Daily Times

The 18th round of negotiations on a secret deal to limit public oversight over the services economy starts this week at the World Trade Organization (WTO) in Geneva, and negotiators will have a new item on their agenda: how to deal with the onslaught of leaks of proposals that were supposed to remain locked away in secret until five years after the deal was concluded or abandoned.

That’s because WikiLeaks released draft texts on three previously unpublished cross-cutting annexes of the proposed Trade in Services Agreement (TISA) yesterday: disciplines on the way governments can regulate State-Owned Enterprises (SOEs); Professional Services, and New Provisions Applicable to All Services.

With this leak, 17 proposed annexes as well as the core text have been released to the public, although none through official government channels. Updated texts on financial services, e-commerce, movement of natural persons (Mode 4), telecommunications, and transparency were also leaked. Member groups of the Our World Is Not for Sale (OWINFS) global network have analyzed earlier chapters.

The publication follows a high-profile leak by Greenpeace earlier this month of a trove of chapters of the proposed Transatlantic Trade and Investment Partnership (TTIP) between the United States and Europe. Given that congressional approval of the Trans-Pacific Partnership (TPP) is on the
rocks, as the EU-Canada Comprehensive Economic and Trade Agreement (CETA) is in those countries, and given that public opposition to the TTIP is on the rise, negotiators had hoped that the TISA could slide by under the public radar. This leak makes that possibility even more remote.

The New Provisions annex would restrict the job-stimulating localization requirements that governments can place on foreign services providers. These proposals, which are more extreme than existing free trade/investment agreements, would make it harder for all TISA countries to effectively regulate these companies – including potentially in the finance sector. And they would restrict developing countries’ ability to regulate foreign investment to promote development the way the industrialized TISA countries did when they were developing, according to an extensive analysis by Sanya Reid Smith, legal adviser to the Third World Network in Geneva.

The US Treasury Department and the Office of the US Trade Representative yesterday revealed a plan to go beyond the TPP in terms of localization requirements on financial services in the proposed TISA, to appease major banking industry corporations and the members of Congress who represent them.

The irony of this is that the limits on localization requirements that the United States, and a few other countries, intend to impose through the TISA are the very same mechanisms by which the US and other countries allege that developing countries would primarily benefit from opening their services sectors to foreign participation.

“They’ll hire local workers, and your population will gain know-how” – nope, requiring local hiring would be prohibited under the TISA. “Having foreign companies will result in the transfer of technology to locals” – except that requiring technology transfer is also prohibited in the proposed text.

Historically, the U.S., Japan, and many European countries required that domestic nationals sit on the boards of foreign companies providing services in their countries; this “local management” tool is explicitly prohibited in the leaked text. This is kicking the proverbial development ladder away, indeed.

This is a core of the problem of the proposed TISA. Because it’s not the participation of foreign companies in a country’s market that the TISA would herald; it does not force foreign banks to provide capital to slum dwellers, or giant telecoms to ensure communications access for the rural poor, or energy corporations to ensure universal access to electricity.

Instead, the TISA is designed to limit the ways in which governments can ensure that the presence of those foreign corporations in an economy can benefit the local population. In the United States, we have enough problems with the customer service of Comcast, Verizon, and the like – imagine how it would be possible to hold a giant telecom accountable if they did not have a local presence, as the proposed TISA would prevent countries from requiring?

The Professional Services annex would restrict how governments and professional associations regulate market access, cross border supply, local presence requirements, foreign capital limitations, and licensing requirements for foreign services providers in specified professional fields including accounting, taxation, architectural services, engineering, urban planning and landscape architecture, technical testing and analysis, and also potentially legal services, engineering-related scientific and consulting services, veterinary services, private education services, and construction-related engineering services.

According to a brand-new analysis of the proposed annex on SOEs by University of Auckland Law Professor Jane Kelsey: the US proposal for state-owned enterprises in TISA adapts key parts of the Trans-Pacific Partnership Agreement chapter on SOEs as part of its strategy to create new global rules through the triumvirate of new mega-deals: TPPA, TISA and TTIP. The proposal would force majority-owned SOEs to operate like private sector businesses.