter MacKay signed an agreement with the Colombian military in November of 2012 to strengthen its “military relationship with Colombia,” which MacKay stated, “represents a natural evolution in our relationship… And we look forward to continuing to build our ties with the Colombian Armed Forces.” No doubt, as they continue to displace hundreds of thousands of innocent people in order to clear the land for foreign corporations, and of course, to help advance the profits of the international illicit drug trade.[31]

Scotiabank decided to expand its operations further in Colombia, with the purchase of a majority stake in one of Colombia’s largest pension fund companies. Scotiabank has taken on a major role in “financing Colombia’s energy and mining sectors,” with the bank’s head of global wealth management stating, “We look to continue the growth and expansion of this business.” Another executive at Scotiabank stated, “We continue to invest in Colombia because we see this as a market with great potential for growth.”[32] Interestingly, the Canadian Embassy in Colombia is located in the new Scotiabank Tower in Bogota.[33]

Canada continues to pursue further “free trade agreements” with other countries as well, notably, Japan and China. In March of 2012, Canada and Japan agreed to begin free trade talks, already steadfast trading partners. On top of “free trade,” the Japanese Prime Minister Yoshihiko Noda announced that Canada and Japan would also be advancing defence and security “co-operation.”[34] At the announcement, Harper declared that, “This is a truly historic step that will help create jobs and growth for both countries.” Jayson Myers, the president of the Canadian Manufacturers & Exporters association stated, “Japan is a strategic commercial partner… However, it is also a country with whom we’ve had a persistent trade deficit when it comes to manufacturing. These negotiations provide the appropriate forum to resolve ongoing concerns.”[35]

As revealed by secret documents obtained by the media, the Canadian government had been lobbying the United States to join the Trans-Pacific Partnership agreement for the main reason of gaining more access to Japan, with one document noting that the TPP without Japan “does not excite us.”[36] In November of 2012, it was reported that Japan was likely to follow Canada’s entrance into the TPP, the largest and most secretive trade agreement in history, involving 11 Pacific rim countries, and negotiated in cooperation with over 600 corporations. The TPP is highly controversial within Japan, since it could potentially – and likely would – lead to reduced protections and subsidies for the Japanese agriculture sector, an area long considered untouchable. A spokesperson for the Canadian department of Foreign Affairs and International Trade stated, “We welcome Japan’s interest in joining the TPP. Japan’s participation in the TPP would further strengthen Canada and Japan’s strong trade and investment relationship. We are already working closely with Japan towards a bilateral free trade agreement that will bring new jobs and increased prosperity to Canadians and we would welcome the opportunity to also work together in the TPP.”[37]

(For more information on the TPP, please see my three-part series here: The Trans-Pacific Partnership)

Canada has also begun talks with India and hoped to sign a free trade deal with the country by the end of 2013, with Stephen Harper stating, upon a visit to India, “I think I am very clear that we need to go farther and faster.” Stephen Harper lamented against the fact that India has democratic institutions, and thus, undemocratic policies are harder to implement. He stated: “What we do have to realize when we deal with India, as opposed to some other countries that we’re dealing with in the developing world – this country is a democracy… And that means that governments cannot simply dictate a whole set of policy changes to happen the next day. That means governments must develop consensus behind policy changes. And that, in this country is not easy. We understand that.”[38] Luckily for Harper, he doesn’t have to face any such problems at home, with a majority government, tearing the country to pieces day-by-day. Stephen Harper once boasted many years ago, that if he was given the chance to become Prime Minister, “You won’t recognize Canada when I get through with it.”[39] Indeed, that turns out to be quite true. Indeed, back in 1997, Harper wrote an article in which he referred to Canada as “a benign dictatorship,” though there seems to be little ‘benign’ about his majority-government rule.[40]

In September of 2012, Stephen Harper signed an investment treaty with China (as a precursor to a potential free trade agreement), called the Foreign Investment Promotion and Protection Agreement (FIPA). The details of the agreement were kept secret until the deal was tabled in the Canadian Parliament in late September, but the agreement is not to be debated in Parliament because treaty making “is a royal prerogative,” and can thus become law through the initiative of the Prime Minister’s cabinet alone, so long as the treaty is ‘tabled’ in Parliament. Canada already had roughly 24 FIPAs in operation, with roughly a dozen more in the works. FIPAs are not “free trade agreements,” but are designed to simply “protect and promote” foreign investment in legally-binding agreements.[41] In essence, they are quicker and smaller versions of “free trade” agreements, and designed with a similar purpose: to advance corporate rights and the expense of democratic rights.

China’s ambassador to Canada stated that the two countries should move quickly toward a free-trade agreement within a decade, adding, “It’s time to open each other’s markets.” The comments came as a major Chinese state-owned corporation was seeking to take over a Canadian energy company, which would be the first direct foreign takeover of a major actor in Canada’s energy sector, a major concern for Canadians who fear Canada’s resource wealth will not benefit Canadians. On this issue, the Chinese ambassador noted, “Business is business. It should not be politicized… If we politicize all this, then we can’t do business.” The ambassador told a Canadian journalist, “We are not coming to control your resources.”[42] No, of course not, they’re just coming to take the resources. Within a couple months, Prime Minister Harper approved of the Chinese takeover of the Canadian energy company Nexen, as well as another takeover by a Malaysian company in the Canadian energy sector. However, Harper then stated that there would be restrictions on foreign governments buying some of Canada’s largest energy conglomerates (just not these ones in particular). At a press conference, Harper stated, “When we say that Canada is open for business, we do not mean that Canada is for sale to foreign governments.” Except, of course, for all the exceptions to that rule.[43]

Critics of the Canada-China FIPA warned that it would reduce Canada to little more than a “resource colony,” which would bind Canada to new investment rights with China for 30 years.[44] Not only does it allow China to gain an increased foothold in Canada’s economy, and specifically, in purchasing Canadian resources, but it also acts “to protect Canadian capitalists when they go into China.”[45] What more could someone ask for? The Council of Canadians, a public interest organization, referred to the Canada-China FIPA as a “corporate rights pact” that would have serious repercussions on Canadian environmental, energy, and financial policies. This is because the deal would allow for lawsuits against the Canadian federal and provincial governments for having “barriers” to investments, which could then be overturned.[46]

Canada is also in the final stages of negotiating a trade agreement with the European Union, called the Comprehensive Economic Trade Agreement (CETA), designed to reduce tariffs and open up “new markets,” having major impacts upon agriculture, intellectual property rights (copyright and patent laws), with drug prices likely to increase “significantly,” as well as allowing for more “labour mobility,” a euphemism for increased labour exploitation.[47] The agreement, which has been in negotiations for years, would “deal another blow to Canada’s already battered manufacturing sector,” with roughly 28,000 jobs under threat, deemed to be the “best-case scenario” by the Canadian Centre for Policy Alternatives. The “worst-case” scenario could see up to 152,000 jobs being “vaporized.”[48]

As is typical, the negotiations are “behind closed doors” and barely deal with actual “trade.” CETA is, much like the TPP, termed a “next generation” free trade agreement, negotiated since May of 2009, and would further deregulate and privatize the Canadian economy, and of course, therefore, increase corporate power, and thus at the expense of democratic accountability. The agreement could restrict how local and provincial governments could spend money, even banning “buy local” policies, increase the cost of drugs by $3 billion, increase Canada’s trade deficit with the EU, allow for European corporations to attack environmental and health protections within Canada as “barriers to investment,” potentially even apply pressure to privatize water, transit, and energy, and even prevent farmers from saving their seeds, as a major gift to GMO manufacturers.[49] Where corporate rights are advanced, democratic rights are dismantled.

A leaked document from the European Commission dated November 6, 2012, revealed that the practice of Canadian municipalities “buying locally” would disappear with the Canada-EU CETA, and that “provincial development programs could go with them.” Canadian municipalities were offering better terms for European access to municipal contracts that those which Canadian provinces give each other. The document, prepared for the European Commission’s Trade Policy Committee noted that the agreement is “the most ambitious and comprehensive offer Canada and its provinces have made to any partner, including the U.S.” EU negotiations will, however, continue to press for more access to energy sectors. Maude Barlow of the Council of Canadians noted: “The amount of room our provinces, municipalities and local communities have to support local farmers and otherwise create the jobs of tomorrow is threatened again by a Canada-European Union free trade deal that will forever prohibit these kinds of economic strategies.” The province of Ontario could alone lose between 13,000 and 70,000 jobs as a result of the agreement, according to the Canadian Centre for Policy Alternatives.[50]

Openly acknowledged by European politicians was that Canada would be getting the short end of the stick in the CETA deal, as a Danish member of the European Parliament stated, “At the moment Europe will be able to export more than what Canada will be exporting.” Another European official closely linked to the negotiations stated, “We will gain a bit more.” Canadian Trade Minister Ed Fast said, “[t]he potential benefits to Canadians under a free trade agreement with the European Union are immense,” though he forgot to acknowledge that the ‘Canadians’ he was referring to are largely corporations, and the elite class that owns them. Michael Hart, a trade expert at Carleton University noted, “[t]rade agreements do not create jobs. Never have. Never will. But ministers have never accepted that economic insight.”[51] And understandably so, after all, it’s rather challenging to sell a trade deal to the public if one openly declares it is for the singular purpose of advancing corporate rights, domination, and plundering. So instead, politicians must always mutter the magical word of “jobs,” which in political language, translates accurately into “profits,” as Noam Chomsky has suggested in the past. Thus, when politicians say that trade agreements will “create jobs,” which they never do, what they are actually saying is that such agreements will “create profits,” and exclusively for major multinational corporations, which they always do.

Canada’s trade agenda is of course driven by big business, whose interests will be served by such “free trade” agreements. In regards to CETA, the Canada Europe Roundtable for Business (CERT) was established in 1999 to contribute “recommendations on trade and investment to government officials and hosting thematic, high-level meeting focused on developing strategic relationships between company executives and with government officials,” according to the website for CERT. A declaration of support in 2008 for a Canada-EU trade agreement was signed by over 100 executives in Europe and Canada, urging Canadian and EU leaders to “design a new type of forward-looking, wide-ranging and binding bilateral trade and investment agreement.” Such an agreement, the document stated, “will provide European companies with a gateway into the vast North American free trade area, while increasing Canadian opportunities in the European Common Market,” serving as “a strategic and important step towards the eventual creation of a comprehensive transatlantic trade and investment area.” Among the signatories to the statement were top executives at the following companies: Anglo American plc, AstraZeneca, Barrick Gold Corporation, BASF, Bayer, Bertelsmann, BNP-Paribas, Bombardier, British Airways, Canadian Chamber of Commerce, Canadian Manufacturers & Exporters, CN, Commerzbank, Deutsche Bank, E.ON AG, Gaz de France, GlaxoSmithKline, Lafarge, Manulife Financial, Merck, Monsanto Canada, Munich Re, Pfizer Canada, Power Financial Corporation, Rio Tinto plc, Royal Dutch Shell, Siemens, SNC-Lavalin, Société Générale, SUEZ, Suncor, ThyssenKrupp, TOTAL SA., TSX Group, Ubisoft Entertainment, and Volkswagen, among many others.[52]

In late October 2012, a number of European and Canadian big business lobbying groups, including BusinessEurope, the Canadian Chamber of Commerce, and the Canada Europe Roundtable for Business (CERT), sent a letter to the Canadian and European trade negotiators, Ed Fast and Karel de Gucht, respectively, urging them to push through on the CETA. The signatories called for Canada and the EU to reach “an ambitious and successful conclusion to the Comprehensive Economic and Trade Agreement (CETA) negotiations by the end of 2012.” The letter said it was “imperative” to “maintain a high level of ambition” in key areas which would benefit Canadian and European corporate interests. Among the many areas for which the letter suggested “a high level of ambition” were in recommending the “full and rapid dismantling of tariffs for all industrial goods,” and “[a]ccess to raw materials and energy products,” the removal of barriers and “discriminations” in service sectors, “full access” to the agricultural sector, including “a satisfactory path forward on the bio-tech issues that have caused trade impediments,” by which is meant to advance the interests of GMO manufacturers. Further recommendations included “access to government procurement” which removes all barriers and allows for increased privatization, and of course, “[r]obust protection and enforcement of intellectual property (IP) rights in both markets,” which would include “the targeting, seizing and destroying of counterfeit imports and exports,” so as to undermine competition and protect monopoly and oligopoly corporations. Finally, the letter stated that the Canada-EU agreement “must also ensure improved labour mobility,” which would allow for increased labour exploitation, enhancing competition between the labour forces of Europe and Canada, which always results in lost jobs, lower wages, and reduced protections and benefits.[53] These are, of course, all very good things for multinational corporations. Since they are terrible things for the populations, they have to be coded in political and economic language, so instead of saying, “we want easily exploitable and cheap labour,” they suggest, “improved labour mobility,” which is also at times referred to as “labour flexibility” (i.e., making labour “flexible” to the interests of multinational corporations).

The Great Canadian Corporate Colony

Such letters from corporate leaders are necessary in order to remind political leaders whose interests they are in office to serve. The Canadian government ensured that it would serve big business interests through trade policy by appointing, in May of 2012, a new ‘advisory panel’ which would “help guide Canada’s ambitious, pro-trade plan in large, dynamic and fast-growing priority markets.” Speaking at the Canadian Chamber of Commerce, International Trade Minister Ed Fast stated: “Our government’s top priority is the economy – creating jobs, growth and long-term prosperity for Canadian workers, businesses and families… We understand the importance of trade to our economy… That is why we are deepening Canada’s trading relationships in priority markets around the world.”[54]

Ed Fast announced the formation of the new advisory panel at the Canadian Chamber of Commerce. The members of the panel include: Murad Al-Katib, president and CEO of Alliance Grain Traders Inc.; Paul Reynolds, president and CEO of Canaccord Financial; Kathleen Sullivan, executive director of the Canadian Agri-Food Trade Alliance (CAFTA), representing 80% of Canada’s agri-food sector; Perrin Beatty, president and CEO of the Canadian Chamber of Commerce, former president and CEO of the Canadian Manufacturers & Exporters, former president and CEO of the Canadian Broadcasting Corporations (CBC), and former government minister; John Manley, former Deputy Prime Minister of Canada, former Foreign Affairs and Finance Minister, and currently president and CEO of the Canadian Council of Chief Executives (CCCE), a corporate interest group made up of Canada’s top 150 CEOs; Catherine Swift, president and CEO of the Canadian Federation of Independent Businesses; Jayson Myers, president and CEO of Canadian Manufacturers & Exporters; Brian Ferguson, president and CEO of Cenovus Energy Inc, a major Canadian oil company; Serge Godin, founder and executive chairman of the board of CGI Group Inc, one of the largest information technology businesses in the world; and Indira Samarasekera, president of the University of Alberta. Upon the announcement of this panel, Ed Fast stated: “I look forward to receiving advice from these knowledgeable Canadian leaders.”[55]

So we return to the statement once made by Prime Minister Stephen Harper: “You won’t recognize Canada when I get through with it.” Sadly, this is quite true as Harper Inc. advance Canada to the status of one of the world’s premier corporate colonies, where plundering for profits, environmental degradation, mass privatization, deregulation, and democratic devastation are the rules of the day. A Canada once thought of as democratic, free, and peaceful, is ever-advancing toward a fully privatized outpost of global corporate tyranny: Canada Inc., a subsidiary of the American Empire & Co.

 

Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, with a focus on studying the ideas, institutions, and individuals of power and resistance across a wide spectrum of social, political, economic, and historical spheres. He has been published in AlterNet, CounterPunch, Occupy.com, Truth-Out, RoarMag, and a number of other alternative media groups, and regularly does radio, Internet, and television interviews with both alternative and mainstream news outlets. He is Project Manager of The People’s Book Project and has a weekly podcast show with BoilingFrogsPost.

Notes

[1]       “The World’s Most Resource-Rich Countries,” 24/7 Wall St., 18 April 2012:

http://247wallst.com/2012/04/18/the-worlds-most-resource-rich-countries/

[2]       Kim Covert, “Canada’s natural wealth tripled between 1990 and 2009,” Financial Post, 28 June 2011:

http://business.financialpost.com/2011/06/28/canada%E2%80%99s-natural-wealth-tripled-between-1990-and-2009/

[3]       UNEP, “A New Balance Sheet for Nations: Launch of Sustainability Index that Looks Beyond GDP,” UNEP News Centre, 17 June 2012:

http://www.unep.org/newscentre/default.aspx?ArticleID=9174&DocumentID=2688

[4]       Free Exchange, “The real wealth of nations,” The Economist, 30 June 2012:

http://www.economist.com/node/21557732

[5]       Joe Oliver, “Natural Resources: Canada’s Advantage, Canada’s Opportunity,” Natural Resources Canada, 4 September 2012:

http://www.nrcan.gc.ca/media-room/speeches/2012/6475

[6]       Ibid.

[7]       CNW, “Canada’s trade strengths come from natural resources and related industries,” Canada Newswire, 19 June 2012:

http://www.newswire.ca/en/story/995619/canada-s-trade-strengths-come-from-natural-resources-and-related-industries

[8]       Jameson Berkow, “Canada could become a global resource superpower in just nine easy steps,” The Financial Post, 9 October 2012:

http://business.financialpost.com/2012/10/09/canada-could-become-a-global-resource-superpower-in-just-nine-easy-steps/

[9]       Jameson Berkow, “Canada could become a global resource superpower in just nine easy steps,” The Financial Post, 9 October 2012:

http://business.financialpost.com/2012/10/09/canada-could-become-a-global-resource-superpower-in-just-nine-easy-steps/

[10]     Energy in Canada, “The great pipeline battle,” The Economist, 26 May 2012:

http://www.economist.com/node/21555928

[11]     “An unconventional bonanza,” The Economist, 14 July 2012:

http://www.economist.com/node/21558432

[12]     Jordan Press, “Future lies in Arctic resource development, Harper says,” Postmedia News, 21 August 2012:

http://www.canada.com/business/Future+lies+Arctic+resource+development+Harper+says/7122937/story.html

[13]     Randy Boswell, “Canada poised for massive undersea land grab off Arctic, Atlantic coasts,” The Ottawa Citizen, 4 October 2012:

http://www.canada.com/Canada+poised+massive+undersea+land+grab+Arctic+Atlantic+coasts/7345687/story.html#ixzz2BZr0yMiK

[14]     Randy Boswell, “Canada to take helm of Arctic Council as region heats up,” Postmedia News, 25 September 2012:

http://www.canada.com/Canada+take+helm+Arctic+Council+region+heats/7298225/story.html

[15]     Terry Macalister, “Arctic military rivalry could herald a 21st-century cold war,” The Guardian, 5 June 2012:

http://www.guardian.co.uk/world/2012/jun/05/arctic-military-rivalry-cold-war

[16]     Campbell Clark, “Harper’s tough talk on the Arctic less stern in private,” The Globe and Mail, 12 May 2011:

http://www.theglobeandmail.com/news/politics/harpers-tough-talk-on-the-arctic-less-stern-in-private/article579749/

[17]     Campbell Clark, “Harper’s Arctic trips are now diplomatic ventures,” The Globe and Mail, 22 August 2012:

http://www.theglobeandmail.com/news/world/harpers-arctic-trips-are-now-diplomatic-ventures/article4494231/

[18]     Jacquelyn Ryan, “As Arctic melts, U.S. ill-positioned to tap resources,” The Washington Post, 9 January 2011:

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/09/AR2011010903400.html

[19]     “Free trade with Canada has become a global aspiration,” The Vancouver Sun, 2 November 2012: http://www.vancouversun.com/business/Free+trade+with+Canada+become+global+aspiration/7488138/story.html#ixzz2BfUjOQxc

[20]     “Canada-Colombia trade deal takes effect,” CBC, 15 August 2011:

http://www.cbc.ca/news/business/story/2011/08/15/f-colombia-canada-trade.html

[21]     Mark Kennedy, “Harper defends trade agreement with Colombia,” 10 August 2011:

http://news.nationalpost.com/2011/08/10/harper-in-colombia-to-mark-launch-of-free-trade-agreement/

[22]     Ibid.

[23]     Martin Hutchinson, “Colombia’s turnaround: from bullets into drill bits,” The Globe and Mail, 19 January 2012:

http://www.theglobeandmail.com/report-on-business/rob-commentary/rob-insight/colombias-turnaround-from-bullets-into-drill-bits/article1359576/

[24]     Caroline Van Hasselt and Dan Molinski, “Scotiabank Buys Stake in Colombian Bank,” The Wall Street Journal, 21 October 2011:

http://online.wsj.com/article/SB10001424052970204485304576643353880991840.html

[25]     Paul Christopher Webster, “Colombia is Canada’s new best friend,” The Globe and Mail, 26 April 2012:

http://www.theglobeandmail.com/report-on-business/rob-magazine/colombia-is-canadas-new-best-friend/article4102946/?page=all

[26]     Ibid.

[27]     Ibid.

[28]     Alex Neve, “Canada’s tainted trade partner,” The Toronto Star, 21 September 2011:

http://www.thestar.com/opinion/editorialopinion/article/1057525–canada-s-tainted-trade-partner

[29]     News Release, “Canada-Colombia trade deal: Empty human rights impact report yet another failure by government,” Amnesty International, 16 May 2012:

http://www.amnesty.ca/news/news-item/canada-colombia-trade-deal-empty-human-rights-impact-report-yet-another-failure-by-go

[30]     FAITC, “Colombia FTA gives Canadian firms a big boost,” Foreign Affairs and International Trade Canada, 7 December 2012:

http://www.international.gc.ca/canadexport/articles/111012b.aspx?view=d

[31]     Jessica Hume, “Canada, Colombia strengthen defence relationship,” The Toronto Sun, 17 November 2012:

http://www.torontosun.com/2012/11/17/canada-colombia-strengthen-defence-relationship

[32]     Grant Robertson, “Scotiabank bulks up in Colombia,” The Globe and Mail, 14 August 2012:

http://www.theglobeandmail.com/report-on-business/international-business/latin-american-business/scotiabank-bulks-up-in-colombia/article4479935/

[33]     Paul Christopher Webster, “Colombia is Canada’s new best friend,” The Globe and Mail, 26 April 2012:

http://www.theglobeandmail.com/report-on-business/rob-magazine/colombia-is-canadas-new-best-friend/article4102946/?page=all

[34]     “Canada, Japan agree to free-trade talks,” CBC, 25 March 2012:

http://www.cbc.ca/news/world/story/2012/03/25/harper-japan-trade.html

[35]     Shawn McCarthy, “Canada, Japan launch free-trade talks,” The Globe and Mail, 25 March 2012:

http://www.theglobeandmail.com/news/politics/canada-japan-launch-free-trade-talks/article534401/

[36]     Jason Fekete, “Secret documents show how hard Conservative government lobbied to get into TPP talks,” Reuters, 12 June 2012:

http://o.canada.com/2012/06/19/secret-documents-show-how-hard-conservative-government-lobbied-to-get-into-tpp-talks/

[37]     Andy Hoffman, “Japanese PM looks to join Trans-Pacific Partnership trade deal,” The Globe and Mail, 11 November 2012:

http://www.theglobeandmail.com/report-on-business/international-business/japanese-pm-looks-to-join-trans-pacific-partnership-trade-deal/article5186241/

[38]     Mark Kennedy, “Stephen Harper says Canada-India trade links must come faster,” The Montreal Gazette, 8 November 2012:

http://www.montrealgazette.com/business/Stephen+Harper+says+Canada+India+trade+links+must+come+faster/7518117/story.html

[39]     Frances Russell, “True colours of Mulroney, Harper revealed,” Winnipeg Free Press, 20 May 2009:

http://www.winnipegfreepress.com/opinion/westview/true-colours-of-mulroney-harper-revealed-45462077.html

[40]     Terry Milewski, “Ending Canada’s ‘benign dictatorship’,” CBC, 30 March 2011:

http://www.cbc.ca/news/politics/canadavotes2011/story/2011/03/30/cv-milewski-harper-coalition.html

[41]     “5 things to know about the Canada-China investment treaty,” CBC, 27 October 2012:

http://www.cbc.ca/news/politics/story/2012/10/27/pol-the-house-fippa-with-china.html

[42]     Campbell Clark, “China calls for free-trade deal with Canada within a decade,” The Globe and Mail, 22 September 2012:

http://www.theglobeandmail.com/news/politics/china-calls-for-free-trade-deal-with-canada-within-a-decade/article4561149/

[43]     Shawn McCarthy and Steven Chase, “Ottawa approves Nexen, Progress foreign takeovers,” The Globe and Mail, 7 December 2012:

http://www.theglobeandmail.com/globe-investor/ottawa-approves-nexen-progress-foreign-takeovers/article6107548/

[44]     Heather Scoffield, “China deals would leave Canada a resource colony: opponents,” The Financial Post, 31 October 2012:

http://business.financialpost.com/2012/10/31/china-deals-would-leave-canada-a-resource-colony-opponents/

[45]     Don Butler, “Understanding FIPA in under 1,000 words,” Ottawa Citizen, 31 October 2012:

http://www.ottawacitizen.com/business/Understanding+FIPA+under+words/7472421/story.html

[46]     Daniel Tencer, “Canada-China Foreign Investment Promotion And Protection Agreement ‘A Corporate Rights Pact,’ Council Of Canadians Says,” The Huffington Post, 1 October 2012:

http://www.huffingtonpost.ca/2012/10/01/canada-china-investment-fipa_n_1929663.html

[47]     Janyce McGregor, “5 key issues in the Canada-EU trade deal,” CBC, 22 November 2012:

http://www.cbc.ca/news/politics/story/2012/11/21/pol-ceta-canada-europe-trade-list.html

[48]     Greg Keenan, “Free-trade deal with EU could cost thousands of Canadian factory jobs,” The Globe and Mail, 27 October 2010:

http://www.theglobeandmail.com/report-on-business/economy/free-trade-deal-with-eu-could-cost-thousands-of-canadian-factory-jobs/article1215960/

[49]     Campaigns, “Canada-European Comprehensive Economic and Trade Agreement (CETA),” The Council of Canadians:

http://canadians.org/trade/issues/EU/index.html

[50]     Daniel Tencer, “Canada-EU Free Trade: Leaked EU Document Sheds Light On Negotiations,” The Huffington Post, 26 November 2012:

http://www.huffingtonpost.ca/2012/11/26/canada-eu-free-trade-leaked-document_n_2192949.html

[51]     Althia Raj, “Canada Trade Deal With European Union: CETA May Benefit EU Over Canada, Officials Say,” The Huffington Post, 17 October 2012:

http://www.huffingtonpost.ca/2011/10/17/canada-may-get-short-end-of-stick-in-economic-and-trade-agreement-with-eu_n_1014707.html

[52]     CERT, “Declaration in support of a Canada-EU trade and investment agreement,” The Canada Europe Roundtable for Business.

[53]     “The Canadian and EU business communities’ call for a successful conclusion to the Comprehensive Economic and Trade Agreement (CETA),” BUSINESSEUROPE, 29 October 2012.

[54]     Press Release, “Harper Government Launches Next Phase of Canada’s Pro-Trade Plan for Jobs, Growth and Long-Term Prosperity,” Foreign Affairs and International Trade Canada, 29 May 2012:

http://www.international.gc.ca/media_commerce/comm/news-communiques/2012/05/26a.aspx?lang=eng&view=d

[55]     Ibid.

The Trans-Pacific Partnership: What “Free Trade” Actually Means

The Trans-Pacific Partnership: What “Free Trade” Actually Means

By: Andrew Gavin Marshall

The following is part 3 of a three-part exclusive series on the Trans-Pacific Partnership for Occupy.com

Part 1: The Trans-Pacific Partnership: This is What Corporate Governance Looks Like

Part 2: Why So Secretive? The Trans-Pacific Partnership as Global Corporate Coup

To discuss “free trade agreements” or the “free market,” we must first identify the theoretical versus the functional definitions of these terms – because theoretical definitions look at what those terms should mean, whereas functional definitions look at what the terms mean actually.

The theoretical definition of a “free market” is one in which every individual actor in the realm of exchange exists in a state of equality of opportunity; where all compete with one another to produce the best products at the cheapest prices for consumers, thus the most innovative and efficient producers succeed while others fail, unregulated – and unhelped – by the state. Within “free markets,” what we call “free trade agreements” are meant to reduce barriers such as tariffs, subsidies and regulations so that market “competitors” can freely move products and goods across borders and compete in an ever-expanding global “free market.”

The functional, or technical, definition of a “free market” is one in which the state regulates the market – the realm of economic exchange and activity – for the benefit of large transnational corporations and banks.

Barriers to profits, such as environmental, labor, safety and financial regulations, are dismantled. Meanwhile, subsidies and legal rights and protections are granted to major corporations, undermining competition and supporting monopolization. So while the rhetoric of “free markets” tends to be all about reducing state interference in the economy, in actuality state interference increases – but only for the benefit of large corporations and banks.

At the same time, state “interference” decreases in sectors that benefit the actual population, such as welfare, social services, pensions, healthcare, education, labor protections and so on. In the actual “free market,” these protections are dismantled, subjecting populations to “market discipline” quite unlike the large corporations and banks that receive direct protection against “market discipline.” The most obvious example of this is the post-2008 bank bailouts.

In a theoretical “free market,” all the banks that gambled badly would have failed and collapsed. But with the functional “free market” we have today, the banks went to the state and got bailed out with trillions of dollars of taxpayer money.

The same dichotomy exists for the term “free trade agreement,” which in theory is the opposite of “protectionism,” where states intervene in the market by establishing tariffs, regulations, subsidies and protections for various imports and exports, thus undermining the “free market.”

The technical definition, however, is one in which protectionism is rampant, with enormous subsidies and protective barriers, and very often includes thousands of pages of regulations and provisions. But because all of this is done to protect corporate and financial interests, it is called “free trade.” It is “protectionism” if the barriers, regulations and protections benefit the nation or population and prevent transnational corporations and banks from having unhindered access to the “market”?

Likewise, is it “free trade” if the barriers, regulations, and protections benefit corporations and banks at the expense of the nation and population? In actuality, so-called “free trade” is a drain on the economy, creates enormous national debts, undermines labor, creates poverty and exploitation, wastes natural resources and devastates the environment. However, it is very profitable for banks and corporations, so is endlessly repeated as something “good” and “necessary.”

In theory, “free trade” would enhance competition because it would allow all parties to compete on an even playing field internationally, thus companies would have to find ways to lower their costs of production while increasing their product standards, ultimately decreasing the final price to consumers. In this theoretical form of “free trade,” the best and cheapest product, the company that made it, and the consumer and society as a whole would all benefit.

The reality is the exact opposite: the production cycle is broken up (this is commonly called “offshoring”), which increases the use of transportation, resources and the overall cost of production, making the final product more expensive to consumers. Case in point is the North American Free Trade Agreement (NAFTA), where competition between corporations is undermined while access to resources and markets is enhanced, subsidized and protected.

Corporate cooperation with each other and the state is enhanced while the poor, working and middle classes of Canada, the United States and Mexico are put in direct competition with each other. Corporations in Canada and the U.S. close their factories and move them to Mexico where labor is cheaper, increasing unemployment and poverty, destroying unions and labor protections, and forcing down wages while costs and corporate profits increase.

The role of the state is to regulate these markets and agreements for the benefit of the corporations and banks, and to force the populations to compete with each other in a race to the bottom: market monopolization for the elite, and market discipline for the population.

The break-up of the production cycle, especially from the late 1980s onward, has redefined what “trade” actually is. Typically, we think of trade as a system where countries export and import products or goods. With the era of “free trade,” the production cycle was no longer confined within national borders, and was broken up between several countries.

The result was that a large percentage of what we call “trade” is actually one corporation moving parts or goods to a subsidiary or another corporation in a different country, to continue the production cycle until it returns to the home country as a finished product for consumption.

This is referred to as “intra-industry trade” (transporting parts or goods between corporations) or “intra-firm trade” (transporting parts or goods between a corporation and its subsidiaries). When the parts move across borders, often several times before the final product is created, customs agents at borders register the cumulative value of those products as a “traded” good, and these numbers are then used to determine the “actual contribution” of that good to the economy.

For example, a product which has parts manufactured in Canada, assembled in Mexico, and sold in the United States, would have to cross borders several times before it becomes a final product. Each time the parts cross a border, the total value of those parts at that time of transport gets registered as an import/export, instead of differentiating between the value added at each part of the production cycle. Thus, the statistics of exports and imports become heavily skewed and inflated since they do not account for “value-added.” While the production cycle is broken up over several countries, the determination of “value” is not broken up to fit the actual trading system as it exists.

For a hypothetical comparison to reveal how absurd this process is, imagine a country that attempts to measure the total education of its population by including in its statistics the degrees and credentials of all the tourists who entered the country for short periods of time. The recorded education level of the country’s population would be enormously inflated, since the educated tourists entering the nation would not be staying and contributing their education to the benefit of the society. Something similar happens when parts move across borders several times before they become a finished product, yet have their total value registered each time they cross a border.

According to a report from a Canadian think tank, the Conference Board of Canada, if countries were to apply a “value-added” measurement of trade instead of using inflated numbers applied to the cumulative value of a good, the actual contribution of trade to a country would rapidly diminish. In conventional measurements, trade accounts for 35% of Canada’s economy, but with the value-added measurement, it drops to 24%. These manipulations are important because they serve as a basis for claiming that countries like Canada are “trade dependent” nations, which justify implementing more “free trade” agreements.

When a country imports more than it exports, it builds up a large amount of debt called a trade deficit. When a country exports more than it imports, it establishes a trade surplus. However, because the process of determining the value of imports and exports is enormously inflated and misleading, countries are saddled with inflated and inaccurate debts. They are then pressured into reducing those debts through austerity measures, which punish those countries’ populations into poverty.

Apple is a great example of this process, often hailed as one of the great corporate success stories, being enormously profitable and therefore “good for the economy.” As the Asian Development Bank Institute in Tokyo reported in 2010, while Apple is a U.S.-based company, the iPhone is itself considered to be a Chinese export to the U.S. The iPhone is produced in many different pieces and parts through several Asian and European countries, which are then transported to China where they are assembled and shipped to the United States and elsewhere.

The estimated value of the Chinese laborers in assembling the iPhone was 3.6% (or $6.50) of the total value of the finished product, estimated at $178.96 in 2009. Yet, the wholesale cost of the shipped iPhone is credited to China as an export. China was merely the last stop in the production cycle, but China records the total value of the finished product as an export, while the United States records it as an import. Thus, the researchers at the Asian Development Bank Institute concluded that “even high-tech products invented by U.S. companies will not increase U.S. exports.”

Pascal Lamy, director-general of the World Trade Organization (WTO), commented, “What we call ‘Made in China’ is indeed assembled in China, but what makes up the commercial value of the product comes from the numerous countries… The concept of country of origin for manufactured goods has gradually become obsolete.”

If trade statistics were adjusted to reflect the actual value contributed to a given product by a country, the U.S. trade deficit with China (which in 2010 stood at $226.88 billion) would likely be cut in half. In 2009, the iPhone left the United States with a $1.9 billion trade deficit with China, but if the value-added approach to determining trade statistics were applied, the United States would have a $48 million trade surplus with China (in relation to the iPhone alone).

With the production cycle broken up and scattered around the globe, this adds enormous costs to transportation of equipment, machinery, goods and products between these nations, which in turn requires enormous quantities of oil and fuel to facilitate this transport system, and thus produces unnecessary amounts of pollution. Because of the high costs of transportation, fuel, and assembly, the value of the end product goes up, making it far more costly than if it were simply produced in one or two countries.

With countries determining their exports and imports based on inflated and inaccurate statistics, populations are saddled with enormous debts and thus the financial cost of breaking up the production cycle lands on the shoulders of the population, who were already subjected to increased competition between labor forces, reduced environmental and social protections, dismantled subsidies and regulations, increased personal debt and poverty.

So if “free trade agreements” are bad for people, bad for labor – at home and abroad – and bad for the environment and the nation as a whole, why are they pursued?

The answer is simple: they create enormous profits for banks and corporations, whose losses are subsidized by the state. In an actual “free market,” breaking up the production cycle would be far too costly to be a rational choice for a corporation, but because the state takes on the cost of doing so (largely through its trade deficit), the process continues.

When it comes to agreements like the Trans-Pacific Partnership, it is not difficult to see what the results will be: increased subsidies, protections and regulations for the benefit of large corporations and banks (notably the 600 corporations involved in secretly drafting the agreement over recent years) and decreased protections, subsidies and regulations that benefit the population, environment and society as a whole.

The TPP advances corporate monopolistic protections through intellectual property rights; undermines labor protections, putting the working class of 11 different nations in direct competition with one another; dismantles environmental protections and financial regulations; and expands corporate rights and privileges to allow undemocratic corporate institutions to challenge national laws through an unaccountable international tribunal of corporate lawyers who are given powers to overturn national laws or demand immense compensation from any nations that hinder those corporations’ “potential profits,” thus further increasing the heavy cost of “free trade.”

The Occupy movement and other activists have a strong mandate to oppose the TPP and all related “free trade agreements.” Popular opinion is swinging against “free trade” as people seem instinctively to recognize – even without all the details – that such agreements undermine labor, increase debt and benefit only the rich.

But while public opinion may oppose the TPP in principle, the bigger problem is that “the public” does not know the TPP even exists. This is a challenge that the Occupy movement can step up to: promoting an educational campaign that crosses borders, organizing international protests and actions against the TPP, and establishing a “free market” of resistance based upon the “free trade” of information.

As corporate rights expand and democratic rights decrease, so must people demand an end to the TPP. Organized resistance, information and action have stopped “free trade agreements” in the past, and they can – and must – do so in the future. The coming corporate tyranny of the Trans-Pacific Partnership can only be defeated through a democratic movement of Transnational People Power.

Our already frail and dying democratic institutions lack the capacity to take up the challenge, so the challenge now rests with the people alone.

Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, with a focus on studying the ideas, institutions, and individuals of power and resistance across a wide spectrum of social, political, economic, and historical spheres. He has been published in AlterNet, CounterPunch, Occupy.com, Truth-Out, RoarMag, and a number of other alternative media groups, and regularly does radio, Internet, and television interviews with both alternative and mainstream news outlets. He is Project Manager of The People’s Book Project and has a weekly podcast show with BoilingFrogsPost.

Why So Secretive? The Trans-Pacific Partnership as Global Corporate Coup

Why So Secretive? The Trans-Pacific Partnership as Global Corporate Coup

By: Andrew Gavin Marshall

The following is the second installment of a three-part exclusive on the TPP for Occupy.com.

Part 1: The Trans-Pacific Partnership: This is What Corporate Governance Looks Like

Part 3: The Trans-Pacific Partnership: What “Free Trade” Actually Means

The Trans-Pacific Partnership is the most secretive and “least transparent” trade negotiations in history.

Luckily for the populations and societies that will be affected by the agreement, there are public research organizations and alternative media outlets campaigning against it – and they’ve even released several leaks of draft agreement chapters. From these leaks, which are not covered by mainstream corporate-controlled news outlets, we are able to get a better understanding of what the Trans-Pacific Partnership actually encompasses.

For example, public interest groups have been warning that the TPP could result in millions of lost jobs. As a letter from Congress to United States Trade Representative Ron Kirk stated, the TPP “will create binding policies on future Congresses in numerous areas,” including “those related to labor, patent and copyright, land use, food, agriculture and product standards, natural resources, the environment, professional licensing, state-owned enterprises and government procurement policies, as well as financial, healthcare, energy, telecommunications and other service sector regulations.”

In other words, as promised, the TPP goes far beyond “trade.”

Dubbed by many as “NAFTA on steroids” and a “corporate coup,” only two of the TPP’s 26 chapters actually have anything to do with trade. Most of it grants far-reaching new rights and privileges to corporations, specifically related to intellectual property rights (copyright and patent laws), as well as constraints on government regulations.

The leaked documents revealed that the Obama administration “intends to bestow radical new political powers upon multinational corporations,” as Obama and Kirk have emerged as strong advocates “for policies that environmental activists, financial reform advocates and labor unions have long rejected for eroding key protections currently in domestic laws.”

In other words, the already ineffective and mostly toothless environmental, financial, and labor regulations that exist are unacceptable to the Obama administration and the 600 corporations aligned with the TPP who are giving him his orders.

The agreement stipulates that foreign corporations operating in the United States would no longer be subject to domestic U.S. laws regarding protections for the environment, finance or labor rights, and could appeal to an “international tribunal” which would be given the power to overrule American law and impose sanctions on the U.S. for violating the new “rights” of corporations.

The “international tribunal” that would dictate the laws of the countries would be staffed by corporate lawyers acting as “judges,” thus ensuring that cases taken before them have a “fair and balanced” hearing – fairly balanced in favor of corporate rights above anything else.

A public interest coalition known as Citizens Trade Campaign published a draft of the TPP chapter on “investment” revealing information about the “international tribunal” which would allow corporations to directly sue governments that have barriers to “potential profits.”

Arthur Stamoulis, the executive director of Citizens Trade Campaign, explained that the draft texts “clearly contain proposals designed to give transnational corporations special rights that go far beyond those possessed by domestic businesses and American citizens… A proposal that could have such broad effects on environmental, consumer safety and other public interest regulations deserves public scrutiny and debate. It shouldn’t be crafted behind closed doors.”

Public Citizen’s Global Trade Watch, a public interest organization, undertook an analysis of the leaked document on investment and explained that the international corporate tribunal would allow corporations to overturn national laws and regulations or demand enormous sums in compensation, with the tribunal “empowered to order payment of unlimited government Treasury funds to foreign investors over TPP claims.”

Even under NAFTA, over $350 million has been paid by NAFTA-aligned governments to corporations for “barriers” to investment “rights,” including toxic waste dumps, logging rules, as well as bans on various toxic chemicals.

Because let’s be clear: for corporations, such regulations and concerns over health, safety and environmental issues are perceived solely as “barriers” to investment and profit. Thus their “government” would sue the foreign government on behalf of the corporation, on the premise that such regulations led to potential lost profits, for which the corporation should be compensated.

The TPP allows the corporations to directly sue the government in question. All of the TPP member countries, except for Australia, have agreed to adhere to the jurisdiction of this international tribunal, an unelected, anti-democratic and corporate-staffed kangaroo-court with legal authority over at least ten nations and their populations.

Further, TPP countries have not agreed on a set of obligations for corporations to meet in relation to health, labor or environmental standards, and thus a door is opened for corporations to obtain even more rights and privileges to plunder and exploit. Where corporate rights are extended, human and democratic rights are dismantled.

One of the most important areas in which the TPP has a profound effect is in relation to intellectual property rights, or copyright and patent laws. Corporations have been strong advocates of expanding intellectual property rights, namely, their intellectual property rights.

Pharmaceutical corporations are major proponents of these rights and are likely to be among the major beneficiaries of the intellectual property chapter of the TPP. The pharmaceutical industry ensured that strong patent rules were included in the 1995 World Trade Organization agreement, but ultimately felt that those rules did not go far enough.

Dean Baker, writing in the Guardian, explained that stronger patent rules establish “a government-granted monopoly, often as long as 14 years, that prohibits generic competitors from entering a market based on another company’s test results that show a drug to be safe and effective.” Baker noted that such laws are actually “the opposite of free trade” since they “involve increased government intervention in the market” and “restrict competition and lead to higher prices for consumers.”

Essentially, what this means is that in poor countries where more people need access to life-saving drugs, and at cheaper cost, it would be impossible for companies or governments to manufacture and sell cheaper generic brands of successful drugs held by multinational corporate patents. Such an agreement would hand over a monopoly of price-controls to these corporations, allowing them to set the prices as they deem fit, thus making the drugs incredibly expensive and often inaccessible to the people who need them most.

As U.S. Congressman Henry Waxman correctly noted, “In many parts of the world, access to generic drugs means the difference between life and death.”

The TPP is expected to increase such corporate patent rights more than any other agreement in history. Generic drug manufacturers in countries like Vietnam and Malaysia would suffer. So would sales of larger generics manufacturers in the U.S., Canada, and Australia, which supply low-cost drugs to much of the world.

While the United States has given up the right to negotiate drug prices with pharmaceutical corporations (hence the exorbitant price for drugs purchased in the U.S.), countries like New Zealand and even Canada to a lesser extent negotiate drug prices in order to keep the costs down for consumers. The TPP will grant new negotiating privileges to corporations, allowing them to appeal decisions by governments to challenge the high cost of drugs or to go with cheap alternatives. Referring to these changes, the U.S. manager of Doctors Without Borders’ Access to Medicines Campaign stated, “Bush was better than Obama on this.”

But that’s not all the TPP threatens: Internet freedom is also a major target.

The Council of Canadians and OpenMedia, major campaigners for Internet freedom, have warned that the TPP would “criminalize some everyday uses of the Internet,” including music downloads as well as the combining of different media works. OpenMedia warned that the TPP would “force service providers to collect and hand over your private data without privacy safeguards, and give media conglomerates more power to send you fines in the mail, remove online content – including entire websites – and even terminate your access to the Internet.”

Also advanced under the TPP chapter on intellectual property rights, new laws would have to be put in place by governments to regulate Internet usage. OpenMedia further warned that, from the leaked documents on intellectual property rights, “there can be heavy fines for average citizens online,” adding: “you could be fined for clicking on a link, people could be knocked off the Internet and web sites could be locked off.”

The TPP, warned OpenMedia founder Steve Anderson, “will limit innovation and free expression.” Under the TPP, there is no distinction between commercial and non-commercial copyright infringement. Thus, users who download music for personal use would face the same penalties as those who sell pirated music for profit.

Information that is created or shared on social networking sites could have Internet users fined, have their computers seized, their Internet usage terminated, or even get them a jail sentence. The TPP imposes a “three strikes” system for copyright infringement, where three violations would result in the termination of a household’s Internet access.

So, why all the secrecy? Corporate and political decision-makers study public opinion very closely; they know how to manipulate the public based upon what the majority think and believe. When it comes to “free trade” agreements, public opinion has forced negotiators into the darkness of back-room deals and unaccountable secrecy precisely because populations are so overwhelmingly against such agreements.

An opinion poll from 2011 revealed that the American public has – just over the previous few years – moved from “broad opposition” to “overwhelming opposition” toward NAFTA-style trade deals.

A major NBC News-Wall Street Journal poll from September of 2010 revealed that “the impact of trade and outsourcing is one of the only issues on which Americans of different classes, occupations and political persuasions agree,” with 86% saying that outsourcing jobs by U.S. companies to poor countries was “a top cause of our economic woes,” with 69% thinking that “free trade agreements between the United States and other countries cost the U.S. jobs.” Only 17% of Americans in 2010 felt that “free trade agreements” benefit the U.S., compared to 28% in 2007.

Because public opinion is strongly – and increasingly – against “free trade agreements,” secrecy is required in order to prevent the public from even knowing about, let alone actively opposing, agreements like the Trans-Pacific Partnership. And this, as U.S. Trade Representative Kirk explained, is a very “practical” reason for all the secrecy.

Part III of Marshall’s investigative series on the Trans-Pacific Partnership will appear Monday.

Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is also Project Manager of The People’s Book Project. He also hosts a weekly podcast show, “Empire, Power, and People,” on BoilingFrogsPost.com.

The Trans-Pacific Partnership: This is What Corporate Governance Looks Like

The Trans-Pacific Partnership: This is What Corporate Governance Looks Like

By: Andrew Gavin Marshall

The following is the first installment of a three-part exclusive for Occupy.com on the Trans-Pacific Partnership.

Originally published at Occupy.com

Part 2: The Trans-Pacific Partnership: This is What Corporate Governance Looks Like

Part 3: The Trans-Pacific Partnership: What “Free Trade” Actually Means

In 2008, the United States Trade Representative Susan Schwab announced the U.S. entry into the Trans-Pacific Partnership talks as “a pathway to broader Asia-Pacific regional economic integration.” Originating in 2005 as a “Strategic Economic Partnership” between a few select Pacific countries, the TPP has, as of October 2012, expanded to include 11 nations in total: the United States, Canada, Mexico, Peru, Chile, New Zealand, Australia, Brunei, Singapore, Vietnam and Malaysia, with the possibility of several more joining in the future.

What makes the TPP unique is not simply the fact that it may be the largest “free trade agreement” ever negotiated, nor even the fact that only two of its roughly 26 articles actually deal with “trade,” but that it is also the most secretive trade negotiations in history, with no public oversight, input, or consultations.

Since the Obama administration came to power in January of 2009, the Trans-Pacific Partnership has become a quiet priority for the U.S., which overtook the leadership role in the “trade agreement” talks. In 2010, when Malaysia joined the TPP, the Wall Street Journal suggested that the “free-trade pact” could “serve as a counterweight to China’s economic influence,” with Japan and the Philippines both expressing interest in joining the talks.

In the meantime, the Obama administration and other participating nations have been consulting and negotiating not only with each other, but with roughly 600 corporations involved. The TPP is accelerating the most dangerous free market policies of previous U.S. administrations, bestowing unprecedented powers and privileges upon Trans-National Corporations (TNCs) while dismantling regulations and laws without any democratic oversight or input.

This three-part investigative series examines the Trans-Pacific Partnership, a legally binding trade agreement for advancing transnational corporate tyranny and dismantling domestic democratic accountability.

I. Trade Representatives: The Global Corporate Lobby

Who negotiates trade agreements? The answer is simple: trade representatives. The term “trade representative” is essentially another way of saying “corporate lobbyist.”

To prove this point, it would be useful to quickly glance over the biographies of the important U.S. Trade Representatives (USTR) since the George H.W. Bush administration, when USTR Carla A. Hills was lead negotiator for NAFTA and the WTO.

Embedded within the U.S. foreign policy establishment, Hills had a long career in government and was the USTR from 1989 to 1993, after which she established and became CEO of Hills & Company, an international consulting firm with a focus on global trade and investment for clients such as the Coca-Cola Company, Procter & Gamble, American International Group (AIG), Novartis, Bechtel, Boeing, Rolls-Royce, Inter-American Development Bank, Pfizer and Chevron.

A few accolades: Hills is a member of the board of the Council on Foreign Relations, Gilead Sciences, and is on international advisory boards for Rolls Royce, the Coca-Cola Company and JPMorgan Chase. She is also a member of the Trilateral Commission, the Peterson Institute for International Economics and the Center for Strategic and International Studies (CSIS).

Following Hill, from 1993 to 1997, the U.S. Trade Representative was Michael Kantor, who now advises corporate clients as a partner in the law firm Mayer-Brown. A member of the board of CBRE (a real estate services company), Kantor also serves on the advisory boards of ING USA and Fleishman-Hillard, a public relations firm.

Next in line, from 1997 to 2001 the USTR was Charlene Barshefsky, who is now on the boards of American Express, the Estée Lauder Company and Intel; like Hill, she is a member of both the Trilateral Commission and the Council on Foreign Relations.

The USTR from 2001 to 2005 was Robert Zoellick, who afterwards served as Deputy Secretary of State, Vice Chairman of Goldman Sachs from 2006 to 2007, and President of the World Bank from 2007 to 2012. Following Zoellick, from 2005 to 2006, the USTR was Rob Portman, a U.S. Senator who was a possible running mate for Mitt Romney’s presidential campaign.

And only after him did Susan Schwab, the USTR from 2006 to 2009, commit the U.S. to joining the Trans-Pacific Partnership. Schwab has since joined the boards of FedEx, Caterpillar and Boeing. Based on the evidence of her and her predecessors’ tenures, it is safe to say there has been a significant interchange between “trade representatives” and “corporate representatives” — to the point where it is almost impossible to distinguish them apart.

Now let’s get even more caught up to speed on appointed “government officials” so we can know exactly what we’re talking about.

In 2008, as Obama was campaigning for president, he stated, “I have done more to take on lobbyists than any other candidate in this race. I don’t take a dime of their money, and when I am president, they won’t find a job in my White House.”

Within a week of becoming president, Obama changed his mind and his “transition team” (responsible for selecting the Obama cabinet) became co-chaired by John Podesta, co-founder with his brother Tony Podesta of the Podesta Group, a major Washington lobbying firm.

Podesta was Bill Clinton’s former chief of staff and, as co-chair of Obama’s transition team, he declared his team was implementing “rules that are the strictest, the most far-reaching ethics rules of any transition team in history.” A top lobbyist whose firm has represented clients ranging from Wal-Mart, BP and Lockheed Martin to the Egyptian military dictatorship, Podesta appeared the ideal figure to implement Obama’s “strict” rules against hiring corporate lobbyists, right?

A little further background: the Podesta Group counts among its recent lobbying successes the stalling of a Senate bill which was calling on Egypt “to curtail human rights abuses.” The Group’s website also boasts that it “challenged” Wall Street reform after “one of the world’s largest banking firms came to the Podesta Group seeking help with their opposition” to proposed regulations for banks.

Thus, it should come as little surprise that part of the “strictest” and most “far-reaching ethics rules” announced by John Podesta in relation to lobbying was that no official could be appointed to the Obama administration if s/he had been an active lobbyist within the previous two years. Luckily for Ron Kirk, Obama’s U.S. Trade Representative, these “strict” rules only applied to the Washington D.C. area; and since Kirk was a corporate lobbyist in Austin, Texas, for the investment bank Merrill Lynch (before it was taken over by Bank of America in 2008), the “far-reaching ethics” promised by Podesta didn’t reach Kirk.

Kirk’s main priority since becoming USTR has been the Trans-Pacific Partnership, worked on in secret for nearly four years with several other countries and 600 corporations. President Obama has called it “a next-generation trade agreement” and a “model” for future agreements.

But not everyone agrees.

In May of 2012, more than 30 legal scholars from nations that will be affected by the TPP signed a letter addressed to USTR Kirk expressing their “profound concern and disappointment at the lack of public participation, transparency and open government processes in the negotiation” of the TPP.

In late June of 2012, more than 130 members of Congress followed this up with a letter that they signed and sent to Kirk urging transparency in TPP negotiations, and an inclusion of Congressional consultations, stating: “We are troubled that important policy decisions are being made without full input from Congress.”

In his not-to-worry response, Kirk reassured the public: “I believe … that we have very faithfully operated within the spirit of the Obama administration to have the most engaged and transparent process as we possibly could.”

Meanwhile, the TPP has received strong endorsements from large transnational corporations and their official lobbies, such as Thomas Donohue, the CEO of the U.S. Chamber of Commerce, who told the Financial Times that, “[t]his must be an agreement with high standards. These standards will set the bar on regulatory coherence, investment and intellectual property.”

Part of these “high standards,” according to a meeting of the Asia-Pacific Economic Co-operation group (APEC), are “deep commitments that go beyond tariff reduction and pass existing World Trade Organization standards.” In other words, it goes far beyond “trade.” This was confirmed by Iwan Azis, the head of the Asian Development Bank’s regional integration office, who stated that the TPP was intended to deal with “behind the border” issues, typically decided by domestic policy, and “which go beyond the normal scope of trade agreements” including issues of labor, environmental and intellectual property standards.

Azis commented: “As a concept, this is definitely something big… This is so comprehensive, it is like a Grade A agreement.” The TPP is designed “to be a structure on to which other nations, including possibly South Korea, and eventually even China, could be bolted.”

At the 2011 APEC summit, Chinese president Hu Jintao stated: “China supports the goal of the regional integration of the Asia-Pacific economy, using the East Asian free trade zone, full economic partnerships in Asia and the Trans-Pacific Partnership as foundations.”

The aim of the TPP appears to be in establishing a core “trade bloc” in order “to create a gravitational force that would bring others in,” according to Karan Bhatia, the Vice-President for international law at General Electric and a former deputy U.S. trade representative. Ultimately, this objective includes bringing both Japan and China into the fold.

In May of 2012, Kirk stated that he “would love nothing more” than to have China join the TPP, following the more immediate additions of Mexico, Canada, and Japan. And in November of 2011, President Obama spoke to the Australian parliament, explaining: “I have directed my national security team to make our presence and missions in the Asia Pacific a top priority… The United States is a Pacific power and we are here to stay.”

One observer and critic has noted that the TPP has the potential to become a new “global trade agreement.” Charlene Barshefsky, the USTR from 1997 to 2001, wrote an article for the Wall Street Journal in October of 2012 in which she strongly endorsed the TPP as a “crucial opportunity” to overcome “barriers to innovation.” Referring to the TPP as the “most important trade negotiation of the past decade,” Barshefsky wrote that it “will set the terms of trade for many years in the world’s most economically dynamic region.”

Gary Horlick, who is rated one of the world’s top international trade lawyers with a long career representing major U.S. and global multinational corporations, and more than 20 countries in international trade negotiations and disputes – and who was the first Chairman of the World Trade Organization’s Permanent Group of Experts on subsidies – commented on the TPP: “This is the least transparent trade negotiation I have ever seen.” As part of this “transparency,” participants in the negotiations had to sign a memorandum of understanding which forbids them from releasing any “negotiating documents until four years after a deal is done or abandoned.”

What Horlick referred to as the “least transparent trade negotiations” he had ever seen, Kirk referred to as “the most engaged and transparent process” possible. Perhaps this can be explained by the fact that Kirk has access to the draft document and observes and participates in the negotiations, unlike the representative bodies of governments or their populations.

So let’s call this what it is: a transnational corporate coup over the democratic process and public accountability.

Kirk explained that “there’s a practical reason” for all the secrecy in the negotiations over the TPP: “for our ability both to preserve negotiating strength and to encourage our partners to be willing to put issues on the table they may not otherwise, that we have to preserve some measure of discretion and confidentiality.”

Indeed, this is “practical.” After all, as he explained, if the talks were not done in secret, the public would be aware of what was being discussed, and if the public knew what was being planned, they would oppose it.

So secrecy is necessary in order to make the agreement as undemocratic and unaccountable as possible, to ensure that corporations get what they want while the public remains in the dark. Deceptive and saturated with disdain for democracy, certainly, but “practical” nevertheless.

Part II of Marshall’s investigative series on the Trans-Pacific Partnership will appear Wednesday.

Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is also Project Manager of The People’s Book Project. He also hosts a weekly podcast show, “Empire, Power, and People,” on BoilingFrogsPost.com.

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