Trans-Pacific Partnership Contains Provison To Help Wall Street Avoid Regulations
— Kevin Zeese (@KBZeese) January 26, 2015
Try to hide your surprise. One of the reasons the Trans-Pacific Partnership (TPP) is being kept secret is because it has unpopular and reckless policies in it such as deregulating Wall Street. Framed as an effort to harmonize rules for efficiency’s sake the TPP contains rules to prevent “localization” or domestic rules that would restrain financial firms.
Much like Dodd-Frank in the US, many countries have local regulations on how the financial industry can operate in their country. TPP seeks to eliminate such local requirements and instead promote a low and loose universal standard to allow global financial firms and financiers to come and go as they please in each country party to the TPP agreement.
For those with decent memories it was the adoption of these kind of loose capital controls and regulations that laid the groundwork for the 1997 Asian financial crisis which would have been considerably harder if not completely impossible without deregulation and harmonization of rules for financial firms. TPP is setting Asia up for another crisis – or so it would seem – based on testimony before Congress.
US Trade Representative Michael Froman told committee chair Orrin Hatch (R-Utah) that the Obama administration is pushing for “protection against data localization requirements.” The issue, which Hatch brought up specifically with respect to the financial services industry, could hinder governments’ ability to enforce rules, critics fear, though Froman said the USTR is proposing it to obviate the need for “the construction of redundant infrastructure.”…
As The Sentinel reported last year, critics of another trade deal, the Trade in Services Agreement, noted that the move to undermine such laws could have a significant impact on regulation enforcement. University of Auckland professor Jane Kelsey and Public Citizen digital rights advocate Burcu Kilic said that enforcing consumer, labor and environmental protections is already a challenge “where foreign firms can minimize their local legal presence and capital backing.”
What could go wrong? Surely Wall Street can be trusted to follow difficult to enforce rules that if broken could jeopardize financial markets and the global economy. When has that ever not worked out?
The issue of avoiding local regulations and oversight for the financial industry joins a growing list of concerns related the TPP. From unionbusting to surrendering national sovereignty to corporate tribunals the TPP looks like an increasingly terrible deal for the average person of each member country. And given the failure of trade deals to do anything positive for America in the past, it’s not surprising that the Obama Administration wants fast track authority to jam it through Congress without an examination of all the dirty little details.
Can TPP be stopped?