Why this Proposed Free Trade
Agreement (FTA) in Services
is Dangerous to Democracy,
Development, and the Public Interest,
and Must Be Stopped!
What is the
At the beginning of 2012, about 20 members (counting the EU as one)
of the World Trade Organization (WTO) calling themselves the
"Really Good Friends" (RGF)
of services launched secret unofficial talks towards drafting a
treaty that would further liberalize trade and investment in
services, and expand "regulatory disciplines" on all services
sectors, including many public services.
The "disciplines," or treaty rules,
would provide foreign services providers free access to domestic
markets at "no less favorable" conditions than domestic suppliers
and would restrict governments' ability to regulate services.
This would essentially change the
regulation of many public and privatized or commercial services from
serving the public interest to serving the profit interests of
private, foreign corporations.
Negotiations occurred throughout 2013 in conjunction with the
meetings of the Council on Trade in Services in the WTO, with the
aim of finalizing very ambitious agreement on far-reaching services
liberalization and disciplining government.
The Really Good Friends of
services currently include,
Australia, Canada, Chile, Colombia,
Costa Rica, Hong Kong, Iceland, Israel, Japan, Liechtenstein,
Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru,
South Korea, Switzerland, Taiwan, Turkey, the United States,
...and the 28 member states of the
They are also pushing for parallel
negotiations on the liberalization of services in the General
Agreement on Trade in Services (GATS) through the re-start of
the Doha Round.
Where did that
crazy idea come from?
The TISA negotiations follow the corporate agenda of using "trade"
agreements to make privatization non-reversible, and to promote
mergers and acquisitions and deregulation, in order to ensure
greater corporate control and profit making of national economies
and the global economy.
The proposed agreement is the direct
result of systematic pressure by transnational corporations in
banking, energy, insurance, telecommunications, transportation,
water, and other services sectors, working through lobby groups like
the US Coalition of Service Industries (USCSI) and the
European Services Forum (ESF).
In fact, in the early 1980s, the
financial lobby started to press for what would become
the GATS to be included in the WTO
at the time of its founding in 1995.
Notwithstanding several financial and
economic crises, the services negotiations in the GATS and free
trade agreements (FTAs) continue in the same business as usual,
with countries' negotiations mandates reflecting the interests of
the services conglomerates through the USCSI and the ESF
(extensively documented by Corporate Europe Observatory).
Corporate pressure was equally strong
during the negotiations of the WTO Financial Services Agreement (an
annex to GATS), completed in 1997, after the founding of the WTO.
The GATS includes a built-in agenda for
further negotiations, which was incorporated as a major area of
corporate interest in the launching of the Doha Round of the WTO in
Developing countries only agreed to start a new Round of
negotiations in Doha because rich countries promised that the Round
would be dedicated to "fixing" the anti-development and anti-public
interest aspects of the existing WTO (such as the unfair rules on
However, since then, corporate interests
have steadily lobbied negotiators to oppose changes to existing
rules that would make the WTO more "development- friendly," and to
instead keep pushing a liberalization, deregulation and sometimes
TISA is thus a cynical attempt of
the major proponents of so-called "free trade" and aggressive market
opening to ensure that corporate wish lists can be fulfilled,
without having to make any changes to existing WTO demanded by poor
A TISA could also jeopardize movement
towards serious transformation of the global trading system demanded
by civil society, such as the global "Turnaround Agenda" of the
Our World Is Not for Sale
What types of
services would be included in the proposed TISA?
"Services" cover a broad range of activities from,
...and much more.
The GATS agreement lists all of these as
tradable commodities, making every aspect of human activity the
subject of closed-door commercial negotiations.
However, GATS allowed countries to choose the services they wanted
to liberalize, and thus commit to the deregulatory disciplines and
rules of the agreement. This is called a "bottom up approach."
At the same time, the negotiations
procedure of making requests and offers still put pressure on
countries to liberalize as much as possible. In contrast, during the
TISA negotiations, the participating countries will have to
liberalize services in "essentially all modes and sectors" which
according to some Really Good Friends means 90% of all services.
Besides extensively listing services for liberalization, the RGF
also want to adopt disciplines on how services sectors can be
governed, restricting governments' and parliaments' right to
The RGF have already had extensive
exchanges about these disciplines, which would go far beyond the
existing GATS and FTAs.
In February of 2014, negotiations
began on six priority topics: financial services,
telecommunications and e- commerce, domestic regulation and
transparency, professional services, maritime transport, and the
so- called "Mode 4" of the GATS, which refers to natural
movement of persons.
In addition, participants had
extensive discussions on road transport, delivery services and
But there are many more sectors and
proposals that have been submitted: is also known that the EU
has submitted a proposal on Government Procurement in Services,
and on Postal Services, just as examples.
What would be
some of the Negative Impacts of the proposed TISA?
Strong regulation of and oversight over both public and private
services is crucial for democracy, development, and the public
interest, all of which would be seriously damaged if the proposed
TISA were allowed to exist.
Democracy is eroded when decision-making about important sectors
...is transferred from citizens, local
oversight boards, and municipal/county/provincial/state jurisdiction
to unaccountable "trade" negotiators to further curtail regulation
and prioritize corporate profits.
One need only to reflect on the recent
impact that the deregulation of the financial sector had on
spreading the negative impacts of the economic crises around the
entire world, and the ongoing negative impacts being suffered in
terms of unemployment and austerity, to realize that robust
financial sector re-regulation is absolutely essential to
forestalling another economic crisis, just to give one example.
Development is jeopardized when essential services such as,
...and others are left to be taken over
by foreign corporations to make profits rather than be provided at
the service of the citizens of the home country.
Examples abound of states having
privatized what were previously public services, and bringing in
foreign corporations to take over the privatized services, only to
find that the private corporation soon begins to charge increased
prices for decreased services, and leaves both consumers and the
government worse off.
The TISA would not contain provisions that foreign investment in
services sectors should only be undertaken in a way that the
benefits the public interest, or when there is a specific public
plan including regarding ensuring accountability of private
corporations to the development goals of the population.
The proposed TISA will be constructed
instead to give "rights to profit-making" to foreign corporations.
Consequently, due to increased competition, employment and labor
rights could also be seriously undermined.
Foreign investors would be granted
protections through the TISA against what they deem to be
trade-restrictive regulations (even if these regulations were
designed to protect the environment, health, safety, financial
stability and the public interest).
Corporations may even become able to defend these "rights" to profit
by directly suing their host country, if the proposal to include the
nefarious Investor-State Dispute Settlement (ISDS) mechanism (which
allows foreign corporations to sue sovereign governments in an
elite, secretive, three-person court, in which countries sometimes
avoid losing but can never win) becomes enshrined the proposed TISA.
What would be
the Basic Structure of the proposed TISA?
Many aspects of the proposed TISA are yet to be determined. However,
negotiators have already agreed on several core aspects, and there
are strong indications about several others.
Participants will have to
liberalize services in "essentially all modes and sectors,"
and countries will be pressured to exclude only a very few
services from their commitments - greatly expanding the
coverage from the current GATS.
All foreign services providers
and their products will receive "National Treatment" except
for those services specified in an exemption list (a serious
deviation from the GATS structure).
The proposed agreement is
intended to become "multilateralized" after its intended
completion, meaning that other countries will be pressured
to join after the framework is set by the most extreme
The United States seems to have
"enforceability" as a major demand for the TISA, which most
likely points to their desire to include the "Investor to
State Dispute Settlement" mechanism.
New, far-reaching disciplines on
regulations would likely include a "standstill" clause that
would mean that no new so-called trade-restrictive
regulation in a services sector could be introduced.
In addition, a "ratchet"
provision would mean that any that future autonomous
elimination of regulatory measure that could be considered
discriminatory, would be automatically become part of the
How Would the
Proposed Services FTA Impact Non-Participating Countries?
Countries like the EU and lately
the United States have made clear that their intention is to
"multilateralize" the negotiations. That means that the
worst neo-liberalizers set a
hyper-deregulation-and-privatization agenda as the global
"norm," and then pressure other countries to join
With regards to the WTO,
participants would notify the WTO through Article V of GATS,
meaning that the under the TISA, countries should liberalize
around 90% of their services. Thus it should be considered a
very radical Services FTA. Participating countries have
agreed on this mechanism in order to prevent
non-participating developing countries from having the
chance to block it within the WTO.
Because it is being negotiated
outside of the WTO, non-participants (as well as civil
society) will have less access to negotiating documents,
texts, or meetings.
Members of the TISA will attempt
to pressure negotiating partners in FTAs and Regional Trade
Agreements (FTAs), as well as so-called Economic Partnership
Agreements (EPAs) to "harmonize" with the TISA, which would
put additional pressure on non-participating countries.
Even if the TISA were to be
technically "outside" the WTO, poor countries that are in
the process of joining the WTO would likely be highly
pressured to join the TISA against their interests.
The proposed TISA weakens the
negotiating position of the developing countries in the WTO.
In the WTO, negotiators have
been seeking to strike a balance between commitments in the
negotiations on Agriculture and Non-Agricultural Market
Access (NAMA, principally manufactured goods and natural
resources) before moving on with Services and other issues.
But if a new agreement on
Services is agreed to outside the WTO, then developing
countries will have less leverage in their efforts to get an
agreement to change global agricultural rules, and other key
aspects of their agenda, including changes that need to be
made to accommodate the needs of the Least Developed
TISA countries are already
putting pressure on WTO members to accept stricter
disciplines and more ambitious liberalization in the current
(2014) talks in the WTO to re-launch the Doha Round. It
should be noted that WTO members rejected such a target, set
at 80% liberalization, at the Hong Kong Ministerial of the
WTO in 2005.
How Can We
STOP the Proposed Services FTA (the TISA) from Ever Existing?
Some governments have to receive a
mandate from their legislative bodies to engage in negotiations, but
most can do so without prior parliamentary consent. Still it is
worth encouraging members of parliament to question the
participation of their country in the TISA negotiations.
Governments may also still be required
to consult local authorities or sub-federal governments before
joining negotiations or making specific commitments.
NO SECRET, UNTRANSPARENT AND UNACCOUNTABLE
Negotiations should not be carried out behind the backs of the
majority of the (developing country) members of the WTO.
They should also not be carried out
in secret, in which the citizens, parliamentarians, trade
unions, regulating agencies, services users and other interested
parties have limited to no access to setting negotiating
mandates and no access to direct negotiations or negotiating
documents, while corporations set the agenda.
NO MORE DEREGULATION AND SURRENDERING
SERVICES TO CORPORATE INTERESTS!
The world is still recovering from the greatest global economic
downturn in history, facilitated by the extreme deregulation of
the financial services industry.
Services sectors that are
predominantly run by private interests, such as banking,
accounting, shipping, insurance, retail, tourism,
telecommunications, and many others, still need strong public
oversight to ensure that they operate in a transparent and
accountable legal framework for the public good.
Other services, such as water and
electricity provision, education, health care, local transport,
sanitation, and others, ought to either be operated by the
public, or strictly regulated to ensure that the public interest
is served as a priority over private profit.
If your country is listed as
a participant in the TISA negotiations, immediately
contact your government and demand that they,
open up the
discussions to include regulatory agencies,
public service providers and users,
parliamentarians, and other civil society
organizations focused on ensuring high-quality
and accessible services for the public
exclude as many key
sectors as possible such as financial, energy,
health care, education, water, sanitation, and
others as possible from the agreement
If your country is NOT
listed as a participant in the TISA talks, contact your
government to ask that they issue a clear and public
statement that they oppose the TISA negotiations, and
will not now or in the future join the agreement (and
that they disapprove of the current RGF process).
Whether or not your
government is part of the negotiations, spread the word
about the dangers of the proposed TISA among
parliamentarians, other elected officials, regulatory
agencies, public services providers and users, trade
unions, and other public interest and civil society
organizations, so that they can also become aware of the
dangers, and advocate on the issue.
If enough TISA participants find their
negotiating mandates severely constricted, or have to renounce their
participation, and enough non-participants publicly affirm their
opposition and lack of interest, the corporate interests pushing for
the proposed TISA will lose in their efforts to gain further control
over services that must be maintained for the benefit of public
interest and not corporate profit.
For more information and to get involved, please contact the Our
World Is Not for Sale (OWINFS) network at