‘Governments are negotiating trade deal in secret!’ – exposed by WikiLeaks

Demonstration outside the Ecuadorian embassy in support of Wikileaks founder Julian Assange who has claimed asylum there
Demonstration outside the Ecuadorian embassy in support of Wikileaks founder Julian Assange who has claimed asylum there

A WikiLeaks exposé has revealed the true intent behind secret 50-country negotiations on a new ‘financial services’ chapter of the Trade in Services Agreement (TiSA) at the WTO in Geneva.

The draft agreement being discussed by government officials is aimed at weakening financial regulation and giving extra market access to hedge funds, banks, insurers and other providers.

Sharan Burrow, ITUC General Secretary, said: ‘Governments are negotiating away financial regulation in secret, instead of tackling the unfinished regulation task that triggered the current global economic crisis in 2007.

‘It defies belief that they are actually planning to help the already “too big to fail” banks and other financial conglomerates to expand.

‘It is deeply disturbing to find out that governments are getting ready to exempt from or expedite the approval of some of the most toxic insurance products, like Credit Default Swaps, and also allow hedge funds and banks to launch “unlimited new products” without proper controls.’

The leaked draft includes self-defeating provisions that would reinforce the power of big finance over democratic processes, with bizarre clauses such as: ‘Notwithstanding any other provision of the Agreement’, prudential measures are allowed in order to ‘ensure the integrity and stability of a Party’s financial system’, but ‘(w)here such measures do not conform with the provisions of this Agreement, they shall not be used’.

In stark contrast to the interests of taxpayers, welfare for the finance industry, including through bailouts, is welcomed under the proposals.

‘Bailouts are meant for the clean-up stage; prudential measures are meant to prevent disasters and mitigate financial risk.

‘The negotiating governments even ignored the stipulations of the International Monetary Fund (IMF) on the usefulness of capital control measures both to prevent and to deal with crises,’ said John Evans, ITUC Chief Economist and General Secretary of the Trade Union Advisory Committee to the OECD (TUAC).

The proposed TiSA rules on financial services go hand-in-hand with ‘investment protection’ provisions of bilateral investment treaties (BITs).

Investors in financial products of other countries will effectively be granted the privilege to contest financial regulation and decisions of competent authorities through private dispute procedures.

On top of the drive to give the finance sector free reign over sovereign states, the TiSA proposals also aim to liberalise professional services, information technology, construction and social and public services, a move sharply criticised by the Public Services International (PSI). The PSI and UNI Global Union have called for the TiSA negotiations to be stopped.

At the beginning of the negotiations, the ITUC and the European Trade Union Confederation called on negotiators to reject clauses that would stop governments exercising regulatory and licensing authority to buy back privatised public services and utilities as well as removing consumer protection and limiting the scope for public policy.

‘Thanks to WikiLeaks, we now know the full extent to which some governments are prepared to go to satisfy their big-business paymasters at the expense of ordinary people and of democracy itself,’ said Burrow.

The TiSA negotiations include Australia, Canada, Chile, Chinese Taipei, Colombia, Costa Rica, European Union (28 Member States), Hong Kong, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, Republic of Korea, Switzerland, Turkey and the United States.

On a related issue, the ITUC and its regional organisation for the Americas, TUCA, have criticised a decision by the US courts in favour of ‘vulture funds’ seeking to extract hundreds of millions of dollars in debt-repayment.

Repayment to other creditors, over 90% of which negotiated repayment deals with Argentina in 2005 and 2010, are also affected by the court decision.

‘Argentina and indeed any other country must have the right to meet external obligations in a way which protects its national interests and maintains internal economic stability, and does not damage its productive capacity or its socio-economic development,’ said TUCA General Secretary Victor Baez.

The ITUC is also concerned that the US decision will have a negative impact on the negotiating space for any country involved in debt restructuring, reinforcing financial speculation at the expense of the real economy.

‘Argentina has been making steady progress on debt, and this decision from the US has not only set that progress back – it also rewards financial speculators at the expense of national economic sovereignty and most of all at the expense of ordinary people.

‘We trust that the Court will at least heed Argentina’s request for a delay in applying the decision,’ said ITUC General Secretary Sharan Burrow.

The aptly-named vulture funds specialise in buying debt of countries facing debt-servicing difficulties cheaply, then litigating to obtain vastly higher payouts from the country concerned, with disastrous economic and social consequences.

NML Capital, controlled by billionaire hedge-fund mogul Paul Singer, has reportedly opposed Argentina’s latest request to delay the application of the US court decision.

• Meanwhile, the Seoul Administrative Court has upheld the deregistration of the Korean Teachers and Education Workers Union (KTU).

The Ministry of Labour had revoked the registration of the KTU on 24 October 2013, which had been temporarily stayed by the court pending review.

In revoking the union’s registration, the KTU becomes an illegal organisation and will no longer have the right to represent members in collective bargaining.

Korean labour law, which has been repeatedly denounced by the ILO as contravening freedom of association, does not allow union members who have retired or been dismissed to retain their union membership.

The KTU has been deprived of legal recognition simply because it allows dismissed or retired members to stay in the union.

Nine people, who the KTU maintains were wrongfully dismissed, are still members of the union.

Sharan Burrow, ITUC General Secretary, said late last month: ‘This is an outrageous decision, symptomatic of a legal system that deprives people of their legitimate right to choose union membership.

‘It is a clear violation of the ILO principle that unions should be allowed to include retirees, unemployed and dismissed workers in their membership.

‘The Korean government is again displaying contempt for international labour rights, and it is no surprise that Korea ranks at the bottom of the Global Labour Rights Index.’