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Commentary :: Globalization
TISA: Everything Will Be Marketed
09 Sep 2014
A new agreement (TISA, Trade in Services Agreement) could privatize drinking water and health care through the backdoor. The resistance by many non-governmental organizations to the free trade agreement TTIP seems to pick up speed.
TISA: EVERYTHING WILL BE MARKETED


A new agreement could privatize drinking water and health care through the backdoor


By Christoph Jehle


[This article published on 7/1/2014 is translated from the German on the Internet, http://www.heise.de/tp/druck/mb/artikel/42/42131/1.html.]


It is a year since the privatization of the drinking water supply planned in the EU service agreement roused people in Germany. The EU Commission let the matter fall amazingly quickly.


That the theme drinking water privatization was long on the negotiation table as TISA (Trade in Services Agreement) must have been known to the decision-makers in Brussels and the EU member states at that time. However TISA was not yet recognized in the public.


According to the freely accessible information of the Swiss state secretariat for the economy SECO [1], several WTO members, the so-called RGF group (Really Good Friends of Service) met regularly in Geneva since February 2012 under the joint chairmanship of the US and Australia. The meetings did not take place in the auspices of the World Trade Organization (WTO) [2] since the planned agreement on Trade with Services was consciously negotiated outside the WTO.


The following states and groups of states participated in the negotiations: Australia, Chile, Costa Rica, the EU (for 28 member states), Hong Kong, Iceland, Israel, Japan, Canada, Columbia, Korea, Lichtenstein, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, Switzerland, Taiwan, Turkey and the US – 50 countries altogether. The BRICS states [3] that only expect disadvantages from the agreement did not participate.


The goal of the TISA initiators is an agreement that enables businesses from the service area to become active in any country that has signed the agreement. The negotiations on TISA are occurring largely under exclusion of the public as with the free trade agreement TTIP (Transatlantic Trade and Investment Partnership) now followed intensely. TISA with encroach much more extensively in the daily lives of citizens than a free trade agreement.


Worldwide there are 3000 free trade agreements today. Mammoth corporations with enough personnel to satisfy the obligations from the respective free trade agreements mostly profit from these agreements. On the other hand, small businesses are usually hopelessly overstrained with the prescribed verification obligations for the origin of every component and must abandon trade with target countries with whom a free trade agreement exists. That few complaints reach the public has its reason in that these businesses usually have neither the time nor the money to complain publically.


We now live today in a service society marked by communication, financial services, energy and drinking water supply and decontamination. All logistic- and postal services are included along with the whole realm of subcontracted labor. 75% of employment in the European domestic market is in the area of services.


Sovereign functions like police, justice, defense and the penal system that cannot be provided on a commercial basis or in competition will be excluded from the two agreements TTIP and TISA, it is now assumed. However this is not true for all other areas of so-called vital public necessities. Practically all services in the areas of health care and education come under privatization pressure, not only the drinking water supply furnished by communal businesses.


A complete re-communalization prohibition exists in the praxis of enacted privatization with the Ratchet-clause in the drafts of the agreement. With the planned standstill clause, new services will be subject to private competition and no longer provided by enterprises of public authority. By the way the advantages of international arbitration courts will only exist in the future for future investors. The effects can be clearly recognized in connection with the German nuclear exit. While German corporations are subject to German courts, Vattenfall is taking legal action against the Federal Republic of Germany through an arbitration court of the World Bank in Washington.


In the area of education, many institutions are already transported today into private control. Church providers are involved as so-called trend-enterprises enjoying special gifts of the legislators. We can only speculate whether the economic advantages of trend enterprises must also be offered international investors in the German educational enterprise. Privatization of the school system is not always marked by success as the example of Sweden shows.


More and more private businesses will also appear in the realm of the public health system. The competition will be carried out intensively on the backs of employees since investors should be able to offer their services in any state with their own personnel who are then also subject to the regulations of the country of origin. That opposes opening the whole rescue system including the fire department to free enterprise competition.


Nevertheless the bank system in Germany is up for disposition again with TISA. The national, farmer cooperative banks and the savings banks do not fit in the spoils-schema of the international financial conglomerates in their present form. Both bank groups expect that a statement of the EU Commission that public services may not be forcibly liberalized or privatized will have authority even for the secret negotiations in the TTIP and TISA.


Whether smaller savings banks can still stand their ground after the signing of TISA may be doubted. In the global market, these locally rooted businesses have a hard time and frighten their customers with fee ideas that can hardly be understood. Some fees for the same service fluctuate around a factor of 30. These institutes can hardly expect much support against the guidelines lying in wait for savings banks in the TISA connection. For bank customers, it will be harder to learn whether their bank is subject to a local regulation, what happens with their money and whether their loans may be resold and cancelled at any time.


If the results of the TISA negotiations that are presently circulating will first be published five years after the signing of the agreement, the framing conditions for life together in Germany will thoroughly change to a largely unregulated market without the voters being able to democratically control this.


LINKS


[1]
http://www.seco.admin.ch/themen/00513/00586/04996/index.html?lang=de
[2]
http://www.wto.org
[3]
http://de.wikipedia.org/wiki/BRICS-Staaten


TTIP – GROWTH STUDIES: NEOLIBERAL HOLOGRAPHY

A critical analysis of the prognoses as to economic growth and increased jobs that should supposedly arise through the increased transatlantic competition because of the free trade agreement (TTIP)

By Jascha Jaworski

[These excerpts of an article published 1/19/2014 are translated from the German on the Internet, http://www.heise.de/tp/druck/mb/artikel/40/40780/1.html.]

The resistance by many non-governmental organizations [1] on both sides of the Atlantic concerning the free trade agreement (TTIP) being negotiated between the main actors EU and the US seems to pick up speed. Unions [2] are also clearly positioning themselves against many dangerous elements of the planned free trade agreement.

TTIP AS A DANGER FOR CIVIL SOCIETIES

I will not repeat here the disastrous elements in the agreement that have reached the public despite the secret negotiations. Whoever needs to catch up here is referred to other sources [3]. The negotiation process based on long wish lists [4] and extensive meetings [5] with many business associations and corporations in which the civil society is given almost no hearing shows what neoliberal spirit is inherent to the whole enterprise.

The negotiation themes extend from adjustment of environmental-, labor-, consumer protection- and social standards on the basis of the lowest common denominator in favor of purely commercial interests to the corporate rights to sue desired by the EU and US leadership. These corporate rights to sue set the perfidious idea of a profit guarantee for investors above the democratic organization of the community. A conversion of the wish lists of big business [6] involving countless standards and protective regulations – merely “non-tariff trade barriers” in the logic of free trade defenders – in nearly all areas and the additional competitive pressure sought after by the agreement could trigger the next neoliberal shock for the civil society.

THE COVER STORY FOR THE POPULATIONS

The prognoses for the free trade agreement point to economic growth and increased employment that should arise through the increased transatlantic competition. Somehow the population must be sold the novel liberalization efforts.

In the civil society, it is happily not enough to simply refer to the freedoms of an enlarged market to produce storms of enthusiasm. A striking (and explicit) market fetish [12] is still in the heads of the elite or those who want to be in the elite. On the other hand, a justification with more everyday concreteness is necessary for the population. This is also possible – thanks to the dominant economic discipline.

One danger for forces of resistance against the undemocratic free trade agreement is that some credibility is granted to the salvation expectations in the growth impulses although the economic mainstream cannot predict the growth of next year without being systematically wrong.

It would be regrettable if – modest – promises of growth and jobs by TTIP proponents led populations to swallow unpleasant pills without much resistance. Unfortunately a well-known model is that a neoliberal “solution” follows a neoliberal problem that paves the way for the next problems. The economic recession fueled by austerity policy could be seen as a problem that calls for a supposed mitigation by a free trade agreement.

PROGNOSES IN THE PSEUDO-WORLD

Firstly, I will briefly discuss the predictions on the economic effects of the conversion of the free trade agreement. A “warning” is necessary since the presentation of numbers can radiate a special reality character. We now leave the world of the (directly) observable and empirically justified and enter the model world of the economic mainstream that for several decades has been largely based on so-called neo-classicism with its claim to the total mathematization of the social world [3]…

Whoever looks at the economic “studies” that estimated the effects of the planned free trade agreement will seem curiously unrealistic or out of touch (and negligent). That is the thought-world of certain elites. The study “Reducing Transatlantic Barriers to Trade and Investment” [7] in the mandate of the EU Commission by the Center for Economic Policy Research (CEPR) and the IFO Institute “Dimensions and Effects of a Free Trade Agreement between the EU and the US [8] commissioned by the Federal German government will be our focus.

Both studies consider the effects of different comprehensive scenarios of a possible free trade agreement according to whether the trifling tariffs are further reduced between the US and the EU [4] or whether a marked reduction of non-tariff trade barriers occurs [5].

Regarding real income in the EU, the CEPR study predicts an increase of 99 Euros for a four-person household in 2027 when a trade agreement is signed that almost completely removes the tariffs (09% reduction)… Here the authors forecast an increase of real income of a four-person household in the EU of 545 Euros for 2027. [6]…The average real wage according to the authors would be 1.6% higher than 2007…

THE ADVENTUROUS MODELS OF THE ELITES

What should we think of these numbers? How are they compiled? The answer sounds crude: models, models and models! The core of the studies is the application of so-called general balance models that replicate the economy of the whole globe from the micro-plane upwards. The main point of the studies is that thanks to model assumptions the general prosperity would be promoted by dismantling tariffs and non-tariff trade barriers to more competition and a re-channeling of trade streams…

The “gravitation model” [10} should be given respect by the gullible reader since its name triggers the association to exact physics. The dominant economy understands itself as social physics even if it makes a fool of itself since it misses the goal of natural science through a hollow imitated mathematization, namely to make viable causal statements about the observable world. [11] Designing non-transparent complex models to gain the necessary respect to justify political intentions announcing disaster.

THE WORLD ECONOMY AS AN EQUATION SYSTEM

The out-of-the-hat magic of the great ones occurring in a mysterious way and reflecting the non-tariff trade barriers in the form of costs appears in the CGE model (balance model) to ultimately model the changes of the world economy through the trade agreement.

The applied model is set up from the madness of its assumptions that it leaves one speechless. On the production side, modeling the businesses of all sectors and their connections is attempted in a halfway plausible way… However the side of private households is represented by a single “representative” private household in the model. Inequality on the household side is completely excluded from the model right from the start and communism is assumed!!!

According to the model, there is nothing but the four-person household. The model knows nothing of the real economy’s structural inequality on all planes. Naming the procedure as deception would be a loving understatement…

TIME IS IRRELEVANT

…In the model world of free trade defenders, economic upheavals are only a circumstance where variables in equations take on new values… People are seduced with false promises. It almost seems the actual economic processes are not interesting.

Economic processes as processes in time are ultimately not elements of models… That a deflationary push is assumed in the free trade agreement does not seem to irritate the authors. The world is in order as long as the model equations exist and are not dissolved.

NAFTA AS MEMORIAL

What value are prognoses based on completely unrealistic assumptions? The neoliberal high priest Milton Friedman could have said to criticism that his assumptions were mad: Yes, that is true. So it is in physics. Physics continuously tests the appropriateness of its assumptions by deriving predictions from them comparable with the observable world. What is the authority of economic assumptions in the area of free trade agreements?

A study [18] of the University of Minnesota should be referenced here… The models for NAFTA provided systematically false conclusions as to changes of export and import for the US, Canada and Mexico. [19]

A growth push was also predicted for Mexico at that time on account of the free trade agreement. Whoever looks at the numbers now sees that the growth declined since introduction of NAFTA while unemployment rose. Since then the agricu9ltural sector has suffered especially under cheap US imports and many farmers lost the foundation of their existence.

If TTIP actually takes effect, the promises of growth and jobs will not be remembered any more. Amnesia in relation to the political is great and the double doors for the crystal ball forecasters are wide open. Thus we reject employment promises on account of incredible models simply for what they are: neoliberal holography in the pay of Big Business.

FOOTNOTES
1)
Um eine kleine Stichprobe zu geben: Abbau des Datenschutzes ("unnecessary restrictions on dataflows"), straffe Verschärfung des Urheberrechts (ACTA lässt grüßen), Zulassung von wachstumshormon-behandeltem Fleisch in der EU, Beseitigung der Kennzeichnungspflicht für genetisch veränderte Lebensmittel, Abbau der Sicherheitsvorschriften bei der Verwendung von Chemikalien (z.B. REACH-Verordnung) oder allumfassende Deregulierungen, der bisher immerhin spärlich erfolgten Reregulierungen im Finanzsektor (siehe z.B. weed Infoblatt[1], Dezember 2013)
2)
wenn häufig auch nur als Mittel zum verschwiegenen Zweck
3)
Siehe hierzu etwa Claus-Peter Ortlieb, Markt-Märchen. Zur Kritik der neoklassischen akademischen Volkswirtschaftslehre und ihres Gebrauchs mathematischer Modelle[1], 2004
4)
Diese betragen in beiden Richtungen des Atlantiks im Industriesektor gemäß ifo-Studie durchschnittlich nur noch 2,8%.
5)
Also jener Standards und unterschiedlichen Gepflogenheiten, die aus Sicht großer Unternehmensverbände und Konzerne ebenso wie Zölle Handelshemmnisse darstellen.
6)
Siehe CEPR-Studie, S. 48
7)
Siehe ifo-Studie, S.100.
8)
Siehe Ecorys, Non-Tariff Measures in EU-US Trade and Investment - An Economic Analysis[1], 2009.
9)
Wortlaut in der Ecory-Studie: "Question A12a. Consider exporting to the US (EU), keeping in mind your domestic market. If 0 represents a completely ‘free trade’ environment, and 100 represents an entirely closed market due to NTMs, what value between 0 - 100 would you use to describe the overall level of restrictiveness of the US (EU) market to your export product (service) in this sector?"
10)
Hierbei handelt es sich um eine Art Analogiegleichungen in Anlehnung an das Newton’sche Gravitationsgesetz, nur dass die Massen durch das BIP der Handelspartner und die Distanzen durch die Distanzen ihrer Hauptstädte ersetzt wurden, um keine Kräfte, sondern Handelsströme zu modellieren. Das Vorgehen sieht dann so aus, dass die Gleichung logarithmiert wird, um ein additives Gebilde zu erhalten, das man dann einer Regressionsanalyse unterziehen kann, um mit besagten Variablen die Exportströme zwischen Ländern "vorherzusagen". Dieses Modell existiert heute in um weitere Variablen erweiterter Form (z.B. gemeinsame Grenze ja/nein). Eine der weiteren Variablen bezieht hierbei endlich auch die Umfragewerte der nicht-tarifären Handelshemmnisse ein. Dies soll offenbar ermöglichen, sie endgültig in eine Art Zolläquivalente umzurechnen. Inwiefern dies gelingt, wie "aussagekräftig" dies also möglich ist, war der Studie leider nicht zu entnehmen, vielleicht aus guten Gründen? Ergo: Viel Mathematik um nichts.
11)
Was die Mainstreamökonomie wie etwa Finanzmarktkrise, Multiplikatorstreit, Konjunkturprognosen etc. zeigen, ja gerade nicht kann.
12)
i.S. zwar nicht aufgehobenen, jedoch komplett gleichen Eigentums an Produktionsmitteln.
13)
Siehe CEPR-Studie, S. 112.
14)
So etwa "Nutzenmaximierung" der Haushalte (pardon, des Haushalts) und "Kostenminimierung" der Unternehmen.
15)
i.S. der neuen Lösung für das Gleichungssystem.
16)
Siehe ifo-Studie, S.97
17)
ebd. S. 69
18)
Kehoe, An Evaluation of the Performance of Applied General Equilibrium Models of the Impact of NAFTA[1], 2003.
19)
Siehe Kehoe (2003), S. 38.
Links
[1]
http://www.ttip-unfairhandelbar.de/start/wer-wir-sind/
[1]
http://UmeinekleineStichprobezugeben:AbbaudesDatenschutzes("unnecessaryrestrictionsondataflows"),straffeVerschärfungdesUrheberrechts(ACTAlässtgrüßen),Zulassungvonwachstumshormon-behandeltemFleischinderEU,BeseitigungderKennzeichnungspflichtfürgenetischveränderteLebensmittel,AbbauderSicherheitsvorschriftenbeiderVerwendungvonChemikalien(z.B.REACH-Verordnung)oderallumfassendeDeregulierungen,derbisherimmerhinspärlicherfolgtenReregulierungenimFinanzsektor(siehez.B.weedInfoblattDezember2013)
[1]
http://SiehehierzuetwaClaus-PeterOrtlieb,Markt-Mrchen.ZurKritikderneoklassischenakademischenVolkswirtschaftslehreundihresGebrauchsmathematischerModelle,2004
[1]
http://trade.ec.europa.eu/doclib/docs/2009/december/tradoc_145613.pdf
[1]
http://www.econ.umn.edu/~tkehoe/papers/NAFTAevaluation.pdf
[2]
http://wipo.verdi.de/wirtschaftspolitische_informationen/data/Informatio
[3]
http://www.annotazioni.de/post/1268
[4]
http://ec.europa.eu/enterprise/policies/international/cooperating-govern
[5]
http://corporateeurope.org/trade/2013/09/european-commission-preparing-e
[6]
http://ec.europa.eu/enterprise/policies/international/cooperating-govern
[7]
http://trade.ec.europa.eu/doclib/docs/2013/march/tradoc_150737.pdf
[8]
http://www.bmwi.de/BMWi/Redaktion/PDF/Publikationen/Studien/dimensionen-
[9]
http://www.maskenfall.de/

RELATED LINKS:

TTIP Endangers Democracy
http://portland.indymedia.org/en/2014/09/428028.shtml

www.citizen.org
See also:
http://www.freembtranslations.net
http://www.alternativetrademandate.org
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