WikiLeaks Performs Valuable Service By Liberating Key Documents from Lesser-Known But Still Major Trade Deal

WikiLeaks TISA graphic

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. (more…)

The TPP Gang That Can’t Shoot Straight

The hit parade of failed arguments should convince any fence sitters that this is a bad deal.

By Dean Baker

As Congress gets ready to vote on whether to “fast-track” the Trans-Pacific Partnership (TPP), its proponents are making weaker and more far-fetched arguments for the deal. And they keep getting their facts wrong and their logic twisted.

This hit parade of failed arguments should convince any fence sitters that this is a bad deal. After all, you don’t have to make up nonsense to sell a good product.

Topping the list of failed arguments was a condescending USA Today editorial from early May.

It admonished unions who oppose the TPP because they worry it will cost manufacturing jobs. The newspaper’s editors summarily dismissed this idea, blaming the huge manufacturing job losses in recent years — amid a doubling of manufacturing output — on productivity growth, not imports.

The editorial rested its case on Commerce Department data that doesn’t actually measure manufacturing output. The correct data showed a sharp slowdown in the growth of manufacturing compared with the prior decade, when the trade deficit was not exploding.

USA Today eventually acknowledged the error, but left the text and the criticism in the editorial unchanged. Remarkably, the headline of the editorial referred to the opposition to the TPP as a “fact-free uproar.”

Another big swing and a miss came from Bill Daley, the former Commerce chief and J.P. Morgan executive who also briefly served as chief of staff in the Obama administration.

Daley wrote a New York Times op-ed pushing the TPP by arguing for the virtues of trade. The piece was chock full of errors and misleading comments. The biggest whopper: a claim that the United States ranks near the bottom in its ratio of exports to GDP because of trade barriers in other countries that supposedly restrict our exports.

But the main reason the United States has a low ratio of exports to GDP is that it’s a big country. This means that Illinois and Ohio, for example, provide a large market for items produced in Indiana. On the other hand, if the Netherlands seeks a large market for its products, it must export.

Another issue is that the TPP hasn’t been made available to the public as Congress prepares to vote. TPP supporters say it doesn’t matter, since lawmakers can see the draft text any time they like. That’s nice, but they must review the jargon-filled text without bringing along staff. Nor are they allowed to discuss the text with others.

As Senator Sherrod Brown pointed out, President George W. Bush made the draft text for the Free Trade Area of the Americas — an international accord that Congress didn’t approve — public before asking Congress to vote on fast-track authority. Apparently, President Barack Obama isn’t willing to do this. He’s even attacking TPP critics, like Senator Elizabeth Warren, for suggesting that he should.

Obama also dismissed Warren’s concern that the TPP and other fast-tracked trade deals could jeopardize our ability to regulate Wall Street. Obama dismissed this as the hypothetical musings of a former law professor. He looked rather foolish the next week when the Canadian finance minister argued that new U.S. financial regulations violated NAFTA.

The reality is that the TPP has little to do with trade. It’s a deal crafted by big business for big business.

While all of its specifics are not known, it’s clear that the TPP would put in place a business-friendly regulatory structure in the United States and elsewhere.

No amount of lipstick can make this pig pretty. The folks who keep trying are making themselves look very foolish in the process.

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Dean Baker is the co-director of the Center for Economic Policy Research (cepr.org).
Distributed by OtherWords.org