Friday, July 21, 2017

Sleeping Monster: TiSA and Its Expansive Definition of “Services”

The Trade in Services Agreement (TiSA) and Its Expansive Definition of “Services”

By Lambert Strether of Corrente

In this post, I continue what is starting to feel to me like a Lewis and Clark expedition through the unexplored territory of “trade” “deals”[1], having engaged New Zealand activist Jane Kelsey, who authored the new report TiSA: Foul Play (PDF) as my guide. Because I’m feeling my way into this topic, rather than bringing (entirely) fixed views to it, you might consider reading the preceding post, where I introduce the idea that we might need to stop focusing on the deal (“We defeated TPP!”), and start focusing on the deal-makers (in this case, “The Trade Blob”[2], the “Really Good Friends of Services,” and Team TiSA).

Deals come and go. Deal-makers do not (and in fact the incorporate the texts of past deals into new deals, as if the past deals were organ donors). I’d also like to introduce the perspective that TiSA enacts a neoliberal utopia[3]: The text of TiSA (available at WikiLeaks) expresses, in the driest possible bureaucratic prose, a vision or dream of the future world in which the globalist elites would like us to live.[4] So, even if TiSA as a deal is defeated, the dealmakers who drive it will not give up their dream; the dream will simply return, revised, and repackaged, in a new guise, until the sleepers wake. TiSA-as-utopian-dream also provides an account of something that was been a mystery to me: Why, after a 2016 election that turned on trade, and an administration that deep-sixed TPP on day three, and a general flattening of world trade since the Crash, has commercial real estate continued to intensify its investment in warehousing, have ports continued to expand, has Amazon gone into the airfreight business, has Silicon Valley gone gaga for robots that deliver stuff, and on and on and on? You would think that if globalization has jumped the shark (Martin Wolf: “The tide of globalisation is turning”), that investment in these areas would flatten or go down. The answer, or an answer, is that the elites who make those investment decisions are still enthralled by the dream.

And so, to today’s post. I’m guessing that one reason that TiSA has been able to slip beneath the radar, unlike TPP, is that people say: “Oh, it’s just about services!” But as it turns out, the scope of “services” is very broad, another reason for TiSA’s wildly ambitious, globally utopian scale. From Foul Play (page 26):

Defining trade in services

The reach of these agreements is incredibly broad. The rules apply to any measures a government adopts, which range from laws to administrative decisions, at central, regional or local government level or by bodies that exercise a delegated authority. Moreover, the measures only need to ‘affect’ the supply of a particular service; they don’t even need to directly target the service (so they could include new labour laws, especially if they negative [sic] affect a particular service). The service is traded when it is supplied by a foreign firm or individual from another TiSA country to a user of another TiSA country through one of four ways or modes of supply: across the border (eg buying a book from Amazon), using the service in another country (an offshore bank account), a commercial presence inside the country (a foreign-owned telco) or personnel coming to the country temporarily to deliver the service (an IT specialist).

(Basically, as we saw yesterday, every link within a supply chain can be covered with these four modes.) And from the New Republic (2015, after Wikileaks published the text):

[TiSA] would liberalize global trade of services, an expansive definition that encompasses air and maritime transport, package delivery, e-commerce, telecommunications, accountancy, engineering, consulting, health care, private education, financial services and more, covering close to 80 percent of the U.S. economy. Though member parties insist that the agreement would simply stop discrimination against foreign service providers, the text shows that TiSA would restrict how governments can manage their public laws through an effective regulatory cap. It could also dismantle and privatize state-owned enterprises, and turn those services over to the private sector. You begin to sound like the guy hanging out in front of the local food co-op passing around leaflets about One World Government when you talk about TiSA, but it really would clear the way for further corporate domination over sovereign countries and their citizens.

Indeed! (And on “guy hanging out,” see “I want to believe” from Links today.) Anyhow, 80% of the economy wherever the supply chain goes seems rather expansive in scope.

Being a suspicious sort, however, I sought a definition of “service.” After all, TiSA stands for “Trade in Services Agreement.” However, the Glossary in Foul Play (PDF) does not provide one (pp. 6-7). If TiSA has a glossary that defines “service,” I can’t find it using the Wikileaks search tool (maybe you’ll have better luck). GATS (General Agreement on Trade and Tarriffs), which may be grandfathered into (“docked” with) TiSA, is maintained by the WTO (World Trade Organization), which does not provide a definition I can find, athough it does provide a list of service sectors; and the “General Agreement on Trade in Services” Annex to GATS doesn’t provide a definition either.

I realize that I’m in the position, as I tend to be more often than I would like, of the New Yorker writer who successfully pitched a story about going to find a putatively extinct bird in the woods, never to find the bird! Perhaps “services” is just one of those terms that is so obvious nobody needs to define it? Turning to Wikipedia:

Trade in Services refers to the sale and delivery of an intangible product, called a service, between a producer and consumer. Trade in services takes place between a producer and consumer that are, in legal terms, based in different countries, or economies, this is called International Trade in Services.

(Of course, Wikipedia doesn’t link to its definition of service, though it does link to “intangible product,” which interestingly goes to a page on Intangible Assets.) The government of Switzerland, in its material on International Trade in Services, seems to agree:

What is a service?

The services sector covers a wide range of activities, in particular professional services (medical doctors, lawyers and other legal services, engineering services, architectural services), business services such as marketing, advertising or consulting services, postal services, telecommunications services, distribution and trading services, financial services (banking services, insurance services, stock exchanges, securities services), tourism (hotels, restaurants, tourist guides), transport, audiovisual and cultural services, health services, education services, construction, energy, and environmental services, and in fact any activity except the production or transformation of industrial or agricultural goods or mining.

So, an operational definition of “services” would be “everything but manufacturing, farming, and mining,” or abstracting further, “anything that transforms stuff” (as opposed to transporting it, transferring its ownership, transmitting information about it, etc). Concluding:

It is thus difficult to encapsulate the notion of “service” in one definition.

In other words, the definition of “services” is a mess (but then you knew that). And you’d think that if there were an authoritative definition, the Swiss would have cited to it.

But let’s take the Swiss operational definition (anything that isn’t manufacturing, mining, or farming) as read, along with its theoretical distinction between the intangible and the tangible. There are some problems with it:

First, for stuff that is traded, where does its value come from? Is the value of a very tangible tomato, for example, to be sought in the tomato as stuff? Or in the very intangible knowledge, and the very intangible time that the farmer invested in growing it? If the latter, then suddenly farming is in the scope of TiSA.

Second, for stuff that is traded, how does it become stuff? Suppose I buy a metal hinge for my old house from a 3D printing shop at my UPS store. The 3D printing machine is entirely driven by software (under whatever intellectual property arrangements that UPS has made). Assuming software to be intangible (why?), is that not a trade in service? How is a deliverable that appeals to my sense of touch (like a hinge) essentially different from a deliverable that appeals to my sense of hearing (telecom) or my sense of sight (a movie)? If there is no difference, then suddenly manufacturing is within the scope of TiSA too.

Finally, consider social relations within the TiSA udystopia (described from what seems to be a right-wing perspective):

The company store was an institution rooted in the industrial revolution. It involved a town that formed around a remote industrial facility, such as a mine or a factory. And because one individual might own that facility, with most of the townsfolk working for him, that owner was wealthy enough to buy up any new businesses attempting to establish in the area and subsequently operate them under the tent of his main enterprise.

The result was a monopolistic, corporate consortium combining his primary business with a sort of “general store,” which would stock all the provisions his employees might need. Because the store was part of his larger company, it became known as the, “company store.”

And because it was a closed system, with minimal need for the townsfolk to interact with the greater economy, the owner paid few wages out of real money. Instead, he paid using credits, redeemable by employees at the company store. The store provided the townsfolk all they needed to get by each day, subsisting on the credits the owner paid them to work in his mine or factory. Because they received few wages beyond meager store credits, company employees became trapped, rarely possessing currency marketable to an outside world, or with which to save or invest toward retirement, or to provide a decent place to live, the factory/mine/store owner also owning the shacks his employees would be forced by circumstances to rent.

When an employee would be unable to work, no problem. The owner would lend him enough store credits to subsist while overcoming illness. Because wages were barely enough to survive, an employee would rarely earn enough to pay back the loaned credits, which explains the last line of our song’s refrain, “I owe my soul to the company store.”

Globalists desire to create a sort of worldwide company store, a monopolistic, corporate consortium that provides employment for the people of the world, subsistence, a place to live, and die, one that operates in a privately owned world economy, one from which escape is virtually impossible.

Consider, then, a mine operating under TiSA in a company town: Every action, with the single exception of the (tangible) axe hitting the (tangible) coalface, is mediated by an (intangible) service, provided, for profit, by the owners of the mine. But how are such social relations any different from those in a law firm, where the production of an (intangible) work product involves the (tangible) xeroxing of (tangible) printed documents? Why is a coalface different from a xerox machine? If it is not, then mining, too (at least when performed in a company town) is also within the scope of TiSA.

It seems to me that the scope of “service” is quite elastic, and the conceptual distinction between intangible (service) and tangible (not a service) is, to say the least, slippery. And if anybody considers these examples mere logic-chopping, that is exactly the, er, service that trade lawyers are hired by the members of Team TiSA to provide in the ISDS tribunals.


If the terms of an agreement are not clear, then the potential scope for the application of the agreement is infinite (as indeed the dealmakers whose dreams are driving TiSA would like it to be). TiSA’s utopia, then, is totalizing. In the next post, I’ll look at “ratchets” and “scheduling” (which are not nearly as dry as you might think, when you consider the human effects).


[1] Unexplored at least by me, as opposed to the aboriginals of “The Trade Blob.” As before, I’m not at all happy with the “trade” framing; some rectification of names is called for. Ditto anti-globalization, etc.

[2] Tony Wikrent and others have rightly remarked that I’m not defining “The Blob” rigorously. All I can say is that I’m working on it. One reason I like “blob,” as a concept/metaphor, is that blobs have soft, flexible edges, and tend to engulf things. That seems to me to be the right way to think about class, and I mean class both in the mathematical sense (a thingie with a set membership function), the political sense (the “working class,” “the political class,” and so on), and the intersectional sense (how do those set membership functions really work, anyhow). So for now, “The Blob,” and “The Trade Blob.”

[3] And the left had better display adaptability with a better competing vision if they want to survive.

[4] I mean, besides the jackpot. I’m not happy with “globalist elites” framing either.

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