Sleeping Monster: Sleeping Monster: The Trade in Services Agreement (TiSA) and Labor

By Lambert Strether of Corrente.

In our previous posts in this series (here, here, and here) we treated TiSA as a sort of dream of the collective unconscious of the globalist elite hive mind; underneath it all, it’s what they really want, though expressed in prose both opaque and phantasmogoric. We saw how TiSA’s definition of services is so vague, so subject to the manipulations of The Trade Blob that provides legal and technical services to the global elites, as to make the scope of the agreement totalizing. We saw the global dominance of the forces behind TiSA: Really Good Friends of Services (23 WTO members, including the US and the EU and TeamTiSA (chaired by Citigroup, IBM, UPS, Walmart, MetLife and Liberty Mutual). We looked at how TiSA negotiations will be structured and showed how, through its standstill and ratchet limitations, TiSA seeks to arrest any government policies that do not put markets first (for example, Medicare for All) to create a neoliberal utopia. And we urged a re-orientation from defeating treaties — though defeating TPP, and putting TTIP on hold, are all good things — to defeating the forces behind the treaties, because when a treaty is defeated, The Trade Blob simply breaks it up for spare parts and tries again. In this post — after which I’ll give TiSA a rest, unless driven by events — I want to look at TISA and labor, again using using Professor Jane Kelsey‘s TiSA: Foul Play (PDF) as our guide. Of course matters are as horrible as you would think.

Foul Play describes TiSA’s globalist fever dream of “constant disruption and creative destruction” in stark terms. Page 14:

Trade in services agreements are designed to serve capital. Labour is rarely visible, except as a commodity, a mode of delivery, or a ‘barrier to trade’ – even though it is workers who provide the services that are being ‘traded’. On the rare occasions that the Really Good Friends of Services and Team TiSA talk positively about workers it is either to promise a fanciful increase in employment from TiSA or to extol the benefits for workers of greater flexibility from harnessing new technologies.

(One might ask whether the “Better Skills” portion of what is “reportedly” the Democrat’s new slogan is designed to support that “flexibility” and, if so, whether “Better Wages” will indeed result.)

Their vision of a globally-integrated services market is devoid of politics or social responsibility, leaving them free to maximise their profits through constant reorganisation, relocation and technological innovation. Those with corporate wealth and power are concentrated at the top of the pyramid, operating through layers of highly competitive subcontractors who employ a fragmented, vulnerable and exploited workforce.

In other words, everybody at the top of a power curve (locally, regionally, nationally, internationally) will be racing toward the top. Everybody on the power curve’s long tail will be pushed toward the bottom. Twas ever thus, you might say, but TiSA is designed to take as much friction out of that process as possible; to grease the greasy pole, you might say.

Since TiSA, obviously, is structured and written for those at the top of the power curve, it’s hard to tease out its effects on working people considered as a class. I’ll consider these effects from two angles:

1) Professional Services

2) Contract Labor

(Of course, all of these classes interact as global elites manipulate them to good effect; for example, foreign services workers can be used to bust unions; professionals in one country can be turned into the precariat of another, as algorithms and digitization eat the world; and so on.)

The Effects of TiSA on Professional Services

I’m putting this first because I think our 10%-ers believe that their guilds, their credentials, and getting their children into the right schools, especially as legacies, will protect them (indeed, will transform them into an aristocracy), and 10%-ers, especially in the suburbs, are highly sought voters by both parties. Of course, The Trade Blob is itself composed of 10%-ers, so for them TiSA may turn out to be a cloud no bigger than a man’s hand. Nevertheless, there are at least two issues affecting professionals. One is TiSA’s assault on requirements for “local presence.” Page 53:

Prohibiting requirements for local presence is one of Team TiSA’s principal demands. Accepting that ban would pose major obstacles to effective legal liability, the vetting of qualifications and assessing compliance with technical and professional standards , consumer protections and the ability to tax, as well as monitoring the labour standards of workers who are delivering the service.

At the 30,000-foot level, you can see how eliminating local requirements for “assessing compliance with technical and professional standards” would make the transfer of legal services much more frictionless; why shouldn’t I be able to obtain legal services from an English-speaking lawyer in India or the Phillipines? Granted, lawyers write the laws, so that may be slow to happen — perhap significantly, “Legal Services” do not have a CPC Code under W/120 — but what about (CPC code 862) “Accounting, auditing and bookkeeping services”? Or (8671) “Architectural services”? Or (8672) “Engineering services”? And so on.

The second is TiSA’s assault on “domestic regulation.” TiSA also includes an “Annex on Movement of Natural Persons,” which could affect professionals. It’s still under development, but this is the current state of play. Page 91:

Independent Professionals would have a right of temporary entry to deliver a service on the same terms as contractual service suppliers. They would still be subject to licensing and qualification requirements and procedures, including codes of conduct. and any technical standards that apply to the service, although those would subject to the light-handed approach required by the Annex on Domestic Regulation [1]. In addition, Australia, Norway and Iceland are pushing an Annex on Professional Services. Almost none of it is agreed.

Good news for professionals! More on the Annex on Domestic Regulation:

The annex would apply to measures affecting ‘trade’ by listed professions through any mode of delivery…… and whatever technologies were used to deliver the service, under the principle of ‘technological neutrality’. The list of professions includes engineering and finance-related services. Australia and Turkey want to prevent any TiSA country from applying a discriminatory economic needs test, including a labour market test to show there are no locals to do the work. Once professional services have become contractualised, for example as a result of TiSA’s Annex on Telecommunications, these rights of entry could have significant displacement effects. Increased cross-border provision of professional services would also make it more difficult for governments, and people using the services, to check the authenticity of qualifications and the quality and ethics of practitioners, apply consumer protection laws and enforce penalties. While there was limited support for these proposals in November 2016, there was extensive support for applying the Domestic Regulation annex to ‘measures affecting trade in professional services’….

So, again from the 30,000-foot level, TiSA’s tendency will be to erode professional protections. How that will affect any professional subsector (which is where policy limitations are fought out) is yet to be determined.

The Effects of TiSA on the Contract Labor

Contract Labor falls under the proposed Annex on Movement of Natural Persons in TiSA, where the text is not agreed. Here, however, is the intent (supported by Canada, Colombia, the EU, Norway and Mauritius). Page 92:

Contractual services suppliers is the most controversial category… The basic intention is clear: if a firm in one TiSA country has a contract to supply services in another TiSA country, it must be allowed to use workers it has employed from its own or a third (even non- TiSA) country to deliver the service, where the contract requires the temporary presence of those workers. The contract referred to is between the contracting parties to supply and receive the service. There are no rules about the nationality of the employees of the contractor supplying the service. For example, a New Zealand company that has a consultancy contract to privatise a country’s postal service could recruit personnel from New Zealand or any other country to deliver the service. A specialist call centre firm in Israel that wins a contract to deliver back office services in Canada could bring temporary employees from Israel, Pakistan or the Philippines. Express delivery firm from Turkey that competes successfully with the public postal service in Italy for delivery contracts could bring its own drivers temporarily from Turkey or Romania to supply the service.

Or the UK’s NHS could contract out nursing services to the Phillipines, say, and obtain those services at whatever wage obtains in the Phillipines.[2]

The pay and conditions of those employees would be governed by their employment contract with the supplier of the service and the relevant law for that contract. It is possible that the original contract for the service requires the workers to be employed under the labour laws of the country in which they are supplying the service, but that is uncommon. It is also possible that the country where the service is supplied requires that local labour laws, such as the minimum wage, apply to foreign employees of foreign contractors, but that is not usually the case.

It’s bad enough to be a member of the precariat in the United States, especially if you’re in debt. What happens when precariats compete globally? Nothing good, to the precariat that by luck, skill, or collective action has managed to achieve wages and working conditions above the global average.

Conclusion

There are many, many other facets to TiSA that perhaps I can consider at a later date, especially e-commerce, finance, telecommunications, and postal services. However, Foul Play puts the immediate priority well. Page 79:

[Defeating TiSA] will help to keep open the spaces for global and national unions to work with others to develop a collective strategy to protect people’s rights as workers and as citizens in the 21st century. The immediate task is to ensure that the TiSA negotiations are not resumed . That requires a concerted campaign by UNI affiliates and others at international, regional and national levels to expose and oppose what governments belonging to the ‘Really Good Friends of Services’ have secretly proposed on behalf of the Team TiSA corporations – and to ensure that the same agenda is not transplanted to other free trade agreements or the WTO.

As for defeating the forces behind TiSA…. Well, somebody should ask Chuck Schumer where he stands on it, and how TiSA jibes with the Democrat Party’s new populist agenda of “better.” Eh?

NOTES

[1] Foul Play, page 138: “A number of countries have been trying for years to secure ‘disciplines’ on government regulation of technical standards, qualifications requirements and procedures, and licensing requirements and procedures in the GATS. They are now attempting to advance their demands through TiSA, in both the core text and an Annex on Domestic Regulation. New Zealand, Australia, Hong Kong and Switzerland are the main proponents. The US, Canada and the EU oppose some of their worst aspects, but not all.”

[2] Not that this is a bad thing on the average, and especially for the Phillipines’ nurses, but will the UK nurses be compensated for the impact? If what happened during the deindustrialization of the Rust Belt is any indication, the answer will be no, although economists will shed crocodile tears after the process is complete and promise to do better next time.