The Trade in Services Agreement and the corporate agenda

TiSASince 2013, 51 nations have been conducting secret closed-door negotiations on a Trade in Services Agreement (TISA) whose text has been kept secret, despite the fact that this Agreement, as proposed, constrains a broad range of services typically performed by governmental organizations and promotes their sell-off similar to the sell-off of public assets being subjected to the government of Greece. The United States the UK, and the European Union are the countries mostly strongly pushing for TISA. The agreement aims at liberalizing the worldwide trade of services such as banking, health care, mail delivery, transportation, and water (and other) utilities.

Proposed Agreement

The agreement covers about 70% of the global services economy, with the aim of privatizing the worldwide trade of services. Services comprise 75% of American economic output, and in EU states, almost 75% of its employment and gross domestic product. For commitments on what the European Commission calls ‘national treatment’, the following applies: Once a particular trade barrier has unilaterally been removed in a TISA country it cannot be reintroduced.

WikiLeaks had released a classified draft of the proposal’s financial services annex in June 2014, and on July 2, 2015, leaked copies of 27 draft TISA texts, ranging from the annexes on Financial Services to an annex on Air Transport Services. See https://wikileaks.org/tisa/

Financial Regulations

Despite the lessons of the 2008 financial crisis which sought to re-regulate financial firms to prevent another crisis, the leaked TISA rules have been drafted to require countries – including the world’s largest financial centers – to halt or even roll back virtually all financial regulations.

The leaked Annex on Financial Services makes clear that TISA restrictions on financial regulations would apply to virtually the entire financial sector – including derivatives, banking, stocks and bonds, foreign exchange, life and non-life insurance, credit cards, financial data processing, credit rating, reinsurance and other financial services. TISA goals are to pressure governments to broadly commit to the pact’s rules, and even bind them to rules for financial products that have not yet been invented, requiring domestic laws to conform to the now-rejected model of extreme deregulation that led to the latest global recession. TISA nations that fail to alter its financial policies to require deregulation could face indefinite trade sanctions, authorized by an extra-judicial tribunal, until it brings its financial policies into conformity.

Health Care

TISA strongly advocates for privatizing health care systems, and seeks to remove any barriers that nations have instituted to promote public systems. The current effort by the Conservative Party in the UK to defund the UK’s NHS (National Healthcare System) is seen as the first step in dismantling the world’s leading public healthcare system. According to the UK’s National Health Action Party (NHAP)

this effort is being taken because of US pressure to ease the approval process of TISA, with reduced opposition expected from the British electorate with a weakened NHS system under attack.

Mail Delivery

The American Postal Workers Union (APWU) claims that TISA is a “trade deal the U.S. is negotiating behind closed doors with 50 other countries” which will “threaten the future of public- and private-sector services, including the U.S. Postal Service”. Member countries could challenge requirements to serve customers in all areas, jeopardizing service to rural communities.

The lobbying group Express Association of America, which represents FedEx and UPS, enthusiast-ically states that TISA “provides an opportunity to review the postal policies of the negotiating partners.”

According to the lobbying association, TISA is expected to:

  • Eliminate regulations that favor public postal services.
  • Eliminate all licensing requirements for express delivery providers.
  • Eliminate mandates requiring express delivery providers to contribute to universal service funds.

The UK two years ago privatized its 500 year old public Royal Mailservice, selling off the entire business and all its assets at a bargain basement price to financial speculators, including a US hedge fund – a public service that had that returned tens of millions of pounds annually to the UK government, and which provided not only mail services, but even banking services to poor and rural people throughout the country. Delivery service has declined, strikes are common, and morale among postal workers has plummeted.

Transportation

The International Transport Workers’ Federation (ITF), comprised of roughly 700 unions from more than 150 countries, warned that the TISA documents “foresee consolidated power for big transport industry players and threaten the public interest, jobs and a voice for workers.” According to ITF president Paddy Crumlin: “This text would supercharge the most powerful companies in the transport industry, giving them preferential treatment. What’s missing from this equation is any value at all for workers and citizens.”

Along with the privatization of the Royal Mail, the UK also recently sold off its national railway system to six private corporations, and the result has been another unmitigated disaster, with the recent levels of service approaching those of AMTRAK in the US, which seems to deliberately discourage public use. One of the six private British lines quickly went bankrupt and had to be taken back by the UK, which is now preparing to sell it off again at an even lower price. Millions of people are discouraged from using the once world-famous British trains while ticket prices have risen to levels that only the affluent can afford.

Water and Other Utilities

Regarding the sell-off of public utilities that TISA is designed to promote, and as mentioned earlier, once a particular trade barrier has unilaterally been removed in a TISA country it cannot be reintroduced. This proposal is known as the ‘ratchet clause’. Had Bolivia, for example, signed the draft agreement, it could not have allowed the seizure of the corporate “Violia” water systems by some of its major cities after massive protests by the citizens. It did this because of the massive company fraud and kickbacks that potential customers had to pay just in order to procure water services.

Neither would the city of Stockton, Calif. have been able to take back its privatized municipal water, sewage, and stormwater systems four years after selling them off to foreign-based private firms in 2003, and after a near revolt of the local electorate who virtually replaced their city government in order to reverse the disastrous sale.

According to the leaked documents, the TISA will not only prevent governments from returning public services to public hands when privatizations fail, it will also restrict domestic regulations on worker safety, limit environmental regulations and consumer protections and regulatory authority in areas such as licensing of health care facilities, power plants, waste disposal and university and school accreditation.

Our US Congress, including Oregon Senator Ron Wyden, recently voted to give “Fast Track Authority” to Free Trade Agreements, such as the TPP, for the next five years, including the TISA deal, should it move to full agreement. Its a shame our Congress failed to listen to the statements below:

Democracy is eroded when decision-making about important sectors– such as financial services (including banking, securities trading, accounting, insurance, etc.), energy, education, healthcare, retail, shipping, telecommunications, legal services, transportation, and tourism– is transferred from citizens, local oversight boards, and local or provincial/state jurisdiction to unaccountable ‘trade’negotiators who have shown a clear proclivity for curtailing regulation and prioritizing corporate profits.

and…

It’s a dark day for democracy when we are dependent on leaks like this for the general public to be informed of the radical restructuring of regulatory frameworks that our governments are proposing,” said Nick Dearden, director of Global Justice Now.