TTIP a treaty too far

“Driving political consensus for TTIP on both sides of the Atlantic” reads the CBI’s press release and worryingly the CBI’s John Cridland seems rather upbeat. His enthusiasm is great news for many of the directors of CBI’s members. It’s not such glad tidings for the groups mentioned in the press release; small businesses and consumers. His chipperness is no good thing for the people not mentioned; the average employee of those large CBI member businesses or me and you.

George Monbiot has been campaigning and covering the TTIP treaty for more than a year. Visiting his blog will give you your fill of information on the treaty as well as fill you with dread. TTIP is the most worrying proposal to increase corporate power ever to be  negotiated at a interstate level. Should it be passed it will place large corporations within a legal framework that would sit above even nation states.

Kudos to the CBI as a lobbying group

The CBI unashamedly represents big business and obviously does it very well judging by whom the CBI have been meeting with:

“From a US investment summit, meeting with senior US government officials at the White House, through to a Congressional roundtable with US Ambassador to the UK, Matthew Barzun………….This is the same message I delivered on this side of the Atlantic just before Christmas at our roundtable event where we were joined by 7 EU Prime Ministers!”

Jolly smashing, if you are in favour of the benefits to corporations, but who else is in those meetings? Who is there representing you and I as consumers? Or me and you as the average worker?

If we are in any way represented in these discussions it is by a politician – who will likely be bank rolled through campaign donations by some of the CBI’s members: he will know which side his bread is buttered. As the discussions progress (similar to the initial drafting) it is being carried out by exceptionally well paid corporate lawyers with little input from consumer groups or trade unions.  It is to no ones surprise that the treaty will reflect the wishes and avarice desires of those who are scribing.

“Five top reasons to support TTIP”

The CBI’s press release focuses on five top reasons to support TTIP and they all deserve to be scrutinised:

Reason one. The biggest reason is that: “small and mid-sized companies stand to benefit the most” This is totally unfounded. Trade agreements work on economise of scale. The larger countries do well and the smaller ones do badly. And within those countries the same applies to companies and regions.

I’d ask the CBI where the evidence is for this statement? As it is the biggest benefit you would expect it to be backed up by a lot of evidence so just one slice of proof would be good.

Also within the release you will find this statement: “For every customer in the UK, there will be five more in the US to sell to” Just because there are more customers in the US doesn’t mean UK companies will sell to them: there is no correlation here. John Cridland draws a tangental relationship were none exists.

In reality the majority of small and medium sized businesses will be fighting to keep a hold of their current customers. “Reason one” says nothing about the competition from the US and it should as the essence of this treaty is to limit competition not to expand it. The idea is to further open up national markets to allow large national and international businesses to take profit and market share away from small and medium sized local and national companies. Just imagine any small business you can think of going head to head with a billion dollar US conglomerate? Really is allowing multi nationals to further access the SME market going to be good for those same businesses?

Second: “TTIP will mean more choice along with lower prices for consumers”. As I’ve outlined above it will actually mean less choice. Possibly there may be more competition in the short term until multinational companies take over and limit your choices.

In the second part of this statement the CBI look to represent the interests of “consumers”. We can of course discount this simply by reading about whom the CBI represent. They don’t and can’t speak for consumers. But to give them the benefit of the doubt we can still at least question the evidence:

– How do they know that any savings will be passed on to consumers and not investors? Why should we believe that savings simply won’t generate greater profits for investors like they always have? Companies aren’t designed to reduce prices only to increase profits.

Third is that “duplicate regulation and excessive paperwork at customs” will disappear. Well, I kind of like regulation and I’d personally like to see more regulation of many more industries and better regulation of those currently regulated, like say the Banking sector. No one likes form filling for the sake of it but really if this is one of the five biggest reasons to support a treaty we are already operating on pretty thin ice.

“Fourthly, it will play to the UK’s strengths grabbing a bigger footprint for our world-leading services.” Here the CBI are spot on. For the UK’s large multinationals this treaty will help them increase returns to their investors. If this is a main goal for the treaty – which of course it is – then we are finally getting into who the treaty will really benefit.

“number five, creates jobs at home” The CBI state that a new treaty will create more jobs because there are already 1 million people working in the UK for American companies. So let’s analyse that, as it may very well be the case:

As these American corporations start soaking up business from smaller national companies of course they are going to need staff.

– The questions is will they hire more employees than those companies who shed workers?

Well that’s unlikely. Larger organisations spend less as a percentage on wages than smaller businesses and they tend to have less staff. So in fact it will cost jobs.

– And what about these new jobs?

You can expect wages to fall and conditions to worsen as multi nationals do what they are designed to do and suck as much revenue from maximising market share to generate profits for investors.

The final aspect of any job transfer (because this is the best case scenario) is the wholly negative impact on the diversity and strength of regions of the UK including of course Scotland. As most corporations, both British and British based America corporations are located in the south east of England – centring around London of course – these jobs would further inflate the London bubble while draining skills and resources from the rest of the UK. There is of course no mention of this in the CBI’s article. And I wonder what its powerful regional members think of this omission?

– And what about the profits that are being generated, who sees the benefit of those?

For every £1 spent with a local company 63p stays in that community.  For a larger business it is as low as 40p. Profits leave poorer regions of the UK and end up in the deep pockets of American and international investors.

What’s missing

Of course the crux of the release is what is not mentioned. There is no note of the negative impact on wages. “creating jobs” is a well known code word for “profits”. These is no note of how good quality, well paid jobs will be protected. Surely this should be at the heart of the negotiation terms for an organisation representing those in business?

This press release and of course the wider treaty do nothing to highlight or address the largest issue that the UK and the USA face together: the continual rise of inequality. It would be great to see TTIP have even the slightest positive impact on reducing the run away train that is the disparity of earnings. But it is not even on the fringes of the negotiations.

There we go, blaming Thatcher again

Since the modern version of “globalisation” which started in the Reagan and Thatcher era, corporate profits in the UK have soared at a factor of 5 to 1 to wages. TTIP, by acting on behalf of multinationals and their investors, will see this difference increase. Inequality will rise and the share of the benefits for those who actually do the work will continue to fall.  

Make no mistake these globalisation treaties do exactly what they are designed to do: to increase returns for those who do not work for the organisations whose interest they serve: save the senior management at these companies. Rather than dress up the treaty by mentioning “consumers” and “jobs” the CBI should have the courage to tell its members exactly what and for whom it is championing, not disguise it in poorly structured, baseless press releases.