Really Good Friends Like These

Glen Newey

‘People of the same trade seldom meet together,’ Adam Smith said, ‘but the conversation ends in a conspiracy against the public.’ Smith was wiser to the wheezes of the marketplace than many of his latterday disciples. But even he might have found it hard to credit that democratic governments could conspire to bind themselves to accepting private supply of essential services.

In the way of conspiracies, details of the Trade in Services Agreement were meant to be kept hush-hush. Wikileaks exposed it last June, though its existence was already known to NGOs like Public Services International. A secrecy clause requires that details of the accords not be published until five years after the ink dries. TISA, whose fifth round met in Geneva in September, encompasses the US, EU and most other G20 states, who style themselves the ‘Really Good Friends of Services’. Unlike the better-known Transatlantic Trade and Investment Partnership, TISA only concerns services, of which the Good Friends account for 68 per cent globally; services in turn account for 70 per cent of global GDP. TISA aims to replace the current General Agreement on Trade in Services. The BRICS nations, who oppose cutting deals outside the WTO, are not included, which may sap their leverage in future negotiations with the 23-strong TISA bloc (the EU counts as one).

Much of the political pressure behind TISA comes from hard-right politicians impatient with the pace of liberalisation in the WTO’s Doha Round. As Roberto Bendini of the EU’s Directorate-General put it in an extraordinary gaff-blowing statement last year, the WTO talks stalled because some countries remain

uncommitted and unbound in their schedules of services liberalisation. In general, trade in services has not been liberalised to the same extent as trade in goods, for both political and technical reasons.

In other words, because some sovereign states opposed getting locked into liberalisation at the WTO, the EU and others decided to start a new game under different rules. At TISA, the EU negotiates for its 28 members under Lisbon Treaty powers; even the EU Parliament’s Rapporteur, Viviane Reding MEP, remarked recently that TISA began with no integration of the Parliament and ‘no transparency at all’.

Pressure for politics-bypass liberalisation also comes from the Coalition of Services Industries, a US lobbying group, which includes 21st Century Fox, AT&T, Google, IBM, Microsoft, Oracle, Prudential, UPS, Verizon and Walmart, not to mention the bailout behemoths AIG, JP Morgan and Citigroup. Accordingly, TISA covers telecoms, water, gas, electricity, transport, financial and legal services, software design, tourism, healthcare and much more. Under TISA’s ‘standstill’ and ‘ratchet’ clauses, the marketisation of services is a one-way street. Countries whose governments privatise public services won’t be able to turn back, even if later mandated to do so by their electors. Any neoliberal government bent on privatising services would leave its successors no longer ‘unbound’ on renationalisation.

Further TISA leaks this month by Associated Whistleblowing Press expose a secret submission to last September’s sessions from Turkey’s delegation, which noted that ‘mainly because the health care services is funded and provided by state or welfare organizations’ it ‘is of virtually no interest for foreign competitors due to the lack of market-oriented scope for activity’. It proposed that insurance mandates be deregulated to encourage patient tourism, on the grounds that in healthcare, ‘quality factors are in eclipse’.

Reding, a Christian Democrat, set out ‘red lines’ that TISA cannot cross if the treaty is to avoid veto by the European Parliament. How this squares with the five-year moratorium on publicising the agreement is anyone’s guess. The Parliament’s international trade committee has been meeting this week to discuss matters.


  • 25 February 2015 at 3:26pm
    Walton Pantland says:
    PSI isn't an NGO, it's a global union:

  • 26 February 2015 at 3:39pm
    kadinsky says:
    In today's post-democratic world, the key economic decisions affecting all our lives are being taken and implemented in secret. TISA is post-democracy in its purest form. It prohibits any further regulation of financial services, despite the whole world knowing that the events of 2007-08 resulted from a lack of regulation. The TISA agreement is one of global historic importance, but so far as our media is concerned it never happened. Glen does us a great service in attempting to force the issue out into the open, but I fear we'll be waiting a long time before James Harding puts it or TTIP at the top of the BBC's news agenda.