The New TPP: Responsible Globalization in Action?

The AIM Network

7 years ago

By Denis Bright

In the absence of the US, China, and Russia, eleven countries are expected to sign the new Trans Pacific Partnership Agreement in Chile on 8 March 2018. This agreement must be ratified later by the Australian Senate after a likely review by the Joint Standing Committee on Treaties.

As reported in the Sydney Morning Herald, public discussion and rigorous political scrutiny are essential for inclusive treaty making and trading agreements which potentially affect the welfare of the Australian people:

Labor, the Greens and the key crossbench votes of the Nick Xenophon Team all called for independent modelling of the deal on Wednesday, stating the government should not assume it will pass Parliament.

“We have just found out today that it’s been finalised overnight in Japan and now it’s an opportunity for the Parliament and the Australian people to get the details of what’s in that agreement,” said Labor’s trade spokesman Jason Clare.

Expert discussions which were concluded in Tokyo on a new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This is but one step in progressive inclusive trade negotiations.

The Prime Minister’s bubbly enthusiasm for the CPTPP is at odds with the cautions recommended by more moderate leaders like Canadian Prime Minister Trudeau and Chancellor Merkel. There can be new positive directions for global capitalism through social market processes.

In endorsing the CPTPP at the Economic Forum in Davos, Canadian Prime Minister Trudeau gave a timely warning of the excesses of the first thirty years of largely unchallenged market ideology since the fall of the Berlin Wall:

Fear of what a rapidly changing world means for workers and their families, and for those who are already struggling in the existing economy. And that fear – that anxiety – is valid.

People have been taken advantage of, losing their jobs and their livelihoods. Governments and corporations – we haven’t done enough to address this. Over the past decades, citizens and workers have been calling for change, but too often, their pleas have been ignored.

Too many politicians become disconnected – refusing to really listen, chasing short term wins over long term, meaningful solutions. And too many corporations have put the pursuit of profit before the wellbeing of their workers. The gap between the rich and the poor is staggering. All the while, companies avoid taxes and boast record profits with one hand, while slashing benefits with the other.

A Positives Only Assessment of the Benefits of the CPTT

These reservations have not been re-echoed by the federal LNP. This places Australia to the far-right of the countries involved in the negotiations for the new CPTPP.

Prime Minister Turnbull’s media release contains a long litany of nauseatingly positive hype which needs to be tested by critical public discussion:

Accelerated reductions in Japan’s import tariffs on beef, where Australian exports were worth $2 billion in 2015-16 – under TPP-11 even better access.
Elimination of a range of cheese tariffs into Japan covering more than $100 million of trade that was not covered by the Japan-Australia Economic Partnership Agreement.
New quotas for wheat and rice to Japan, and for sugar into Japan, Canada and Mexico.
Elimination of all tariffs on sheep meat, cotton, wool, seafood, horticulture, wine and industrial products (manufactured goods).
Eleven separate deals – legally enforceable market access to all these countries.

The positives soon end in negative swipes at Bill Shorten. The Opposition Leader is deemed to be an opponent of all endless horizons of the CPTPP:

“This is a multi-billion-dollar win for Australian jobs. Australian workers, businesses, farmers and consumers will benefit.

The Government took a leadership role and worked hard to deliver the TPP because it will generate more Australian exports and create new Australian jobs.

The TPP will eliminate more than 98 per cent of tariffs in a trade zone with a combined GDP of $13.7 trillion. The agreement will deliver 18 new free trade agreements between the TPP parties. For Australia that means new trade agreements with Canada and Mexico and greater market access to Japan, Chile, Singapore, Malaysia, Vietnam and Brunei.”

By implication, these vast horizons justify our fullest support for the federal LNP. Our foreign policy agendas now seem to have an increasingly domestic political agenda as under the Trump Administration.

An Appeal for Blank Cheque Endorsement

The Prime Minister’s appeal for blank-cheque support for the TPP concludes with this frightening caveat. It is an attack on Australian sovereignty and an exercise in political elitism:

The text of the agreement is now undergoing a legal review and translation and will be made public on a date to be agreed by all parties.

No inclusive government should responsibly demand that the electorate supports a non-existent public text.

Events have moved so swiftly that even DFAT in Canberra has not had time to modify its descriptive economics graphic on the Latest News release on 24 January 2018. Data from the old TPP is still being communicated which includes trade with the US. In the Trump era, the US is outside the CPTPP.

Let’s hope DFAT will update the site immediately. Do look for the changes on this site.

Bill Shorten cannot logically support the CPTPP on behalf of the Australian people when its text is not available for critical analysis.

Still The Australian persisted with its usual attacks on Bill Shorten:

Prime Minister Malcolm Turnbull said nobody had been more pessimistic about the TPP than Mr Shorten.

“Nobody was more pessimistic about it, more lacking in enthusiasm, more lacking in confidence for the enterprise of Australians than Bill Shorten,” Mr Turnbull said.

“Bill Shorten said the TPP was dead and we should down tools and stop working to keep it going.

“Well, we didn’t take his advice on this or any other matter. We’re not going to start doing that because he’s got no policy that support investment or employment.

As with the Australia-US Free Trade Agreement (USFTA) in 2014, it was Federal Labor which insisted on clauses to protect the Pharmaceutical Benefits Scheme (PBS) before the Senate achieved bipartisan agreement on the new arrangements. Prime Minister Howard complied with the recommendations to negotiate a more bipartisan agreement that protected the PBS.

The CPTPP: Substantial Reservations Are Appropriate

Nobel Prize-winning economist Joseph Stiglitz took issue with the empowerment of corporations in the old TPP agreement with its consequences for industrial awards and environmental protection protocols:

“Stiglitz takes issue with the TPP’s investment-protection provisions, which he says could interfere with the ability of governments to regulate business or to move toward a low-carbon economy.

It’s the “worst part of agreement,” he says, because it allows large multinationals to sue the Canadian government.

“It used to be the basic principle was polluter pay,” Stiglitz said. “If you damaged the environment, then you have to pay. Now if you pass a regulation that restricts ability to pollute or does something about climate change, you could be sued and could pay billions of dollars.”

There were similar provisions in North American Free Trade Agreement that led to the Canadian government being sued, but the TPP goes even further. He said the provision could be used to prevent raising of minimum wages or to overturn rules that prevent usury or predatory lending practices. Stiglitz argues the deal, which is a 6,000-page mammoth and extremely complex, should have been negotiated openly. “This deal was done in secret with corporate interests at the table,” he said.

It is appropriate for Australians to maintain a ‘wait and see’ attitude to the CPTPP. The evangelical hype from the federal LNP on the exclusive benefits of a new partnership arrangements is suspect. Even the DFAT website has not yet caught up with the changes. The federal LNP is probably anticipating that reporters will not have time to read the details and of course the real text of the CPTPP is with-held.

Empowering corporations with a commitment to the old market ideology defies the warnings at Davos from Prime Minister Trudeau and Chancellor Merkel. Both leaders endorse a new era of social market capitalism to extend the benefits of globalization to millions of real households and wage-earners in the Trans Pacific countries and beyond. Cheers to Bill Shorten for being cautious about the new CPTPP until the negotiating text is available for all.

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Denis Bright (pictured) is a registered teacher and a member of the Media, Entertainment and Arts Alliance (MEAA). Denis has recent postgraduate qualifications in journalism, public policy and international relations. He is interested in promoting pragmatic public policies that are compatible with contemporary globalization.