TTIP: signs of division in the imperialist camp

As the US-EU free trade agreement founders, the EU is demanding that Apple pay €13bn in back taxes.

Proletarian writers

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Proletarian writers

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The proposed Transatlantic Trade and Investment Partnership (TTIP) between the US and the countries of the EU, a laughably named ‘free trade agreement’, has been in negotiation since summer 2013.

Labelled by Hillary Clinton the “Economic Nato”, this treaty is specifically designed to safeguard the domination of the globe by decaying US imperialism. Its negotiation is occurring in a time of declining rates of imperialist profitability and the steady rise of the Chinese economy, in particular, among the developing nations.

Status of the negotiations

With the disruption caused by the British vote to leave the European Union, TTIP has lost one of its greatest advocates – the British ruling class – and hopes of an agreement before the end of 2016 will now most probably be frustrated.

United States president Barack Obama finishes his term on 20 January 2017. With the signing of TTIP before then now looking near impossible, it is up to the next head of the US state – be it Clinton or Trump – to see the treaty through. Clinton, in her capacity as the representative of US neo-liberal capital, was previously vocally keen on pushing TTIP through. Under pressure, she has apparently been forced into a volte face and is hinting at opposition to the treaty. However, little or no credence should be given to this apparent change of heart, which is clearly aimed at gulling concerned voters.

Trump, on the other hand, with his protectionist demagogy, has come out clearly against both TTIP and TPP (the Trans-Pacific Partnership – finalised but awaiting ratification) claiming that they are unfair to the United States! However, Trump’s own business history and practice should, as with all his statements, leave at least reasonable cause for doubt as to which way he might finally jump given the opportunity.

In France, President Hollande recently stated: “The negotiations are bogged down, positions have not been respected, it’s clearly unbalanced,” and said that he will withhold support until after the end of the Obama presidency. French foreign minister for trade Matthias Fekl has been even more forthright, saying: “France calls for an end to these negotiations.” (See No compromise from US, no TTIP with EU this year – France and Germany on trade deal, RT, 30 August 2016)

In Germany, vice-chancellor and economics minister Sigmar Gabriel has stated that the TTIP negations have failed, although “nobody is really admitting it”. (It should be noted that Sigmar represents the Social Democratic Party [SPD], the junior partner in Germany’s ‘grand coalition’. For now, Chancellor Angela Merkel and her dominant Christian Democratic Union [CDU] remain strongly committed to TTIP.) (TTIP has failed – but no one is admitting it, says German vice-chancellor Sigmar Gabriel, Independent, 28 August 2016)

These statements have been accompanied in the bourgeois press by bombastic headlines to the effect that TTIP has been derailed, is finished, has collapsed and so on, with much congratulatory back-slapping from the ‘leftist’ wing of imperialism.

All inter-imperialist alliances are temporary

These developments cannot be seen outside of the global economic situation, however. Weak growth despite low and even negative interest rates, constantly increasing inequality, rising debt and declining rates of profit characterise the world economy – all symptoms related to the current capitalist crisis of overproduction.

Rumblings of TTIP failing are part of a rising tide of protectionist rhetoric on both sides of the Atlantic, much of which is being couched in terms of ‘protecting workers’ in the imperialist countries. TTIP must be considered in the wider circumstances in which it is proposed – that of the most serious crisis of overproduction the capitalist system has ever known and the consequent desperation of capitalists everywhere to protect their diminishing sources of profit.

Elsewhere, further signs of division between the EU and the United States imperialists are showing. The recent order by the European commission demanding that Ireland extract €13bn from Apple in back taxes represents a historic action by the EU against a business based in the United States – a demand, essentially, for Europe to take its ‘fair share’ of the profits of US imperialism; of the surplus value the US has extracted from exploited workers in Europe.

This is one of the world’s biggest tax disputes ever seen, and, if it is progressed, it will have a significant impact on US-EU relations. Unsurprisingly, the government of Apple’s host country in the EU – Ireland – has sided with the United States in this dispute and seeks to appeal the ruling. Of the major parties, only Sinn Fein is demanding that the US multinational pay what it owes.

Apple’s chief executive, Tim Cook, called the decision “political crap”, and in one respect he is right: this is a political action by the EU. (See Tim Cook says Apple could send cash back to US next year, Wall Street Journal, 1 September 2016)

The ruling against Apple by the EU follows on from German-based car manufacturer Volkswagen being pressured into paying out $15bn in compensation in the USA while the EU has refrained from pressuring a company of ‘its’ bourgeoisie to offer any sort of compensation to defrauded customers. (See VW rejects cash offer for European car owners, Wall Street Journal , 4 July 2016)

These rulings over tax have the capacity to develop into further tit-for-tat rulings as the US and EU ruling classes scramble to claim tax from multinationals based in each other’s jurisdiction.

Is this really the end for TTIP?

All this demonstrates the contradictions that exist between the imperialist countries of the world. Their respective bourgeoisies are in competition with each other for the division of the rest of the world, and for the exploitation of labour and resources.

However, it must not be forgotten that:

1. Both the US and the EU ruling classes on the whole want TTIP to be passed – negotiations are still ongoing. This is a treaty designed to ensure the imperialist domination of the world, and it is in the best interest of these decaying parasitic imperialist countries to get it signed.

2. There is enormous popular resistance to TTIP in Europe, and, with upcoming elections in France, Germany and Austria, it is to the benefit of the governments of these countries to give a token demonstration that they are ‘reconsidering’ the treaty – at least until after these elections – in order to assuage popular anger and dissipate the protest movement.

With this in mind, and barring any other developments in relations between US and EU imperialists, it seems likely that TTIP negations will merely be delayed until after the elections have been held, rather than that they have really ‘failed’, as headlines have been quick to proclaim.

There are definite signs of division in the ruling classes, which must be used to bury TTIP for good. The strongest pressure against TTIP has come from popular resistance by the masses and it should not be diverted by insubstantial sloganeering by government clerks.

TTIP is still under discussion – wavering but not finished. We should believe the agreement is dead when we are sure it has been buried by the force of working-class resistance, not when representatives of the bourgeoisie tell us that the fight is over.