No nation can preserve its freedom in the midst of continual warfare

James Madison, "Political Observations" April 20, 1795

The Anglo-Saxon vision of world order, with Washington and London as self-appointed arbitrators for permanent and universal war, is contrasted from Moscow and Beijing. As immunity is not plausible in any attempt to destroy such discrepancy with the usual military violence, such contrast means a return to a multipolar world, which always involves a geopolitical perspective.

A first symptom of such an approach is the lack of economic rationality, in the issue of sanctions on Russia, because they are more harmful to those who apply them. US pressure is obvious when the European Union -EU-  stops selling goods and services to Russia, the sixth world economy in purchasing power (PPP) and the third trading partner of the EU, with a € 326 billion trade (2013). In Germany, Ms. Merkel's servility harms a € 75 billion trade. In France, Mr. Hollande's servility will cost about € 3 billion, due to failure to deliver to Russia two Mistral helicopter carriers already paid for, which are useless to France or any other country because they are built under Russian standards.

A second symptom is the change in trade policy priorities. So far Washington sought to shape the world economy with rules that give leeway to the big corporations that dictate US policies. It is noteworthy that those policies do raise stock values, but lower social and economic standards for 99% of the population and bring ruin to small and medium enterprises, which are the main source of employment. When popular purchasing power is reduced, the internal market shrinks and loses trade relevance. The awareness of the shortcomings of the Anglo-Saxon model has turned the attempts to impose it at WTO talks into a wearing dialogue. The Anglo-Saxon answer is a castling: to create economic blocs with countries also governed by the same unpatriotic interests.

Economic blocs

Until the sixties, economic areas were defined by use of imperial currencies.  There were areas of the British pound, the French franc, the Russian ruble, the Dutch guilder, the Portuguese cruzeiro and the US dollar.  Gradually they were invaded by the dollar, thanks to the Bretton Woods agreement and Washington's underhanded support to any separatist insurrections. While their colonial markets were eroded, in order to keep economies of scale for their rebuilt factories, the Europeans merged markets and resources. The process went through the European Coal and Steel Community, the European Common Market and eventually to the European Union, which is the world's largest economy, with a € 14,303 billion GDP and the second on PPP, after China, with € 12,712 billion.

Outside Europe, the doctrine of development by import substitution, promoted by Raul Prebisch from UNCTAD, impelled Latin America and Asia towards more mergers of markets and resources. In Europe and Asia mergers were successful; in Latin America less so, due to a corrupt abuse of protectionism that enriched a few rentiers and retarded development.

The Third World financial debt crisis, in the 1980's, forced many developing countries, in return for loans from the IMF and the World Bank, to pay their debts to the big banks, to accept their open market economic prescriptions, always identical. They required adherence to the GATT[1] or afterwards to the WTO[2], adherence to WIPO[3] and to other international economic organizations, which should have constituted a multilateral forum to create new global standards in international economic relations. The most visible axis of the system is the WTO, with 161 member countries now, which assumed and expanded the GATT rules. These have two basic principles: a) non-discrimination in trade; b) equal treatment to imported or domestic goods or services. These principles aimed at improving international production efficiency and sharing the benefits of participating in a global market economy. A vision impregnated with classical liberalism, if you will.

This concept, originally from the Anglo-Saxon group, is now turned around by them.  The US and UK, faced with the loss of trade competitiveness and the loss of control over the making of norms for international trade, responded by proposing mega preferential economic agreements that have as a central and common bond the United States and exclude new rivals: The Trans-Pacific Partnership – TPP and TransatlanticTrade and Investment Partnership – TTIP. The first one excludes China; the second, Russia. The geopolitical goal of both agreements is clear: to weaken China's economic interdependence with its neighbors and to undermine the growing economic interdependence between the EU and the Eurasian Common Market, created around Russia.

The new free trade or partnership agreements

The so called free trade or partnership agreements are the opposite of non-discrimination in treatment, which is the basis of multilateralism and the WTO. The name is Orwellian, as it conceals the opposite of free trade. Its promise is to discriminate in trade with a preferential treatment to goods and services of pact member countries. As the US seeks to sign such agreements with as many countries as it can impose on, almost all of which are developing countries, such preferential treatment has no benefit. They compete with each other by exporting similar products to the US market. Such openness brings benefits only to large US companies, which can use money invented by the Federal Reserve, to sweep away the national enterprises of the other member countries.

These agreements are clearly administered trade and go beyond the exchange of goods and services. Their norms involve adopting certain economic policies and they invade areas alien to the classic concept of trade and international economic relations.

In intellectual property the rules involve extending monopolies on the use of proprietary knowledge and expanding patentable knowledge, with serious damage to public health, agricultural diversification and scientific and technological development.

On foreign direct investment they give an official guarantee to foreign investor profits. States must respond to foreign arbitrators for any act that can be interpreted as contrary to the interests of investors. Foreign investment is exempt from any requirement, so much so that there is not even a need to invest in the country; it is enough to buy an existing local company. The Committee on International Trade of the European Parliament has just approved, on 28 May 2015, the requirement that subordinates government policies to the interests of foreign companies. The vote was 28 against 13, but it will be argued again before the full EU Parliament on June 10.

In agriculture they exclude the use of safeguards in crisis situations and block the right to apply countervailing duties, that the WTO allows, against the subsidies received by US agricultural exports. The issue of agricultural subsidies is left to whatever is negotiated at WTO, where the Doha Round is stalled precisely over agricultural subsidies. The import of subsidized agricultural products and the admission of GMO products is a death sentence for local agriculture. The cases of free trade agreements with Mexico and Central America show a depopulated countryside, while the population migrates or agglomerates in urban areas, where it overwhelms public services and is vulnerable to crime. Its ultimate consequence is social and political chaos, which may be a strategic choice to make a strong neighbour indispensable or to neutralize a potential geopolitical adversary.

On industrial policy they corrupt the rational and efficient use of inputs in the production chain with exclusive rules of origin. Those rules require the use of products from the members of the agreement in order to enjoy preferential treatment. One example is the production of textiles from cotton fibre, where US cotton subsidies of 80% give an overwhelming advantage, but they prevent the advantageous use of already made fabrics made in Asia. In Costa Rica and other Central American countries, some successful exporters forgo the preferences in order to avoid having to meet the rule that lowers their competitiveness.

Another feature of these Made in USA agreements is the secrecy and lack of transparency with which they are negotiated. The population is not aware or is not consulted at all. Those agreements are approved by parliaments, by votes tied to party discipline.

The Trans-Pacific Partnership – TPP

This agreement aims to be a renewal of what was the Association of Southeast Asian Nations – ASEAN, founded in 1967 as an economic weapon against China, and which wound up signing a deal with China for an FTA, which is in force since 2010. The countries now negotiating the TPP are 12 and on both coasts of the Pacific: Canada, USA, Mexico, Peru and Chile on the American side; Brunei, Japan, Malaysia, Singapore, Vietnam, Australia and New Zealand on the Asian side.

In terms of population the American side is more relevant, with 535 million inhabitants against only 285 on the Asian side. It is even more unbalanced if we think that Asia's total population exceeds 4.3 billion. The only relevant Asian country by size of population and economy is Japan, still occupied by the United States. South Korea, which also remains occupied, did not adhere to this anti-China alliance, though it has an old bilateral agreement with the United States. Vietnam, which nourishes an ancient rancour against China and a more recently one against the United States, has just signed an economic agreement with Russia, which together with China, India and Indonesia is another Pacific economic and military power absent from the TPP.

In some Asian countries that are negotiating it there is strong opposition. In Malaysia the old prestigious Prime Minister Dr. Mahathir Mohamad, has said that the TPP is ... an agreement to bind nations with rules and regulations that benefit only the big US companies and that the secrecy that surrounds the negotiation adds to the suspicion that it is a conspiracy.  The proposed Asian members have little in common and seem to participate by a geopolitical interest, as a step towards a military alliance to contain China. The substantial part that seems clear is that it strengthens, with other economic ties, the military alliance between Japan and the United States.

China's response is a powerful agreement, under the attractive name of New Silk Road, which does not bind with rules and is inclusive. The bond is common projects, on trade, infrastructure and investment with countries that lay between China and Europe, which is China's largest market. The geopolitical goal is to seed prosperity in the regions crossed by the land and sea versions of the New Silk Road to avoid the possibility of seeding chaos that feeds subversive initiatives on its periphery. That approach brought a rapprochement between China and India, which in the US strategy was the potential brake to the growing and modern military power of China.

The Transatlantic Trade and Investment Partnership - TTIP

Europe and America are linked by many agreements; they are the main market for each other and should not need yet another deal. The difference between them is that Europe has a positive trade balance and the United States has a chronic negative balance. Europe's real economy is healthy, her ailing side is the virtual economy of finance, whose origin is not European, it is the contagion of a madness that emanates from New York and passes through London. It is the folly of believing that money can be created out of nothing to pay opulent rents and to view debts as a sign of prosperity.

In proposing this agreement the United States seeks to parasitize the European economy, to weaken the Euro to sustain the US Dollar, hinder trade between Europe and Russia or China, to divert trade within Europe and to complement military occupation with economic occupation, as with Japan.

The TTIP is intended to legally tie Europe, which is the economic, scientific and ethical dormant giant, before she wakes up. The European example in terms of social protection is seen as dangerous to the Anglo-Saxon model of Darwinian competition and greed as the sole ethic. The TTIP erodes the European welfare State. Finally, the TTIP completes the task of weakening Europe when there is a peripheral chaos that threatens its security. That chaos is the result, not a casual one, of direct or indirect interventions to overthrow, always with American weapons, all secular governments with social sensitivity in Muslim countries, be it in Asia Minor and Africa, which creates loads of refugees to afflict Europe with. The coup of Ms. Nuland in Ukraine is part of those actions. Only the calm shown by Moscow in the face of Washington's provocations and the courage of East Ukrainians facing military aggression by the usurper government in Kiev, saved Europe from the consequences of the most dangerous destabilising US action on its periphery.

Conclusion

Geopolitics has always used economic blocs in its power strategies, which were part of the notion of empire. The novelty is that an empire is devoured by the private interests of big business and seeks new victims for its parasites, before collapsing. In Asia it does not seem that the TPP will manage to be a springboard to destabilize China's periphery and wear her with actions by fanatic mercenaries. In Europe the process that erodes its culture, its economy and its security is obvious and the TTIP is intended to complete it; the worst is that the current European political class, for mysterious reasons, is complicit in its destruction.  We wonder if the peoples of Europe will awake in time to shake it off, or if they will wait for their liberation to come, as does the Sun, from the East. Festina, mox nox[4]

Geneva, 30/05/2015