Mike Davies sounds the alarm over a toxic US trade deal post-Brexit
Trade is a good thing as long as it’s on fair terms and to the benefit of both parties. Britons have been trading with countries as far away as the Pacific for thousands of years. So what is wrong with having more trade deals?
The first problem is that such deals rarely meet the ‘fair terms’ test. The British Empire was built on forcing colonies to sell their resources and buy our goods on our terms. In 1799, the East India Company conquered the Kingdom of Mysore, killing its ruler Sultan Tipu. At the time India was the world’s leading industrial power. Of course we soon put a stop to that. A few decades later, Britain invaded China to force its government to accept opium imports.
The second problem is that trade deals are becoming less and less to do with trade. Increasingly they are about preventing supposedly sovereign states regulating their own internal affairs. Under the guise of preventing ‘non-tariff barriers’ to trade, deals prevent all sorts of internal regulation from consumer safety to workers’ rights.
The proposed US trade deal (son of TTIP) is a good example of the problem. There is, in fact, a pretty low level of trade between our two countries and little by way of tariff barriers to its growth. So why would we need a trade deal at all?
The answer lies in the US aim of imposing an American model of operation on the UK. Everything from food safety to the cost of medicine, privatisation of the NHS and public transport, and our access to cheap medicine, is in play. We face losing British safeguards and become as ‘free’ of regulation (i.e. as profitable for the US supplier) as the American system. Britain would have to cease applying its own regulatory safeguards because these might act as ‘non-tariff barriers’ to US corporations selling into Britain.
In Britain, we have a precautionary approach that requires producers to show that a product is safe before it can be sold. The United States has the opposite. Producers are free to sell anything at all unless and until someone can prove that it is harmful.
Food is a graphic example. In agriculture, we have a ‘farm to fork’ system that requires (at least in theory) safeguards on health, hygiene, inputs and produce at every stage. The US attitude is that nothing matters before the stage when produce reaches the point of sale. No cleanliness standards, no control of medication or growth-promoting hormones, uncontrolled genetic modification, no welfare standards etc. Needless to say, people in the United States suffer a rate of food poisoning 10 times higher than the Brits.
American poultry production exemplifies the problem. Birds are reared on drugs, in filthy and inhumane conditions, maximising growth even at the cost of crippling deformities. They are killed and then (the first regulation they benefit from) washed in chlorine to supposedly make them safe for humans to eat.
Pig production in America (including by US corporations located over the border in Mexico) is even more worrying. The animals are housed in gigantic industrial units containing hundreds of thousands of pigs in cramped conditions. To make them grow faster, they are given ractopamine, despite it having serious side effects including death. Ractopamine is banned here and in the European Union. The pigs are also given steroids and hormones to make them put on weight. The unnaturally crowded conditions in which so many animals are jammed together inevitably generate disease. We think of cattle as largely grazing in the fields. Not in America. Cattle spend most of their lives in ‘feed lots’: huge industrial units with no grass and little room for exercise. Pigs and cattle are routinely fed antibiotics. Inevitably, their diseases develop resistance to the antibiotics, which include several important to human health. The animal factory becomes a factory for disease which becomes a factory for antibiotic resistance.
Nor is the scandal limited to animal production. Over 70 pesticides banned in Europe are in common use on crops like wheat in the United States. Something as innocuous as an apple can be contaminated with 400 times the level of pesticide allowed here.
Off the table
This is not just a matter of food safety, vital though that is. If a trade deal allows unregulated American food into Britain, what will happen to our agriculture? Of course it is more expensive to produce wholesome food free of poisons. Inevitably American producers will undercut British farmers with dire consequences for nutrition and health, not to mention for agricultural jobs.
The National Health Service is probably the most prized of British institutions. It provides free care for those who are sick. It removes the fear – all too real in America – of illness causing both financial ruin and lack of treatment. Yet both Labour and Conservative governments have quietly forced an increasing level of privatisation in the NHS.
In the United States, health is privately provided for profit. Even the Obamacare reforms leave poorer people liable to pay huge amounts if they fall ill. Around 45% of the cost of healthcare in the US goes on management and administration, compared to under 15% in Britain. Priority is given to making money from illness, not curing the patient.
The US government has made it abundantly clear that the NHS must be ‘on the table’ in any trade deal. US corporations, already clandestinely involved in our health service, would be given free rein to bid for anything they liked. Even worse, the deal would have ‘ratchet’ provisions meaning that anything privatised could not subsequently be returned to public ownership.
The US also intends any trade deal to raise the British price of vital medicines insulin up to ninefold. At the moment Britain can, where appropriate, override the inflated costs of medicines patented by (largely US) big pharmaceutical companies. Even the threat of doing so can lower medicine prices hugely. Under a new trade deal the US government wants to rule out this mechanism. After all, what does saving lives matter compared to making bigger profits.
The way in which post-deal disputes are resolved is a key factor. Washington is determined to give its own corporations the right to intervene in anything and everything, either on their own behalf as investors, or via the government. Disputes are not heard in court but by a special tribunal, a private panel of experts. Any British regulation from food safety to postal services to workers’ rights could be challenged as a ‘non-tariff barrier’. We would lose the right to control our economy, our food standards, our social rights – indeed, anything from which US corporations could make a profit.
This is not just theory. For example, under the 1994 US-Canada NAFTA agreement, US corporations have already prevented a Canadian ban on exports of PCB waste by suing Canada.
The ultimate objective is to force the US economic model on the UK: to sweep away protections that look after consumers, workers and animals. Put simply, Britain would be bound by regulations, or lack of them, made in the United States. Whether our regulations protected British people’s food, slowed climate change to protect our environment, limited our exposure to poisons or protected people from harm at work, they would be liable to be swept away by a trade deal with the United States. Britain’s sovereignty, our ability to set our own standards, would go.
Mike Davies is Chair of the AGS