Trade Agreements NOT About Free Trade; TiSA Exposed

by Victor Sperandeo with the Curmudgeon




Every U.S. politician and candidate for President uses the same word over and over to impress the public, sometimes with a resounding thud.  That word is JOBS! It's a never ending promise pols make to voters.  Yet they never talk about how jobs are actually created, and more importantly, what preserves or destroys jobs for American workers?


In our recent post titled: Analysis of Secret Trade “Partnerships” (Pseudo Treaties) Which Bypass the Constitution, we discussed the "Trade Bills" (TPP, TPA, TTIP, etc.) and giving Fast Track authority to President Obama to negotiate them in lieu of Congress (as per the U.S. Constitution). 


In this post, we submit that rather than create more jobs and free trade, the trade bills being negotiated and voted on by Congress have the opposite effect of reducing American jobs and possibly attracting a lot more foreign workers to the U.S.  We also provide a fresh expose on TiSA--another secret trade deal that few have ever heard of (till now).


The reader may find my post Where Do Jobs Come From?, to be relevant to the views expressed in this article.


Comment and Analysis:


The propaganda (sale) to "we the people" is that these were supposedly "Free Trade" bills that would create high paying JOBS.  We restate with strong emphasis that these trade bills have virtually nothing to do with free trade, or "Jobs."  Instead, they are all about ending sovereignty of the U.S. and transferring huge amounts of power to large multi-national corporations to enhance profits by providing special privileges to them via the trade bills.


Former U.S. Treasury Secretary Larry Summers, one of the elites of the current progressive movement and a pro "New World Order” promoter, confirms this.  He candidly admits the trade bills are not about "FREE TRADE.  In a June 14, 2015 Financial Times editorial titled "A setback to American leadership on trade," Summers said that we need to make sure the globalization we have works for all citizens.  He wrote: 


"First, the era of agreements that achieve freer trade in the classical sense is over. The world’s remaining tariff and quota barriers are small, and often result from deeply held cultural values, such as Japan’s attachment to rice farming. What we call trade agreements are in fact deals on the protection of investment and on achieving regulatory harmonization and establishment of standards in areas such as intellectual property."                                    


Summers ends with the REAL GOALS of these "Free Trade Partnerships”:


"Ultimately, trade diplomacy must be one component of a broader approach whose primary stakeholders are not just global companies but also those concerned with economic equity, the environment, opportunities for workers to migrate and financial stability.  If the TPP is to be secured, there must be clear signs that international economic diplomacy will turn to these concerns."                                                   


Summers Remarks Decoded:


It's incredibly honest of Summers to admit the real goals: "economic equity" AKA egalitarianism OR Marxism.  I believe "the environment” refers to possible "Global Warming" by hydrocarbon emissions and the INCREASE IN TAXES on the middle class it mainly effects.  By “workers to migrate, " I think he means open borders and no immigration barriers  (which can make strong nations weak by bringing into a nation low wage workers from poorer countries).  Lastly, "financial stability" infers Central Banks printing money to make the economy look better in the short term, until it can't be changed.


TiSA Exposed:


This is depicted in a more recent SECRET trade agreement known as TiSA or "TRADE IN SERVICES AGREEMENT."  TiSA is a trade agreement currently being negotiated by 24 members of the World Trade Organization (WTO), including the EU. Together, these countries account for 70% of world trade in services.


From WikiLeaks: 


“Services now account for nearly 80% of the U.S. and EU economies.  Even in developing countries like Pakistan, services account for 53% of the economy. While the proposed Trans-Pacific Partnership (TPP) has become well known in recent months in the United States, the TiSA is the larger component of the strategic TPP-TISA-TTIP 'T-treaty trinity'.  All parts of the trinity notably exclude the 'BRICS' countries of Brazil, Russia, India, China and South Africa.”


Here's a brief description of TiSA from Wikipedia: "The Trade in Services Agreement (TiSA) is a proposed international trade treaty between 24 Parties, including the European Union and the United States. The agreement aims at liberalizing the worldwide trade of services such as banking, health care and transport. Criticism about the secrecy of the agreement arose after WikiLeaks released in June 2014 a classified draft of the proposal's financial services annex, dated the previous April.”


TiSA also includes hotels, retail stores, food, and/or 38 industries that provide services.  Criticism about the secrecy of the agreement arose after WikiLeaks released in June 2014 a classified draft of the proposal's financial services annex, dated the previous April.


My Take: While the U.S. continues to outsource manufacturing jobs to Asia, with TiSA it can bring low cost workers from Taiwan and Pakistan to the U.S.!  This looks like the end of America's middle class if it passes.  And you probably thought it couldn't get any worse?


This trade agreement is the effective OPPOSITE of creating jobs for U.S. workers.  Instead, it's about lowering wages by bringing in cheaper "foreign workers," without applying for visas, to replace the higher paid U.S. Workers. The resulting cost cutting would produce greater profits for multi-national corporations.  This is all about control by Corporations and negating laws that exist, and negotiating new trade deals in SECRET.


The agreement has been criticized for the secrecy around the negotiation. The draft has been classified to keep it secret not just during the negotiations but for five years after the TISA enters into force.


“That the negotiating texts say they are supposed to stay secret for five years is quite shocking, and therefore it is really important that the text is made public,” Melinda St. Louis, international campaigns director for Public Citizen’s Global Trade Watch, told Common Dreams.


The cover page of the negotiating document leaked by WikiLeaks says: "Declassify on: Five years from entry into force of the TiSA agreement or, if no agreement enters into force, five years from the close of the negotiations."


The Public Services International (PSI) organization described TiSA as Massive leak of TISA trade documents “highlights madness of secrecy” in this blog post.


In a June 11th blog post titled "TiSA: A Secret Trade Agreement That Will Usurp America’s Authority to Make Immigration Policy,  Daniel Costa and Ron Hira of the Economic Policy Institute wrote:  “ Many members of Congress in both parties have expressed concern that trade agreements might limit America’s ability to set immigration policy.”  In the same article, the authors infer the effective end of U.S. Visas:


"In the United States, this means the L-1 intra-company transferee, B-1 business visitor visa programs, and any other applicable visa programs could be used to permit temporary employees from abroad to work in the United States, and no economic needs tests (i.e., testing the labor market) could ever be imposed by Congress. To translate, that means that foreign firms would not be required to advertise jobs to U.S. workers, or to hire U.S. workers if they were equally or better qualified for job openings in their own country. (It should be noted that the L-1 is already restricted in this way, as a result of the United States’ commitments under the General Agreement on Trade and Tariffs (GATS).) These visa programs are already under-regulated and abused by employers, but since neither the L-1 nor the B-1 visa program is numerically limited by law, this means that potentially hundreds of thousands of workers could enter the United States every year to work in these 38 sectors.


Misplaced Corporate Tax Incentives, PACs and Payoffs:


The traditional way U.S. corporations have gotten privileges at the expense of jobs is via tax benefits (in the 77,000 of unreadable IRS tax code).  For example, a merger that uses borrowed money is tax deductible. Buying companies never creates jobs, but it subsidizes the effects e.g. layoffs resulting from redundant staffs). 


Note also that accelerated depreciation rules favor building or buying equipment and machines, rather than hiring workers.  Regulations and higher tax rates hinder small business formation and therefore fewer jobs are created.   Of course, this inhibits future competition for established companies (e.g. large incumbents). Higher minimum wage laws create less demand for workers, rather using "Earned Income Tax Credits."


PAC's1 were created as pay-offs to our "Public Servants." Remember when they retire this money it's theirs to keep – even if they don't use the money for re-election campaigns!                                             


Note 1:  “Political action committees, or PACs, account for roughly one-third of the campaign cash collected by candidates for the U.S. House of Representatives, and about 16% of the money raised by Senate candidates. There are today about 4,000 PACs giving actively in federal elections. Most are sponsored by corporations, trade associations and other business and professional groups like the American Medical Association. The money comes not from the sponsoring organization, but from its employees or members. (That's how they get around the 100-year-old ban on corporate and union contributions to federal candidates.)"  Source


Victor's Conclusions:


How will this end?  For clues, let's relate to what Thomas Jefferson wrote in the U.S. Declaration of Independence: 


"Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security."                                                                


I can't imagine it ending any other way?


It seems to me that America is being sold out in every possible area and direction by both Republican and Democratic politicians.  That's in exchange for money to our elected representatives which is called “campaign contributions.


As usual, we let the reader be the judge. 


Good luck and till next time...


The Curmudgeon


Follow the Curmudgeon on Twitter @ajwdct247

Curmudgeon is a retired investment professional.  He has been involved in financial markets since 1968 (yes, he cut his teeth on the 1968-1974 bear market), became an SEC Registered Investment Advisor in 1995, and received the Chartered Financial Analyst designation from AIMR (now CFA Institute) in 1996.  He managed hedged equity and alternative (non-correlated) investment accounts for clients from 1992-2005.

Victor Sperandeo is a historian, economist and financial innovator who has re-invented himself and the companies he's owned (since 1971) to profit in the ever changing and arcane world of markets, economies and government policies.  Victor started his Wall Street career in 1966 and began trading for a living in 1968. As President and CEO of Alpha Financial Technologies LLC, Sperandeo oversees the firm's research and development platform, which is used to create innovative solutions for different futures markets, risk parameters and other factors.

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