Now Available to Non-Subscribers! – Trade Agreements Part Two: Trade In Services Agreement Background, Composition of Support and Opposition, Potential Dangers and Links

[Note from CAF: We first published this piece in 2015. I am moving it up as TISA is moving forward and runs the risk of picking up on provisions that many thought would go away with the US withdrawing from the TPP. This piece is the second part of a series on the proposed trade agreements. Our first piece on the Trans-Pacific Partnership can be found here. Any one of the still proposd agreements are expected to have a significant impact on the global economy. We hope these pieces help to educate you about what is underway.]

By Carolyn A. Betts, Esq. and Catherine Austin Fitts

In Part 1 of the Solari Report’s series on international trade agreements and trade promotion authority, we provided a summary of some of the terms of the secret draft sections of the Trans Pacific Partnership Agreement (TPP), a proposed regional free trade agreement that would cover the trade in goods among twelve Pacific Rim countries, including the US. We provided links to sections of the TPP that have been leaked by Wikileaks and described some of the objections registered by various groups that oppose the TPP. We described some non-tariff trade barriers sought to be addressed in typical free trade agreements like the TPP and the international tribunals that have become the arbiters of disagreements among signatories (called “Parties”) to various trade agreements in recent years.

We explained how trade promotion or “fast track,” authority, when in effect as the result of Congressional renewal of a law passed in 1974, governs the trade agreement approval process in the US and how trade promotion authority ties the hands of Congress – preventing Congress from debating the merits of and influencing the terms of proposed international free trade agreements under negotiation by the US.[i] We identified the three major agreements under negotiation by the US Trade Representative with input from special “consultative appointees” as, in addition to the TTP, the Trade in Services Agreement (TiSA), a free multilateral trade agreement among the US, the EU and 23 additional countries, and the Transatlantic Trade and Investment Partnership (TTIP), a bilateral free trade agreement between the US and the EU (which, for this purpose, is considered a single “Party”). Trade promotion authority will remain in effect for at least four years (subject to a possible three-year extension) and, thus, will govern any US approval of TPP, TiSA and TTIP within a period of up to seven years.

In this Part II of the Series, we provide background information on international trade in services, definitions of relevant terms and frameworks, a description of the types of trade barriers intended to be covered in trade in services agreements generally and examples of covered matters and other provisions that members of the public, the small business community, consumers, laborers and members of various special interest groups might oppose if they knew the overall TiSA plan, the identity of backers of and the history of TiSA. An analysis of specific leaked appendices to TiSA, will follow in a later part of the Series.

Introduction

The Office of the US Trade Representative website defines TiSA as “a trade initiative focused exclusively on service industries” and describes its benefits:

Drawing on best practices from around the world, TiSA will encompass state-of-the-art trade rules aimed at promoting fair and open trade across the full spectrum of service sectors – from telecommunications and technology to distribution and delivery services. TiSA will also take on new issues confronting the global marketplace, like restrictions on cross-border data flows that can disrupt the supply of services over the Internet – a rapidly expanding market for U.S. small businesses and entrepreneurs. And TiSA will support the development of strong, transparent, and effective regulatory policies, which are so important to enabling international commerce.

A more jaundiced view of US motives in supporting TiSA (at least as to the e-commerce, technology transfer, cross-border data flow and net neutrality sections) is that the US imperative is to:

1. Advance the commercial interests of its services industry that supplies services across the border, mainly through ecommerce, and foreign direct investment in manufacturing and services. The proposal would provide particular gains to the information telecommunications and technology sector, but has broader based goals to protect US competitive advantage and monopoly rights over intellectual property and technology.
2. Consolidate data repositories to the benefit of the US government, transnational companies (TNCs) and third party commercial interests. This serves a range of ‘national security’ and commercial purposes.
3. Prevent or restrict government regulation that impedes the activities and profits of the major global services industries, and guarantees unrestricted cross-border data flows, which impacts on consumer protections, privacy laws, regulatory constraints and competition policy.[ii]

The US Trade Representative and Commissioner of the European Union in a March 2015 joint statement maintained that free trade agreements under negotiation between the EU and the US (i.e., TiSA and TTIP) will not (a) prevent governments, at any level, from providing or supporting services in areas such as water, education, health, and social services; (2) impede governments’ ability to adopt or maintain regulations to ensure the high quality of services and to protect important public interest objectives like health, safety, and the environment; or (3) require governments to privatize any public service.

But opponents of TiSA say these are the likely dangers. One might wonder whether, in making these denials, the lady doth protest too much. According to Sam Smith, a virtual journalistic fixture in Washington, DC with an over 50-year history of providing independent and thoughtful criticism of initiatives in both political parties as publisher and editor of The Progressive Review and author of four books on ideas for implementing progressive social change, “If they get away with phase one of this power grab [i.e., TPP] you can rest assured that there will be more to come . . . This isn’t about trade. This isn’t about jobs. This is about power, power that is being covertly shifted farther and farther away from the people.”

The Administration and mainstream media reports in the US regarding international trade agreements under negotiation in general and TiSA in particular, in supporting trade expansion or “liberalization,” tend to focus on the potential profits to be made by US companies from an increase in US service exports, tacitly assuming (or implying) that the covered services are those provided by the service industries typically associated with international trade — construction and engineering, technology, transportation and delivery, and telecommunications services — and that small business as well as multinational corporations stand to enjoy the benefits. They tend to minimize the importance of or fail to mention:

• What exactly the current service trade barriers consist of and whether and, if not, why such barriers are not covered by current international agreements, specifically the General Agreement on Trade in Services through the World Trade Organization. [Note: according to a Congressional Research Service report on trends and challenges from US foreign trade in services, GATS already prohibits WTO members from imposing foreign market access restrictions on the number of service suppliers, the total value of service transactions or assets, the number of transactions or value of output, the type of legal entity or joint venture through which services may be supplied and the share of foreign capital or total value of foreign direct investment.]
• The effects that TiSA would have on the ability of the US Congress and state and local governments to enact consumer protection, financial services regulation, public safety, privacy, healthcare, environmental, food safety and other laws without violating the terms of the agreement, what sanctions could apply for violations by the US and to what extent entry into TiSA would result in a sacrifice of US and state and local sovereignty.
• Studies, if any, that predict the likelihood that an agreement like TiSA could result in increases (either overall increases or increases in individual market sectors) in imports of foreign services to the US from other countries (e.g., outsourcing of US jobs) and the potential magnitude of any such increases in imports.
• That “trade in services” as defined in TiSA drafts includes such matters as:
  • “movement of natural persons” (i.e., migrant workers),
  • locus of storage of private data on US citizens,[iii]
  • public utilities and government contracts,[iv] and
  • professional services performed by accountants, attorneys, veterinarians, architects, engineers and other licensed professionals as well as the provision of education services

and the implications of the inclusion of such matters on internal US commerce, the health of US and local and state economies and employment and well-being of US professional and other service workers.

• That the terms of TiSA would remain classified for a period of five years from its effective date.[v]

Important Concepts in International Agreements on Trade in Services

In order to put TiSA into context, a summary of certain trade concepts adopted within the WTO and other frameworks for international trade is in order.

Mode of Delivery Categories

International agreements place trade in services in four categories according to the mode of delivery of the covered services[vi]:

Mode 1—Cross-border supply: The service is supplied from one country to another. The supplier and consumer remain in their respective countries, while the service crosses the border. Example: A US architectural firm is hired by a client in Mexico to design a building. The US firm does the design in its home country and sends the blueprints to its client in Mexico.

Mode 2—Consumption abroad: The consumer physically travels to another country to obtain the service. Example: A Mexican client travels to the United States to attend training on architecture and stays in a US hotel.

Mode 3—Commercial presence: The supply of a service by a firm in one country via its branch, agency, or wholly-owned subsidiary located in another country. Example: A US construction firm establishes a subsidiary in Mexico to sell services to local clients.

Mode 4—Temporary presence of natural persons: Individual suppliers travel temporarily to another country to supply services. Example: a US computer programmer travels to Mexico to provide training to an employee.

Commitments and Schedules

Under the GATS/WTO Financial Services Agreement regimes, the language and some of the substance of which is retained in the negotiating texts for TiSA annexes, various countries enter into “commitments” that specify what service industries they were willing to make subject to the market access and national treatment portions of the agreements. As explained in an analysis of the TiSA financial services annex by Professor Kelsey, a member of the law faculty of the University of Auckland, NZ, in the past, some international agreements (e.g., GATS) have worked with “positive” lists or schedules, which specify the country’s services that are subject to the market access (referred to in shorthand as “MA”) and national treatment provisions. Others (e.g., the voluntary Understanding adopted as an addition to the Financial Services Agreement by WTO members) use “negative” lists or schedules that state what is not covered by the country’s additional “commitments.”

Increasingly, free trade agreements, and probably all of those entered into by the US in recent years, use the negative schedule approach. The downside risk of the negative schedule approach is that successor governments are bound in the future to the provisions of law and other matters foreseen at the time of signing and do not have flexibility to respond to changing circumstances and enact new laws that are not covered or anticipated in the schedule. Also, predictably, there is greater chance of error and omission in listing what is not covered by the schedule (because everything not listed is covered) than what is covered.

Without access to the full text of TiSA and since much of the leaked text is in the annex sections rather than the main section(s),[vii] it is difficult to determine whether TiSA employs a positive or negative schedule approach, but Professor Kelsey speculates that it probably adopts a hybrid approach, with positive schedules for the list of services and sectors for which market access is guaranteed to foreign service providers and negative schedules listing the services, activities and laws that are excluded from “national” non-discrimination treatment (which prohibits discrimination between host country suppliers and foreign signatory suppliers[viii]). She says that there also are indications in the leaked financial services appendix of both a “standstill” provision pursuant to which a government would be bound to (no more than) existing liberalization and unable to introduce new reforms in the future and a “ratchet provision that would lock in any regulatory relaxation after adoption of the agreement. Such a standstill provision would work to the detriment of less developed countries that have no or little existing regulation, e.g., in the financial services industries.

Examples of Barriers that May Impede Trade in Services

The Congressional Research Service report identifies[ix] the following areas of regulatory treatment that may result in impediments to foreign trade in services (and therefore may be objectionable to those in favor of trade liberalization):

• restrictions on international payments, including repatriation of profits, mandatory currency conversions, and restrictions on current account transactions;
• restrictions on the movement of personnel, including visa and work permit restrictions;
• requirements that foreign professionals pass certification exams or obtain extra training that is not required for local nationals;
• mandatory hiring of local labor;
• restrictions on information transfer imposed to protect data and maintain privacy—“data localization;”
• “buy national” requirements in government procurement;
• lack of national treatment in taxation policy or protection from double taxation;
• government-owned monopoly service providers and requirements that foreign service providers use a monopoly’s network access or communications connection providers;
• government subsidization of domestic service suppliers;
• discriminatory licensing and certification of foreign professional services providers; and
• limitations on foreign direct investment such as equity ceilings, restrictions on the form of investment (i.e., a branch, subsidiary, joint venture, etc.) and requirements that the chief executive officer or other high-level company officials be local nationals or that a certain proportion of a company’s directors be local nationals.

For obvious reasons, various taxpayer, consumer, labor, privacy and other special interest groups within the US and other signatory countries would support these “barriers” as legitimate exercises of sovereign power and authority to protect the interests of host country citizens and stimulate local and national economies and employment. Examples abound of the types of problems the elimination of such so-called barriers to trade could cause. The following section sets forth some unanswered questions in this regard.

Political Background of TiSA

According to certain authorities cited or included in the linked documents below, TiSA is an end run around provisions of the General Agreement on Trade Services (GATS), the World Trade Organization (WTO) Financial Services Agreement (FSA) provisions and stalled Doha talks, all of which have been the subject of and influenced by concerns of certain (mostly less-developed) countries that blame the US, the EU and other developed countries for the global financial crisis (among other things). These existing agreements and negotiating structures troubled major globalist interests (dominated in large part by financial services providers like Citicorp (whose executive is the head of the US Coalition of Service Industries, a major supporter of TiSA), AIG, American Express and Merrill Lynch) as being too restrictive of international expansion by multinational service providers. Further, following the global financial crisis, certain members of the WTO had called into question the deregulation of the financial markets and the proliferation of risky and toxic derivatives and other financial instruments that they blamed for the financial crisis. The pro-trade liberalization countries led by the US and EU, a sub-group of WTO, pushing TiSA, referred to themselves as the “Really Good Friends” of services.

According to a memorandum written by Professor Jane Kelsey, Faculty of Law, University of Auckland, New Zealand, the US Trade Representative admitted in a 2012 speech[x] that the plan was to establish new negotiating rules in TiSA (i.e., rules more protective of the interests of more powerful, developed countries, under the influence of multinational corporations, and less restrictive in terms of preserving members’ ability to impose regulatory control than what is promoted by renegade members and in the reports by the Stiglitz Commission[xi]), get a large number of countries to support it so that it is incorporated in the WTO and then have the same rules adopted for negotiations at WTO. In the words of another article co-authored by Professor Kelsey, “. . . TISA is intended as a ‘gold standard’ agreement that other countries can accede to, set new standards that will inform other agreements, and eventually be incorporated back into the GATS to apply to the whole WTO membership.”

Recent State of US and International Trade in Services[xii]

According to the World Bank, “services” comprise 75% of the EU economy and 80% of the US economy. The TiSA covers the majority of the global economy. The US is by far the largest single-country exporter and importer of services in the world. In descending order, as of 2012, the ten top exporting countries are: US (14.1%), United Kingdom (6.4%), Germany (5.9%), France (4.8%), China (4.4%), India (3.4%), Japan (3.2%), Spain (3.2%), Singapore (3.1%) and the Netherlands (2.9%) while the top importing countries are: US (9.9%), Germany (6.9%), China (6.8%), United Kingdom (6.3%), Japan (4.2%), France (4.2%), India (3.0%), Singapore (2.8%), the Netherlands (2.8%) and Ireland (2.8%). As time passes, however, the BRIC countries of Brazil, Russia, India and China (none of which has been included in TiSA negotiations) gain larger shares of this trade in services.

The US is a net exporter of services by approximately $700B (2014 figures, according to the US Chamber of Commerce). In a 2011 study of 21 countries across the spectrum of development stages, in terms of tariff-like barriers to trade in services, Norway, Switzerland, the US and the EU have the least restrictions (0-6%), while restrictions in Canada and Australia (approximately 15%), Japan (17%) and South Korea (25%) are significantly higher. The less developed countries tend to have the highest barriers to service trade, with the worst offenders in this study being China, India, Indonesia and Pakistan, which have tariff-equivalent service barriers in the 60 to 70% range.

Estimates of the magnitude of services trade that may be affected or covered by TiSA are speculative at best, in part because different measuring methods use different definitions of what constitutes “foreign” trade in services (e.g., more or fewer categories of services measured according to mode of delivery — see “—Mode of Delivery Categories” below) and different sources for their information. According to the US Department of Commerce Bureau of Economic Analysis, US cross-border trade in services grew from $85.4B of exports and $80.1B of imports in 1986 to $681.7B of exports and $452.7B of imports in 2013. Thus, there was a positive balance of trade in cross-border services that grew from $5.3B to $229B between 1986 and 2013 – at a time when the negative balance of trade in goods grew from $145.1B to $703.9B. By contrast, in 2011, US firms sold $1.3T in services to foreigners through majority-owned foreign affiliates and foreign firms sold $754B in services to US residents through their majority-owned affiliates located in the US. These figures, while they may not be directly compatible, illustrate that the majority of sales of services occur through the commercial presence of companies in foreign markets.

A direct comparison of trade in goods (which is measured in terms of the value of the end product) to trade in services can be deceiving, because included in figures for the trade in goods is value-added that is attributable to services (e.g., R&D, design, transportation and finance). A joint project between the WTO and the Organization for Economic Cooperation and Development (OECD) to measure trade flows on a disaggregated, value-added basis rather than final-cost basis suggests that in 2009 almost 50% of the value of US exports of manufactured goods was attributable to service inputs.

The largest trading partner of the US is the EU. In 2012, 32% of US [cross-border] service exports were to the 28 members of the EU and 35% of imports were from the EU. Eight percent of US service exports and 7% of US service imports were attributable to trade with Japan, while other Asian and Pacific trading partners accounted for 12% of US service exports and 10% of US service imports. The US’s largest single-country trading partner is Canada, to which the US exports 10% and from which it imports 7% of its foreign [cross-border] services.

The dominance of the EU in US foreign services trade is even more dramatic when viewed from the perspective of multinational corporations. In 2011, 43.1% of services supplied by US multinational corporations were provided to foreign EU residents, compared with 25.4% to foreign Asian residents, and 9.8% to foreign residents of Canada. For US affiliates of foreign multinational corporations selling services to US residents, 54% of such sales were by EU-based multinationals, 20.4% were by Asian-based multinationals and 9.9% were by Canadian-based multinationals.

In 2013, the categories of US cross-border trade in services and their percentages of the total were:

• business and professional (23.8% exports and 28% imports)
• travel (21.2% exports, 20.2% imports)
• insurance and other financial (14.6% exports, 16.0% imports)
• royalties and fees (19.5% exports, 9.7% imports)
• passenger fares (6.2% exports, 8.7% imports)
• other transportation (6.9% exports, 13.7% imports)
• education (4.0% exports, 1.5% imports)
• telecommunications (2.1% exports, 1.8% imports)
• other (1.6% exports, 0.4% imports)

The picture changes, with a somewhat different range of categories of services being represented, when types of services by multinational corporations are ranked separately. In terms of value to foreign consumers, in 2011, 25.8% of services sold by US-owned multinational corporations were in the retail and wholesale trade category and 21.7% were in the “other industries” category, which includes mining, utilities and transportation services. Financial services accounted for 19.6% of the services sold by US-owned multinational corporations while 14.1% were attributable to professional services (including computer systems and design and engineering and related services). On the import side, wholesale and retail trade accounted for 22.5% of services that foreign-owned multinationals sold to US persons, 20.9% of such sales were financial services and the rest were in the “other industries” category.

Support for and Opposition to TiSA

Advocates

The most vocal advocates for TiSA in the US, in addition to the White House and Office of the US Trade Representative, are the Coalition of Service Industries and the US Chamber of Commerce. Trade Benefits America, another trade group similarly comprised of large US and international corporations (like Walmart, Viacom, Siemens, Morgan Stanley, Toyota and Disney), voiced its support of trade promotion authority to Congress, listing several hundred supporting members, some of which themselves are trade groups (e.g., National Retail Federation, Recording Industry Association and the Telecommunications Semiconductor Industry Associations), agricultural associations (e.g. US Wheat Growers, National Milk Producers, National Pork Producers and the Grain and Feed Association), and chambers of commerce comprised of multiple members.

Grant Thornton, KPMG and EY are the only conspicuous professional service providers represented in this group, although King & Spaulding and White & Case (two large law firms) have demonstrated their support through membership in the Team TISA Coalition.[xiii] Affiliate members of the Coalition of Services Industries include the American Bar Association, the American Consulting Engineers Council and the American Institute of Architects. Conspicuous by their absence among obvious major stakeholders of TiSA in these supporting organizations are state and federal governments.

Opponents

Unions (including AFL-CIO, AFSCME[xiv], Teamsters, the American Federation of Teachers[xv], the American Postal Workers Union, the National Association of Federal Credit Unions, the National Association of Letter Carriers, Communication Workers of America, the American and
International Trade Union Confederations and members of Public Services International (a global trade union federation), generally to oppose TiSA. Other opponents include academics and progressive organizations and watchdog groups like the Public Citizen and Common Dreams.

Much of published opposition to TiSA comes from abroad. In September 2013 (when talks were being undertaken in Geneva), the European Commission (EC) consultation, the International Trade Union Confederation (ITUC) and the European Trade Union Confederation (ETUC) submitted a joint statement asking that negotiators exclude public services from TiSA coverage. That same month, the Corporate Europe Observatory and “340 other organizations representing hundreds of millions of people from nearly every country” called for the abandonment of TiSA negotiations. Among its endorsers were 42 international and regional networks, such as Public Services International (PSI), UNI Global Union, the European Federation of Public Services Unions (EPSU), the IndustriALL Global Union, the International Union of Food and Allied Workers (IUF) and the European Attac network.

A sign-on letter by 341 “civil society organizations representing hundreds of millions of members across the globe” called upon the Really Good Friends to abandon negotiations of TiSA and upon those countries not participating in negotiations to register strong opposition and to pledge never to join any future agreement. The US signatories were the Alliance for Democracy, Center for Policy Analysis on Trade and Health (CPATH), Food and Water Watch, the Global Exchange, the Milwaukee Clean Clothes Campaign, the Milwaulkee, Minnesota and Texas Fair Trade Coalitions, New Rules for Global Finance, Public Citizen, the United Electrical, Radio and Machine Workers of America (UE), and the Utilities Union Workers of America. Education International, represented in the US by the American Federation of Teachers, at its Seventh World Congress voted on a resolution condemning trade agreements, including TiSA, that seek to commercialize and privatize public services, including education.

Conclusion: Unanswered Questions

Although details about specific annexes to TiSA and the recently-released core text is left to a later Part, our TiSA research conducted so far raises the following unanswered questions:

• How does one reconcile the existence of a system of unelected international tribunals for the settlement of disputes between private corporations and federal, state and local governments with sovereign rights of such governments and the right to access to the US judiciary system?
• How is it constitutional for the federal government to enter into international trade agreements that purport to bind state and local governments in adopting future laws?
• How does tearing down barriers to cross-border data flows that “disrupt” Internet commerce protect individual privacy and national security interests in light of the fact that rapid changes in technology call for new safeguards to prevent access by criminals, overzealous law enforcement interests, international terrorist organizations and others who seek to profit from infringing on the rights of citizens in other countries?
• What are the regulatory costs and burdens to governments in complying with the additional requirements of TiSA?
• How can stakeholders in TiSA plan for the future and comply with the terms of TiSA if its terms remain classified for five years following its adoption?
• How can current governments bind the hands of future governments to continue the privatization of public services to the benefit of multinational, including foreign-based, corporations, particularly where such privatization has been unsuccessful?
• How does it benefit US labor, taxpayer and small business interests to require that government contracts afford national treatment to foreign service providers and what is the benefit to the American people in involving foreign service providers in US federal, state and local government matters?
• How does preventing the US (or, for that matter, any sovereign nation) from enacting laws in the future to protect the environment, the economy and the health, safety, and welfare of its citizens from harm by US and foreign for-profit corporations — whose primary interest is to increase profits to shareholders — contribute to sustainability of the planet?
• If financial deregulation was a primary cause of the global financial crisis, how does preventing re-regulation (or, in the case of less developed countries, the initial imposition of financial safeguards and controls) contribute to global financial stability?
• How does a sovereign government address balance of trade deficits without violating its obligations under TiSA?
• How do standstill and ratchet provisions affect the ability of governments to address unanticipated changes in circumstances?
• Is there any evidence that eliminating non-tariff barriers to international trade in services would have the effect of increasing the size of the global financial pie (i.e., global GDP) rather than reallocating the size of its pieces in favor of powerful and more developed countries or, conversely, that it will not result in a race to the bottom, with multinational corporations choosing to locate operations in less-regulated, lower-taxed countries with cheap sources of labor — to the detriment of members of the middle class in developed nations?
• How do the possible effects of “movement of national persons” provisions of TiSA square with national immigration policies and attempts to increase employment of US citizens in high-paying jobs in the US?

It remains to be seen whether these and other pressing questions about ramifications and potential “unintended” consequences will be raised by the US mainstream news media before TiSA comes up for an up or down vote in the US Congress.

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[i] Overshadowed by funerals in Charleston and news that the Supreme Court had found gay marriage to be a constitutionally protected right the same week, on June 25, 2015 Congress approved legislation renewing trade promotion authority and President Obama signed the bill into law on June 30, 2015.

[ii] This list is taken from “Briefing on US TISA Proposal on the E-commerce, Technology Transfer, Cross-border Data Flow and Net Neutrality,” Professor Jane Kelsey, Faculty of Law, University of Auckland, NZ and Dr. Burcu Kilic, Public Citizen, Washington D.C., USA, which can be found among the documents at https://data.awp.is/filtrala/2014/12/17/19.html.

[iii] According to the Wikipedia entry for TiSA, citing “LEAKED: Secret Negotiations to Let Big Brother Go Global”, Wolf Street, Don Quijones, retrieved 27 December 2014, “the agreement would strip existing protections [in the laws of some negotiating Parties] which aim to keep confidential or personally identifiable data within country borders or which prohibit its movement to other countries which do not have similar data protection laws in place.”

[iv]Of particular interest in this regard is Public Service International’s “Special Report: TISA Versus Public Services” [4/14/14] http://www.world-psi.org/en/psi-special-report-tisa-versus-public-services

[v] According to the Wikipedia entry for TiSA, Switzerland is the only country whose practice it is to publish all internal proposals it submitted to other parties, and the EU published its “offer” for TiSA in July 2014.

^[vi] These descriptions are taken from the Congressional Research Service report (see fn. Vi. above), which in turn provides the following citation to its source:

The description and examples of modes of delivery are based on, and adapted from, the description contained in Organization of Economic Cooperation and Development (OECD), GATS: The Case for Open Services Markets, Paris, 2002. p. 60.

[vii] During the first week of July 2015, Wikileaks for the first time published a version of the core text of TiSA. A summary of this document will be left to a later part of the Series.

[viii] “National” treatment contrasts with “most favored nation” treatment in that MFN treatment only requires that a host country not discriminate among foreign suppliers who are signatories of the agreement, not that it grant the same treatment to foreign suppliers as for its own (host country) suppliers. MFN treatment is granted to all service suppliers from signatory nations whereas national treatment is granted only for scheduled services.

^[ix] Citing as its source: OECD, Working Party of the Trade Committee Assessing Barriers to Trade in Services—Revised Consolidated List of Cross-Sectoral Barrier, Paris, February 28, 2001.

^[x] US Trade Representative Ron Kirk, Remarks to the Coalition of Service Industries 2012 Global Services Summit, 19 September 2012.

^[xi] According to Professor Kelsey’s briefing:

The commission established by the President of the UN General Assembly in 2009 to review the financial crisis (the Stiglitz Commission) wrote in its interim report that trade-related liberalisation of financial services had been advanced under the rubric of these [previous free trade] agreements ‘with inappropriate regard for its consequences on orderly financial flows, exchange rate management, macroeconomic stability, dollarization, and the prudential regulation of domestic financial systems’.

The paper indicates that the provisions of the leaked drafts of TiSA appear to be even more liberal than those of the trade agreements referred to by the Stiglitz Commission. Professor Kelsey adds:

The major players at the WTO, led by the US, Canada, Australia, Switzerland and the EU, consistently refused to accept there is any relationship between the WTO’s financial services rules [which deregulated financial services] and the [global financial crisis]. Instead, they have continued to negotiate bilateral free trade and investment treaties that lock governments more deeply into that regime and extend their obligations even further.

[xii] Taken from May,15, 2015 Congressional Research Services report, “U.S. Foreign Trade in Services: Trends and U.S. Policy Challenges,” (William H. Cooper, Specialist in International Trade and Finance and Rebecca M. Nelson Specialist in International Trade and Finance), which, in turn, draws much of its information from World Trade Organization data and reports, as cited.

[xiii] Not surprisingly, the Council for Global Immigration is a member of the Team TISA Coalition.

[xiv] A resolution adopted by AFSCME members states:

[WHEREAS] . . . The provisions being advanced by the United States Trade Representative for the TPP Agreement will undermine the ability of the states and the federal government to moderate escalating prescription drug, biologic drug and medical device costs in public programs, such as Medicaid and Medicare and . . . . The current negotiating process is not transparent . . . . [BE IT THEREFORE RESOLVED] . . . . That AFSCME opposes any extension of Trade Promotion Authority (TPA), which ended in 2007, because it would facilitate closed-door deal-making which is not only a threat to American jobs but to our democracy as well; and . . . .AFSCME will oppose any trade agreement that does not contain basic worker rights and does not retain the power of state and local governments to adopt economic, labor, health care, and environmental and human rights policies.

[xv] As recently as June 15, 2015, the AFT president stated to Members of the House of Representatives:

The House’s vote in favor of ‘fast-track’ legislation could still create an opaque process for trade deals like the Trans-Pacific Partnership (TPP) and possibly the Trade in Services Agreement (TISA) . . . . The American Federation of Teachers will continue to stand shoulder-to-shoulder with the growing, progressive movement that is demanding an end to the legacy of bad trade deals that have spurred on the rising income inequality in our nation.

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TISA ARTICLE LINKS

Associated Whistleblowing Press, “Proposal of New Provisions Applicable to All Services of the Secret TISA Negotiations”(a bilingual copy of the Proposal of New Provisions Applicable to All Services and the Annex on Professional Services of the Trade in Services Agreement) [12/17/14] https://data.awp.is/filtrala/2014/12/17/19.html [note: this page also includes a link to Professor Jane Kelsey (Faculty of Law, University of Auckland, NZ) and Dr Burcu Kilic

Public Citizen, Washington D.C., USA, “Briefing on US TISA Proposal on E-Commerce, Technology Transfer, Cross-border Data Flows and Net Neutrality”]

Canadian Centre for Policy Alternatives, “Secret Trade Negotiations Undermine Public Services: Study” [4/28/14] https://www.policyalternatives.ca/newsroom/news-releases/secret-trade-negotiations-undermine-public-services-study

Coalition of Service Industries (Pro-TiSA Trade Group) website section on TiSA https://www.servicescoalition.org/negotiations/trade-in-services-agreement

Coalition of Services Industries, “Why American Needs New Trade in Services Agreement” [12/13] https://www.servicescoalition.org/images/TiSA_Background.pdf

Congressional Research Service report: William H. Cooper and Rebecca M. Nelson, “US Foreign Trade in Services: Trends and US Policy Challenges” [5/15/14] http://www.fas.org/sgp/crs/misc/R43291.pdf

Philip Dorling, The Age, “Secret Deal Bank Free-for-All” [6/20/14] http://www.theage.com.au/federal-politics/political-news/secret-deal-bank-freeforall-20140619-3ah2w.html

Dierdre Fulton (Staff Writer, Common Dreams), “TISA Exposed: ‘Holy Grail’ of Leaks Reveals Detailed Plot for Corporate Takeover,” [7/1/15] http://www.commondreams.org/news/2015/07/01/tisa-exposed-holy-grail-leaks-reveals-detailed-plot-corporate-takeover

Glen Newey, “Really Good Friends Like These,” London Review of Books [2/25/15] http://www.lrb.co.uk/blog/2015/02/25/glen-newey/really-good-friends-like-these/

Global Services Coalition statement in support of Trade in Services Agreement [9/20/12] http://servicescoalition.org/images/files/press-releases/GSC%20Statement%2020%20Sept%202012.pdf

Ellen Gould, “The Really Good Friends of Transnational Corporations (PSI International Special Report) [9/14] http://www.world-psi.org/sites/default/files/documents/research/report_tisa_eng_lr2.pdf

Gary Hershorn, Reuters (Russia Today website), “TiSA WikiLeaked: Winners & Losers of Multinational Trade Deal” [7/2/15] http://rt.com/news/271138-wikileaks-tisa-leak-documents/

International Trade Union Confederation webpage, “Trade in Services Agreement Risks Jeopardising Universal Access to High Quality Public Services” [9/9/13] http://www.ituc-csi.org/trade-in-services-agreement-risks?lang=en

William Jasper, New American, “TISA, Yet Another Secret ‘Trade’ Threat” [10/3/14] http://www.thenewamerican.com/world-news/item/19239-tisa-yet-another-secret-trade-threat

Professor Jane Kelsey, WikiLeaks Press Release, “Time to Wave the Flag on TISA Secrecy” [6/2/15] http://www.scoop.co.nz/stories/PO1507/S00019/time-to-wave-the-white-flag-on-tisa-secrecy.htm

Professor Jane Kelsey, “TISA The Leaked ‘Core Text,’” [7/1/15] https://wikileaks.org/tisa/core/analysis/Analysis-TiSA-Core-Text.pdf

Sarah Lazare (Staff Writer, Common Dreams), “WikiLeaks Strikes Again: Leaked TISA Docs Expose Corporate Plan For Reshaping Global Economy” [6/3/15] http://www.commondreams.org/news/2015/06/03/wikileaks-strikes-again-leaked-tisa-docs-expose-corporate-plan-reshaping-global

OurWorldisNotForSale.Org “Why International “Trade in Services Agreement” (TISA) is Dangerous to Democracy, Development, and the Public Interest, and Must Be Stopped!” [6/14/14]

http://www.ourworldisnotforsale.org/en/article/international-trade-services-agreement-tisa-why-proposed-free-trade-agreement-fta-services-d

“OWINFS and PSI release their second report on Trade in Services Agreement (TISA)”

[9/30/14] http://ourworldisnotforsale.org/en/report/owinfs-and-psi-releases-special-report-trade-services-agreement-tisa

Public Citizen, “Trade Agreements Cannot Be Allowed To Undermine Financial Reregulation” https://www.citizen.org/documents/FinanceReregulationFactSheetFINAL.pdf

Public Service International press release denouncing TiSA [9/16/13] http://www.world-psi.org/sites/default/files/attachment/media/en_psi_tisa_statement_16sept2013_1.pdf

Public Service International “Special Report: TISA Versus Public Services” [4/14/14] http://www.world-psi.org/en/psi-special-report-tisa-versus-public-services

Don Quijones, Wolf Street, “LEAKED: Secret Negotiations to Let Big Brother Go Global” [12/25/14]http://wolfstreet.com/2014/12/25/leaked-secret-negotiations-to-let-big-brother-go-global/

Scott Sinclair (Canadian Centre for Policy Alternatives) and Hadrian Mertins-Kirkwood (Institute of Political Economy, Carleton University), PSI Special Report: “The Trade in Services Agreement and the Corporate Agenda” [4/28/14] http://www.world-psi.org/sites/default/files/en_tisa_versus_public_services_final_web.pdf

Techdirt website “Meet TISA: Another Major Treaty Negotiated In Secret Alongside TPP And TTIP,” [4/29/14] https://www.techdirt.com/articles/20140428/10593427051/meet-tisa-another-major-treaty-negotiated-secret-alongside-tpp-ttip.shtml

US Trade Representative website – 1/13 press release on early TiSA negotiations: https://ustr.gov/about-us/policy-offices/press-office/press-releases/2013/january/ustr-kirk-notifies-congress-new-itas-negotiations

US Chamber of Commerce website 5/16/15 brief on TiSA https://www.uschamber.com/international/trade-agreements

Daniela Vincenti, “EU and ‘Good Friends’ Mull US Trade Services Pact” [10/9/12] http://www.euractiv.com/specialreport-free-trade-growth/really-good-friends-mull-interna-news-515258

Wikileaks Leaked TiSA Documents:

TiSA Annexes under Negotiation (including various country positions) — Archive:

July 2015 publication of Chapters and Annexes of the TiSA text under negotiation:

July 2015 Agenda for 7/6/15 Round

TiSA Market Access Negotiation Documents (i.e., requests for a schedule of commitments from one of the negotiating Parties to another):

Miscellaneous TiSA Documents:

Wikipedia Links:

Trade in Services Agreement: https://en.wikipedia.org/wiki/Trade_in_Services_Agreement

General Agreement on Trade in Services: https://en.wikipedia.org/wiki/General_Agreement_on_Trade_in_Services

World Trade Organization: https://en.wikipedia.org/wiki/World_Trade_Organization