The New Reich: principles of undemocratic centralism of U.S. in global economy

The Trans-Pacific Partnership (TPP) Ministers Meeting earlier this month was rich in ambitious statements and prompted an indirect dispute between Barack Obama and the Chinese Foreign Ministry.

Obama: “When more than 95% of our potential customers live outside our borders, we can't let countries like China write the rules of the global economy. We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment."

Spokesperson for the Chinese Foreign Ministry Hong Lei responded adequately: “The U.S. seems to have a big ambition but a narrow vision. It is China's stance that world trade rules should be jointly written by all countries, instead of being dictated by any single country.”

U.S. does not conceal that the reason behind the establishment of TPP is counteraction to Beijing that successfully promotes its own project of Regional Comprehensive Economic Partnership (RCEP).

Obama: “This past week, China and 15 other nations met in Australia with a goal of getting their deal, the Regional Comprehensive Economic Partnership, done before the end of this year.” In his words RCEP will help China “carve up some of the fastest-growing markets in the world at our expense, putting American jobs, businesses and goods at risk.”

However, the Chinese diplomat recalled that Mexico, U.S. and Canada are in a single trade bloc (NAFTA), while Australia, Singapore and Chile made a similar agreement with U.S. yet in 2000s. The economies of Peru and Vietnam with a summary GDP of about $400 billion are comparable with the Greek economy even in the current hard times for that country. Malaysian economy ($338 billion) is almost equal to the ones of Israel or Denmark. The only real attainment of U.S. is Japan (more than $4 trillion). Furthermore, the deal is more necessary to Tokyo rather than to Washington. For U.S. this deal is an opportunity to support the unhealthy economy of its ally in view of growing might of China.

One more scandal broke out in Washington over another U.S. project – Transatlantic Trade and Investment Partnership (TTIP) that looks to unite the North American and European markets. Negotiations on the project were held in strong secrecy. Information on the negotiation process was made public thirty years after they were completed. Brussels did not share any data even with Germany. The unofficial leaders of the EU had to ‘fight’ for the access to the documents.

In early May, Greenpeace leaked some data. It turned out that Washington among others pursues reduction of the quality standards on the agrarian and European markets. It Europe these standards are higher than in U.S. (Germany strictly opposes GMO products), which affects the American exports.  All this sparked a kind of “anti-American rebellion” in Europe.

The French trade minister said his country will stop the negotiations unless there is any progress in the next rounds.

President Francois Hollande supported the Ministry saying France will never allow violation of its agrarian standards, its culture and mutual access to the procurement markets.

Berlin supported Paris’ stance.

It appears that the quality standards were the last straw, as Washington benefits from the deal more than the EU will do. To be more precise, EU will hardly manage to get anything from it in practice.  U.S. has a range of competitive advantages, such as cheap electric power, growing reserves of labor force, and lower environmental standards. Therefore, industrial costs in U.S. are lower than in Germany and the competitive advantages of U.S. have steadily grown in 2004-2014 and this upward trend is likely to continue in the future too.

Actually, Washington seeks to re-industrialize at the expense of the EU, which will face a stiff competition with Canada and Mexico with its surplus cheap labor force. The “young democracies” of Eastern Europe – the traditional “anchorage” of Washington on the continent – will be affected too. The problem is that both the deals - the transpacific and the transatlantic ones – are just the foundation of the U.S.  Administration’s efforts towards economic domination. Further plans include The Trade in Services Agreement (TiSA). It is noteworthy that the BRICS countries are not involved in it and the negotiations are strictly secret. Before 2014, even the European Parliament was unaware that the European Commission held consultations with U.S. The text of the Agreement must be kept secret within five years…after signing.

Judging from the snippets of information, the Agreement is about delegating regulation of national markets of services to supranational bodies – actually, a “doctrine of restricted sovereignty.” Second, it covers not only commercial services but also “state services” (education, healthcare etc.). Third, it is about privatization of the “services.” U.S. has made the biggest progress in the given fields (there are even private prisons there) and will probably have the last word at the “supranational bodies.”

“Testifying to the US government in his capacity as Coalition chair, Samuel Di Piazza, a senior banker with Citigroup, stated that TISA countries should ‘modify or eliminate regulations’ within their borders. According to Di Piazza, banks, insurance companies, media and other corporations that do business globally should be able to operate in an environment where the determinants are ‘market-based, not government-based’. Di Piazza’s vision of the future under TISA is one without publicly delivered or regulated services, where “free market principles can govern the investment in, and delivery of, services on a transnational scale.” 

In other words, with the support of Brussels, Washington is building an empire with much higher level of centralization. The motives of the White House are clear.  The share of the United States in the global economy has shrunk dramatically over the last 15 years amid rapidly growth Chine and other newly industrial countries.  It is anticipated that BRICS countries will account for 70% of the global GDP by 2030 i.e. the mirror opposite of 1950 when these 70% of GDP belonged to the West will.

If the Western countries in general and U.S. in particular seek to retain their domination, they will actually have to transform from the current fragile conglomerate into a single…Reich, won’t they?

EADaily analysis