By Mitch Jones
While once a central component of the economic activity of the United States, Detroit – like other American cities reliant on manufacturing – has fallen on hard times. To be clear, this isn’t an accident of misfortune. Detroit was targeted by both the “free trade” and anti-labor agenda that took over American politics in the 1970s. As a result, the city lost thousands of jobs and its economy suffered. The current crisis in Detroit involving water shut-offs is a symptom of this agenda.
The state-appointed emergency manager for Detroit opened up bids for privatizing the sewer and water department. Recently, the city hired private water company Veolia Water to advise the city on “cost savings” within the department. Headquartered in Paris, Veolia Environnement operates as Veolia Water North America in the United States and is the second largest water company in the country, serving about 10.5 million people in 32 states. In addition to advising the city on cost savings within the department, Veolia is also one of the companies that have expressed interest in a privatized Detroit water system.
We know that privatized water systems are boon for the companies running them and trouble for residents. Under privatization deals rates tend to go up, service tends to go down, and jobs tend to be cut. That, by the way, is what “cost savings” means. The people of Detroit are already struggling to pay their ever-increasing water bills in an economy that shows little signs of recovering.
Now, as the push for privatization plays out behind closed doors, another proposed trade deal could make it hard to get out of any private contract. Earlier this year the United States started negotiating a trade deal with the European Union called the Transatlantic Trade and Investment Partnership or TTIP. The deal could give private water companies a powerful arsenal to use against local communities. TTIP could undermine communities’ ability to halt hostile privatization efforts, hinder attempts to reclaim water systems from EU corporations and make it harder to hold private water companies accountable.
The deal could also allow EU water companies to challenge municipal decisions about owning and operating water utilities at secret international tribunals, part of a system known as Investor-State Dispute Resolution. An EU company like Veolia could even challenge an unfavorable decision by a public domestic court in this private international venue. The tribunal would have the power to second-guess local rules and public safeguards on behalf of EU companies. If Detroit decides to try to terminate any private contract—once the city reestablished complete control of its system from the emergency manager—an EU company holding that contract could also seek monetary damages. This would make it much more difficult for a city like Detroit to exit bad privatization deals or remunicipalize their water.
Having had it’s economy systematically destroyed by previous free-trade agreements, Detroit now stands poised to suffer again from the ridiculous attempt to establish trade tribunals that will be able to overrule the decisions of local citizens.
The way to stop this is to prevent TTIP from ever becoming law. Write to your Congress member and ask them to oppose “fast tracking” the TTIP and other trade deals.