Don Quijones: Uruguay Does Unthinkable, Rejects TISA and Global Corporatocracy

Lambert here: A little good news on the trade front, and a victory for open discussion and critical thinking.

By Don Quijones, Spain & Mexico, editor at Wolf Street. Originally published at Wolf Street.

Often referred to as the Switzerland of South America, Uruguay is long accustomed to doing things its own way. It was the first nation in Latin America to establish a welfare state. It also has an unusually large middle class for the region and unlike its giant neighbors to the north and west, Brazil and Argentina, is largely free of serious income inequality.

Two years ago, during José Mujica’s presidency, Uruguay became the first nation to legalize marijuana in Latin America, a continent that is being ripped apart by drug trafficking and its associated violence and corruption of state institutions.

Now Uruguay has done something that no other semi-aligned nation on this planet has dared to do: it has rejected the advances of the global corporatocracy.

The Treaty That Must Not Be Named

Earlier this month Uruguay’s government decided to end its participation in the secret negotiations of the Trade in Services Agreement (TISA). After months of intense pressure led by unions and other grassroots movements that culminated in a national general strike on the issue – the first of its kind around the globe – the Uruguayan President Tabare Vazquez bowed to public opinion and left the US-led trade agreement.

Despite – or more likely because of – its symbolic importance, Uruguay’s historic decision has been met by a wall of silence. Beyond the country’s borders, mainstream media has refused to cover the story.

This is hardly a surprise given that the global public is not supposed to even know about TiSA’s existence, despite – or again because of – the fact that it’s arguably the most important of the new generation of global trade agreements. According to WikiLeaks, it “is the largest component of the United States’ strategic ‘trade’ treaty triumvirate,” which also includes the Trans Pacific Partnership (TPP) and the TransAtlantic Trade and Investment Pact (TTIP).

TiSA involves more countries than TTIP and TPP combined: The United States and all 28 members of the European Union, Australia, Canada, Chile, Colombia, Costa Rica, Hong Kong, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, South Korea, Switzerland, Taiwan and Turkey.

Together, these 52 nations form the charmingly named “Really Good Friends of Services” group, which represents almost 70% of all trade in services worldwide. Until its government’s recent u-turn Uruguay was supposed to be the 53rd Good Friend of Services.

TiSA Trailer

TiSA has spent the last two years taking shape behind the hermetically sealed doors of highly secure locations around the world. According to the agreement’s provisional text, the document is supposed to remain confidential and concealed from public view for at least five years after being signed. Even the World Trade Organization has been sidelined from negotiations.

But thanks to whistle blowing sites like WikiLeaks, the Associated Whistleblowing Press and Filtrala, crucial details have seeped to the surface. Here’s a brief outline of what is known to date (for more specifics click here, here and here):

1.TiSA would “lock in” the privatization of services – even in cases where private service delivery has failed – meaning governments can never return water, energy, health, education or other services to public hands.

2.TiSA would restrict signatory governments’ right to regulate stronger standards in the public’s interest. For example, it will affect environmental regulations, licensing of health facilities and laboratories, waste disposal centres, power plants, school and university accreditation and broadcast licenses.

3.TiSA would limit the ability of governments to regulate the financial services industry, at a time when the global economy is still struggling to recover from a crisis caused primarily by financial deregulation. More specifically, if signed the trade agreement would:

• Restrict the ability of governments to place limits on the trading of derivative contracts — the largely unregulated weapons of mass financial destruction that helped trigger the 2007-08 Global Financial Crisis.
• Bar new financial regulations that do not conform to deregulatory rules. Signatory governments will essentially agree not to apply new financial policy measures which in any way contradict the agreement’s emphasis on deregulatory measures.
• Prohibit national governments from using capital controls to prevent or mitigate financial crises. The leaked texts prohibit restrictions on financial inflows – used to prevent rapid currency appreciation, asset bubbles and other macroeconomic problems – and financial outflows, used to prevent sudden capital flight in times of crisis.
• Require acceptance of financial products not yet invented. Despite the pivotal role that new, complex financial products played in the Financial Crisis, TISA would require governments to allow all new financial products and services, including ones not yet invented, to be sold within their territories.

4. TiSA would ban any restrictions on cross-border information flows and localization requirements for ICT service providers. A provision proposed by US negotiators would rule out any conditions for the transfer of personal data to third countries that are currently in place in EU data protection law. In other words, multinational corporations will have carte blanche to pry into just about every facet of the working and personal lives of the inhabitants of roughly a quarter of the world’s 200-or-so nations.

As I wrote in LEAKED: Secret Negotiations to Let Big Brother Go Global, if TiSA is signed in its current form – and we will not know exactly what that form is until at least five years down the line – our personal data will be freely bought and sold on the open market place without our knowledge; companies and governments will be able to store it for as long as they desire and use it for just about any purpose.

5) Finally, TiSA, together with its sister treaties TPP and TTIP, would establish a new global enclosure system, one that seeks to impose on all 52 signatory governments a rigid framework of international corporate law designed to exclusively protect the interests of corporations, relieving them of financial risk and social and environmental responsibility. In short, it would hammer the final nail in the already bedraggled coffin of national sovereignty.

A Dangerous Precedent

Given its small size (population: 3.4 million) and limited geopolitical or geo-economic clout, Uruguay’s withdrawal from TiSA is unlikely to upset the treaty’s advancement. The governments of the major trading nations will continue their talks behind closed doors and away from the prying eyes of the people they are supposed to represent. The U.S. Congress has already agreed to grant the Obama administration fast-track approval on trade agreements like TiSA while the European Commission can be expected to do whatever the corporatocracy demands.

However, as the technology writer Glyn Moody notes, Uruguay’s defection – like the people of Iceland’s refusal to assume all the debts of its rogue banks – possesses a tremendous symbolic importance:

It says that, yes, it is possible to withdraw from global negotiations, and that the apparently irreversible trade deal ratchet can actually be turned back. It sets an important precedent that other nations with growing doubts about TISA – or perhaps TPP – can look to and maybe even follow.

Naturally, the representatives of Uruguay’s largest corporations would agree to disagree. The government’s move was one of its biggest mistakes of recent years, according to Gabriel Oddone, an analyst with the financial consultancy firm CPA Ferrere. It was based on a “superficial discussion of the treaty’s implications.”

What Oddone conveniently fails to mention is that Uruguay is the only nation on the planet that has had any kind of public discussion, superficial or not, about TiSA and its potentially game-changing implications. Perhaps it’s time that changed. By Don Quijones, Raging Bull-Shit.

The timing could not have been worse. Read… Is Brazil About to Drag Down Spain’s Biggest Bank?