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<\/p>\nPhoto by SumOfUs | CC BY 2.0<\/a><\/p>\n<\/div>\n One can hear the cry ringing through the boardrooms of capital: \u201cFree trade is dead! Long live free trade!\u201d<\/p>\n Think the ideas behind the Trans-Pacific Partnership or the so-called \u201cfree trade\u201d regime are buried? Sadly, no. Definitely, no. Some of the countries involved in negotiating the TPP seeking to find ways to resurrect it in some new form \u2014 but that isn\u2019t the most distressing news. What\u2019s worse is the TPP remains alive in a new form with even worse rules. Meet the Trade In Services Agreement, even more secret than the Trans-Pacific Partnership. And more dangerous.<\/p>\n The Trade In Services Agreement (TISA), currently being negotiated among 50 countries, if passed would prohibit regulations on the financial industry, eliminate laws to safeguard online or digital privacy, render illegal any \u201cbuy local\u201d rules at any level of government, effectively dismantle any public advantages to be derived from state-owned enterprises and eliminate net neutrality.<\/p>\n TISA negotiations began in April 2013 and have gone through 21 rounds. Silence has been the rule for these talks, and we only know what\u2019s in it because of leaks, earlier ones published by WikiLeaks<\/em> and now a new cache published<\/a> by Bilaterals.org<\/em>.<\/p>\n Earlier draft versions of TISA\u2019s language would prohibit any restrictions<\/a> on the size, expansion or entry of financial companies and a ban on new regulations, including a specific ban on any law that separates commercial and investment banking, such as the equivalent of the U.S. Glass-Steagall Act. It would also ban any restrictions on the transfer of any data collected, including across borders; place social security systems at risk of privatization or elimination; and put an end to Internet privacy<\/a> and net neutrality. It hasn\u2019t gotten any more acceptable.<\/p>\n TISA is the backup plan in case the TPP<\/a> and the Transatlantic Trade and Investment Partnership<\/a> don\u2019t come to fruition. Perhaps fearful that the recent spotlight put on \u201cfree trade\u201d deals might derail TISA as it derailed TPP, the governmental trade offices negotiating it have not announced the next negotiating date. The closest toward any meaningful information found was the Australian government\u2019s bland statement that<\/a> the \u201cParties agreed to reconvene in 2017.\u201d<\/p>\n The cover story for why TISA is being negotiated is that it would uphold the right to hire the accountant or engineer of your choice, but in reality is intended to enable the financial industry and Internet companies to run roughshod over countries around the world. And while \u201cliberalization\u201d of professional services is being promoted, the definition of \u201cservices\u201d is being expanded in order to stretch the category to encompass manufacturing. Deborah James of the Center for Economy and Policy Research laid out the breathtaking scope<\/a> of this proposal:<\/p>\n \u201cCorporations no longer consider setting up a plant and producing goods to be simply \u2018manufacturing goods.\u2019 This activity is now is broken down into research and development services, design services, legal services, real estate services, architecture services, engineering services, construction services, energy services, employment contracting services, consulting services, manufacturing services, adult education services, payroll services, maintenance services, refuse disposal services, warehousing services, data management services, telecommunications services, audiovisual services, banking services, accounting services, insurance services, transportation services, distribution services, marketing services, retail services, postal and expedited delivery services, and after-sales servicing, to name a few. Going further, a shoe or watch that measures steps or sleep could be a fitness monitoring service, not a good. A driverless car could be a transport service, not an automobile. Google and Facebook could be information services and communication services, respectively.\u201d<\/p><\/blockquote>\n Why is it you are kept in the dark?<\/strong><\/p>\n Before we get to the details of the text itself, let\u2019s take a quick look at how the world\u2019s governments, on behalf of multi-national capital, are letting their citizens know what they are up to. Or, to be more accurate, what they are not telling you. Many governments have not bothered to update their official pages extolling TISA in months.<\/p>\n The European Union is negotiating TISA on behalf of its 28 member countries, along with, among others, the United States, Canada, Mexico, Australia, New Zealand, Japan, South Korea, Taiwan, Chile, Colombia, Peru, Norway, Switzerland, Pakistan and Turkey.<\/p>\n In the United States, the new Trump administration has yet to say a word about it. The Office of the U.S. Trade Representative web site\u2019s page on TISA<\/a> still says \u201cTiSA is part of the Obama Administration\u2019s ongoing effort to create economic opportunity for U.S. workers and businesses by expanding trade opportunities.\u201d Uh-huh. President Donald Trump is not against \u201cfree trade\u201d deals<\/a>; he simply claims he can do it better. The Trump administration has issued blustery calls for \u201cfair deals\u201d and braggadocio puffing up Donald Trump\u2019s supposed negotiating prowess. A typical White House passage<\/a> reads, \u201cTo carry out his strategy, the President is appointing the toughest and smartest to his trade team, ensuring that Americans have the best negotiators possible. For too long, trade deals have been negotiated by, and for, members of the Washington establishment.\u201d<\/p>\n More typical of the TISA negotiators is the latest report<\/a> from the European Commission, which summarized the latest round, held last November, this way: \u201cParties made good progress in working towards an agreed text and finding pathways towards solving the most controversial outstanding issues at both Chief Negotiators and Heads of Delegation levels.\u201d The Canadian government\u2019s last update <\/a>is from last June and declares \u201cParties conducted a stocktaking session to assess the level of progress on all issues.\u201d<\/p>\n Traveling across the Pacific brings no more useful information. Australia\u2019s government offers this information-free update<\/a>: \u201cParties agreed to a comprehensive stocktake of the negotiations, identifying progress made and areas which require ongoing technical work.\u201d New Zealand\u2019s government can\u2019t even be bothered to provide updates, instead offering only discredited, boilerplate public-relations puffery<\/a> similar to other trade offices.<\/p>\n The one hint that TISA negotiations are experiencing difficulty that could be found through an extensive online search is this passage in a U.S. Congressional Research Service report<\/a> dated January 3, 2017: \u201cRecognizing that outstanding issues remain and the U.S. position under a new administration is unclear, the parties canceled the planned December 2016 meeting but are meeting to determine how best to move forward in 2017.\u201d Given that the new administration is moving as fast as possible to eliminate the tepid Dodd-Frank Act financial-industry reforms, it would seem TISA\u2019s provisions to dismantle financial regulation globally would not be a problem at all.<\/p>\n But that these talks are not progressing at the present time does not mean the world can relax. It took years of cross-border organizing and popular education to stop the TPP, and this effort will have to replicated if TISA is to be halted.<\/p>\n The details are the devils already known<\/strong><\/p>\n Commentary accompanying Bilaterals.org<\/em>\u2019s publication of several TISA chapters stresses that the Trans-Pacific Partnership, despite its apparent defeat, is nonetheless being used as the model<\/a> for the Trade In Services Agreement. Thus we are at risk of the TPP becoming the \u201cnew norm\u201d:<\/p>\n \u201cSeveral proposed texts from the failed Trans-Pacific Partnership (TPP) agreement have been transferred to TiSA \u2014 including state-owned enterprises; rights to hold data offshore (including financial data); e-commerce; and prohibitions on performance requirements for foreign investors. While these texts originated with the United States, they appear to be supported by other parties to the TPP, even though those governments were reluctant to agree to them in the TPP and will no longer be bound by that agreement. That suggests the TPP may become the new norm even though it has only been ratified in two of the 12 countries, and that was done on the basis of U.S. participation that no longer applies. TPP cannot be allowed to become the new \u2018default\u2019 position for these flawed agreements.\u201d<\/p><\/blockquote>\n Some of the most extreme measures have been dropped (at least for now) and much of the text is not agreed. Nonetheless, there is nothing to cheer about, Bilaterals.org<\/em> reports.<\/p>\n \u201cThe effectiveness of opposition to TiSA has led governments to conclude that they cannot sell some of the more extreme proposals, which have thus been dropped from previous leaked texts. But the fetters on the rights and responsibilities of governments to regulate in the interests of their citizens from what remains would still go further than any single other agreement. There are no improvements on the inadequate protections for health, environment, privacy, workers, human rights, or economic development. And there is nothing to prevent developing countries becoming even more vulnerable and dependent in an already unequal and unfair global economy.\u201d<\/p><\/blockquote>\n Hypocritically, TISA would prohibit developing countries from adopting measures that countries like the United States used to facilitate its industrial development when it was an emerging country in the 19th century. In an analysis for WikiLeaks<\/em><\/a>, Sanya Reid Smith of the Third World Network, an international coalition specializing in development issues, wrote:<\/p>\n \u201c[T]he proposals in this text restrict the ability of developing countries to use the development paths taken by many of the developed TISA countries. Some experts call this developed countries \u2018kicking away the ladder\u2019 after they have climbed up, to prevent developing countries from developing the same way. \u2026 In TISA, the USA is proposing restrictions on host countries being able to require senior managers be citizens of the host country. Yet when it was a capital importer, the USA had the opposite law: its 1885 contract labour law prohibited the import of foreign workers, i.e. the USA required senior managers (and all other staff) be Americans, which increased the chances of skills being passed to locals.\u201d<\/p><\/blockquote>\n Letting banks decide what\u2019s good for you<\/strong><\/p>\n These proposals are more extreme than language in existing bilateral trade agreements. Many of TISA\u2019s provisions are lifted from TPP, but some go beyond the latter\u2019s already extreme proposals For example, not even the TPP contemplated the entire elimination of regulations of any kind against the financial industry. Article 14 of TISA\u2019s annex on financial services, which had contained the most explicit language prohibiting regulation, has been removed, but Article 9 still contains language requiring no limitations beyond those applying to domestic financial firms. In other words, a smaller country would be required to allow a giant bank from a bigger country to take over its entire banking system.<\/p>\n Incredibly, regulations against financial derivatives yet to be invented would be illegal. A Public Citizen analysis<\/a> states:<\/p>\n \u201cTISA would require governments to allow any new financial products and services \u2014 including ones not yet invented \u2014 to be sold within their territories. The TISA Annex on Financial Services clearly states that TISA governments \u2018shall permit\u2019 foreign-owned firms to introduce any new financial product or service, so long as it does not require a new law or a change to an existing law.\u201d<\/p><\/blockquote>\n As another example, the financial-services annex (in article 21) would require that any government that offers financial products through its postal service lessen the quality<\/a> of its products so that those are no better than what private corporations offer. Article 1 of the financial-services annex states that \u201cactivities forming part of a statutory system of social security or public retirement plans\u201d are specifically covered by TISA, as are \u201cactivities conducted by a central bank or monetary authority or by any other public entity in pursuit of monetary or exchange-rate policies.\u201d<\/p>\n That social security or other public retirement systems are covered is cause for much alarm because they could be judged to be \u201cillegally competing\u201d with private financial enterprises. It is conceivable that central banks could be constrained from actions intended to shore up economies during a future financial crisis if banks decide such measures \u201cconstrain\u201d their massive profiteering off the crisis.<\/p>\n Article 10 of the annex continues to explicitly ban restrictions on the transfer<\/a> of information in \u201celectronic or other form\u201d of any \u201cfinancial service supplier.\u201d In other words, EU laws guarding privacy that stop U.S.-based Internet companies from taking data outside the EU to circumvent those privacy laws would be null and void. Laws instituting privacy protections would be verboten before they could be enacted. These rules, if enacted, could also provide a boon to companies like Uber whose modus operandi is to circumvent local laws<\/a>. The Bilaterals.org<\/em> analysis accompanying the leaks notes<\/a>:<\/p>\n \u201cThe main thrust of TiSA comes through the e-commerce, telecommunications, financial services and localisation rules and countries\u2019 commitments to allow unfettered cross-border supply of services. Together they would empower the global platforms who hold big data, like Google, without effective privacy protections, and tech companies like Uber, who have become notorious for evading national regulation, paying minimal tax and exploiting so-called self-employed workers. Given the backlash against global deals for global corporations TiSA will simply add fuel to the bonfire.\u201d<\/p><\/blockquote>\n Who interprets the rule is crucial<\/strong><\/p>\n The language of TISA, like all \u201cfree trade\u201d agreements, is dry and legalistic. How<\/em> these rules are interpreted is what ultimately matters. TISA contains standard language requiring arbitration by judges possessing \u201crequisite knowledge\u201d; that language means that the usual lineup of corporate lawyers who represent corporations in these tribunals will switch hats to sit in judgment. The tribunals used to settle these \u201cinvestor-state disputes\u201d are held in secret with no accountability and no appeal.<\/p>\n The intention of \u201cfree trade\u201d agreements is to elevate corporations to the level of governments. In reality, they raise corporations above the level of governments because only \u201cinvestors\u201d can sue; governments and people can\u2019t. \u201cInvestors\u201d can sue governments to overturn any law or regulation that they claim will hurt profits or even potential future profits. On top of this, a government ordinarily has to pay millions of dollars in costs even in the rare instances when they win one of these cases.<\/p>\n Each \u201cfree trade\u201d agreement has a key provision elevating corporations above governments<\/a> that codifies the \u201cequal treatment\u201d of business interests in accordance with international law and enables corporations to sue over any regulation or other government act that violates \u201cinvestor rights,\u201d which means any regulation or law that might prevent the corporation from extracting the maximum possible profit. Under these provisions, taxation and regulation constitute \u201cindirect expropriation\u201d mandating compensation \u2014 a reduction in the value of an asset is sufficient to establish expropriation rather than a physical taking of property as required under customary law. Tribunal decisions become precedents for further expansions of investor \u201crights\u201d and thus constitute the \u201cevolving standard of investor rights\u201d required under \u201cfree trade\u201d agreements. TISA contains the usual passages requiring \u201cequal treatment.\u201d<\/p>\n At bottom, \u201cfree trade\u201d deals have little to do with trade and much to do with imposing corporate wish lists through undemocratic means, including the elimination of any meaningful regulations for labor, safety, health or the environment. TISA is another route to imposing more of this agenda. And the TPP itself isn\u2019t necessarily dead \u2014 both Chile and New Zealand are holding discussions with other TPP countries to salvage some of the deal. Chile has invited TPP countries, plus China, to a March summit<\/a> and the New Zealand trade minister is visiting<\/a> Australia, Japan, Mexico and Singapore.<\/p>\n Working people around the world scored a major victory in stopping the TPP, at least in its current form. The activists who achieved this deserve much credit. But there is far more to do. Capital never rests; nor can we. Here we have class warfare in naked fashion, and there is no doubt on which side the capitalist world\u2019s governments lie.<\/p>\n