Memorandum on Leaked TISA Financial Services Text Professor Jane Kelsey, Faculty of Law, University of Auckland, New Zealand This memorandum provides a preliminary analysis of the leaked financial services chapter of the Trade in Services Agreement dated 14 April 2014. It makes the following points: • The secrecy of negotiating documents exceeds even the Trans-Pacific Partnership Agreement (TPPA) and runs counter to moves in the WTO towards greater openness. • The TISA is being promoted by the same governments that installed the failed model of financial (de)regulation in the WTO and which has been blamed for helping to fuel the Global Financial Crisis (GFC). • The same states shut down moves by other WTO Members to critically debate these rules following the GFC with a view to reform. • They want to expand and deepen the existing regime through TISA, bypassing the stalled Doha round at the WTO and creating a new template for future free trade agreements and ultimately for the WTO. • TISA is designed for and in close consultation with the global finance industry, whose greed and recklessness has been blamed for successive crises and who continue to capture rulemaking in global institutions. • A sample of provisions from this leaked text show that governments signing on to TISA will: be expected to lock in and extend their current levels of financial deregulation and liberalisation; lose the right to require data to be held onshore; face pressure to authorise potentially toxic insurance products; and risk a legal challenge if they adopt measures to prevent or respond to another crisis. Without the full TISA text, any analysis is necessarily tentative. The draft TISA text and the background documents need to be released to enable informed analysis and decision-making. 1. Unprecedented Secrecy Reverses WTO Trend of Disclosure The cover sheet records that the draft text will not be declassified until 5 years after the TISA comes into force or the negotiations are otherwise closed. Presumably this also applies to other documents aside from the final text. This exceeds the 4 years in the 1 1 super-secretive Trans-Pacific Partnership Agreement (TPPA)! It also contradicts the hard-won transparency at the WTO, which has published documents relating to negotiations online for a number of years. 1 Secrecy during the negotiation of a binding and enforceable commercial treaty is objectionable and undemocratic, and invites poorly informed and biased decisions. Secrecy after the fact is patently designed to prevent the governments from being held accountable by their legislatures and citizens. The suppression of background documents (travaux preparatoires) also creates legal problems. The Vienna Convention on the Law of Treaties recognises they are an essential tool for interpreting legal texts. Non-disclosure makes it impossible for policy-makers, regulators, non-government supervisory agencies, opposition political parties, financial services firms, academics and other commentators to understand the intended meaning or apply the text with confidence. 2. The states driving TISA were responsible for the WTO’s pro-industry finance rules The participants in the TISA negotiations are Australia, Canada, Chile, Chinese Taipei (Taiwan), Colombia, Costa Rica, Hong Kong China, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, South Korea, Switzerland, Turkey, the USA and the European Union, including its 28 member states. The leaked text shows the US and EU, which pushed financial services liberalisation in the WTO, are the most active in the financial services negotiations on TISA. The third most active participant is the renowned tax haven of Panama. To understand the implications of the TISA proposals on financial services it is necessary to understand the comparable WTO texts. What is commonly called the Financial Services Agreement is a composite of texts: i. the General Agreement on Trade in Services (GATS) sets the framework for rules that govern services transactions between a consumer of one country and a supplier of another; 2 ii. the Annex on Financial Services applies to all WTO Members; 3 iii. schedules of commitments specify which financial services each country has committed to the key rules in (i) and (ii), and any limitations on those commitments; 4 and iv. a voluntary Understanding on Commitments in Financial Services 5 sets more extensive rules and has an ambivalent legal status in the WTO. #WTO #GATS #TISA #G20 #BCBS #IAIS #IOSCO #FATF #OECD
Posted on: Fri, 27 Jun 2014 15:26:30 +0000
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