BLURTING out the truth, the German economy minister, Sigmar Gabriel, has pronounced the Transatlantic Trade and Investment Partnership (TTIP), a free trade deal long being negotiated by the US and EU, and billed as the future for both regions, as being effectively dead.
Gabriel reported that the deal had been subject to 14 rounds of talks that have not produced agreement on a single item contained in the 27 chapters of the draft TTIP agreement. EU leaders are blaming the intransigence of the US government on making any concessions on the deal.
At the heart of this inability to reach agreement is the huge opposition TTIP has generated in the working class across Europe and in the US over its implications. It has also dawned on EU leaders what the deal means. French president Francois Hollande announced in May that he would ‘never accept’ the deal because it would completely destroy the sovereignty of France and the rest of Europe and leave the EU nothing more than a vassal state of the US.
This, of course, was the sole intention of TTIP as far as US capitalism was concerned.
Under the terms being insisted upon by Washington, US corporations would legally be entitled to veto any laws that impinged on their right to exploit Europe and reap super-profits.
It contained provisions that would force governments to privatise everything, including health services, for the benefit of US companies, all of this to be legally enforced by an international court presided over by lawyers and judges drawn from the ranks of these same corporations.
With the leaders of the EU finally recognising that TTIP is the equivalent of cutting their own throats, we can now expect the US to react with fury. This has raised the spectre of an all-out currency war between the EU, Britain and the US.
This was raised immediately after the Brexit vote, which at once caused the pound to drop in price to a 31-year low against the dollar. The euro has similarly dropped in what the US capitalist class sees as the beginnings of a currency war in which countries engage in competitive devaluations to win advantages in important export markets by making their products cheaper.
The harm to US exports has already been felt as their products become more expensive and imports cheaper, increasing the US trade deficit. This has increased since Brexit and now, with TTIP dead in the water, a currency war between the US and EU is inevitable in a ‘beggar-thy-neighbour’ confrontation.
In Britain, the crisis couldn’t be worse. As prime minister David Cameron was the main cheerleader for TTIP in the EU, he represented a bankrupt British capitalist class that saw their salvation in becoming a vassal state of US capitalism. After Brexit, they are now calling for a separate agreement with Washington, a TTIP ‘on steroids’ it has been called.
But, as Obama made clear during the referendum campaign, the only use Britain is to the US was as its puppet promoting the interests of American capitalism in the EU. Now it can no longer function in this way it will be cast aside in the developing economic war.
The importance of a currency war is that it inevitably brings much closer a real war. This shines a light on the recent clamouring by leaders of the EU countries for the creation of an independent EU army and the demand last week by the ex-head of the British navy, Admiral West, for Britain to urgently build up its armed forces to meet ‘existential’ threats.
The existential threats are rapidly turning out to be the fight between rival capitalist nations for survival as their economies are smashed up by the world crisis of their system. This is capitalism today – nation states fighting for survival and declaring war on one another while waging war on their own working class and at the same time making war on the ex-colonial countries for their resources.
The only future for workers and youth lies in the overthrow of this rotten, bankrupt capitalist system through the victory of the world socialist revolution.