The Tyee - Gordon Campbell, Last Champion of Financial Deregulation: The crash should have killed TILMA by Murray Dobbin
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Stop TILMA!
Nov 7, 2008, 11:00:15 AM11/7/08
to TILMA-BC
All,
Apologies for the late distribution of this latest article by Murray
Dobbin on TILMA and the financiual collapse.
Best,
Carleen
Gordon Campbell, Last Champion of Financial Deregulation
The crash should have killed TILMA
http://thetyee.ca/Views/2008/11/03/TILMA/
By Murray Dobbin
Published: November 3, 2008
TheTyee.ca
In the midst of the financial meltdown, one man, apparently, stands
alone calling for more deregulation. While anti-government George Bush
buys up banks and insurance companies, former Fed chair Alan Greenspan
admits he was "partially wrong" in his hands-off approach towards the
banking industry, and the crisis has caused right-wing French
President Sarkozy to virtually denounce capitalism.
Yet, while everyone else is demanding the rogue financial industry be
brought to heel, B.C. Premier Gordon Campbell is actually pushing for
even more financial deregulation right across the country.
That would seem to be the only logical interpretation of his call at
the premiers' meeting in Montreal to get every province signed on to
his pet project, the Trade, Investment and Labour Mobility Agreement,
or TILMA. Campbell claimed this would help counter the economic
slowdown. But what TILMA does is make a broad range of government
regulations vulnerable to challenge, including regulations over the
financial sector.
How TILMA ties regulators' hands
Among other things, TILMA has a standstill clause so that any new
regulations on financial services that got in the way of investment
would be a violation, potentially subject to a $5 million penalty.
Article 5(3) of TILMA states: "Parties shall not establish new
standards or regulations that operate to restrict or impair trade,
investment or labour mobility."
Existing financial regulations will also be open to challenges under
TILMA if they restrict investment. And unlike other trade agreements,
there is nothing in TILMA to exempt regulations designed to ensure the
stability of the financial system. In stark contrast to other
agreements, TILMA has no safeguards to protect prudential regulations
from challenges by investors.
TILMA does allow governments to do things that are inconsistent with
the agreement if they are pursuing objectives the agreement defines as
legitimate. But nowhere on TILMA's list of "legitimate objectives" is
anything about safeguarding the soundness of financial institutions.
Right now, just Alberta and B.C. are TILMA signatories. The Yukon
recently said no, as have all other provinces either by act or
omission. Most seem to have decided the agreement is too radical -- an
ideological solution looking for a problem. But despite repeated
rejections, Campbell continues to push his fellow premiers to join. It
makes him the most determined deregulation advocate among the
premiers.
Anyone not blinded by laissez faire theology can see the agreement for
what it is: the most radical investment agreement in existence.
Article 3, "No Obstacles," states unequivocally: "Each Party shall
ensure that its measures do not operate to restrict or impair trade
between or through the territory of the Parties, or investment or
labour mobility between the Parties." Period. You cannot put up
obstacles to investment, which is arguably what every government
regulation does by definition.
Learn from Quebec's narrow escape
So what would happen if other provinces accepted Campbell's sales
pitch and signed on? Take for example Quebec, and its recent moves to
regulate the financial sector. In July, Quebec gave royal assent to
Bill 77, the Derivatives Act, which establishes a broad legal
framework specifically aimed at regulating derivatives traded in
Québec. Québec is the first province to take on the regulation of
these investments, the most toxic of any of the financial
"innovations" unleashed on the world over the past 10 years. Warren
Buffett refers to derivatives as "financial weapons of mass
destruction."
But Quebec's laudable efforts to get some control over these risky
financial products would have been impossible if the province had
signed TILMA. Its regulatory initiative on derivatives would have
broken TILMA's rules: that governments cannot introduce new
regulations that restrict investment; that they have to reconcile
their regulations with those of other parties to the agreement; that
they cannot create obstacles to investment.
As of April 1, 2009, all existing B.C. and Alberta regulations over
financial institutions and products will be challengeable under TILMA
-- never mind these provinces ever trying to introduce new financial
reforms. What about other provinces that might hopefully follow
Quebec's lead in strengthening financial regulation? If they sign
TILMA, they might as well forget it, as they would in effect be
setting their own regulations up for a legal challenge.
Who says the Washington Consensus is dead? It is being defended by
deregulation's last crusader, Premier Gordon Campbell.
Apologies for the late distribution of this latest article by Murray
Dobbin on TILMA and the financiual collapse.
Best,
Carleen
Gordon Campbell, Last Champion of Financial Deregulation
The crash should have killed TILMA
http://thetyee.ca/Views/2008/11/03/TILMA/
By Murray Dobbin
Published: November 3, 2008
TheTyee.ca
In the midst of the financial meltdown, one man, apparently, stands
alone calling for more deregulation. While anti-government George Bush
buys up banks and insurance companies, former Fed chair Alan Greenspan
admits he was "partially wrong" in his hands-off approach towards the
banking industry, and the crisis has caused right-wing French
President Sarkozy to virtually denounce capitalism.
Yet, while everyone else is demanding the rogue financial industry be
brought to heel, B.C. Premier Gordon Campbell is actually pushing for
even more financial deregulation right across the country.
That would seem to be the only logical interpretation of his call at
the premiers' meeting in Montreal to get every province signed on to
his pet project, the Trade, Investment and Labour Mobility Agreement,
or TILMA. Campbell claimed this would help counter the economic
slowdown. But what TILMA does is make a broad range of government
regulations vulnerable to challenge, including regulations over the
financial sector.
How TILMA ties regulators' hands
Among other things, TILMA has a standstill clause so that any new
regulations on financial services that got in the way of investment
would be a violation, potentially subject to a $5 million penalty.
Article 5(3) of TILMA states: "Parties shall not establish new
standards or regulations that operate to restrict or impair trade,
investment or labour mobility."
Existing financial regulations will also be open to challenges under
TILMA if they restrict investment. And unlike other trade agreements,
there is nothing in TILMA to exempt regulations designed to ensure the
stability of the financial system. In stark contrast to other
agreements, TILMA has no safeguards to protect prudential regulations
from challenges by investors.
TILMA does allow governments to do things that are inconsistent with
the agreement if they are pursuing objectives the agreement defines as
legitimate. But nowhere on TILMA's list of "legitimate objectives" is
anything about safeguarding the soundness of financial institutions.
Right now, just Alberta and B.C. are TILMA signatories. The Yukon
recently said no, as have all other provinces either by act or
omission. Most seem to have decided the agreement is too radical -- an
ideological solution looking for a problem. But despite repeated
rejections, Campbell continues to push his fellow premiers to join. It
makes him the most determined deregulation advocate among the
premiers.
Anyone not blinded by laissez faire theology can see the agreement for
what it is: the most radical investment agreement in existence.
Article 3, "No Obstacles," states unequivocally: "Each Party shall
ensure that its measures do not operate to restrict or impair trade
between or through the territory of the Parties, or investment or
labour mobility between the Parties." Period. You cannot put up
obstacles to investment, which is arguably what every government
regulation does by definition.
Learn from Quebec's narrow escape
So what would happen if other provinces accepted Campbell's sales
pitch and signed on? Take for example Quebec, and its recent moves to
regulate the financial sector. In July, Quebec gave royal assent to
Bill 77, the Derivatives Act, which establishes a broad legal
framework specifically aimed at regulating derivatives traded in
Québec. Québec is the first province to take on the regulation of
these investments, the most toxic of any of the financial
"innovations" unleashed on the world over the past 10 years. Warren
Buffett refers to derivatives as "financial weapons of mass
destruction."
But Quebec's laudable efforts to get some control over these risky
financial products would have been impossible if the province had
signed TILMA. Its regulatory initiative on derivatives would have
broken TILMA's rules: that governments cannot introduce new
regulations that restrict investment; that they have to reconcile
their regulations with those of other parties to the agreement; that
they cannot create obstacles to investment.
As of April 1, 2009, all existing B.C. and Alberta regulations over
financial institutions and products will be challengeable under TILMA
-- never mind these provinces ever trying to introduce new financial
reforms. What about other provinces that might hopefully follow
Quebec's lead in strengthening financial regulation? If they sign
TILMA, they might as well forget it, as they would in effect be
setting their own regulations up for a legal challenge.
Who says the Washington Consensus is dead? It is being defended by
deregulation's last crusader, Premier Gordon Campbell.
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