European Union
The Direct Democratic Struggle About Free Trade

How to reconcile people power with trade politics? This question is about to be answered by modern direct democracy at the transnational level.

3'263’920 signatures from 28 EU member states. This impressive pile of statements of support from EU citizens was delivered to the European Commission on October 7. Their demand is twofold: first, a hold on the so-called "Comprehensive Economic and Trade Agreement" (CETA) with Canada, and, second, an immediate stop to the negotiations between the European Union and the United States of America on a "Transatlantic Trade and Investment Partnership" (TTIP). In both cases the sponsors and most supporters of the initiative see these free trade agreements (FTA) as "a threat to democracy, the environment, consumers and labour standards".

Free trade agreements across national borders have always triggered opposition and debate, in part because international trade politics and democracy are hard to reconcile. Free trade is about creating an economic environment across national borders and continents that primarily offers benefits and protection to powerful investors and big companies, whereas the aim of modern democracy is to protect citizens and enable even the smallest communities to make their voices heard. The secretive way free trade agreements is illustrative of the great gap between these two worlds: of a global economy that has few constraints and boundaries, and people power that is still very much limited.


Swiss innovation

It was in Switzerland that the first nation-wide popular vote on a trade agreement took place. On December 3, 1972 almost 75 percent of the participating Swiss voters approved the trade agreement between Switzerland and the European Economic Community (EEC, the predecessor of today´s EU). This vote was remarkable in several ways: it was one of the first popular votes after the introduction of full universal suffrage in Switzerland (which until 1970 had excluded women from the ballot box!); the vote was not based on a citizen-triggered referendum or required by the Swiss constitution, but was presented to the voters by the government; and the complexity of the proposed agreement (including 1500+ pages) led the authorities to develop - for the first time - a voters pamphlet. Known today as the "Abstimmungsbüchlein" (and used by most Swiss as a primary source of information), this innovative pamphlet has become a model for good referendum practice across the globe.

This first "free trade popular vote" was accompanied at the time by several other citizen decisions across Europe in France, Ireland, Norway and Denmark on EEC-related issues like expansion and admission. Since then, the European integration process, which has always had a lot to do with free trade, has become one of the most voted on issues in the history of modern direct democracy, featuring more than 60 nationwide votes in 28 countries in nearly half a century.

But the conversation about balancing international economic freedoms with nation-based democratic rights and practices has not been limited to Europe. Wherever a certain amount of democratisation has occured within countries, the willingness of their governments to negotiate and implement far-reaching free trade agreements has come under extensive scrutiny - as it was the case with the first FTA by US in Asia, when millions of Koreans signed petitions against it, followed by large street protests. However, due to the highly polarized two-party system of South Korea, the right-wing government was finally able to bypass the strong opposition and strike the deal with Washington in 2011.


Costa Rican popular vote

In a similar way, democracy advocates and labor unions across the Americas opposed the wave of FTAs across the two continents in the 1990s and 2000s. It was up to the most developed democracy in the region, Costa Rica, to introduce the practice of a direct democratic check on an FTA in 2007. Negotiations for the creation of a Free Trade Area of the Americas (FTAA) date back to the early 1990s. While the creation of such an area – extending from Alaska in the north to Tierra del Fuego in the south – was stalled by strong opposition in many countries, sub-regional agreements included the Central American states of Nicaragua, Guatemala and Honduras, the Dominican Republic and Costa Rica. Here a new constitution established as late as 2002 offered the citizens the possibility to launch their own initiative against CAFTA (the Central American Free Trade Agreement). By November 2006 more than 132,000 citizens corresponding to slightly more than 5% of the electorate – had signed this initiative, leading to the very first nationwide popular vote on an substantive issue in Costa Rica on October 7, 2007. While 51.5% approved CAFTA, 48.5% voted against. With a turnout rate of almost 60% this decision became binding, as the constitution requires at least 40% of the electorate to take part in order to validate a citizen decision at the ballot box.

Democratic scrutiny is said to have improved the trade agreements, and their implementation, in Switzerland and Costa Rica. And trade clearly gave a push forward for the development of direct democracy–and the transparency and responsiveness it brings. Now the trade agreements, and direct democracy are being tested for the first time at the transnational level.


Self-Organized citizens initiative

The tool at hand to do that is the European Citizens Initiative (ECI). This instrument was introduced as late as 2012 with the latest constitutional reforms of the European Union. The ECI allows at least one million EU citizens (with a requirement to have a certain number of supporters from at least seven member states) to propose new EU legislation - on equal footing with other legislative bodies like the EU Parliament (Congress) and the EU Council (Senate). It is the very first such participatory tool at the transnational level worldwide - with the innovation to allow for signatures gathered electronically.

However, the first three years with the ECI has offered a true roller-coaster ride to more transnational people power as the procedure as such includes cumbersome verification and certification procedures involving authorities from 28 member states. Additionally, the EU Commission (which is the main executive branch of government at the EU level) has been reluctant to allow and register initiatives, which are not under their full competence to legislate - as it was the case in the TTIP-ECI. Here the Commission, as in about one third of all filed initiatives, simply refused to register with the result, that more people supported the (self-organised) ECI, than any other initiative so far. After all, ECIs have limited binding powers on the institutions, but rather strong communicative opportunities.

The "Stop-TTIP" campaign, which gathered a quarter million citizens for a demonstration in Berlin on October 10, has generated a greater intensity of purpose in the serious goal of revising the ECI itself (where major reforms are currently being discussed in the European Parliament and promoted by NGOs like Democracy International) and to drawing much wider public attention to the TTIP-negotiations, making this treaty – at least in its original format – less likely to succeed by the day. The consequences can of this growing popular interest in FTAs can even be felt in the ongoing ratification process about the newly agreed Trans-Pacific Partnership agreement, including the US and 12 Pacific rim countries, covering about 40% of the world economy.

By self- organising a highly successful "ECI“ reaching threshold numbers in basically all the EU member states - the campaign has also encouraged democracy activists in many countries to use their own participatory tools to make their voices heard - including a new citizens initiative about the agreements at the national level in the Netherlands. So regardless of what one thinks, feels and understands about Free Trade Agreements, there seems to be only one main way to reconcile them in the long-term with people power, by practising modern direct democracy at the transnational level.