Sleeping Monster: The Trade in Services Agreement (TiSA) and the Supply Chain

By Lambert Strether of Corrente.

Trade[1] activists may regard the defeat of TPP — its (no doubt feigned) rejection by Democrat candidate Clinton, and its deep-sixing by President Trump on his third day in office — as a victory, and they’re not wrong. But it’s a mistake to regard the defeat of a deal as the defeat of the deal-makers: The forces and drivers behind the deal, which, if unchecked, will simply emerge with a [cough] new deal serving the same objectives. In this post I want to look briefly at the the state of play in “trade,” and then begin to look at the Trade in Services Agreement (TiSA) — that lowercase “i” gets me every time; I suppose it’s meant to make the acronym seem friendlier — because, unlike the regional TPP, TiSA is a global agreement, because it’s far less undead than TPP, and because it provides great insight into the future world our globalist elites would like us to live in[2]. I’m going to take the supply chain as my starting point for future posts on TiSA, because it’s about “stuff,” and as readers know I like stuff: Shipping containers, boats, trucks, trains, planes, the UPS guy with the package, and so on. My interest in TiSA was renewed by this report: TiSA: Foul Play (PDF)[3], authored by Professor Jane Kelsey of the University of Auckland, a trade activist, and I’m going to be relying on that report for some key points in this and future posts. (There is the a text of TiSA at WikiLeaks, thankfully; in future I’ll try to get more into detail.)

The State of Play for Trade

First, TPP. Trump having pulled out, the other other 11 TPP nations, led by Japan, are discussing reviving it. Next, the text of the TPP is being broken up for spare parts and incorporated into other deals. The National Interest:

While the rhetoric of ‘high standards’ owed much more to political salesmanship than rigorous analysis, there are parts of the agreement that can facilitate economic progress…. The existing text needs creative adaptation rather than simple adoption. Any successor agreement should be between those members who wish to exploit the gains of well-managed globalisation for innovative, inclusive and sustainable growth. The TPP can be a valuable organ donor.

In particular, TPP may be an organ donor for NAFTA. The Electronic Frontier Foundation on e-commerce:

Preliminary steps towards the renegotiation of NAFTA, the North American Free Trade Agreement, have already begun, and Alan Davidson, former director of digital economy issues at the Commerce Department, has flagged the problematic e-commerce provisions of the TPP as suitable for transplanting into the renegotiated agreement. “TPP is a terrific starting point,” he is reported as saying.

TPP’s objectives are also being stitched, Frankenstein-style, into NAFTA:

On July 17 the Trump administration released a 20-page list (pdf) of its objectives for the NAFTA renegotiation, which could begin as early as August. Many bear a striking resemblance to provisions agreed by TPP negotiators, experts and Trump opponents have pointed out. “The administration is planning to come to the table with watered down versions of TPP proposals,” said US senator Ron Wyden, a Democrat from Oregon.

And the same goes for TPP’s ISDS language, also being transplanted into other deals. Politico’s “Morning Trade” as cited at NC:

Leading small and medium-size companies are issuing a united call for the Trump administration to abandon in an updated NAFTA dispute settlement clauses that they say “grant greater rights to foreign corporations than to domestic businesses” and pose a challenge to local, state and federal policies” [Politico]. “The 100 businesses, included the co-founders of Ben & Jerry’s ice cream and eco-friendly clothing maker Silk Oak, are asking Trump in a letter today to eliminate investor-state dispute settlement clauses from all current trade deals — ‘beginning with the NAFTA renegotiation’ — while also removing the U.S. from any negotiations that would expand the clauses. It named the Bilateral Investment Treaty with China and the Transatlantic Trade and Investment Partnership with the European Union as two such negotiations that would expand ISDS.

As far as who is doing the stitching and surgery: We might call the lawyers, lobbyists, industry representatives, standards body wonks, legislators and diplomats — Flexians all — “The Trade Blob,” and clearly The Trade Blob has its own class interests in keeping the trade “conversation” going, beyond the passage of any one deal. But there are other class more dominant class interests at stake, made refreshingly clear by listing the key supporters of TiSA, the “Really Good Friends of Services” — I’m really not kidding about the name — and “Team TiSA.” From Foul Play (page 11):

Since 2013 a group of like-minded governments have been secretly negotiating a deal that would lock the world into the failed neoliberal model of the past four decades. They call themselves The Really Good Friends of Services.

The Really Good Friends of Services

Australia, Canada, Chile, Colombia, Costa Rica, European Union, Hong Kong China, Iceland, Israel, Japan, Lichtenstein, Mauritius, Mexico, New Zealand, Norway, Pakistan, Panama, Peru, South Korea, Sweden, Switzerland, Taiwan, Turkey, United States of America

They are working with, and largely for, a corporate lobby known as Team TiSA. The six US co-chairs come from the world’s most powerful major financial, tech, logistics and retail corporations: Citigroup, IBM, UPS, Walmart, MetLife and Liberty Mutual.

So, with a line-up full of heavy-hitters like that, it’s no wonder TiSA is not dead, but sleepeth. Politico:

The effort to finalize TISA talks has been hampered by friction with the European Union, which the U.S. blames for dragging its feet on how to handle rules on data flows. The agreement being negotiated by the U.S., EU and 21 other governments could now lie fallow for a while, given President-elect Donald Trump’s critical view of new trade initiatives. But the official held out some hope that a Trump administration could put its attention on the deal at some point.

There is a higher likelihood that a Trump administration decides to pursue TISA than there is that the EU will get its act together on data in the next four years,” the official said. “I doubt very much that the Trump administration has thought very much at all about TISA. When they do think about it, they may look at it as being a different kind of trade agreement, because it’s not dealing with industrial goods[4]. They may see the broad support for it among U.S. stakeholders. They may see the support for it in Congress and see it’s interesting.”

So even though TiSA on the inactive list now, that doesn’t mean it won’t be back in the game. Politico:

[United States Trade Representative Robert] Lighthizer was asked specifically about the Trade in Services Agreement, another Geneva-based negotiation that stumbled in the remaining days of the Obama administration [at Wednesday’s Senate Finance Committee hearing]. “That certainly is an important one, and I don’t expect it to fall by the wayside,” Lighthizer said about TISA. “We’re doing an evaluation right now across the board, and when that is done we’ll move forward where appropriate.”

Besides the USTR, Congress:

The Congressional Services Caucus, co-chaired by House Ways & Means trade subcommittee chairman Dave Reichert (R-WA), is calling on U.S. Trade Representative Robert Lighthizer to re-engage with partners in the Trade in Services Agreement negotiations and address the priorities of the services industry, which include promoting the free flow of data across borders and removing barriers such as forced data localization. “The negotiation and enforcement of trade agreements need to address the barriers U.S. services companies face in foreign markets.”

So, with Team TiSA pushing, and The Trade Blob smoothing the path, TiSA is still very much in motion. Now let’s look at TiSA and the supply chain.

TiSA and the Supply Chain

Deborah Hames of the Center for Economic and Policy Research summarizes the supply chain nature of TiSA:

[I]t’s important not to think of TiSA as “only about services.” Now that nearly every chapter of the agreement has been leaked, a more complete picture has emerged: that the TiSA is fundamentally an offshoring and outsourcing charter

(To me, “offshoring and outsourcing charter” is another way of saying “supply chain.”) More:

The TiSA is intended to lock in a system of rules to allow multinational companies to operate in a borderless digitized environment with minimal regulation and maximum rights regarding the treatment of labor, capital, inputs, and the new key element of data. As promoted by the multinational financial, logistics, and big data corporations through Team TiSA, the agreement would set severe limits on the ways that governments can regulate domestic economies, removing key tools of economic management and the ability to shape the service economy while providing an extensive corporate bill of rights for multinational companies’ operations across the globe. Given the shift in employment patterns from high-paying manufacturing jobs to low-wage services jobs, and given the potential offshorability of millions more services jobs, the danger posed by TiSA is daunting.

Foul Play provides the following chart (page 25):

(As a parenthetical, note “professional services” in the lower left quadrant; clearly, TiSA is aimed squarely at the guilds and rents of our friends in the 10%, even if they don’t know it yet.) In the lower right quadrant, we see “Movement of Stuff/Service (inputs)”, described on page 12:

The TiSA agenda for postal, courier and express delivery services is set by DHL, Fedex, TNT and UPS. The globally integrated logistics chains they organise through digital platforms require seamless crossborder flows of transport, goods, data, money and people, free from government regulation. Public postal systems have to be minimised, while still providing access to a universal network. Amazon will piggy-back on these gains, forcing the Big Four to compete harder to survive.

(As a parenthetical, note if you want a Post Office Bank, you don’t want TiSA.) Contemplate the extraordinarily ambitions scope of “Movement of Stuff,” the “seamless crossborder flows,” for a moment; you can see that TiSA really is an “agreement for everything.”

Conclusion

There’s an old saying attributed to Internet activist John Gilmore: “The Net interprets censorship as damage and routes around it.” TiSA seems to suggest a more generalized variant: “Capital interprets regulation as damage and routes around it.” Regardless, again, of the success or failure of any particular deal, that’s what the dealmakers — the Trade Blob and our globalist elites — desire. Tomorrow I’ll look at what “services” really means in TiSA.

NOTES

[1] I’m not at all happy with the “trade” framing; some rectification of names is called for. Ditto anti-globalization, etc.

[2] I mean, besides the jackpot. I’m not happy with “globalist elites” framing either.

[3] Foul Play has two sponsors: The Friedrich-Ebert-Stiftung, “the oldest political foundation in Germany,” named for the first President of the Weimar Republic, which has a social democratic focus; and the UNI global union, which represents more than 20 million workers from over 900 trade unions. From their site:

Belonging to a local trade union was once enough to protect your rights and to improve your conditions at work. Working people came together because they were stronger together. Your local union was able to defend you, intervene with your local employer in times of trouble and help to improve your conditions. As local union members you were strong.

In a workplace now dominated by powerful multinational companies, the conditions under which local employees work are largely dictated at the regional and global levels.

The interest in building links across national borders has marked the trade union movement and we have developed this idea further with the creation of UNI Global Union.

At UNI Global Union, national unions remain our pillars. Those unions continue to organise workers, negotiate and mobilise for a fair deal at work. However, in today’s global workplace it is no longer enough to only have only local unions. It is now necessary for those unions to affiliate to a global union for representation on an international scale.

Incidentally, if liberal Democrat immigration activism in the United States is not about arbitraging cheap labor, you’d expect to see institutions like UNI put front and center in messaging. If that’s happened, I’ve missed it. (Interestingly, UNI is not one of the civil society organiztions invited to comment on TiSA by the EU.)

[4] As we shall see, TiSA’s definition of “service” is extremely broad. Think “steelmaking as a service,” and so forth.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

20 comments

  1. flora

    Thanks for the heads-up. Good to know. I see India and Brazil are not in the Really Good Friends of Services list. All in all, TiSA looks like a great way for multi-nationals to lower wages, roll back health and environmental laws, circumvent democratic governments, loot goverment purses, and escape taxes.

    Reply
  2. Enquiring Mind

    Speaking of Supply Chains:
    Today is as good a day as any for a periodic assessment one’s personal and family supply chain risks. For example, how long could you survive if the power went out? Could you even open your garage door to drive, or even turn on the car radio to find out what happened? Would you be stuck hiking down 78 floors to the street just to breathe some fresh air? How about eating? Do you have food and a means to heat it, or to preserve it longer than it takes for your refrigerator to seek out ambient temperature?

    The above is presented due to my concerns about the increasing fragility of the everything chains and tendrils that I see everywhere. Be prepared or be toast. Now back to your regularly scheduled programming.

    Reply
    1. Jeremy Grimm

      Good idea! Some predict a more exciting than usual hurricane season. Absolutely everything where I live depends on the continuous flow of electric power.

      Right now my best place for preserving leftovers without electricity is around my middle. Without a propane gas burner or charcoal barbecue I’ll be stuck eating canned fish and beans heaped over some dried bread cubes I collected. Remember water can be problematic as well. After the first few days without power and with no prospect of power soon I’ll have to gather up all the frozen meats — frozen no longer — and talk someone with a barbecue into cooking it all for a neighborhood eating fest.

      Reply
    2. Punxsutawney

      Yes, my family and maybe a neighbor or two for a few months…I think. In the long term water would be the problem. Only have 12 gallons fresh for an emergency, though almost as many gallons of beer as well. :-) Have a filter, but the muddy relatively polluted creek is not appealing. Rainwater collection would be no problem in the winter here in Oregon, but if it’s summer it could go weeks without significant rainfall.

      Would have to smoke the meat in the freezer, and turn the frozen berries into jam. Have plenty of hardwood to do so. I have a marine battery that I can recharge via solar panel that will run tablets and phones, and a portable radio, or start a car.

      All good questions that should be asked.

      Reply
    3. fajensen

      Fragility Indeed! My son works in logistics. When he nags over work it is very clear that the IT-skills in the whole business are very limited and mostly outsourced to 3-rd parties with very little oversight and quality assurance. The IT providers do not seem at all to be very bright too, not at all top-range staffing. They can take weeks to do quite trivial things like, f.ex., stopping someone sending orders into someone else’s system, which the recipient cannot figure how to block! My son sometimes have to hack something up himself to fix a problem and he is not a programmer or engineer at all, he is smart but not a professional.

      There is generally no monitoring of the state of an order, no monitoring of incoming and outgoing receipts so cashflow is always a surprise and …. probably an easy area that one should write some software for, corner the Market, retire on the proceeds.

      The second those proverbial Russian HaX0rs, or even the script kiddies, discover all those logistics and supply management systems exposed on the internet, there will be Trouble.

      Being somewhat paranoid over a Credit Event and from cutting down on meat eating, I have a storage of dry food-stuff, beans, rice, lentils, kush-kush, peas, tomatoes … the house has a wood furnace for extra heating (I don’t use it, normally, but it is serviced and ready to go), several hiking stoves with fuel – because I really like hiking – sleeping bags, warm clothes, water I can get from the local creek. Tent, If I need to go into hiding. I probably need a solar cell though, for feeding the IT-junk. Maybe store some cash too.

      Wife and I could probably make it for about a month or so without assistance. My adult children would be in trouble.

      Reply
  3. EoH

    The scope for abusing transfer pricing – and thus avoiding even more tax – in this new, digitized supply chain seems even better than the wide scope that prevails now.

    Reply
  4. PlutoniumKun

    (As a parenthetical, note “professional services” in the lower left quadrant; clearly, TiSA is aimed squarely at the guilds and rents of our friends in the 10%, even if they don’t know it yet.)

    This is surely the weak link for implementing TiSA. The potential impact on groups such as civil servants and lawyers is obvious, and both professions are in a very strong position to make life very difficult for politicians looking to implement this.

    Reply
    1. Jeremy Grimm

      I wonder whether the “professional services” might also apply to medical doctors and dentists. Their unions seem most like Medieval guilds.

      Reply
  5. Jeremy Grimm

    Humans may give flesh to the entities pressing for TiSA and pulling levers to build a new world “order” but we must never forget those entities are inhuman. [They] “… can’t be bargained with. [They] can’t be reasoned with. [They don’t] feel pity, or remorse, or fear. And [they] absolutely will not stop, ever …”. The TPP thrust met too many obstacles but tosses off it’s sunglasses and says “I’ll be back.” And it will come back in a different vehicle.

    Neoliberalism is an ongoing project of decades. TPP and TiSA are just two among many neoliberal projects driven by the undying will of inhuman forces of Evil and Destruction. [I started thinking of Corporations and their Cartels and Associations and the Neoliberal Thought Collectives and their “think” tanks and foundations as arms of the Kraken risen from the depths to destroy humankind. It entertains me to view the tireless dismantling of our planet and civilization through a haze of Sci-Fi chic — and an allusion to Tennyson.]

    The entities who pushed for TPP and now push for TiSA have a long attention span, deep deep pockets, and control the actions of hundreds of thousands of fungible human actors. I don’t believe it’s impossible to end their drive … I fear for the human costs we are being driven toward to stop them.

    Time to move to higher elevation and a smaller tighter community — grow wings like the swallow and learn to fly.

    Reply
    1. flora


      It never ceases to amaze how many economic and social models of human behavior are based, not in history, but rather on simplistically convenient constructs and myths that serve the status quo and the power of Big Money.

      A better model perhaps is to think that freedom and truth are always under threat by those who value neither more than their own obsessive lust for power and money, beyond all reason. That last is important to remember because the current liberal impulse is to simply blame bad information for some of the most outrageous abuses of power and privilege. “ -Jesse

      http://jessescrossroadscafe.blogspot.com/2017/07/the-continuing-threat-to-freedom-and.html

      Reply
      1. Jeremy Grimm

        I’m not quite sure how to understand your comment. Jesse’s post echo’s Benjamin Franklin’s warning I saw repeated a couple days ago here at NC:
        “Well, Doctor, what have we got—a Republic or a Monarchy?”
        “A Republic, if you can keep it.”

        The Kraken I invoke may be the same Kraken Tennyson wrote about or — what I think is more likely — an offspring of Tennyson’s Kraken. I believe the Neoliberal Project is different in kind and different in scale from anything known to the past. I also believe the greed embodied in our Corporate persons is a greed and lust for power beyond that of any merely human individual.

        Reply
        1. flora

          I was responding to this line:
          “Neoliberalism is an ongoing project of decades. TPP and TiSA are just two among many neoliberal projects driven by the undying will of inhuman forces of Evil and Destruction. ”

          I my response was an attempt to amplify part of your original comment. Yes, it does echo Franklin. The Kraken is/are unfamiliar to me.

          Reply
          1. Jeremy Grimm

            I don’t remember where — but I recall reading a speculation that Roosevelt exploited the leverage he had as a result of the 1934 Coup attempt to get legislation he wanted passed — including social security.

            Reply
    2. Winston Smith

      Sometimes you hope that a well positioned asteroid will come hurtling at Earth and smash into some place like mmmm New York City, Washington DC, or hell right smack into the Atlantic ocean and well the rest is left as an exercise to the reader, and maybe, just maybe THAT will stop these entities and their lackeys.

      Reply
      1. Ian

        Where the grand Bilderberg gathering happens to be taking place. I think a good vacuum like that could potentially be leveraged. Outside of that i see little hope of avoiding a dystopian nightmare.

        Reply
      2. fajensen

        Gnawer, Saudi Arabia. Our Engine of Destruction and Mass Murder still runs on Oil, via the USD, of course on margin and leveraged about 100x the underlying assets.

        One good kick right in the physical supply lines will wipe out most of the DNC-donors during the first 100 milliseconds of robotic “Market Adjustments” … their team-mates on the other side will go too.

        Reply
  6. Ignacio

    The TiSA is intended to lock in a system of rules to allow multinational companies to operate in a borderless digitized environment with minimal regulation and maximum rights regarding the treatment of labor, capital, inputs, and the new key element of data

    I think this should be expanded and explained in detail

    Reply
  7. Ox

    Deborah James is the author.

    The sheer magnitude of the changes coming from services liberalisation are terrifying.

    (Not just TiSA also the two WTO agreements, which now include procurement of all services for governments, and the newly proposed TFS – with its potential to force health insurance into an international market – a shift which would require subsidized patients to go offshore if the WTO deems it consistent with the GATS and the US restriction in its schedule, not, which it most certainly will do, a WTO official, Rudolph Adlung has already said hat is the interpretation- push skilled professional wages down to Third World levels) Also, the 1998 Understanding on Commitments in Financial Services rollback of the ACA and Dodd Frank is being done to make those service sectors more attractive to foreign investors, especially banks who see huge potential profits as suddenly jobless Americans lose their homes in large numbers. the trade agreements are all about making sure that nothing can be done to stop the feeding frenzy at the ballot box.

    TiSA may even be a diversion, like TPP was, from the real action in Geneva.

    A recent Harvard replication study of Alan Blinder’s work several years earlier found that 41% – that’s not a typo, 41% of our jobs are easily “offshorable”.

    That’s the whole point of TiSA (and GAT S and newer GPA before it). Also the procueent portions in TTI PTo do that.

    The (Doha Development Agenda or Doha Round) negotiations over this market access issue repeatedly stalled. (So now they are pushing for the original Uruguay Round terms – which were more generous on market access..)

    Poor countries wanted more from the US particularly in the way of market access commitments, while the US and EU wanted more rapid privatization and globalization of global services so the online sales part of the agenda moves forward-

    (This is why public health care in the US was never on the table, it would be a 180 degree reversal for the US- this shows how diverced from reality the American people now are wih our captured news media feeding them disinformation about whats going on in the rest of the world, especially our part in it)

    An agenda which also hopes to also make the world ready for cashless, really a dangerous thing to be doing just as he worlds jobs are about to vanish. (Automation may decimate an additional 40% of our jobs in the next decade, that’s a total of 81% of all the worlds jobs!)

    Keep an eye on India – Worlds most populous country and they are the second largest English speaking country after the US.

    They have even set up a Center for WTO Studies, they are determined to make the WTO system work for them. In return they have likely agreed to play the heavy (along with the WTO) in the pushing down of the US worker.

    A decision on its March 2016 WTO suit against US visa quotas for intra-corporate workers in body shops is due. My gut feeling is the US will turn out to have lost. That would explain the new Trump immigration agenda, a desire to transform immigration into a tool of corporate off-shoring.

    Offshoring poor patients is certain to go over big with Republicans as it will also force many sick people to voluntarily leave the workforce.

    Also, it keeps prices for maternity care here high and out of the reach of young women, keeping a very profitable and very coercive adoption facilitation industry going.

    All in all, TiSA, TFS, GATS etc, are means of keeping dictatorships in power, by giving them sources of patronage jobs.

    Public health care and education are just too darn efficient, old boy.

    Reply

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