In the past two days, WikiLeaks has released drafts from a lesser-known trade agreement being negotiated between 52 nations called the Trade in Services Agreement (TISA). The publication comes just before the next round of negotiations, which will begin on July 6.
The “Core Text” of TISA, as well as chapters from negotiations on “Electronic Commerce,” “Telecommunications Services,” “Financial Services,” and “Maritime Transport Services,” were published.
WikiLeaks describes the “Core Text” of the agreement that they released from the “largest ‘trade deal’ in history” a “modern journalistic holy grail.” The media organization is not exaggerating.
Edward Alden, who used to be a reporter for the newsletter Inside US Trade, wrote in a post for the Council on Foreign Relations that WikiLeaks’ sources are “impressive.” Alden recalled how he worked in the “pre-digital age” to “encourage leaks of trade negotiating positions. “But, with the exception of the Clinton administration’s proposal for the NAFTA labor and environmental side agreements in 1993, we rarely got our hands on the texts themselves.”
In a time when corporations are being aided by governments, which are negotiating sweeping trade deals like TISA and the Trans-Pacific Partnership (TPP) with complete secrecy, WikiLeaks has ensured that governments do not finish negotiations without the public having some idea about this conspiracy unfolded behind closed doors.
Deputy US Trade Representative Michael Punke previously described TISA as an agreement that “would encompass all service sectors and modes of supply and impose a high standard for liberalization.” By liberalization, Punke means deregulation.
Quite aggressively TISA seeks to establishes rules that would tie the hands of TISA governments, preventing them from being able to craft their own regulations to protect people from exploitation by businesses or corporations. And, the very rules, which have been adopted since the 2008 economic crisis, to protect against future financial meltdowns would likely come under attack as a result of this trade deal.
Ben Beachy of Public Citizen’s Global Trade Watch put together an analysis [PDF] of the “Financial Services” chapter and found sweeping rules for “market access,” which “would expose governments to legal challenges before extrajudicial tribunals for banning risky financial services or products, such as the complex derivatives that fueled the financial crisis. The same rule threatens proposals to limit the size of banks so that they do not become ‘too big to fail.'”
Yet another rule opening up the world to financial risk would challenge policies, which prevent banks from being able to “hold consumers’ deposits from engaging in hedge-fund-style trading of high-risk securities.” It would be prohibited to restrict “financial inflows—used to prevent rapid currency appreciation, asset bubbles and other macroeconomic problems—and financial outflows, used to prevent suddent capital flight in times of crisis.”
“Despite increasing concerns about data privacy, sparked by revelations of the US National Security Agency’s dragnet spying, TISA would require that financial firms be permitted to transfer consumers’ personal financial data overseas, where it could be exposed to unwanted surveillance,” Beachy warns.
In some instances, TISA countries may have to roll back regulations if they were inhibiting the business of a foreign firm.
Countries adopting TISA would be barred from financial regulations that did not meet the standards of deregulation agreed upon during trade negotiations. There also would be a requirement that governments allow “any new financial products and services—including ones not yet invented—to be sold within their territories.”
…The provision allows governments to deny authorization of new financial services “only for prudential reasons” (Annex, Art. X.9). But unless a government can preemptively prove that a new financial service or product may one day pose a threat to financial stability – an unrealistic requirement – this exception would seem to not apply, meaning the government would have to accept the new product or service. For example, it would have been difficult to prove the prudential threat posed by “collateralized debt obligations” when the complex financial products were first introduced in the United States in 1987, despite the significant role they played two decades later in spurring the financial crisis…
Yet, tucked in the agreement is a provision that would seem to permit governments to deny authorization of services to protect consumers. For example, Beachy suggests a foreign financial firm could be blocked from opening the “first payday lending service in a TISA country that had no payday lenders” to protect “cash-strapped consumers” from predatory loans.
The TISA seems designed to permit firms from powerful countries to muscle their way deeper into markets of TISA countries so that they can gain more control. For example, one provision would “bind government procurement of financial services to TISA’s ‘national treatment’ rules, prohibiting governments from preferring domestic firms when contracting sensitive financial services.” In other words, government could not favor domestic firms to protect taxpayer funds from risk and would have to grant foreign financial services the same level of access.
The International Transport Workers’ Federation maintains that the TISA, particularly the “Maritime Transport Services” chapter, will allow for a “power grab by transport industry players at the expense of the public interest, jobs, and a voice for workers.” It could be used to threaten seafarers’ wages and safety conditions in the workplace.
Jane Kelsey, a law professor from New Zealand, analyzed the “Core Text.” She concludes TISA is “being negotiated by a self-selected group of mainly rich countries, calling themselves the ‘Really Good Friends of Services’. The leaked ‘core’ text provides further evidence of their game plan to bypass other governments in the World Trade Organization (WTO) and rewrite its services agreement in the interests of their corporations. It also makes the new risks from TISA to governments’ right to regulate in their national interest much clearer.”
The deal is designed to apply to “any aspects of the supply chain for a particular service — its production, distribution, marketing, sale, and delivery,” according to Kelsey.
“Privacy protections are illusory,” Kelsey states. “In addition to all the hurdles for other exceptions, laws, and regulations to protect individual’s privacy in relation to processing and disseminating personal data and protecting confidentiality must not be inconsistent with the provisions of the agreement.”
That the world now knows this is what has been negotiated reinforces the fact that WikiLeaks has performed a valuable service.
Like Public Citizen said in its press release, “It is unimaginable that such an agreement is under negotiation while the global economy is still recovering from the most severe crisis since the Great Depression, and while Greece and other countries are still reeling from developments related to the crisis.”
“These leaks show that it is imperative for TISA negotiators to suspend their efforts, publish all texts under negotiations and not resume until there is a proper public debate about their radical deregulatory maneuvers.”
Image from WikiLeaks and created for publication of TISA documents.