How Corporations Drive the Global Agenda PDF Print E-mail
Sharon Beder, 29 May 2006


The GATS is not just something that exists between Governments. It is first and foremost an instrument for the benefit of business, and not only for business in general, but for individual services companies wishing to export services or to invest and operate abroad. (European Commission)  [1]

American Express (AmEx) has been cited in Business Week as a prime example of the new breed of stateless corporation pioneering a borderless future in which ‘open markets, deregulation and unimpeded flow of capital’ is the norm.[2]  Nevertheless, AmEx, the stateless corporation, found it convenient to identify its interests with the US national interests when it came to lobbying US policy makers and negotiators.

During the 1970s AmEx was facing saturation of its markets at home, as well as increasing competition from other companies offering credit cards, and needed to expand to new countries in order to grow. Overseas markets were turning out to be extremely lucrative and AmEx targeted the most affluent customers in each country and was able to underprice European companies by supplying only the most profitable elites.

However AmEx was having trouble accessing markets in some countries and it believed that the GATT negotiations might provide a solution. In 1979 the CEO of AmEx, James D. Robinson III, asked AmEx vice president Harry Freeman to get a new round of GATT negotiations started that would include services. When Freeman asked what budget limitations there were Robinson responded ‘Don’t worry about money. This is so important, you will have an unlimited budget.’ [3]

With so much money at his disposal Freeman was able to have dedicated staff in Brussels, Tokyo, Washington, New York and elsewhere. AmEx had clout not only because it was a ‘corporate superpower’, but because its board included some political heavyweights, including Henry Kissinger, Vernon Jordan and Drew Lewis with Gerald Ford, former president, as an ‘outside advisor’. AmEx ‘enlisted the aid’ of Citicorp and American International Group (AIG) and the CEOs of these three financial corporations went to ministerial meetings through the early 1980s until the Uruguay Round of negotiations started in 1986. [4]

These corporations were particularly interested in having ‘financial services’ included in a trade agreement. Freeman described how:

The first thing we did in 1979 was to coin the phrase. You will not see the term ‘financial services’ before 1979. We did that by asking everybody in the company to talk about financial services particularly with the media, and in about two years the term financial services was part of the lexicon…. We were quite successful in the Uruguay Round in defining financial services as ‘any service of a financial nature’. This allowed us to have more and more allies, and you have to take care of your allies.[5]

Freeman also promoted the phrase ‘goods and services’ by getting his staff to write to journalists who used the term ‘goods’ to tell them they had missed out the term ‘services’. In the early 1980s, he claims they wrote at least 1,600 such letters and in this way succeeded in getting the phrase ‘goods and services’ widely adopted. Getting acceptance of the phrase ‘trade in services’ was more difficult because it was not immediately apparent what it meant, particularly with respect to banks.[6]  Most people do not see the establishment of a foreign bank in a country as trade in the sense of export and import.

Freeman and executives from Citicorp and AIG formed a broad coalition of service sector corporations as ‘allies’, including non-financial service companies, to better influence Congress. Until this point corporate executives in fields as diverse as entertainment, engineering, transportation and finance did not identify as ‘part of a coherent ‘services’ sector with common interests’.[7]

AmEx CEO Robinson also became a leading advocate of free trade in his own right. He was appointed as chair of President Bush’s influential Advisory Committee on Trade Policy and Negotiations (ACTPN) in 1987 and in that role he oversaw US GATT negotiations. This committee was comprised of up to 45 people from a range of sectors, including business, labour and agriculture and advised the US Trade Representative directly.

Indicative of the company’s farsightedness, Robinson even achieved acclaim as an early proponent of Third World debt relief, propounding the ‘Robinson Rollover’ plan… Key to its fiscal clemency is the requirement that Third World governments expose their economies and populations to market discipline according to stringent restructuring formulas.[9]

As well as overseeing US GATT negotiations Robinson was a corporate member of the Multilateral Trade Negotiations (MTN) Coalition, ‘the leading pressure group on GATT’ (see previous chapter). MTN’s executive director was none other than Harry Freeman, who left Am Ex under a cloud when it was alleged that he was part of a campaign to discredit Swiss banker Edmond Safra, a rival to AmEx. Although Freeman took the fall for the smear campaign he remained close to AmEx and continued his work on liberalizing financial services and lobbying government to support GATT.[10]

The Coalition of Service Industries (CSI), a group of large US-based multinational for-profit service corporations, was formed in 1982 with Freeman as chair. Its purpose was to get services included in the GATT round of negotiations. It sought to make trade in services ‘a central goal of future trade liberalization initiatives’. It claims to have ‘played an aggressive role in writing’ and ‘ shaping’ the General Agreement on Trade in Services (GATS), included in the WTO at the end of the Uruguay Round.[11]

GATS aimed to open up the provision of all services to international ‘free trade’. It prohibits governments from discriminating against foreign multinational companies that want to buy government services or compete to supply them, in areas that governments agree to liberalize. As a result, CSI hoped that large sectors of government services would be privatized and opened to foreign investment.

CSI took a three pronged approach: targeting public opinion, the US Congress, and the US Executive. A public campaign to promote the importance of the service sector was aimed at changing public perceptions and therefore indirectly influencing Congress and the Executive. The message conveyed was that services were important to the economy; provided many good quality jobs; promoted technological and productivity advances; and that these services were part of US trade and should be covered by GATT negotiations.[12]

In aid of reinforcing this message CSI persuaded Fortune magazine to publish a Services Industry 500 just as it did the Fortune 500 list of manufacturing companies. It also put together and publicized data and statistics to prove what a large proportion of exports, GDP and jobs could be attributed to service industries. CSI also lobbied for legislation requiring the Commerce Department to collect data on the services industry as a category. It lobbied for legislation that included trade in services as part of the Trade Act so that countries with trade barriers against US service exports would be subject to sanctions in the same way as other exports.[13]

The crucial role of CSI in getting the GATS agreement included in the Uruguay Round has been widely recognized. David Hartridge, Director of the WTO Services Division till 2001, admitted that ‘without the enormous pressure generated by the American financial services sector, particularly companies like American Express and Citicorp, there would have been no services agreement.’[14]


1. European Commission, ‘Opening World Markets for Services: Towards GATS 2000’, European Commission, 2003, http://gats-info.eu.int/gats-info/g2000.pl?NEWS=bbb accessed 10 May 2003
2.  Cited in Brian Ahlberg, ‘American Express: The Stateless Corporation’, Multinational Monitor, November, 1990, http://multinationalmonitor.org/hyper/issues/1990/11/mm1190_11.html
3.  Quoted in Harry Freeman, ‘Comments and Discussion’, Brookings-Wharton Papers on Financial Services 2000, 2000, p. 456.
4.  Ahlberg, ‘American Express’, ; Freeman, ‘Comments and Discussion’, , p. 456.
5. Freeman, ‘Comments and Discussion’, , p. 457.
6.  Ibid., p. 457.
7.  James P. Zumwalt, ‘Pressure Politics and Free Trade: Influence of the Services Industry on the Uruguay Round’, National Defense University, 16 December 1996, pp. 3-4.
8.  Ahlberg, ‘American Express’, ; Peter Drahos and John Braithwaite, ‘Who Owns the Knowledge Economy? Political Organising Behind TRIPS’, The Corner House Briefing, no 32, 2004, p. 11.
9.  Ahlberg, ‘American Express’,
10.  Ibid.
11.  USCSI, ‘About CSI’, Coalition of Service Industries, 2003a, http://www.uscsi.org/about/ accessed 2 May 2003; R. Vastine, ‘Statement of Robert Vastine, President, Coalition of Service Industries’, Senate Senate Finance Committee Subcommittee on International Trade, 21 October 1999
12.  Spero cited in Zumwalt, ‘Pressure Politics and Free Trade’, , p. 5.
13.  Ibid. , pp. 5-8.
14.  Quoted in Darren Puscas, ‘Enron-Style Corporate Crime and Privatization’, Ottawa, Polaris Institute, 19 June 2003, p. 3.


This is an excerpt from Sharon Beder's new book, Suiting Themselves: How Corporations Drive the Global Agenda, Earthscan, London 2006.

Buy it from  Earthscan   Information about availability outside the UK here.



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