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“By means of TiSA the ‘service public’ will be abolished”

Interview with Stefan Giger, Secretary-General VPOD (Union of Public Service Employees)

Current Concerns: TTIP (Transatlantic Trade and Investment Partnership) and TiSA (Trade in Services Agreement) are sold to the public as free trade agreement. Why do we have to conclude such agreements now?

Stefan Giger: Over the past few years there has been a wave of new trade agreements that have been handled for the most part outside the WTO. The WTO and its predecessor organization GATT are instruments of the North that serve to suppress the Southern part of the world. The crucial change has been that the Doha Round started to raise the demands of the countries of the South, and thus derail brought these negotiations. The main source of conflict is agricultural trade, for which the North has aggravated its protectionism to dismiss free trade. Another source of conflict are the patent rights against epidemics such as malaria or AIDS, where countries such as India and South Africa are demanding medication at affordable production prices, instead of monopolized prices. Pharmaceutical companies prefer to let thousands of people die, instead of renouncing some of their profits. A third source of conflict is the patenting of genetic information of medicinal plants: Pharmaceutical companies want to patent genetic information from all over the world. This might mean, for instance, that a small business in an African country, which processes a native medicinal plant to produce a drug would have to pay royalties to the Novartis Group, if Novartis has patented the genome of this plant.

What does that mean for the TiSA agreement?

TiSA will in principle cover all services. According to the UN classification of merchandise, chapters 1 to 4 cover freight and chapters 5 to 9 cover services. This includes all possible services: financial services, retail, consulting services, as well as water supply, energy supply, waste management, health services, education, communication, mail, security, law enforcement, social services, social security, in general: the entire public service. The objective is to deregulate trade for services and to provide market access to those services worldwide.
Although the agreement stipulates that each country may establish a so-called negative list, comprising the services not to be deregulated in one’s own country. But if TiSA is actually standing, it works as a power cartel of the 23 TiSA States. According to website of SECO (State Secretariat for Economic Affairs) in the end TiSA is to be transferred to the WTO structure. If other countries want to join, they need to be voted in by the 23 TiSA States, unanimously. That would mean that each of the 23 countries can make any claim and can also enforce that claim against any other country. For example France may request the deregulation of the water supply and the United States may request the deregulation of health care in India, and Switzerland could then request the deregulation of the banking sector in the interests of UBS and CS. With the TiSA agreement, the North takes the crowbar to deregulate the service sector of the South, at the same time the protectionism of the North will continue in agriculture.

What does that mean for Switzerland?

Switzerland can exempt the public service on its own negative list, and that way its health sector, the social services, the public transport and so on will not be deregulated. But recently we learned that there are also appendices, so-called “annexations”, to the agreement, which can be directly enforced. If, for example, Switzerland adds energy to the negative list, that wouldn’t help Switzerland at all, in case an appendix of “energy services” existed. That annex would strike Switzerland, because in this case the negative list is useless, the annex overrules it in regard to energy services. And, on the SECO website one can read, that there will indeed be an annex concerning energy services.

What are the dangers concealed in the agreement?

The American-European TTIP Agreement or the North American NAFTA agreement contain the same elements as TiSA, especially the “standstill clause” (status quo clause) and the “ratchet clause”. These clauses undermine the authority of the state by putting the interests of multinational corporations over those of the state. With TiSA the North wants to secure big business in the services sector – to a large extent, the production of bulk goods has been already moved to the south. The service sector is to be the new money-making machine.

You have mentioned the negative lists. How safe are they, or might this list be modified once you have become member of TiSA?

They will certainly exert pressure to change the negative list. This may already be the case. During the negotiations, the countries can submit their negative lists, but probably already now debate is going on to change these lists. Neither do we know whether and what deregulation Switzerland is demanding regarding other countries. The VPOD has asked SECO the question: Does the Swiss delegation demand deregulation from other countries? At this point, we still have not received an answer.

How does the agreement actually work?

Annexes are negotiated outside of the main text of the Treaty. As we read the Treaty, these annexes undermine the text of the contract. That is, the exception refers to the main body of the Treaty, however, the annex is universally applicable, as well in case the same topic were on a negative list.

How do you know that?

By way of indiscretions three annexes became public last year. In January a fourth annex text by Turkey about health care became public. We went to the State Secretariat for Economic Affairs SECO with it. Maybe this had the effect that the SECO started to publish the list of topics on the attachments in the Internet. There are 17 areas, where annexes are negotiated, for example in regard to energy services. All these attachments are applicable directly to Switzerland, even if the same topic is on the negative list.

You mentioned the NAFTA agreement. What connection is there?

NAFTA and TiSA know both the standstill and the ratchet clause. With the NAFTA Treaty you can beat down an environmental impact study as shown in a new Court ruling of 17 March 2015. The American mining group Bilcon had sued Canada on the basis of the NAFTA agreement and won. In accordance with Canadian laws Canada had made an environmental impact assessment for a mining project where Bilcon wanted to extract ore with use of explosives. With regard to the environmental impact assessment Canada denied the mining permit and must now pay US$ 300,000,000 damages. Bilcon would have made this benefit with the ore mining and Canada must now replace this lost potential income.

What kind of courts are those which rule such high damages?

These are private courts. There is no instance of appeal. The judges are not independent. The same persons who act as judges are acting as lawyers in another case. One hand washes the other. At global level this is probably the new standard how to govern the world.

That is completely absurd, how does this “private” justice system work?

All around the World Bank and its court a whole “industry” of lawyers established themselves, they do nothing else than reading the newspapers and thinking about to what company they may suggest what suits against a State. Then the lawyers offer them to the company – in case of failure for free, but in case of success the lawyers will receive a significant share of the revenues made by he lawsuit. When 300 million damages is ruled as in the case of Bilcon, that is a big chunk for the law firm.

Can you forward a concrete example for understanding the matter?

In the 1990s the then corrupt president Carlos Menem granted the concession of taking over the water supply business in the greater Buenos Aires area to the French group Suez. To that end a contract was concluded in which the company Suez acquired the water rights and the existing water network. In return, Suez committed itself to renew the outdated infrastructure and to build sewage treatment plants. Before the completion of the sale, water prices increased massively at first, after the privatization they were a little lowered, in order to celebrate the business as success of privatization. Suez first released half of the staff and then began to turn the water off completely in the slums where many people could not pay the water bill. The renewal of the water networks and construction of sewage treatment plants were delayed by Suez. Then Argentina’s economy collapsed and thus the Argentine currency. Suez demanded an exchange rate guarantee by the Argentine State or threatened Suez would increase water prices by 60 percent – due to market and business risk. Suez stopped all renovation projects and the construction of sewage treatment plants. The new Argentine Government ended this battle with the re-nationalization of water supply on the grounds that Suez had not fulfilled the obligations arising from the contract and that an exchange rate guarantee had never been agreed on. Suez too appealed to the private World Bank Court and won in April 2015: Argentina must pay over 400,000,000 US$ to Suez – as a compensation for the lost future profits. This is how economic lobby organizations and international corporations dominate the political decision making processes. This is a disempowering of politics by the economy with the help of a completely arbitrary jurisdiction.

This is supposed to take place in our country as well, that’s inconceivable.

Let’s imagine: Due to a new zoning law, the City of Berne carries out an environmental impact assessment in regard of a new shopping center on the outskirts of the city and refuses to grant the planning permission. An international group that has invested here can now sue the city of Berne due to the TiSA contract and claim damage compensation. A lawsuit worth a billion by a global corporation will probably result in that municipal or cantonal governments no longer have the courage to enforce the law that was democratically adopted. Regarding the legislative process, this will also lead to the situation that Switzerland can no longer develop its environmental legislation or social rights or other standards in view of possible lawsuits. Tisa’s standstill- and ratchet clauses would prevent this, otherwise we will have some billion-dollar-suits on our hands.

In consequence this would mean that our direct democracy would be completely contained.

Yes, totally. An example: The SECO has uploaded a document on its website giving examples of what constitutes discrimination with respect to the “treatment of nationals” where the standstill- and ratchet clauses comes into operation. On this list there are quite a lot of points which mean discrimination; one point is: the constraints of foreign persons and companies to acquire real estate would be discriminatory. This means that Lex Koller is discrimination. Thereafter, when the ratchet clause applies, this means that what was recently negotiated in parliament would in future no longer be valid – parliament has recently discussed to plug loopholes in the Lex Koller which today allow that any billionaires still can buy their second home in Switzerland. The standstill clause excludes any tightening of the Lex Koller. Housing prices will therefore continue to rise; on the other hand any measures to stop them will no longer be possible because of TiSA.

These are devastating examples which interfere directly with the political system …

… The main problem with TiSA is that, what we call in Switzerland “Service public” or in Austria and Germany “Daseinsvorsorge” (services of general interest) will no longer exist. Everything is just trade. From the point of view of a trade union, education is not a commodity but a fundamental right and therefore a state monopoly is necessary, because only a state or public school can guarantee a non-discriminatory access to education to all children. This concept is deeply rooted in Switzerland; in the Canton of St. Gallen, the deregulation of the elementary school was recently rejected by vote at more than 70 percent of. On the other hand, the concept of the United States is: those who have money can buy education; those who have none have lousy public schools. This is diametrically opposed to our concept. The concept of Service public does not exist in the view of the United States, and with TiSA Service public is to be abolished.

Our AHV as well? Is it at the end of a problem for the “free trade”?

Yes, sure. Social insurances are to be deregulated, too. Here is another example: in 2007, the Dutch Achmea Group sued the Slovak government. Slovakia was planning a law with which the payout of profits from the basic health insurances should be excluded – precisely that provision is part of the Swiss Health Insurance Act KVG. The Achmea Group won the lawsuit back then, and Slovakia had to pay 22 million euros in damage compensation. But the Slovak government was not impressed, and fought it.

What did they do?

They initiated a national health insurance. Achmea sued this, too – but this time they lost. This case was not settled in a World Bank court. If it had been decided by a private World Bank court, the judgement would have probably been a different one.
What can we citizens do against this development? Negotiations are secret and this alone is not worthy of our democracy. What can the population, we, the

individual citizens, do against this disastrous development?

If we succeed in starting a broad social debate, pressure will be exerted on politics. This is the only way to prevent such treaties. The old Agreement on Investment MAI could be stopped by the resistance of the civil society. Currently, a large movement against the TTIP agreement has developed in Germany and Austria.

Is there any connection of Switzerland to TTIP?

In the FDP [the Swiss liberal party] there are some exponents who think we should join TTIP and seek an association. Federal Councillor Schneider-Ammann has spoken similarly. I doubt if the US and the EU would be willing to accept a “stowaway” among them, especially since in other questions Switzerland is neither willing to be integrated. I think this is more a kind of wishful thinking. It is bizarre: The core of our service public has been created by the liberals. In 1848, there was no SP [Socialist Party]. It was the liberals who erected the federal state.

Can Switzerland, even if it does not join TTIP, be forced to open its markets by way of the “Cassis de Dijon” principle?

The TTIP agreement will contain the “Cassis de Dijon” principle, but the legal systems in the US and in Europe are different. This becomes apparent in the possibility to ban poisonous products. In the EU, proof is needed that a certain substance is not hazardous if used. In the US, the state must prove that something is poisonous in order to ban it. This of course is a problem for consumer protection. If the US and the EU agree on a mutual permission for all products permitted in one region, there will be no way to prevent poisonous products from being used in the EU. By way of the Bilateral Agreements this would also be valid for our country, at least for industrial products, and hence could also have an effect on Switzerland.

What about agriculture?

With food this is optional; the “Cassis de Dijon” principle has just been revoked by the parliament. But with respect to industrial products, TTIP could still have an effect via the Bilateral Agreements. From a Swiss perspective, this is another reason why it should be prevented.

And what about TiSA?

Here, Switzerland is a direct partner in the negotiations, but I am convinced that TiSA may finally be challenged in a referendum. If we build up resistance and there is a wider debate regarding the effects, which will also include a reduction of the communes’ independence, a referendum can be won.

But first it will be an issue for parliament?

It is crucial that the parliament abides by the constitution. Regarding a treaty with such wide consequences as the TiSA treaty, a facultative referendum must be possible. Then we will move forward to a referendum and I think we can win it. SECO seems to be aware of this. They are signalling that they are willing to talk or to publish information which has not been published by other countries, including negotiation documents, the list of discriminations or the list of appendices. This has not been published by any other country.

What is your interpretation of this?

It is a hint that they are worried if we succeed in starting a debate. In the Romandy, the debate is already under way. In Geneva there will be a public discussion on TiSA with several personalities, including our VPOD. Geneva will probably pass a resolution, declaring it to a TiSA-free Zone. These are signals which have no legal significance but demonstrate that there is a movement, that there is resistance and that the issue is now to obtain majorities. The topic needs to be taken serious, we have to report on it, like your newspaper is doing. An article has also been published by the Beobachter; Radio SRF has reported on it in Echo der Zeit.

Is this a recent development?

For a long time, it has been difficult to start a discussion. The parties were not really interested. Newspapers were also reluctant. The interest has increased recently.

Mr Giger, thank you very much for this extensive interview.     •

(Interview Thomas Kaiser)