Wikileaks has shone the light yet again on behind-the-scenes manoeuvres by a core of governments seeking to advance a free market agenda in the guise of “trade”. The leaked text on financial services is part of the little known Trade in Services Agreement (TISA), which has been brewing for several years in the shadows of the World Trade Organization (WTO).
Why in the shadows? There are three reasons. First, the majority of WTO members have rejected an aggressive strategy to expand and lock in the liberalisation and deregulation of services under the General Agreement on Trade in Services (GATS). Countries as diverse as Brazil and the Least Developed Countries argue that the benefits would accrue almost solely to transnational corporations and their patron states. Moreover, the experience of recent decades, and the global financial crisis especially, show the neoliberal agenda is in decline and needs to be reconsidered, rather than extended.
Second, the services negotiations that have been underway since 2000 have become hostage to disputes over other issues, especially agriculture. Attempts to bypass that through plurilateral services negotiations within the WTO have failed.
Third, negotiations inside the WTO would have to take place in daylight. The WTO has bowed to criticism of its democratic deficit and become a relative paragon of transparency when compared to bilateral and regional trade negotiations in recent years.
Twenty-three parties, including the European Union on behalf of 28 states, have opted to go it alone. These fellow travellers call themselves the “Really Good Friends of Services”, a play on the self-description of pro-liberalising groups in the WTO as “friends of”. Their goal is to take “trade in services” where no services agreement has gone before.
If this sounds familiar, it is. TISA is part of an interlocking web of new super-deals that are being negotiated under similar conditions of secrecy. Indeed, the leaked TISA text shows all documents other than the final text would be withheld for five years after the agreement came into force, one year longer than for the Trans Pacific Partnership Agreement (TPPA).
A trio of four-letter acronyms is now in play: the Trade in Services Agreement (TISA), the Trans-Atlantic Trade and Investment Agreement between the US and EU (TTIP), and the US-led Trans-Pacific Partnership Agreement (officially called the TPP, but dubbed the TPPA to make it clear has nothing to do with a “partnership”). They overlap in membership and, largely, in ambition.
The US and EU are the drivers. Other parties include arch-liberalisers, like Australia and New Zealand, or those with sectoral interests, such as Panama. The two superpowers are explicit about their strategy.
The US Trade Representative told the Coalition of Services Industries in 2012 that it wants to establish new negotiating rules in TISA, get enough countries to sign on to enable it to be incorporated into the WTO, and then have the same rules adopted for negotiations at the WTO. The European Commission said in 2013 that TISA would use the same concepts as the GATS so it could “be easily brought into the remits of the GATS”.
This strategy has been tried before and often failed. The ill-fated Multilateral Agreement on Investment (MAI) was promoted through the OECD in the mid 1990s. The MAI was intended as a “high quality” regime, devised by capital exporting countries to promote and protect the interests of their investors. It was then supposed to be presented as a fait accompli to reluctant Southern governments in the WTO. However, the MAI was defeated once the draft text was leaked. A mass campaign forced its proponents onto the defensive and saw some crucial players, notably France and Canada, eventually pull the plug.
A plurilateral Information Technology Agreement is currently under negotiation inside the WTO. The talks were suspended for the second time in March 2014 because the US, especially, said China had not made enough concessions.
The TPPA is currently hostage to a standoff between the US and Japan, as each tried to defend its domestic interests while insisting that the other plays by the liberalisation rules.
An underlying conundrum is also evident in TISA: expanding the participants to include other major economies would give the negotiations credibility and critical mass; but their defensive interests and leverage potentially dilutes the “quality” of the outcome. China has asked to join TiSA. The EU is keen, for the former reason. The US has resisted for the latter.
TISA has some way to run. Whether the original parties can broker a deal, and then get enough sign on from others to force it back into the WTO, are imponderables. But there is no doubt that this first major leak of the text will bring unwelcome attention to the plan. Negotiating TISA in daylight, and subjecting it to public scrutiny, will enhance the prospect that they fail.