The global elite strikes back

The common people in Europe, the USA and other countries are starting to revolt against international institutions—the European Union, the World Trade Organization, the International Monetary Fund—that represent the interests of an international financial elite.

The financial elite is striking back by promoting international trade agreements—the Trans-Pacific Partnership (TPP) agreement, the Transatlantic Trade and Investment Partnership (TTIP) agreement, the Trade in Services Agreement (TISA) and the lesser-known Comprehensive Economic and Trade Agreement (CETA) involving Canada and the European Union.

All these agreements would enact pro-business policies into international law, and would create tribunals with the power to fine governments for unjustly depriving businesses of expected profits.

Nationalists oppose these agreements because they undermine national sovereignty.   Progressives and liberals oppose these agreements because they are un-democratic.  On this issue, progressives and nationalists are on the same side because, at these moment in history, national governments are the highest level in which democracy exists.

President Obama hopes to get the Republican majority in the lame duck Congress following the November election to enact the TTP Agreement.   The Conservative Party in Britain favors the TTIP, which would subject the UK to a new pr0-business international authority.   CETA would accomplish the same goal for the remaining EU members.

If any of these agreements passes, they can be used to block legislation to protect workers, consumers or public health, or to bring banks and financial institutions under control.

Followers of Bernie Sanders in the USA and Jeremy Corbyn in the UK, and progressives in other subject countries, would be stymied until they could figure out a way to roll back the agreements.

None of these agreements is needed in order to have international trade.   Rather their goal is to remove controls on the operations of international corporations.

ISDS: the worst part of the TPP

Source: What Now Cartoons.

Negotiations for the proposed Trans-Pacific Partnership agreement are essentially negotiations concerning business interests.  They reportedly are running into trouble on disagreements about dairy and auto parts imports and drug patents.

But from the standpoint of ordinary citizens, the most odious part of the TPP — and its sister proposals, the Transatlantic Trade and Investment Partnership agreement (aka TAFTA) and the Trade in Services Agreement — are the Investor-State Dispute Settlement provisions that allow an un-elected tribunal to penalize governments for enacting laws to protect the health and welfare of their citizens, if such laws unfairly deprive foreign corporations of expected profits.

Not compensation for actual losses, but compensation for hypothetical losses.

A letter signed by more than 100 legal scholars and former judges sums up the problem.

ISDS grants foreign corporations a special legal privilege, the right to initiate dispute settlement proceedings against a government for actions that allegedly cause a loss of profit for the corporation. 

Essentially, corporations use ISDS to challenge government policies, actions, or decisions that they allege reduce the value of their investments.  These challenges are not heard in a normal court but instead before a tribunal of private lawyers.

There are more TPPs in the pipeline

The Trans-Pacific Partnership is just the beginning.

POLITICO reported that four more trade agreements are now being negotiated.

Following Congress’ hard-fought approval of “fast-track” trade authority last week, U.S. Trade Representative Michael Froman vowed not only to complete the 12-nation Trans-Pacific Partnership but an even bigger pact with the European Union and three other major trade deals — all in the 18 months remaining in President Barack Obama’s term.

It could add up to the biggest trade blitz in history, transforming the rules under which the world does business.

“We’ve got a lot of pots on the stove,” Froman told POLITICO while watching senators cast their final votes to send the legislation to the president. “We want to get TPP done and through Congress. We want to get TTIP negotiated. We’re going to finish ITA. I’m hoping to finish EGA and TISA.”

Those would be, in order: the Transatlantic Trade and Investment Partnership agreement with the European Union, an even bigger pact than the TPP in terms of economic size; the World Trade Organization’s Information Technology Agreement, which covers about 97 percent of world IT trade; the Environmental Goods Agreement, accounting for 86 percent international commerce in green goods; and the 24-party Trade in International Services Agreement, which involves three-quarters of the United States’ gross domestic product and two-thirds of the world’s services, such as banking and communications.

via POLITICO.

I’d heard of the Transatlantic Trade and Investment Partnership (TTIP) and the Trade in Services Agreement (TISA), but not the Information Technology Agreement or the Environmental Goods Agreement until now.

Chinese vs. American trade agreements

U.S. rivalry with China should be mainly economic, not military.   The threat to us Americans is that we shall continue to allow the hollowing out of our manufacturing industry while China grows ever more powerful.

China offers the world the chance to invest in its Asian Infrastructure Investment Bank, which may or may not amount to anything, but potentially could help all its partners achieve their economic goals.

The US government is trying to pressure the world into joining the Trans Pacific Partnership, the Transatlantic Trade and Investment Partnership and the Trade in Services Agreement, which would require them to give up national sovereignty so that multinational corporations could operate with greater freedom.

President Obama has said that it is important that “we” rather than China get to write the rules for the international economy.  I don’t feel included in that “we”.   I think the “we” who will write the rules are the big international banks and other corporations, not us Americans.

There’s an old saying that you can catch more flies with honey than with vinegar.  Right now the Chinese government is offering honey while the U.S. government is trying to force its allies to swallow vinegar.

More toxic trade agreements are in the pipeline

Scope of the proposed Trans-Pacific Partnership Agreement

Scope of the proposed Transatlantic Trade and Investment Partnership

Scope of the proposed Trade in Services Agreement

If Congress approves the Trade Promotion Authority, aka Fast Track, it will grease the way not only for the Trans-Pacific Partnership, but for two other toxic trade agreements now in the pipeline—the Transatlantic Trade and Investment Partnership and the Trade in Services Agreement.

The Transatlantic Trade and Investment Partnership is basically the same as the Trans-Pacific Partnership, except that it covers a different set of countries.

The Trade in Services Agreement is mainly about deregulation of financial services, but it also has a section on “movement of natural persons.”  In other words, TISA would cover immigrationtemporary visas for specialized workers, according to a draft released by Wikileaks.

Notice which countries are not in any of the three proposed agreements.  The BRICS countries—Brazil, Russia, India, China and South Africa—would retain sovereignty over their economies after United States, the European Union and their satellites give them up.

‘Fast track’ involves more than just the TPP

The significance of “fast track” goes far beyond clearing the way for quick approval of the Trans Pacific Partnership agreement.

There are other TPP-like trade agreements now under negotiation, such as the Transatlantic Trade and Investment Partnership and the Trade In Services Agreement.

The Trade Promotion Authority bill, otherwise known as “fast track,” would govern how such agreements are negotiated and voted on in the future.

In theory this could work well.  Negotiators would pursue objectives set by Congress, the leaders of Congress would be kept informed as negotiations progress and ratification of the agreement would be only a formality.   But there is no mechanism in the current fast track bill by which Congress can call the negotiators to account or demand information.

Fast track assumes good faith on the part of all concerned, and, based on the historic record, including the way the TPP has been negotiated, I think this would be a naive assumption.

LINK

Hatch Bill Would Revive Controversial 2002 Fast Track Mechanism That Faces Broad Congressional, Public Opposition by the staff of Public Citizen’s Global Trade Watch division.

What’s Wrong With Wyden-Hatch-Ryan’s Fast Track Bill – The Specifics by Gaius Publius for Down With Tyranny (via naked capitalism).  [Added 4/22/2015]

Services trade pact locks out democracy

The Obama administration is engaged in secret negotiations of new trade agreements that would limit the power of national governments to control international corporations.

The proposed Trans-Pacific Trade Agreement (TPP) is one; the proposed Trans-Atlantic Free Trade Agreement (TAFTA) is another.   Less well-known is the proposed Trade In Services Agreement (TISA), which is being negotiated among 50 countries, including the United States.

If the President were trying to negotiate agreements for control of global climate change, or nuclear disarmament, or standards for protecting labor and the environment, I would support him.  Even in these cases, though, I would not favor “fast track” procedures which force an up or down vote without full debate.

But, thanks to disclosures by Wikileaks of the financial services portion of the proposed agreement, we know that TISA would limit the powers of government concerning:

• limits on the size of financial institutions too big to fail;
• restrictions on activities, e.g., deposit taking banks that also trade on their own account;
• requiring foreign investment through subsidiaries regulated by the host rather than branches regulated from their parent state;
• requiring that financial data is held onshore;
• limits on funds transfers for cross-border transactions e-finance; authorisation of cross-border providers;
• state monopolies on pension funds or disaster insurance;
• disclosure requirements on offshore operations in tax havens;
• certain transactions must be conducted through public exchanges, rather than invisible over-the counter operations;
• approval for sale of ‘innovative’ potentially toxic financial products;
• regulation of credit rating agencies or financial advisers;
• controls on hot money inflows and outflows of capital;
• requirements that a majority of directors are locally domiciled;
• authorization and regulation of hedge funds; etc.

via Jane Kelsey, University of Auckland.

In other words, TISA would handcuff governments in doing precisely those things that are needed to prevent the next financial crash.

And that’s just the financial services part.  Among the other topics of negotiation are telecommunications and e-commerce, domestic regulation and transparency, professional services, maritime services and international movement of people, and this may not be a complete list.

New trade pact would lock in privatization

The proposed new 50-nation Trade in Services Agreement now being negotiated is the latest in a series of proposals in create international structures to lock in corporate agendas and neutralize government regulation.   It would, among other things, prevent municipal governments that privatized public services from taking them back if privatization didn’t work out.

I learned about TISA through a report published by two Canadian academics, Scott Sinclair of the Canadian Centre for Policy Alternatives, and Hadrian Mertini-Kirkward of the Institute for Political Economy of Carleton University, and commissioned by Public Services International, an international federation of public sector trade unions.  What follows is based on their report.

Formal TISA negotiations began early in 2013, and negotiators hope they can finish up by the end of 2014.   There’s a round of negotiations now going on in Geneva.   The Chinese government reportedly wants to join, but the U.S. representatives aren’t sure the Chinese are committed to the goal of the agreement.

The basic idea of TISA is that foreign companies should be able to compete to provide services on the same basis as domestic companies.  Hence there “standstill” and “rachet” clauses to make current and future privatizations of public services a one-way street, so that foreign companies don’t lose their right to bid on them.

There are provisions for governments to carve out exceptions in the agreement, but if there is something they fail to think of, they are out of luck.  Even if you think privatization is a good idea in general, you might admit that municipal governments should have the power to make decisions based on individual circumstances.

The agreement would forbid governments to restrict movement of corporate employees, such as construction workers or nurses.  Corporations would be allowed to bring in their own workers, without having to check on whether local workers were available to do the work.

However, there is no provision to give these employees resident or immigrant status.  When and if they lose their jobs, they’d be kicked out of the country immediately, so that they would not be in a position to complain or join unions.

Another provision would restrict governments’ authority to set rules for licensing clinics and medical laboratories, water and sewerage plants, power plants, for broadcast licenses and for accreditation of schools and universities.

There seems to be no end to these agreements.  First there was NAFTA, the North American Free Trade Agreement, which I was foolish enough to support, but which never delivered on its promises.

Then came the proposed Trans Pacific Partnership Agreement, which in the name of international trade would restrict governments from regulating corporations, and create an unelected tribunal to which corporations could appeal decisions that unfairly deprive them of “expected profits.”

I’d written and published a good many posts about the TPP when I learned there was another international agreement in the works that was just as bad, the Trans-Atlantic Trade and Investment Partnership.

Now this.  I wonder what else is being cooked up that we the people don’t know about.

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Click on Secret trade negotiations undermine public services: study for the press release by the Canadian Centre for Policy Alternatives.

Click on The Trade in Services Agreement and the corporate agenda for the complete report.