The US Withdrew From TPP—Not TISA
US President Donald Trump withdrew his country from the Trans-Pacific Partnership (TPP) on his first full day in office, fulfilling one of his longstanding campaign promises.
However, TPP isn’t dead—many of its most dangerous provisions live on through the Trade In Services Agreement (TISA).
You probably haven’t heard of TISA.
Not surprising. Few have.
And yet TISA’s been here for a while.
In fact, it’s been through 21 rounds of negotiations since April 2013.
Basically, it was designed to serve as a back-door for economic globalism in case TPP (which bore the brunt of public ire) failed, as it has—it was a fail-safe.
In short, TISA deregulates international banks and financial firms, undermines internet privacy, and redefines manufacturing as “services” in order to make offshoring easier and cheaper for multinationals.
Documents released by WikiLeaks, and published by Bilaterals.org confirm this.
What is the Trade In Services Agreement (TISA)?
As I said, TISA’s been in negotiations since 2013.
The participating countries include the US, the European Union (the EU is negotiating on behalf of the member nations, who don’t have direct input on the agreement), Canada, Mexico, Australia, New Zealand, Japan, South Korea, Taiwan, Chile, Columbia, Peru, Norway, Switzerland, Pakistan, and Turkey.
As you can see, TISA’s actually larger in scope than the TPP, as it includes Europe, and a number of other large economies, like Pakistan and Turkey.
As for what it does, according to the Obama Administration:
TiSA is part of the Obama Administration’s ongoing effort to create economic opportunity for US workers and businesses by expanding trade opportunities.
Great, but we know that’s just boiler-plate stuff. Not helpful.
What will TISA actually do?
1. TISA Erodes National Sovereignty By Deregulating International Banks & Investment Firms
Article 9 of TISA’s draft legislation contains language which would eliminate extra regulations for foreign financial firms: essentially, it ensures that countries cannot make separate rules for foreign-owned banks.
This has a number of adverse impacts.
For example, in the US, states draw artificial boundaries to protect local financial firms (particularly insurance companies).
Now, we can debate whether or not that’s a good thing to begin with, but what’s not up for debate is the fact that TISA would benefit foreign firms, by exempting them from these artificial boundaries.
This means that small insurance companies in, for example, Vermont (which are currently protected from competitors in New York), would potentially be put into competition with foreign-owned giants like Britain’s HSBC or Barclay’s.
TISA makes it open-season on small domestic financial firms.
Also, according to the Public Citizen‘s analysis, financial derivatives, including those yet to be invented, would necessarily be sold within all participating country’s territories—individual countries lose the ability to restrict the type of financial products sold there.
This is a recipe for spreading financial contagion—if TISA goes through, you better believe the next financial meltdown will be even worse (hard to believe, I know).
Last point here: TISA (like most free trade agreements) would allow foreign firms, which have been adversely impacted by legislation which contravenes TISA, to sue the perpetrating government.
Disputes would go to international corporate arbitrators, as opposed to traditional court systems.
This may not sound like a big deal, but it is—it gives foreign firms more de facto rights than domestic firms, since foreign firms are allowed to sue, domestic ones can’t (the same thing is true in NAFTA with respect to property rights in Canada, for example).
Basically, it gives foreigners more rights than citizens, depending on the country in question.
2. TISA Undermines Internet Privacy
Article 10 of TISA bans restrictions on the transfer of information in “electronic or other form” of any “financial service supplier”.
This is a major issue because financial service suppliers doesn’t just include firms like banks, but also internet suppliers and data firms, like Facebook or Google (they sell advertising services etc.).
This means that companies like Facebook or Twitter have free reign over the data they collect—it would contravene international law for an individual country to make regulations stopping foreign companies from extracting data and processing it elsewhere.
For example, if America wanted to pass an internet privacy law, which stopped Pakistani firms from collecting data on their customers due to fear of espionage or terrorism (yes, I know this is a ridiculous example, but you get the point), we couldn’t.
Not only would TISA void existing laws (of which there are many, especially in Europe), but it would make any new law ultra vires (void) before it was even enacted.
TISA serves the interests of major internet companies, not the people.
Furthermore, it’s an assault on internet privacy, since it enshrines border-less data.
3. TISA Redefines “Services” To Include Manufacturing—Secretly Empowers The Law
TISA was originally pitched as making it easier to hire international accounting or engineering firms, ie. it was supposed to facilitate the free flow of services.
But, in effect, the “services” category has been expanded to include certain secondary industries, like manufacturing.
This means that TISA is basically just a shadowy version of TPP.
Deborah James of the Center for Economic and Policy Research laid out TISA’s scope as such:
Corporations no longer consider setting up a plant and producing goods to be simply ‘manufactured goods.’ This activity is now broken down into research and development services, design services, construction services, energy services, employment contracting services, consulting services, manufacturing services, adult education services, payroll services, maintenance services, refuse disposal services, warehousing services, data management services, telecommunications services, audiovisual services, banking services, marketing services, retail services, postal and expedited delivery services, and after-sales servicing, to name a few.
Going further, a shoe or watch that measures steps or sleep could be a fitness monitoring service, not a good. A driver-less car could be a transport service, not an automobile. Google and Facebook could be information services and communication services, respectively.”
Basically, anything and everything can be interpreted as a service under TISA.
That’s TPP, in a nutshell.
This will lead to increased offshoring, which will continue to undermine America’s economy, and adversely impact our long run economic growth—that’s the whole reason Americans supported scrapping TPP in the first place.
Free trade doesn’t always work—but they’re force-feeding it to us come hell or high-water.
Thankfully, TISA talks have stalled since Donald Trump’s election, although his administration has yet to mention TISA—the media has also been frightfully silent on the topic.
According to a Congressional Research Service report from January 3, 2017:
Recognizing that outstanding issues remain and the US position under a new administration is unclear, the parties canceled the planned December 2016 meeting but are meeting to determine how best to move forward in 2017.
There you have it, TISA’s not going any time soon.
Not unless Americans get angry, like they did at TPP.
If you’re interested in learning more about TPP, I recommend this fairly comprehensive article from CounterPunch.org.