Reports from the Economic Front

a blog by Marty Hart-Landsberg

Uruguay Withdraws From The Trade In Services Agreement

You probably don’t know that 52 countries are engaged in secret negotiations over a proposed Trade in Services Agreement (TISA), or that the Government of Uruguay, responding to massive domestic opposition to the agreement, has withdrawn from the negotiations.  And that is too bad because it’s all a big deal.

TISA negotiations have been on-going for two years and according to the agreement’s provisional text, the document is supposed to remain secret for at least five years after it is has been signed.  The only reason we know about the negotiations is because of WikiLeaks, which called the TISA the “largest component of the United States’ strategic trade ‘treaty’ triumvirate.  The other two treaties are the Transpacific Partnership (TPP) and the TransAtlantic Trade and Investment Pact (TTIP).

As Don Quijones explains: 

TiSA involves more countries than TTIP and TPP combined: The United States and all 28 members of the European Union, Australia, Canada, Chile, Colombia, Costa Rica, Hong Kong, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, South Korea, Switzerland, Taiwan and Turkey.

Together, these 52 nations form the charmingly named “Really Good Friends of Services” group, which represents almost 70% of all trade in services worldwide. Until its government’s recent u-turn Uruguay was supposed to be the 53rd Good Friend of Services. . . .

Here’s a brief outline of what is known to date (for more specifics click herehere and here):

1.TiSA would “lock in” the privatization of services – even in cases where private service delivery has failed – meaning governments can never return water, energy, health, education or other services to public hands.

2.TiSA would restrict signatory governments’ right to regulate stronger standards in the public’s interest. For example, it will affect environmental regulations, licensing of health facilities and laboratories, waste disposal centers, power plants, school and university accreditation and broadcast licenses.

 3.TiSA would limit the ability of governments to regulate the financial services industry, at a time when the global economy is still struggling to recover from a crisis caused primarily by financial deregulation. More specifically, if signed the trade agreement would:

  • Restrict the ability of governments to place limits on the trading of derivative contracts — the largely unregulated weapons of mass financial destruction that helped trigger the 2007-08 Global Financial Crisis.
  • Bar new financial regulations that do not conform to deregulatory rules. Signatory governments will essentially agree not to apply new financial policy measures which in any way contradict the agreement’s emphasis on deregulatory measures.
  • Prohibit national governments from using capital controls to prevent or mitigate financial crises. The leaked texts prohibit restrictions on financial inflows – used to prevent rapid currency appreciation, asset bubbles and other macroeconomic problems – and financial outflows, used to prevent sudden capital flight in times of crisis.
  • Require acceptance of financial products not yet invented. Despite the pivotal role that new, complex financial products played in the Financial Crisis, TISA would require governments to allow all new financial products and services, including ones not yet invented, to be sold within their territories.

4. TiSA would ban any restrictions on cross-border information flows and localization requirements for ICT service providersA provision proposed by US negotiators would rule out any conditions for the transfer of personal data to third countries that are currently in place in EU data protection law. In other words, multinational corporations will have carte blanche to pry into just about every facet of the working and personal lives of the inhabitants of roughly a quarter of the world’s 200-or-so nations.

Uruguay’s withdrawal is unlikely to do much to slow down the negotiations, especially since the story has largely been ignored by the media in other countries, including the United States.  However, the government’s decision does demonstrate the power of education and organizing.  The Uruguayan government took action only because of massive popular political pressure.  As Viviana Barreto and Sam Cossar-Gilbert describe:

After months of intense pressure led by unions and other social movements—including a general strike on the issue—the Uruguayan President listened to public opinion and left the US-led trade agreement. The overwhelming majority of members of the ruling Frente Amplio party believe that the deal would undermine the government’s national development strategy and therefore considered it “unadvisable to continue participating in the TISA negotiations”. . . .

By leaving the TISA negotiations, Uruguay has created a blueprint of how to beat these corporate-driven agreements. A strong coalition of trade unions, environmentalists and farmers working together on an effective public campaign were able to take on the interests of the world’s biggest companies and win.

Information and clear communication was key to the campaign. The negotiation texts released by WikiLeaks and assessments by international experts helped to break the secrecy surrounding the negotiations. Then when Uruguay entered the TISA negotiations in February [2015] social movements were able to launch a public awareness campaign that gave rise to ongoing public debate in the media.

The Stop TISA campaign was able to successfully lobby and engage the government on the issue. It exposed the negative effects that Uruguay’s participation in the trade deal would have on key government policies in health and education, as well as the role of the State to address inequality.

For example, TISA attempts to transform healthcare into a tradable commodity would “raise health care costs in developing countries and lower quality in developed countries,”  according to Dr. Odile Frank of Public Services International.

Building a strong coalition of social movements and non-profits  against TISA enabled a popular opposition to the agreement to grow rapidly across diverse sections of society, from doctors to train drivers. The Workers’ Trade Union Federation of Uruguay (PIT-CNT) played a crucial role in organizing mass mobilization. Thousands marching in the streets and a general strike against TISA increased pressure on the government and led it to walk away from the deal.

Stopping TISA in its tracks is a huge victory for the Uruguayan people and their fight for a more just and sustainable future. It is time for all other countries involved in the negotiation to do the same and end this bad trade deal.

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One response to “Uruguay Withdraws From The Trade In Services Agreement

  1. keyarris October 2, 2015 at 7:43 pm

    This is a great, informative blog piece; thank you, Dr. Hart-Landsberg! Bravo to Uruguay and to the Uruguayan people for popular movements against austerity and neoliberalism, which have given the government grounds to make this move out of the TISA. I remember being in Nicaragua shortly after the priviatization/staged sale/transfer in 2000 of the electricity grid to the Spanish multinational, Unión Fenosa, and seeing the massive public protests when the company raised prices and service quality fell, leading to massive apagones, or blackouts, of the entire capital city of Managua… Privatization of energy and other services does not go well, particularly for low income people, and it seems that only mass social protest can push back against this trend. Thanks for bringing these trade deals to our attention. From Eugene, Kristin Yarris

    Like

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