Do not cede more sovereignty “by secretariat” in Free Trade Agreements

I follow with great interest the deliberations of the Constitutional Convention in the field of my specialty as an academic. That is why I have suggested from a distance the following indication in the Constitutional Convention, as part of the duties of the President: “In the event that the treaties are about commercial, investment or similar matters, the President of the Republic must also ensure that these treaties do not limit the sovereignty of the State to establish regulations, nor its autonomy in terms of economic policy or legislative changes.”

The purpose of this indication is to ensure that these treaties do not imply a loss of sovereignty or autonomy of the Chilean State in matters of regulation or economic policies due to clauses related to investment, aspects that in case of conflicts are decisive for rulings. One of the great challenges of development for a country like ours is to be able to synchronize two different logics: that of national development and that of globalized capital (national and foreign). The working hypothesis since 1973, both in dictatorship and in democracy, is that both logics are indistinguishable. But as it is more evident every day that they are essentially different, and many times even contradictory, the large national and foreign corporations now incorporate this type of clauses that limit the Sovereignty of the State, in order to later be able to use them as the basis for resolution rulings. controversies, constituting “insurance” so that in the growing dilemma between both logics, it is that of globalized capital that prevails.

In other words, these courts have become a mechanism that allows “time to stop”, since they penalize change – and force “more of the same”. What is sought in some of these treaties, such as TPP-11, is to extend the life expectancy of the old, to force what is already vanishing to continue. It’s been a while since that gave all it could give.

The objective of treaties such as TPP-11 is so obvious that even the New York Times, for example, has declared: “The priority [en el TPP] it is the protection of corporate interests, and not the promotion of free trade, competition, or what benefits consumers.” For his part, and for this reason, Nobel Laureate in Economics Joseph Stiglitz called TPP-11 “a commercial farce.”

The purpose of this indication is not to hinder the commercial integration of our country in the world economy, but rather to prevent that with said excuse, it takes advantage of violating our national sovereignty in regulatory matters, and the range of maneuver of governments in economic policy is reduced, of the environment, financial issues and salary matters (among others). In short, these treaties, disguised as commercial treaties, have become a mechanism “to cede sovereignty by secretariat”, and an obstacle to our democracy in terms of its ability to seek alternative development strategies and national autonomy in political matters. economic, environmental, salary, etc.

Finally, these treaties contradict economic theory, even the neoclassical one that supports it, in relation to the need to have the greatest possible room for maneuver to make economic and regulatory policy and thus be able to effectively and efficiently face the innumerable market failures and distortions.

Matters such as having to pay compensation for having adopted a measure that is now euphemistically called “indirect expropriation” (for which tomorrow they will invent another name) is something completely antagonistic to the needs of our national development. And precisely the TPP-11 establishes in its articles that compensation must be paid for any change in regulatory matters or economic policy that could affect “the reasonable expectations of return to corporate investment”, even if these changes are logical, necessary and democratic. .

It is necessary to specify that the meaning of the term “reasonable” expectations of profit from the investment in this type of treaties and ad hoc courts is defined by corporations and judges with a conflict of interest. This type of treaty, such as TPP-11, also insists on already obsolete concepts, such as the current one on intellectual property. In fact, today intellectual property has become an obstacle to the creation of knowledge, instead of being an incentive for it. In addition, these treaties violate, among others, the rights of ancestral peoples; they do not guarantee access to seeds for small farmers; they impact on the price of the remedies; restrict financial regulation and labor rights. In the latter, for example, the TPP-11 only recognizes five labor rights, among which are not the right to strike, compensation, paid vacations and pre and postnatal. Also, they greatly restrict the operation of public companies.

It is necessary to ensure that the future trade agreements that are presented, which will undoubtedly be many, do not also become mechanisms to violate our sovereignty, democracy, and introduce all kinds of rigidities to our decision-making system, following the model of the already described. We have to defend our democratic right to decide on our development model and its most effective and efficient ways of implementation. These types of treaties, by their nature, should be unconstitutional.

*José Gabriel Palma is an academic at the University of Cambridge and the University of Santiago.

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Do not cede more sovereignty “by secretariat” in Free Trade Agreements