WikiLeaks Performs Valuable Service By Liberating Key Documents from Lesser-Known But Still Major Trade Deal

WikiLeaks TISA graphic

In the past two days, WikiLeaks has released drafts from a lesser-known trade agreement being negotiated between 52 nations called the Trade in Services Agreement (TISA). The publication comes just before the next round of negotiations, which will begin on July 6.

The “Core Text” of TISA, as well as chapters from negotiations on “Electronic Commerce,” “Telecommunications Services,” “Financial Services,” and “Maritime Transport Services,” were published.

WikiLeaks describes the “Core Text” of the agreement that they released from the “largest ‘trade deal’ in history” a “modern journalistic holy grail.” The media organization is not exaggerating.

Edward Alden, who used to be a reporter for the newsletter Inside US Trade, wrote in a post for the Council on Foreign Relations that WikiLeaks’ sources are “impressive.” Alden recalled how he worked in the “pre-digital age” to “encourage leaks of trade negotiating positions. “But, with the exception of the Clinton administration’s proposal for the NAFTA labor and environmental side agreements in 1993, we rarely got our hands on the texts themselves.”

In a time when corporations are being aided by governments, which are negotiating sweeping trade deals like TISA and the Trans-Pacific Partnership (TPP) with complete secrecy, WikiLeaks has ensured that governments do not finish negotiations without the public having some idea about this conspiracy unfolded behind closed doors.

Deputy US Trade Representative Michael Punke previously described TISA as an agreement that “would encompass all service sectors and modes of supply and impose a high standard for liberalization.” By liberalization, Punke means deregulation.

Quite aggressively TISA seeks to establishes rules that would tie the hands of TISA governments, preventing them from being able to craft their own regulations to protect people from exploitation by businesses or corporations. And, the very rules, which have been adopted since the 2008 economic crisis, to protect against future financial meltdowns would likely come under attack as a result of this trade deal.

Ben Beachy of Public Citizen’s Global Trade Watch put together an analysis [PDF] of the “Financial Services” chapter and found sweeping rules for “market access,” which “would expose governments to legal challenges before extrajudicial tribunals for banning risky financial services or products, such as the complex derivatives that fueled the financial crisis. The same rule threatens proposals to limit the size of banks so that they do not become ‘too big to fail.'”

Yet another rule opening up the world to financial risk would challenge policies, which prevent banks from being able to “hold consumers’ deposits from engaging in hedge-fund-style trading of high-risk securities.” It would be prohibited to restrict “financial inflows—used to prevent rapid currency appreciation, asset bubbles and other macroeconomic problems—and financial outflows, used to prevent suddent capital flight in times of crisis.”

“Despite increasing concerns about data privacy, sparked by revelations of the US National Security Agency’s dragnet spying, TISA would require that financial firms be permitted to transfer consumers’ personal financial data overseas, where it could be exposed to unwanted surveillance,” Beachy warns.

In some instances, TISA countries may have to roll back regulations if they were inhibiting the business of a foreign firm. (more…)

Latest Guilty Pleas Prove Big Bank Criminality ‘Rampant,’ But Jail Time Non-Existent

In announcing settlement, Attorney General Loretta Lynch calls the crimes ‘a brazen display of collusion’ that caused ‘pervasive harm’

By Deirdre Fulton

In the wake of Wednesday’s announcement that five global financial institutions have agreed to plead guilty to multiple crimes and pay about $5.6 billion in penalties for manipulating foreign currencies and interest rates, corporate watchdogs are reiterating the call to ‘break up the banks’ in light of their ongoing malfeasance.

As with other recent settlements, Wednesday’s news provides further evidence to those who say certain megabanks are still considered “too big to fail”—or criminal bankers to jail.

“There are two messages in today’s plea deal,” said Public Citizen president Robert Weissman in a statement on Wednesday. “First, criminality is rampant on Wall Street. Second, the era of too-big-to-jail is alive and well. Even as they beat their chests announcing how tough they are, government regulators refuse to apply to the giant banks the same rules that apply to everyone else.”

According to the Wall Street Journal:

Five global banks have agreed to pay more than $5 billion in combined penalties and will plead guilty to criminal charges to resolve a long running U.S. investigation into whether traders at the banks colluded to move foreign currency rates in directions to benefit their own positions.

Four of the banks, J.P. Morgan Chase & Co., Barclays PLC, Royal Bank of Scotland Group PLC, and Citigroup Inc., will plead guilty to conspiring to manipulate the price of U.S. dollars and euros, authorities said.

The fifth bank, UBS AG, received immunity in the antitrust case, but will plead guilty to manipulating the Libor benchmark after prosecutors said the bank violated an earlier accord meant to resolve those allegations of misconduct. UBS will also pay an additional Libor-related fine.

The New York Times adds:

The Justice Department forced four of the banks — Citigroup, JPMorgan Chase, Barclays and the Royal Bank of Scotland — to plead guilty to antitrust violations in the foreign exchange market as part of a scheme that padded the banks’ profits and enriched the traders who carried out the plot. The traders were supposed to be competitors, but much like companies that rigged the price of vitamins and automotive parts, they colluded to manipulate the largest and yet least regulated market in the financial world, where some $5 trillion changes hands every day, prosecutors said.

Underscoring the collusive nature of their contact, which often occurred in online chat rooms, one group of traders called themselves “the cartel,” an invitation-only club where stakes were so high that a newcomer was warned, “Mess this up and sleep with one eye open.”

In announcing the settlement, Attorney General Loretta Lynch called the megabanks’ crimes “a brazen display of collusion” that caused “pervasive harm.”

Lynch declared: “Today’s historic resolutions are the latest in our ongoing efforts to investigate and prosecute financial crimes, and they serve as a stark reminder that this Department of Justice intends to vigorously prosecute all those who tilt the economic system in their favor; who subvert our marketplaces; and who enrich themselves at the expense of American consumers.”

But as Weissman noted, “important questions remain about this plea deal,” including:

Will individual executives be prosecuted? And did the DOJ charge the parent companies in this case to avoid triggering potential sanctions with real and significant business consequences for the banks, including charter revocation hearings? The public deserves answers to these questions. In that information is some insight into whether the government continues to protect the megabanks—those colloquially labeled “too big to jail.”

“What becomes clear is that regulators genuinely are afraid of enforcing the law when it comes to the megabanks,” Weissman concludes. “As a result, and notwithstanding today’s announcement and others like it, these banks are not deterred from violating the law—indeed, they are literally not subject to the same standards as other banks and other companies. A democratic society cannot tolerate having banks above the law. There’s a solution to this problem: break them up.”

Earlier this month, Sen. Bernie Sanders (I-Vt.) introduced a bill to do just that—the Too Big to Fail, Too Big to Exist Act—under which regulators on the Financial Stability Oversight Council would compile a list of institutions which say they are so large that their collapse could trigger an economic crisis. The Treasury Secretary, in turn, would then have a year from the bill’s passing to break up such banks.

In a recent report, the Corporate Reform Coalition warned that regulators’ continued reluctance to crack down on megabanks leaves the U.S. vulnerable to another financial crisis.

“Avoiding another meltdown depends on the will of federal regulators to use the new powers they were granted in the Dodd-Frank Wall Street Reform and Consumer Protection Act,” said Jennifer Taub, author of the report and professor of law at Vermont Law School. “If they behave as if they are beholden to the banks, we will likely face a more severe crisis in the future.”

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