It’s almost impossible to keep anything secret
these days – not even the core text of a hyper-secret trade deal, the Trade in
Services Agreement (TiSA), which has spent the last two years taking shape
behind the hermetically sealed doors of highly secure locations around the
world.
According to the agreement’s provisional text,
the document is supposed to remain confidential and concealed from public
view for at least five years after being signed! But now, thanks to
WikiLeaks, it has seeped to the surface.
The Really, Really
Good Friends of Services
TiSA is arguably the most important – yet
least well-known – of the new generation of global trade agreements. According
to WikiLeaks, it “is the largest component of the United States’ strategic
‘trade’ treaty triumvirate,” which also includes the Trans Pacific Partnership
(TPP) and the TransAtlantic Trade and Investment Pact (TTIP).
“Together, the three treaties form not only a
new legal order shaped for transnational corporations, but a new economic
‘grand enclosure,’ which excludes China and all other BRICS countries” declared
WikiLeaks publisher Julian Assange in a press statement. If allowed to take universal effect, this new enclosure system
will impose on all our governments a rigid framework of international corporate
law designed to exclusively protect the interests of corporations, relieving
them of financial risk, and social and environmental responsibility.
Thanks to an innocuous-sounding provision
called the Investor-State Dispute Settlement, every investment they make will effectively
be backstopped by our governments (and by extension, you and me); it will be
too-big-to-fail writ on an unimaginable scale.
Yet it is a system that is almost universally
supported by our political leaders. In the case of TiSA, it involves more
countries than TTIP and TPP combined: The United States and all 28 members of
the European Union, Australia, Canada, Chile, Colombia, Costa Rica, Hong Kong,
Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Pakistan,
Panama, Paraguay, Peru, South Korea, Switzerland, Taiwan and Turkey.
Together, these 52 nations form the charmingly
named “Really Good Friends of Services” group, which represents almost 70% of
all trade in services worldwide.
As WOLF STREET previously reported, one explicit goal of the TiSA negotiations
is to overcome the exceptions in GATS that protect certain non-tariff trade
barriers such as data protection. For example, the draft Financial Services
Annex of TiSA, published by Wikileaks in June 2014, would allow financial institutions,
such as banks, to transfer data freely, including personal data, from one
country to another – in direct contravention of EU data protection laws.
But that is just the tip of the iceberg.
According to the treaty’s Annex on Financial Services, we now know that TiSA
would effectively strip signatory governments of all remaining ability to
regulate the financial industry in the interest of depositors, small-time
investors, or the public at large.
1. TiSA will restrict the ability of governments to limit
systemic financial risks. TiSA’s sweeping market access rules conflict
with commonsense financial regulations that apply equally to foreign and
domestic firms. One of those rules means that any governments that seeks to
place limits on the trading of derivative contracts — the largely unregulated
weapons of mass financial destruction that helped trigger the 2007-08 Global
Financial Crisis — could be dragged in front of corporate arbitration panels
and forced to pay millions or billions in damages.
2. TiSA will force governments to “predict”
all regulations that could at some point fall foul of TiSA. The leaked
TISA text even prohibits policies that are “formally identical” for domestic
and foreign firms if they inadvertently “modif[y] the conditions of
competition” in favor of domestic firms:
For example, many governments require all
banks to maintain a minimum amount of capital to guard against bank collapse.
Even if the same minimum is required of domestic and foreign-owned banks alike,
it could be construed as disproportionately impacting foreign-owned banks… This
common financial protection could thus be challenged under TISA for “modifying
the conditions of competition” in favor of domestic banks, despite governments’
prerogative to ensure the stability of foreign-owned banks operating in their
territory.
3. TiSA will indefinitely bar new financial regulations
that do not conform to deregulatory rules. Signatory governments will
essentially agree not to apply new financial policy measures which in any way
contradict the agreement’s emphasis on deregulatory measures.
4. TiSA will prohibit national governments
from using capital controls to prevent or mitigate financial crises. As
we are seeing in Greece right now, capital controls are terrible. But for a
government facing the complete breakdown of the financial system, they serve as
a last resort for restoring some semblance of order. Even the IMF, which urged
countries to abandon capital controls in the Washington Consensus years of the
1990s, recently endorsed capital controls as a means of maintaining the
stability of the financial system. But if TiSA is signed, the signatory
governments will be prohibited from using them:
The leaked texts prohibit restrictions on
financial inflows – used to prevent rapid currency appreciation, asset bubbles
and other macroeconomic problems – and financial outflows, used to prevent
sudden capital flight in times of crisis.
5. TiSA will require acceptance of financial
products not yet invented. Despite the pivotal role that new, complex
financial products played in the Financial Crisis, TISA would require
governments to allow all new financial products and services, including ones
not yet invented, to be sold within their territories.
6. TiSA will provide opportunities for financial firms to
delay financial regulations. If signed, TISA will require governments
to address financial firms’ criticism of a regulatory proposal when publishing
a final version of the regulation. Even then, governments would be obliged to
wait a “reasonable time” before allowing the new regulation to take effect. In
the United States, such requirements have produced delays sometimes
lasting years in the enactment of urgently needed financial and other
safeguards. If the same process is applied across the globe, it would make it
almost impossible for government to constrain the activities of the world’s
largest banks.
What that would likely mean is that when (not
if) a new global financial crisis takes place in the not-too-distant future,
the banks will once again be on hand to lead efforts to clean up and rebuild
with taxpayer money the very sector that they themselves have destroyed.
Lather, rinse, repeat. Only this time, on an even grander scale./p>
Global banking behemoth HSBC is not having a
good 2015. Now, is it just in dire financial straits? Read… Does HSBC Know Something Other Banks
Don’t?
Comments
TISA also includes unfettered excessive immigration to
the US from treaty partners and the formal loss of control by Congress over US
borders.
Norb Leahy, Dunwoody GA Tea Party Leader
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