The Trade in Services Agreement (TiSA) seeks to lock in forever the failed neo-liberal ideology that has dominated the past four decades. It is being negotiated, in secret, at a time when neo-liberalism and the legitimacy of such agreements have hit rock bottom, in large part because of its negative impacts on workers and the escalating inequality within and between countries.

Without any sense of self-parody the 23 negotiating parties, which of course include New Zealand, call themselves “The Really Good Friends of Services”. (1) Their mission is to create a “21st Century agreement” that removes barriers to the global expansion of services industries and puts handcuffs on governments so they can’t regulate even when new services and technologies, and new risks, emerge in the future.

TiSA’s formal corporate cheerleading team called “Team TiSA” is a US-led coalition, whose role is to support the “Really Good Friends” and lobby their patron states to deliver on their demands. According to its Website Team TiSA is “dedicated to promoting and advocating for an ambitious agreement which eliminates barriers to global services trade, to the benefit of services providers, manufacturers and farmers, and consumers globally”.(2) While consumers rate a mention, workers and the grounded communities in which consumers and workers live are ignored, as are the responsibilities of governments to their people.

The Backdrop: GATS And All That

TiSA has its origins in the General Agreement on Trade in Services (GATS) in the World Trade Organisation (WTO). In the late 1970s, as manufacturing was relocating from the affluent global North to Asia, affected workers and communities were promised a “new economy” based on services, intellectual property, foreign investment and the high value end of transnationalised production. Corporate lobbyists in the US, led by American Express and AIG, convinced their Government and later the Organisation for Economic Cooperation and Development (OECD) countries to push for international rules that would enhance their offshore expansion and profitability.

The key was to secure control of the blood supply (finance) and nerve system (telecommunications) of an integrated global marketplace. In addition, they wanted to remove two sets of “barriers”: laws, policies and practices that give preferences to local firms, including restrictions on foreign investments or excluding them from certain activities; and those that limited their access to, and potential for growth in, services markets, in particular public monopolies, economic needs tests, numerical caps on operators, or requirements to invest through particular legal forms, including joint ventures.

The term “trade” was co-opted to legitimise these demands and allowed the rules to be developed under cover of the Uruguay Round of trade negotiations from 1986 to 1994. The GATS negotiations faced strong resistance from the global South, which meant the OECD states and their services industries did not get all they wanted. Countries were allowed to minimise their exposure to the core rules by listing which services they would apply to, and could differentiate between four different “modes” of delivery (across the border, consumption of the service abroad, through a commercial presence in the host country, and by the temporary presence of a real person). Each country’s schedule used a provisional classification list developed by the UN in 1991 when services markets were embryonic. The resulting commitments were often very limited, and provided fragmented and incoherent coverage for supply chains.

A new round of services negotiations launched in 2000 (GATS 2000) was incorporated into the WTO’s Doha Round from 2001. Those talks became paralysed due to continued resistance from developing countries to the expansion of the GATS, especially as richer countries refused to guarantee broader scope for labour mobility and a backlash from civil society around the world to the corporate takeover of services. The services negotiations also became hostage to demands for trade-offs on agriculture and goods within the broader Doha mandate.

Bypassing The WTO

Affluent countries with large or sophisticated services firms formed an alliance called the “Really Good Friends of Services” and developed a multi-pronged strategy to circumvent the stalemate in the WTO. Holding plurilateral talks within the WTO they developed model schedules and GATS-plus rules for different sectors; those are resurfacing in TiSA. They pressured developing countries to agree to stricter rules on services and much more extensive commitments through bilateral and regional free trade agreements (FTAs).

Most recently, new generation mega-regional agreements between mainly OECD countries have promised “gold standard” rules for their corporations and commercial interests, notably the 12-country Trans-Pacific Partnership Agreement (TPPA),(3) the EU Canada Comprehensive Economic and Trade Agreement (CETA), and the Transatlantic Trade and Investment Partnership (TTIP) between the US and EU. While there are common corporate demands and proposed texts, each agreement reflects the parties’ particular sensitivities and interests.

The plurilateral negotiations for a Trade in Services Agreement were launched in 2013 as another new generation agreement. Operating under a veil of secrecy on the fringes of the WTO has allowed the “Really Good Friends” to expand the mandate of GATS 2000 negotiation and seek to rewrite the original GATS, with chapters imported from other mega-agreements, notably those on e-commerce, cross-border services and State-Owned Enterprises (SOEs). The first round of negotiations was held in Geneva in March 2013. By October 2016 there had been 20 negotiating rounds, variously hosted by the US, the EU and Australia. The later rounds were held within the WTO buildings, seemingly serviced by the WTO Secretariat even though TiSA is not mandated by the WTO.

The negotiating texts and documents are secret. Most information that is publicly available has come from leaks posted on Wikileaks,(4) Greenpeace,(5) and Associated Whistleblowing Press.(6) At the beginning of negotiations the US asked other negotiating parties to agree to the same terms adopted in the TPPA: to keep all negotiating documents and related communications between the parties secret for four years after the agreement came into force (aside from the final text); each country could decide what information should be shared internally on a confidential basis.(7)

Cover sheets of leaked documents from the US show it extended the four years non-disclosure in TPPA to five years for its own documents.(8) It is not known which, if any, other TiSA parties responded to the US request and their practices have been inconsistent. Norway, Switzerland and the EU have publicly released their own initial and revised offers of commitments along with some other documents they have tabled, and the EU publishes edited summaries of each round.(9) Other democracies, such as New Zealand, say they have made no written commitment to secrecy, but still refuse to release any documents.(10)

The Main Objectives

The State Of Play

While TiSA initially attracted very little attention, the uncertain fate of TPPA, CETA and TTIP has made it much more symbolically and strategically important. The TPPA and CETA were both concluded in February 2016. Their ratification fell captive to domestic politics in the US, and EU and Canada, respectively. The TPPA appeared to be dead after the November 2016 election of Donald Trump as US President, who vehemently denounced the deal (and who has said he will pull the US out of it on his first day as President, in January 2017. Ed.). The TTIP talks are stalled. The US belatedly tabled several TiSA texts drawn from the TPPA, notably on SOEs, and openly planned to use TiSA to impose additional obligations on TPPA parties to allow offshore storage of financial services data, which was considered a pre-condition for Congress approving the TPPA.

The target date for completing TiSA is the end of 2016. A Ministerial meeting was announced for 5-6 December 2016, preceded by almost continuous negotiations from October. The deadline was presumably driven by the desire to sign a deal during the Obama Administration, noting that TiSA had remained under the radar during the Presidential election campaign. That could only be met, if at all, by dropping annexes that have the least support or which the US or EU are likely to veto. The US and EU would also have to finesse their major points of dispute, notably on the maritime annex and financial regulation at sub-federal level on the US side, and the privacy protections for e-commerce and commitments not to regulate “new services” for the EU.

That posed a dilemma. Any genuinely “21st Century” deal for the corporations would have to provide systemic rules to protect digital platforms and Internet-enabled commerce from future regulation, and to enable the global supply and logistics chains to reorganise freely through whatever new technologies emerge. In late October 2016 it became clear the EU would not have a position on the privacy protections before the end of the year and would not commit to allow data to be held offshore without them; it was also holding firm on the regulation of new services, making it impossible to meet the deadline.(11) Suggestions that TiSA could process without the EU lacked credibility.(12) These roadblocks are important indicators of action points and potential alliances in a strategy to stop TiSA.

Why Should We Be Concerned?

Under the TiSA model, services are redefined as purely commercial commodities to be exchanged for money through disembodied markets. Their social essence and intrinsic social relations are stripped away. Public ownership of services is considered an “anti-competitive barrier” to this international “trade”. The non-commercial components of public services are to be isolated, minimised and open to private providers. However, too much attention is often focused on issues of public services without understanding the systemic goals of these agreements.

TiSA is not just more of the same. When corporations and their patron states talk of an agreement for the 21st Century they are looking to design rules that will serve their interests 20 or 30 years from now. In the 1980s and 1990s the GATS negotiations focused on opening up countries to foreign direct investment. Today’s priority is to remove and pre-empt constraints on cross-border services and digital trade or “e-commerce”, as part of what some are now calling the “fourth industrial revolution”.

By harnessing new technologies, corporations that already dominate the IT (information technology) and logistics infrastructure can tailor individualised delivery across borders through streamlined global supply chains. Digital platforms use algorithms to connect suppliers and consumers, organising delivery through “self-employed” platform workers whose working lives they control. Layers of competitive contracts between transnationals, and with smaller national and local businesses, enable those who control these digital platforms and supply chains to consolidate their dominance whilst minimising costs, responsibilities, tax obligations and regulatory constraints.

As services, products, knowledge and technology are blended in the “Internet of things”, traditional line production in factories is disrupted, as are brick and mortar warehouses and retail stores. Artificial intelligence, such as drones, robots and driverless vehicles are already replacing work performed by human labour. All this foreshadows a future of constant restructuring under intense international competition that leaves workers insecure and vulnerable, and unions struggling to identify who are the employer and employee, let alone to organise.

TiSA’s role is to act as midwife and then protector of this transformation. The corporate lobby that calls itself Team TiSA includes global logistics and transport operators like DHL, FedEx, and Maersk, digital traders like Amazon, technology giants like Google, and platform operators like Uber and Deliveroo. In the guise of creating a “level playing field” they want sweeping rules and commitments that would basically let them do what they want. That includes guaranteed rights to operate seamlessly across the world, and for governments to commit never to regulate as-yet-unknown services and technologies, irrespective of their social, economic, development, employment and environmental impacts or contribution to climate change.

TiSA is all about “freedom” – freedom of corporations from restraints and from responsibilities - and its obligations are designed as a one-way street from which there is no retreat. Imagine the following rules are agreed. There are no limits on off-shoring and outsourcing. Those who supply services from outside the country can’t be required to have any local presence or local directors. Transnationals are free to invest and disinvest as their markets, technologies and strategies change.

They can develop hubs that service regions and relocate them in response to commercial imperatives, including labour conditions and tax regimes. Their corporate employees can move with them. Multi-modal operators have rights to access the integrated public infrastructure, including ports and roads, wherever they operate without having to compensate taxpayers for the costs of their construction, or contribute to universal service obligations or future upgrades. They can bring their contract workforce to deliver the service as well.

The Corporate Power Takeover

Each country that becomes a party to TiSA has a schedule of commitments to various rules. They have some choices, but whatever they seek to retain control over has to be negotiated with and agreed by all the other TiSA parties. The stated goal of the negotiations is to impose self-restraint, reinforced by mutually agreed disciplines in a series of annexes. The right and responsibility of central, regional and local governments to regulate in ways they think best for their community takes second place to ensuring regulations are not too burdensome for services’ firms.

A major aim is to stop new regulation in the future. So, governments have agreed, as a general principle, not to introduce new regulation that favours domestic services, and to lock in every future liberalisation. Those restrictions will apply in the future to any new technology used to deliver those services, even when they pose new and unforeseen challenges. Data can be transferred in and out of the country without restrictions and held in any country, however weak its privacy or consumer protections or how intrusive its surveillance may be. Yet the corporations insist that their own source codes are kept secret to protect their market power. State-owned entities must operate on a corporatised model. There is unrestricted movement of payments and capital into and out of countries. And much more…

The workers who actually operate the services economy are invisible. Labour is a factor of production to be reorganised, relocated and replaced as corporate strategies, profit targets and technologies dictate. The quest for “flexibility” and “efficiency” means more precarious work and individualised employment contracts. New impediments to organising workers and projected decline of unions are a silent victory for capital. Workers as consumers are to be courted, their data captured and sold, and their choices manipulated, without effective protections or remedies.

Taking Back People’s Power

The entire TiSA project is a fundamental assault on democracy, from its broad pro-corporate objectives, the secrecy of the negotiations and the standstill and ratchet in unchangeable schedules, to the more specific concept of “technological neutrality”, prohibitions on localisation requirements, and much more. Removing power from the State disenfranchises unions and workers, their communities and entire nations for the indefinite future.

To deliver on this distorted vision for the 21st Century, states have to sign away their regulatory sovereignty and the ability of central, regional and local governments to address competing social, economic, gender, environmental, cultural and political priorities. Citizens and voters are disenfranchised, exacerbating the alienation that underlies the vote for Brexit in the United Kingdom and the election of Donald Trump to the Presidency of the USA.

Governments must be able to respond to predictable and unanticipated problems without facing the threat of a legal dispute or economic sanctions. What may appear low risk when it is agreed can become a major liability. Even without significant change, it is easy to make mistakes in drafting such a complicated area as services. The core text, annexes and schedules of TiSA together would remove permanently the flexibility that states require when domestic and global economic circumstances change and new technologies alter the impact of rules and commitments – let alone when a democratically elected government has a different mandate.

Its champions expect people as citizens, workers and consumers to surrender their right and power to influence the rules that govern their lives through democratic politics and organised labour. Because such rules can only be successfully negotiated in secret, TiSA is bound to deepen the alienation many already feel towards these agreements. TiSA therefore exemplifies the current paradox: these agreements are binding, enforceable, and assumed to be forever; yet by denying the social realities of humankind and political responsibilities of states they make themselves unsustainable. But, as with the TPPA, it won’t fall over by itself. People need to become educated, active, and determined that TiSA joins the other failed corporate takeovers in the name of “trade”.