In response to an FT article by Wolfgang Münchau on 24th April 2016, entitled 'The revenge of globalisation's losers'
Thanks Mr. Münchau - this is important stuff and I’m glad you are talking about it. You have covered a lot of ground here so I’d like to pick up on just one aspect of it – the notion of ‘free trade’, and the apparent backlash against it.
Free trade is essentially the idea that trade unencumbered by government regulation is good for business, good for individuals, good for society as a whole, and supports the property rights which underpin personal liberty.
The trade agreements on the table now are not really about free trade. They are attempts to harmonise regulations across borders - efforts at global governance. They don’t keep governmental organisations out of the market so much as bring them in further, but notably – in favour of corporate interests at the expense of national sovereignty. That explains much, though of course not all, of the backlash against them.
This is particularly evident in the ‘investor-state dispute mechanisms’ (ISDS). These mechanisms give foreign corporations the right to sue national governments for regulations that interfere with their expected profits. It allows multinationals to bypass the national courts, empowering in their place panels of private arbitrators—most of whom will be lawyers – effectively giving them the right to judge national laws. They owe no allegiance to any particular system or tradition of law, and are not bound by much precedent – whatever precedent exists has been developed by earlier panels, not constitutional judges. If that wasn’t enough to alert the alarm bells of anyone averse to the insidious growth of elitism and cronyism, the decisions of ISDS panels are typically considered to be final, and not subject to review by a higher court.
Maybe we do need more harmonization, but let’s be clear – this doesn’t look much like ‘free trade’, at least not to me. To me, it looks like integration and cronyism by stealth. If it is not, let the politicians prove that. It seems to have escaped President Obama’s radar for example, that locking up a ‘free trade’ deal in a Washington basement, insisting that the people’s elected representatives view it by appointment only, disallowing them from making copies or talking about it in public…doesn’t inspire confidence…in anything other than the likelihood that he has had an irony bypass.