TISA - Trade In Services Agreement - What is it and why is it important to take action NOW!
This short briefing document is being circulated in order to alert PHM country circles and partners about the ‘Trade in Services Agreement’ that is being currently negotiated. The negotiations could have far reaching implications as regards the ability of governments to regulate vital services that impact on all aspect of our lives. The agreement, if signed, will also have grave implications for the health sector. Do go through this document and the suggested reading list, so that appropriate activities can be planned within countries and at regional and global levels.
CLICK HERE to download the briefing paper in PDF
Secret Negotiations to Promote Trade in Services
Four decades of Neoliberal Globalisation – premised on the belief that free markets, free trade, strong property rights, and minimal government interference are the best recipe for enhancing human well-being – has led to increasing economic disparities between countries and within countries. In order to further the interests of a tiny elite that has benefited from neoliberal policies, the locus of decision making that affects the lives of people across the world, has shifted to multilateral trade and investment negotiations, often conducted behind a veil of secrecy beyond the scrutiny of parliaments and the general public.
True to this tradition, negotiations around the Trade and Services Agreement (TISA) commenced in 2012 in Geneva, far removed from the scrutiny of the people, whose lives would be decisively impacted upon. TISA has far reaching implications for the welfare and well being of billions of people across the world. It seeks to convert all forms of services across the world into tradable commodities. The latest round of negotiations in this process concluded in Geneva in June 2014, and the next round will take place from 21 to 25 September 2014, in Geneva
TISA was initiated primarily by the US and the EU. They mobilised a group of countries curiously termed as the "Really Good Friends", to begin negotiations on an agreement to liberalize trade rules related to services – both at the global level and within countries. At present those participating in the negotiations include the following: Australia, Canada, Chile, Chinese Taipei, European Union (all 28 participating countries), Hong Kong, Iceland, Israel, Japan, Liechtenstein, New Zealand, Norway, Republic of Korea, Switzerland, United States (all High Income Countries as per the World Bank’s definition); Colombia, Costa Rica, Mexico, Panama, Peru, Turkey (Upper Middle Income countries); and Pakistan, Paraguay (lower Middle Income Countries). Clearly, as the name of the ‘club’ (really good friends!) suggests, it is a rich countries’ club, with a few Upper MICs and just two Lower MICs (Pakistan and Paraguay).
Services and the global trade regime
It is estimated that the participating countries account for 70% of the global services economy. The TISA negotiations need to be understood in the context that the economies of the rich countries are critically dependant on the services sector -- services comprise 75% of the economy in both the EU and the US. While manufacturing has continued to shift to countries other than the elite rich countries, economic growth in the high income countries is dependant on the growth of the services sector, a large part of which is mediated through global TNCs operating in services such as finance, insurance, media, management consultancy, etc.
The GATS (General Agreement on Trade in Services) agreement under the WTO (signed in 1994) was the first attempt to globalize trade in services. It may be recalled that developing countries had initially resisted the inclusion of services (and intellectual property rights) in the WTO agreement, but were subsequently brought on board with the promise that increased access to global markets in the manufacturing and agricultural sectors would compensate for any losses that they would face by opening the services markets. However, the liberalized global trading regime has failed to benefit the poorest nations of the world, while there have been continuing efforts to further liberalise rules at a global level, especially in the services sector.
Services cover every aspect of human activity; they encompass all that we need to lead fulfilling lives. We elect governments so that we have access to services that address our needs and aspirations – ranging from health, education, water supply, transport, housing, energy, and telecommunications to financial services such as banking, insurance and pensions. We expect governments to regulate access to these services in a manner that would promote equity and sustainability. Thus a key role of governments has been to provide public services, so that commercial and private interests do not hamper the access to needed services by those who are socially and economically disadvantaged.
It is important to understand that TISA (and other multilateral negotiations on services) also includes rules that govern investment and intellectual property. These rules are designed to facilitate and protect foreign investment, especially those of MNCs, through binding rules that supersede existing domestic regulations and laws. Negotiating parties are subject to dispute settlement procedures, and MNCs can sue governments for alleged infringement, even in situations where governments seek to curb the rights of foreign investors to protect public interest and welfare.
Since 1994, negotiations under the GATS agreement have not kept pace with the aspirations of the rich economies and MNCs. These aspirations are not limited to measures that would affect public services in the South. Neoliberal governments in the North, while promoting the interests of their financial sector and of MNCs, are now also engaged in the dismantling of the ‘welfare state’ in their own countries. This is now increasingly visible post the 2008 financial crisis, when the need to bail out the capitalist banks and financial institutions took clear precedence over securing access to public services. Consequently, liberalisation of services translates into the rolling back of access to public services in the North (achieved through decades of struggle by the working people in these countries), and further cuts on access to public services in the South.
GATS is not seen as an useful toolalso because negotiators from developing countries had been successful (when the WTO agreement was being negotiated) in insisting that the services sector be treated differently from other sectors. GATS was supposed to work on the principle of ‘positive lists’, which requires countries make a pro-active decision to choose those sectors and sub-sectors of their economy that they want to open up to global trade. This approach has been resisted by the rich countries who are looking for ways for across the board liberalisation of the services sector, unhindered by what they see as a cumbersome process embedded in the GATS framework.
thereby effectively stalling the negotiations.
TISA subverts equitable access to services
TISA is a dangerous attempt by the rich and powerful to subvert attempts to secure equitable access to a range of services. It not only affects poor countries, it also affects the poor in rich countries. The basic philosophy that drives TISA is that governments should not provide services, but should rather regulate the provision of services by private and commercial entities. Under such a schema, services would be provided by for-profit private enterprises operating in a global market for services. If markets are to be created for services, then for obvious reasons existing public services need to be privatized.
The Public Services International (PSI) describes TISA as: “A treaty that would further liberalize trade and investment in services… treaty rules, would provide all foreign providers access to domestic markets at ‘no less favorable’ conditions as domestic suppliers and would restrict governments' ability to regulate, purchase and provide 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”.
Implications for the health sector
A global agreement on services would prevent governments from imposing laws and regulations to protect public health (among other areas), and governments would be forced to allow transnational corporations to operate freely, even in situations where they may clearly endanger public health. We already know that tobacco companies are suing country governments which have laws that restrict the manufacture, sale and advertisement of tobacco products. Price controls on medicines can be challenged on the premise that they place restrictions on the operations of drug MNCs by distorting the play of the ‘free market’ and thereby adversely affecting the return on investment. TISA – by promoting the global healthcare market and the ‘trans-nationalization’ of healthcare -- could also allow global health management companies to determine the cost of health care, and take decisions regarding access to healthcare for billions of people. Governments would lose the power to regulate healthcare services. Somewhere in all of this we need to communicate that one of the big aspects of TTIP and TISA is the shift of risk from private to public … i.e. that investors have a right to make a profit!!
Public provision of healthcare would be under threat, because private ‘health markets’ are a prerequisite for the entry of foreign healthcare service providers. Countries would be ‘locked’ into a regime of private healthcare provision, as those seeking to expand public services would be required to ‘compensate’ foreign commercial service providers and investors for loss of revenue!
TISA would also impact on polices related to the migration of health workers. Commercial service providers would be free to ‘import’ health workers (generally as temporary contract labour) from other countries. The availability of ‘cheaper’ health workers would depress local wages and jeopardize local employment. It would also further accentuate the global health worker crisis, brought on in large measure by the migration of health workers away from low and middle income countries. This would also have a negative effect on the labour rights of ‘imported’ health workers, who would be at the mercy of the commercial service providers.
Stalling regulations of the financial markets: Wall Street strikes back!
Diabolically, TISA is designed to stall all attempts to reform and regulate the financial sector (including the big capitalist banks and other financial instruments) in the aftermath of the global economic meltdown. An analysis carried by wikileaks of a leaked version of the April 2014 negotiating text, by Law Professor Jane Kelsey of the University of Auckland, reveals that the U.S. and EU negotiators propose that governments that sign on to the TISA will be required to halt new regulations, including those intended to regulate the financial sector.
TISA is led by the same countries whose regulatory failures were singularly responsible for the global financial crisis in 2008. Yet negotiators from the EU and the US are engaged in forging ways to make regulations of the financial sector (banking, insurance, etc.) even more difficult. Steve Suppan, in a blog on www.globalpolicyjournal.com writes that the U.S. and EU trade negotiators are engaged in trying to open markets for the big banks and other financial firms. “Incredibly, the leaked text gives no indication that the industry the U.S. and EU negotiators so zealously lobby for needed at least a $29 trillion bailout to avoid bankruptcy from 2007 to 2010. It’s as if the negotiators slept through the financial collapse”.
Secrecy and Expansionist Strategy
Negotiations under TISA are being conducted with utmost secrecy. The recent Wikileaks report reveals that the cover page of the negotiating document says: "Declassify on: Five years from entry into force of the TISA agreement or, if no agreement enters into force, five years from the close of the negotiations”.
At the heart of TISA and several other recent Trade related negotiations (such as the ‘Trade Facilitation’ negotiations of the WTO), lies the attempt to undermine domestic regulations in all spheres of human activity. As Joseph Stiglitz points out in a recent column: “Today, the purpose of trade agreements is different. Tariffs around the world are already low. The focus has shifted to ‘non tariff barriers’, and the most important of these — for the corporate interests pushing agreements — are regulations. Huge multinational corporations complain that inconsistent regulations make business costly. But most of the regulations, even if they are imperfect, are there for a reason: to protect workers, consumers, the economy and the environment”.
A moot question is how TISA would affect countries that are not part of the negotiations. TISA’s strategy is almost akin to a military manoeuvre. The strategy is to arrive at a common position amongst the rich countries (with a fig leaf of legitimacy provided by a few middle income countries) and then to force the consensus on the rest of the world. TISA negotiations are currently taking place outside the framework of the General Agreement on Trade in Services (GATS) and the World Trade Organization (WTO). However, the Agreement is being crafted to be compatible with GATS so that a critical mass of participants will be able to pressure remaining WTO members to sign on in the future. Given the way global power relations work and the fact that the negotiating countries control 70% of the services ‘market’ this is not inconceivable.
Important documents to read:
Brief on why TISA must be opposed (English):
Brief on why TISA must be opposed (Spanish):
Preliminary analysis of the leaked financial services chapter of the Trade in Services Agreement dated 14 April 2014
Paper by Public Services International (PSI) in English
Paper by Public Services International (PSI) in English
More information after the latest round of negotiations in Geneva (23-27 June, 2014)