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A Top-Secret Agreement to Carve Up Public Services

The US, EU countries, and a score of other States have begun negotiations on trade in services in Geneva. Distinguishing mark: these dealings are to remain secret for five years. WikiLeaks has succeeded in lifting the veil a bit on this mystery.

Delegates arriving for the first day of the World Trade Organization Ministerial Conference in Geneva, December 15, 2011. (Photo: US Mission / Eric Bridiers)

Delegates arriving for the first day of the World Trade Organization Ministerial Conference in Geneva, December 15, 2011. (Photo:<a href= Photo US Mission by Eric Bridiers / Flickr)” width=”400″ height=”271″ />Delegates arriving for the first day of the World Trade Organization Ministerial Conference in Geneva, December 15, 2011. (Photo: US Mission / Eric Bridiers)It was all to be done on the sly. Nothing was to seep out concerning the negotiations on the General Agreement on Trade in Services that started two years ago in Geneva between the US, the EU and a score of other countries – a vast plan for the liberalization of even basic public services. Measures have been taken to ensure absolute secrecy during the negotiations, in a language that has the distinct flavor of a James Bond screenplay. The texts stating the progress of the talks have been “classified”, to use the jargon generally to be found in official secret files. They must be “protected from unauthorized disclosure” and stored in an equally classified computer system kept “in a closed building or container” under strict surveillance. The stated objective is that nothing should escape from the contents of the negotiations during the five years following the conclusion of an agreement or the end of the negotiations – should no agreement be reached.

That was a clear under-estimation of the WikiLeaks whistleblowers’ dexterity – for these have succeeded in opening some of the locked-up files. And on June 19th they published on their site an annex to the treaty under negotiation that deals with financial services. These revelations throw light upon the massive scale of the offensive launched by Washington, followed by the EU member States, in order to make it possible for multi-national companies eventually to monopolize the trade in financial products and also the trade in all services on the great trans-Atlantic, trans-Pacific markets – for which negotiations are, as we know, moving apace in the utmost secrecy.

With a View to By-Passing Popular Resistance and Opposition to WTO

The secret talks to reach an agreement on trade in services started in 2012 and their initiators are set upon doing their utmost to clinch a deal by late 2015. These secret talks were meant to by-pass the obstacle of the resistance of progressive forces, social movements, trade-unions and of several developing countries to the conclusion of such a general agreement on trade in services within the WTO. Faced with the paralysis of the multi-lateral process launched in 2001 within the cadre of the WTO’s so-called Doha cycle, and egged on by the US and some EU States, a group of countries decided to start a parallel negotiation two years ago.

To put it bluntly, after being democratically voted down and evicted through the door, the General Agreement on Trade in Services is pushed back in through the window by a coalition of fifty governments. These self-proclaimed negotiators hope they can define in a multi-lateral cadre norms that after a time will be imposed as the sole international reference. They obviously reckon their economic leverage (they represent nearly 70% of the world trade) will eventually rally the refractory WTO countries that have been kept away from the negotiating table. Simply, the location for the dealings has been transferred from the WTO seat to the Australian Embassy, a few streets away in Geneva – Australia being opportunely a 100% supporter of liberalization.

The group draws on the theories of the “experts” of the Global Services Coalition which includes, on the US side, the giant companies of banking, the internet, energy, and, on the European side, the French Employers’ Confederation or the French Juggernaut Veolia (…). The document disclosed by WikiLeaks, which is the account of the negotiation on April 14th last, throws light on the extraordinary pressure that is being put on to have trade in financial products taken for granted, considered as normal practice – as though the causes of the devastating crash that took place only seven years ago had sunk into oblivion.

Financial Trading: Wild Frenzy Back At the Wheel

The norms proposed in the annex to the secret text about trade in financial products are meant to restrain the exercise of public authority and their declared objective is to define a self-regulating model of finance. Any State that signed the document would lose the right to legislate in order to restrain cross-border financial transactions (article X 3.2).

In the name of free competition “State monopolies that provide pensions” (…) would eventually be dismantled. Even insurance against natural catastrophe (an act of God!) would be excluded from the public sphere.

The licensing of innovative financial products is to be encouraged (as stipulated in article X 2.1). Despite the well-known fact that deliberate laxity in this sphere has vastly contributed to the financial bubble that burst seven years ago. “CDS were considered as innovative products and these have played a decisive role in the crisis,” Professor Jane Jersey, from Auckland University, rightly observes on Wikileaks.

US internet companies exert pressure to distribute their customers’ data without any real safeguard. Especially those present in the “cloud” system that make it possible to store data outside the computer’s hard disk. Since that information was made public by WikiLeaks on June 19th it has met with a sharp reaction in the German press where whistle-blower Edward Snowden’s revelations on NSA’s mass-espionage with the complicity of the US internet giants, had already raised considerable concern in public opinion.

The general orientation of the secret text stipulates that foreign companies could in no way be treated “discriminatingly”. In other words, they must enjoy access to the markets of the signatory countries in exactly similar conditions to those granted to local providers, whether they provide a public service to the population or not.

A giant gas or water supplier, like the French group Veolia or GDF Suez, would not only be entitled to establish a foothold in a third country, but it could also invoke the third country’s legal commitment to ensure fair competition in order to benefit from equal amounts of subsidies to those paid by the third State to its water or energy public supplier.

Moreover, it would be impossible for a signatory State to nationalize a public service that had been liberalized, if only partly, in the name of the guarantees granted to investors in order to promote the fluidity of trade – or so the argument goes. And so it would become impossible for a local authority to buy back a water-supply company as many French local authorities have chosen to do owing to these big sharks’ chaotic management and the sky-rocketing bills their customers have been charged –as was done in Paris where the market had been long divided between Générale des eaux, or Lyonnaise des eaux.

Education, Health, Transport, No Sector Would Be Safe Against the Greed of Private Capital

The Agreement on Trade in Services is to concern all sectors that can provide a service on an international scale. According to the international confederation of public services unions, which represents some 669 unions worldwide, the agreement covers an immense field: cross-country supply (mode 1 of the former AGCS) such as tele-medecine, distance education, tourism (mode 2), direct foreign investment on the principles and with the consequences that have just been made clear (mode 3 of the former AGCS), and temporary movement of natural persons (mode 4). Through agreements like the ACS that is now being secretly negotiated, the objective, Rosa Pavanelli, general secretary of PSI, warns, is “to institutionalize investors’ rights and to ban all kind of State intervention in a wide range of sectors.”

Health, education, transport – no sector would be safeguarded against a logic that would speed up the liberalization of public services at an unprecedented rate, For the logic is for private capital to cream off maximum profit from new resources in the current phase of the crisis where outlets are getting scarce. Capital is trying to grab the most promising sectors, financially speaking. The French rail-workers currently on strike have clearly identified the threat that might lead to a polarization of private investments on the most profitable passenger lines when dozens of so-called secondary lines, together with the stations on them, would be doomed. Though the European Commission’s fourth “rail pack” is not part of the secret agreement under negotiation, it nevertheless follows the same devastating line, and jeopardizes the future of public services and advancing in so doing a particular strategy for the construction of Europe. As should now be crystal clear following last May 25’s vote, the dogged pursuit of liberal policies against democracy itself, even to the point of secretly plotting against EU citizens’ interests, exposes Europe to a major risk.

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