{"id":65,"date":"2011-12-23T04:49:10","date_gmt":"2011-12-23T12:49:10","guid":{"rendered":"https:\/\/www.citizenstrade.org\/ctc\/oregon\/?page_id=65"},"modified":"2012-01-09T15:31:27","modified_gmt":"2012-01-09T23:31:27","slug":"trade-pacts-and-financial-deregulation","status":"publish","type":"page","link":"https:\/\/www.citizenstrade.org\/ctc\/oregon\/orftc-campaigns\/trade-pacts-and-financial-deregulation\/","title":{"rendered":"Trade Pacts and Financial Deregulation"},"content":{"rendered":"

\"Deregulation\"Today\u2019s international trade pacts are often thousands of pages long and cover far more than just reductions in tariffs on goods traded across borders.\u00a0Many modern trade agreements also impose strict limitations on governments\u2019 ability to establish domestic policies that in any way encroach upon international commerce.\u00a0These restrictions specifically cover environmental, agricultural, procurement, intellectual property, investment, product safety and many other policy arenas.\u00a0According to Public Citizen,<\/a> \u201cDeregulation of the financial service sector\u2014including banking, insurance, asset management, pension funds, securities, financial information and financial advisory services\u2014has been among the most important, but least discussed aspects of the World Trade Organization\u2019s (WTO) agenda since its 1995 inception.\u201d<\/p>\n

The Roots of Banking Regulation <\/strong>
\nDuring the Great Depression, Congress passed the Banking Act of 1933 (also known as the Glass-Steagall Act) to create a firewall between \u201ccommercial banks\u201d that primarily took deposits and made out loans and larger \u201cinvestment banks\u201d that provided a wide range of other financial services.\u00a0Glass-Steagall mandated the separation of these two types of banks, and among other things, federally-insured commercial bank deposits, while leaving the risks associated with speculative investments in the hands of individual investors.\u00a0The overriding concept behind this law\u2014based on the experience of economy-wide financial collapse during the late 1920s and early 1930s\u2014was that American citizens\u2019 personal savings and their ability to take out loans should be protected from potentially-unwise speculation on the part of large financial corporations.<\/p>\n

WTO-Mandated Deregulation<\/strong>
\nThe World Trade Organization\u2019s \u201cGeneral Agreement on Trade in Services\u201d (GATS)\u2014which was lobbied for intensively by financial service firms from the U.S. and elsewhere\u2014required that the United States allow foreign banks to do business in this country even if they did not separate \u201ccommercial banks\u201d from \u201cinvestment banks.\u201d\u00a0The Clinton administration knew that this would create conflict with U.S. law, and made a formal commitment to support changes to the Glass-Steagall Act while negotiating the GATS.\u00a0In 1999, President Clinton signed a repeal of Glass-Steagall into law, deregulating financial markets not only for foreign companies, but also for domestic corporations. Other parts of the WTO\u2019s \u201cFinancial Service Agreement\u201d (FSA) further locked-in this deregulation and spread it to other countries throughout the world.\u00a0Establishing new banking regulations in conflict with the FSA is impossible under current international trade obligations without risking the imposition of hefty annual penalties.<\/p>\n

The Current Crisis<\/strong>
\nThe massive mergers between commercial and investment banks that have taken place in recent years have created an environment in which the speculative losses of one sector of the nation and world\u2019s financial institutions can have immediate and serious repercussions on other sectors, including bank deposits, access to loans and other financial services.\u00a0In this environment, the United States \u201ccannot afford\u201d to allow a risk-taking, speculative financial company to fail without risking the failure of commercial banks.\u00a0This new reality resulted in the $700 billion financial sector bailout that Congress approved in October 2008.<\/p>\n

A Path Forward<\/strong>
\nMany steps are needed to improve the economy for working people.\u00a0One first step is to re-regulate the financial sector in the United States and around the world so that the speculative risks accepted by investors no longer threaten to drag down the entire global economy when they do not pay off as expected.\u00a0This re-regulation or new regulation would clearly be WTO-illegal.\u00a0In order to avoid a costly WTO challenge, Congress should also pass the Trade, Reform, Accountability and Development (TRADE) Act<\/a>, which would allow all countries to regulate financial services in the best interests of their citizens.<\/p>\n

For More Information<\/em><\/strong>
\nThe WTO’s General Agreement on Trade in Services (GATS): Implications for Regulation of Financial Services in the United States (PDF)<\/a><\/p>\n

No Meaningful Safeguards for Prudential Measures in WTO Financial Service Deregulation Agreements<\/a><\/p>\n

Lori Wallach on Democracy Now!<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Today\u2019s international trade pacts are often thousands of pages long and cover far more than just reductions in tariffs on goods traded across borders.\u00a0Many modern trade agreements also impose strict limitations on governments\u2019 ability to establish domestic policies that in … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"parent":12,"menu_order":4,"comment_status":"closed","ping_status":"closed","template":"","meta":[],"yoast_head":"\nTrade Pacts and Financial Deregulation - Oregon Fair Trade Campaign<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.citizenstrade.org\/ctc\/oregon\/orftc-campaigns\/trade-pacts-and-financial-deregulation\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Trade Pacts and Financial Deregulation - Oregon Fair Trade Campaign\" \/>\n<meta name=\"twitter:description\" content=\"Today\u2019s international trade pacts are often thousands of pages long and cover far more than just reductions in tariffs on goods traded across borders.\u00a0Many modern trade agreements also impose strict limitations on governments\u2019 ability to establish domestic policies that in … Continue reading →\" \/>\n<meta name=\"twitter:image\" content=\"http:\/\/i188.photobucket.com\/albums\/z167\/liberalamerican\/clintonsignsglasssteagallrepeal.gif\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.citizenstrade.org\/ctc\/oregon\/#website\",\"url\":\"https:\/\/www.citizenstrade.org\/ctc\/oregon\/\",\"name\":\"Oregon Fair Trade Campaign\",\"description\":\"Fighting for Fair Trade Policy\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.citizenstrade.org\/ctc\/oregon\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/www.citizenstrade.org\/ctc\/oregon\/orftc-campaigns\/trade-pacts-and-financial-deregulation\/#primaryimage\",\"inLanguage\":\"en-US\",\"url\":\"http:\/\/i188.photobucket.com\/albums\/z167\/liberalamerican\/clintonsignsglasssteagallrepeal.gif\",\"contentUrl\":\"http:\/\/i188.photobucket.com\/albums\/z167\/liberalamerican\/clintonsignsglasssteagallrepeal.gif\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.citizenstrade.org\/ctc\/oregon\/orftc-campaigns\/trade-pacts-and-financial-deregulation\/#webpage\",\"url\":\"https:\/\/www.citizenstrade.org\/ctc\/oregon\/orftc-campaigns\/trade-pacts-and-financial-deregulation\/\",\"name\":\"Trade Pacts and Financial Deregulation - 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