Dear Fair Trade Supporter,
Sometimes, they just don't get it. World leaders at this week's G20 Summit will issue plans for reregulating the financial industry to help solve the economic crisis. Yet, bizarrely those same leaders will push for completion of the current WTO negotiations - called the Doha Round - which at its core calls for further financial services deregulation and pressures governments to limit their regulation of banks.
We need to stop this.
President Obama needs to hear from you that he must lead the renegotiation of existing WTO rules – like he said he would on the campaign trail. And, he must pull the plug on the lunatic idea of the WTO Doha Round requiring further financial service deregulation - which would only exacerbate the economic crisis. Sign our petition to the president telling him to turn around the WTO.
Banks and insurance giants pushed for new WTO negotiations on financial service deregulation in the mid-1990s. The deal that was negotiated and then implemented in 1999 exudes the prevailing consensus in favor of radical deregulation. This consensus has been all but swept away after the 2007-09 financial meltdown, but the binding WTO obligations remain.
Just some of the WTO limitations many governments have placed on their financial regulatory policies are:
- A ban on policies that limit the size of financial institutions (aimed at dealing with the too big to fail problem).
- A "standstill" on financial regulation of sectors already committed to WTO jurisdiction, so countries risk WTO challenges if they reregulate elements of the financial industry.
- Foreign firms must be allowed to offer any new financial product or services – no matter how risky – which limits the ability of countries to keep out harmful products, such as the credit default swaps and collateralized debt obligations that fueled the current financial crisis.
What's worse, the WTO's Doha Round negotiations – which have dragged along despite major opposition since 2001 - would actually further financial services deregulation. Not surprisingly, the banksters are pushing this WTO expansion.
But what is surprising is that now in Pittsburgh, the government leaders representing the world's 20 largest economies – including President Obama - say they want to revive the Doha Round - and bizarrely tout it as a solution to the crisis – even as it would undermine the reregulation commitments they are also making.
One year after the reckless decisions made by executives at Lehman Brothers, AIG and dozens of other banks nearly brought down the entire economy, we know we need change. However, expanding the WTO's financial services agenda is just more of the same.
Sign our petition to President Obama. Then tell your friends about this WTO sneak attack on plans to reregulate the financial industry.
To solve the economic crisis, G20 leaders must agree to review and repair the existing WTO limits on financial service regulation and devise a future WTO negotiating agenda that takes into consideration the harsh lessons of the current crisis.
As he heads to Pittsburgh, make sure the President hears from you.
Thanks for all that you do,
Deputy Director, Public Citizen's Global Trade Watch division