The Trans-Pacific Partnership: Undermining Wall Street Reform

In the wake of the worst financial crisis and economic recession since the Great Depression, governments around the world have been re-regulating financial firms, seeking to reverse the extreme deregulation that led to foreclosed homes, bank bailouts, lost jobs and collapsing economies. But status quo, corporate-driven trade deals contradict those efforts.

Most of the world's countries are bound to expansive financial services deregulation requirements imposed by the World Trade Organization (WTO) and various Free Trade Agreements (FTAs). These terms lock in domestically, and export internationally, the model of extreme financial service deregulation that most analysts consider a prime cause of the global financial crisis. Written under the advisement of banks before the financial crisis, these deregulatory rules in the WTO and other FTAs undermine bans on particularly risky financial products, such as the toxic derivatives that led to the $183 billion government bailout of AIG. They also threaten policies to prevent banks from becoming "too big to fail" and the use of "firewalls" to prevent banks that keep our savings accounts from taking hedge-fund-style bets.

The good news is that a major threat to greater financial system accountability was averted when trade activists around the world succeeded in stopping the Trans-Pacific Partnership (TPP), which would have doubled down and expanded on this deregulatory model. However, these onerous terms are being replicated and expanded in trade deals now under consideration like the Transatlantic Trade and Investment Partnership (TTIP), which would also empower foreign financial firms to directly attack these and other financial stability policies in foreign tribunals, demanding taxpayer compensation for regulations that they claim frustrate their expectations and inhibit their profits – as well as the Trade in Services Agreement (TiSA).

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