Resist Corporate Europe!
Over the last 15 years the European Roundtable of Industrialists (ERT), representing 45 of the largest European transnational corporations, has worked successfully for a sweeping re-structuring of European societies, a process of which we have as yet seen only the early phases. Below, Olivier Hoedeman argues that resisting the corporate agenda of economic globalisation and increased competition is the most urgent task for those struggling for democracy, the environment and social justice in Europe.
Founded in 1983, the ERT consists of more than 45 ‘captains of industry’ from large transnational corporations (TNCs) including BP, DaimlerBenz, Fiat, ICI, Nestlé, Philips and Unilever. Although still largely unkown among the general public, the ERT is a leading political force on the European Union scene. Thanks to its close connections with top European politicians, the ERT played a crucial role in pushing for the Internal Market, TransEuropean Networks (TENs) and much of the Maastricht Treaty. Today, the ERT and its offshoots fight for further deregulation within Europe, global free trade and, its new buzzword, ‘benchmarking’. At the Amsterdam summit, it saw a number of its latest demands become official EU goals, whilst successfully resisting ‘anti-competitive’ social and environmental proposals.
Relations with Santer
The intimate relations which the ERT had built with the Commission under the presidency of Jacques Delors have continued under new President Jacques Santer. Santer’s Confidence Pact: Action for Employment in Europe, launched at the Florence EU Summit in June, 1996, is largely a reworked version of Delors’ 1993 ERT-inspired employment White Paper as well as a new attempt to increase financing for TENs. Santer’s job creation strategy neatly follows industry’s agenda: progress towards the single currency, completion of the single market, deregulation of biotechnology legislation, strengthening of the World Trade Organisation (WTO) and flexible labour markets.
Established in 1995, the Competitiveness Advisory Group (CAG) is a body whose members, personally selected by Santer, include leading ERT figures. Since its founding, the CAG has produced four reports, each one published shortly before a European Council meeting, and including recommendations to decision-makers which bear a close resemblance to the advice given by the ERT. In Spring 1997 Santer appointed a new CAG. Chaired by Jean-Claude Paye, former Secretary General of the Organisation for Economic Cooperation and Development (OECD), the new Group has three representatives of ERT corporations, three from other corporate interests and three trade unionists. By the time you read this, its first report may well have been presented to November’s EU Employment Summit in Luxembourg, so that you will be able to judge for yourself what Santer meant when he said that its task was to come up with ‘practical policy proposals on how to move the political process forward.
Benchmarking
The latest tool proposed by the ERT in its relentless search for competitiveness is ‘benchmarking’. In its 1996 report Benchmarking for Policy-Makers: The Way to Competitiveness, Growth and Job Creation, the ERT explains that benchmarking means ‘scanning the world to see what is the very best that anybody else anywhere is achieving, and then finding a way to do as well or better.’ The benchmarking gospel has been received with open arms by the European Commission. The ERT has organised several seminars on the idea with Commission and government officials and the Commission recently established a special working group led by Industry Commissioner Bangemann, with the task of introducing benchmarking as a leading principle in EU policy-making. If the ERT’s benchmarking mission succeeds, and it looks as if it will, international competitiveness will be institutionalised as the primary criterion for decision-making, consolidating the dominance of neo-liberal policies in virtually every field.
EMU criteria as benchmarking
For the ERT, the Maastricht criteria for monetary union are an example of ‘what benchmarking is about’. According to Roundtable General Secretary Keith Richardson, ‘Maastricht has put enormous pressure on every country in the EU, even on those which do not intend to join the monetary union, to bring their finances in better order and to keep them there.’
The ERT does not limit its enthusiasm for benchmarking to Europe. In late 1996, it produced a survey called Investment in the Developing World: New Openings and Challenges for European Industry. The ERT prides itself on the fact that governments in the South have used a previous survey from 1993 as a benchmarking tool - by assessing themselves against their neighbours and then implementing further concrete improvements...Thanks to this ...many countries in the so-called ‘developing world’ now offer a significantly better environment for investment than they used to.’ The ERT’s prurpose is to make European governments look nervously over their shoulders in an endless competitive race with Southern countries.
ERT and the GATTastrophy
The ERT views the completion of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), which expanded the access of European TNCs to fast-growing Southern markets as one of its main achievements. According to Keith Richardson, the ERT ‘had a number of conversations with government leaders in which we made the point that the health of the European economy as a whole needed a satisfactory conclusion of the Uruguay Round.’ For TNCs, GATT and the creation of the World Trade Organisation (WTO) was a dream come true. As WTO President Rugiero puts it, the WTO is ‘writing the constitution of a single global economy’. It has largely unlimited powers to remove every imaginable regulation which can be considered a barrier to ‘free trade’ and will in this way act as an effective protector of global corporate interests. Recently, whilst the WTO has backed the USA and Canada’s demand that the EU lift its ban on meat with hormones, the EU has in turn challenged US food labelling laws disliked by European TNCs. A race to the bottom has begun which can continue until all regulations protecting people and the environment have been sacrificed on the altar of global free trade.
MAI: Accelerating Corporate Control
Currently the OECD is negotiating the Multilateral Agreement on Investment (MAI), which will do to foreign investment what GATT did to trade: removing the last barriers preventing TNCs from taking control over local, regional and national economies. MAI will put an end to regulatory laws on buying, selling and moving businesses and other assets, and prevent countries from setting conditions for investing corporations (such as employment of local managers or purchase of materials from local producers). The resulting ‘improved investment climate’ will encourage relocation to low wage countries and further increase pressure to lower standards of environmental and social protection. Granting any corporation the right to sue public authorities, the proposed agreement lacks even the few clauses on human and animal safety and nature conservation that can be found in the GATT, nor has it any elements for protecting human rights, consumers or workers. Negotiations on MAI, which take place in secret and without media attention, are expected to be finalised in the spring of 1998. The ERT is pushing for a rapid expansion of the MAI rules to cover all WTO member states.
Trans-Atlantic Deregulation
Another forum through which the ERT pushes its globalisation agenda is the Trans-Atlantic Business Dialogue (TABD), a remarkable corporate-state alliance among whose initiators was European Trade Commissioner Sir Leon Brittan and whose mission he describes as ‘the realisation of a true transatlantic marketplace through developing an action plan for the removal of obstacles to trade and investment flows across the Atlantic.’ Such obstacles include environmental, safety, health and workplace regulations as well as restrictions protecting local and traditional markets. The TABDþs position on environmental legislation is spelled out clearly in the declaration of it s 1996 conference in Chicago: ‘We urge governments not to undermine the international trading system through the use of trade measures to enforce environmental regulations.’
The ERT and the Amsterdam Treaty
A close look at the new treaty reveals that weak and limited improvements in fields such as the environment or employment by no means threaten the corporate agenda of strengthening the EU’s ability to act, not least in relation to global trade issues, expansion into eastern and central Europe, and the shunning of social and envrionmental elements. In the run-up to the Summit, the ERT estimated that a new employment chapter would do no more than allay public fears about rising unemployment, provided it remained in general terms. This was exactly what happened: EU governments commited themselves to ‘work towards developing a coordinated strategy for employment and particularly for promoting a skilled, trained and adaptable workforce and labour markets responsive to economic change’ and the chapter stresses the need for competitiveness, completion of the single market and economic growth.
To the ERT, environmental regulations are simply another barrier to unfettered competitiveness. The Roundtable wants government regulation minimised and voluntary action by industry encouraged. For this reason, it was far more concerned about the ecological movement’s demands for environmental issues to be integrated into other policy areas in the treaty than it was about the anticipated employment chapter. ‘This is really much more damaging,’ said Richardson a few months before the Amsterdam summit. ‘I think they are asking for too much.’ In the event, though such integration of policy is included, it is unclear whether this, along with the adoption of sustainable development as an EU objective, the increased use of environmental assessment or the ‘environmental guarantee’ in Article 100a (on the internal market), are any more than mere lip service. National rules stricter than those agreed amongst the member states will be allowed, but only on the basis of scientific evidence that a country has special circumstances which require them and only if the Commission accepts that they do not form an ‘obstacle to the functioning of the Internal Market.’
Getting the structure right
Although the new treaty brought fewer changes to the institutional structure than expected, many of the ERT’s demands were fully or partly fulfilled. Strengthened EU decision-making powers and ‘ability to act’ was a main ERT demand. The advantages enjoyed by Japanese and US competitors - single governments, markets and currencies - are a source of envy in relatively fragmented Europe. Hence the Roundtable’s support for a change in the weighting of qualified majority voting (QMV) to favour bigger countries as well as for its more frequent use; and an increase in the powers of the Commission President.
Both were to some extent achieved, but the ERT was less than satisfied with the result. Whilst welcoming the reforms, Richardson complained that they did not go far enough. ‘The EU economy is in many ways as strong as the American,’ he explains, ‘but we lose out...because our economic structures are still too fragmented and our political system is slow to take decisions and stubbornly resistant to innovation.’ Richardson expressed disappointment that there had been ‘little progress towards a unified foreign policy to protect Europe’s overseas interests and none at all towards the integrated defence which we need if we are to preserve competitive defence industries.’
The bigger the better
The ERT is keen to encourage enlargement of the EU to include Central and Eastern European countries. Richardson sees this as ‘fundamental indeed. It will bring generous benefits. These countries will bring new people, a lot of skills, technology, education, know-how...material resources including land and energy, and...markets for our products.’ Indeed, the prospect of increasing the EU home market from 360- to 500 million people is wildly exciting from an industry perspective - ‘as if we had discovered a new South East Asia on our doorstep.’
The ERT’s fingerprints on the new treaty are the result of an intensive, efficient and methodical lobbying campaign. Position papers are aimed at a small audience of key decision-makers up to prime ministerial level. The results are clear: confirmation of the EUþs commitment to a fully deregulated internal market and a monetary union enforced by a stability pact which will force the European economy into further ‘budgetary discipline’ resulting in cuts in public expenditure for years to come; and international competitiveness as THE key to employment creation, despite the many warning signs that ever-increasing global competition will lead to further job losses and a race to the bottom in taxation, social protection, environmental legislation and many other crucial concerns.
What can be done?
The EU is a wonderful place for organisations like the European Roundtable to do business: decisions with far-reaching effects are taken behind closed doors and in secretive committees, invisible to and far removed from the many people affected by the resulting deals. The powerful European Commissioners give little thought to the reactions of voters, as they are not elected. The decision-making procedures of the Council of Ministers also lack transparency, whilst the powers of the European Parliament are far too limited to compensate for the overall lack of democracy.
The centralisation of power in Brussels has given business an enormous advantage over social movements. Organisations such as trade unions and environmentalist groups that sometimes hamper corporate activities at the local and national level are relatively weak at the European level. Both the single market and EMU are projects in which social, environmental and democratic concerns have been largely bypassed. Oppositional groups are racing to catch up, but their limited resources, unequal access and lack of a European constituency make this an extremely difficult task.
Gaps in EU democracy cannot alone explain why corporate lobby groups have gained such a strong foothold in the apparatus. The firm grip of TNCs on European economies, which is a direct consequence of the creation of the Internal Market and increasing globalisation, must be challenged. In a globalised economy, governments have little choice but to do their best to attract investments. Economic dependence upon TNCs forces them to adapt to the agenda proposed by corporate lobbyists. To reduce the political influence of TNCs, European economies must be weaned from this dependence.
Viable and socially-fulfilling alternatives to the current situation do exist. Citizens’ movements - environmentalists, feminists, indigenous movements, trade unionists, small farmers, international solidarity groups and others - all over the world are beginning to reject the corporate agenda through strikes, demonstrations and civil disobedience, forming coalitions which give hope for the future.
