Corporate benefit trumps public welfare in TPP

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It took around-the-clock negotiations in Atlanta, and the pressure among 12 delegations was showing. Elections were due in some of the countries represented. The issue of the Trans-Pacific Partnership was looming as a selling point.

TPP Why So Secret?The signatures obtained from 12 countries ringing the Asia-Pacific, including Australia but excluding China, binds them to what ostensibly amounts to a supposed Free Trade Agreement.

According to WikiLeaks, the TPP is the 'icebreaker agreement' for what will be a 'T-treaty triad' which includes two additional documents — the Trans Atlantic Investment Agreement and the Trade Services Agreement that would replicate a similar body of rules to apply to 53 states, 1.6 billion people and two-thirds of the global economy.

The troubling feature of such talks was that each of the countries was being sold the implausible idea that the agreement was too large not to sign. This was the train of history that needed to be occupied, even if seating was in third class. What was on sale, however, was a dogma of corporate benefit rather than public welfare.

It has been shown time and again that the reality of projections suggesting equitable wealth creation, as opposed to selective accumulation, in such trade agreements is distant from the consequences that arise from them. Powerful partners — in this case, the United States and Japan — tend to hold sway over smaller states. One should hesitate about using the term 'partners' at all.

Australia's gains from its own free trade agreement with the US have shown up as mind numbing losses. Analysis conducted on the implications of AUSFTA by the Australian National University suggest both Australia and the US actually reduced their trade with the rest of the world by a staggering $53 billion.

Preferential treatment for US goods, services and investment effectively diverted trade away from more efficient and competitive suppliers, thereby putting pay to the myth of 'free' trade.

Even the giants can be wounded. The US itself has a foretaste of things to come with the TPP, given the impact the North American Free Trade Agreement had on the economy after it was signed into law by President Clinton in 1993. While there are disagreements among economists over the consequences, a good number point to the loss of manufacturing jobs overseas and a ballooning US trade deficit.

Billionaire and former US presidential candidate Ross Perot suggested that if the TPP were to be implemented, a 'giant sucking sound' would be heard as millions of jobs would leave the country.

The overwhelming conclusion is that the TPP is a corporate, US driven document that suggests a re-writing of the trade rules. It constitutes an unabashed effort to counter China's emergent role in the Asia-Pacific.

As the US House Ways and Means Committee Chairman Paul Ryan (R-WI) explained, 'A successful Trans-Pacific Partnership would mean greater American influence in the world and more good jobs at home.' President Barack Obama openly stated in January that 'there are countries all over the world, China included, that would like to take away America's mantle of economic leadership'.

The second aspect, apart from the unlikely benefits that may accrue to smaller states, is the severe blow such an agreement has for democratic practice. Debate on this arguably most important trade agreement has been stifled. The only non-government groups represented at negotiations have been corporate entities, rather than public interest organisations and members of the media.

Debate, it is safe to say, would have been all but shut out had WikiLeaks not released the draft chapters on intellectual property, the environment, and various annexes on ministerial directions regarding state owned enterprises and healthcare.

Those provisions demonstrate, to an alarming extent, the degree to which governments will capitulate in the name of a doctrine that has scant value. There are vast concessions to corporations in terms of extending patents on so called biologics, and policing measures to restrict dissemination of unauthorised copyrighted material on websites, a nasty remnant of the rejected US Stop Online Privacy Act.

This is the ideology of the corporate boardroom writ large, not the philosophy of liberal democracy. Corporations stand to benefit from lower tariffs, higher prices for pharmaceuticals, and rigorous protections of intellectual property. Protections for the environment, in contrast, are minimised.

Then come the big partner side agreements that also function, and potentially affect, the rest of the parties, notably the large Japan-US bilateral deal that left various members, primarily Canada and Mexico, stunned, especially in the field of auto part production.

The signing of the agreement does not negate the role of parliamentary bodies that are supposedly going to debate the provisions. The US administration has to make the text public for 60 days prior to sending it to Congress.

But even in this area, there is much to doubt. The Obama administration sought and received power from Washington to fast-track the TPP negotiation process, a measure that effectively curtails debate in favour of yes-no contentions. 

Where ideology is ascendant, there is nothing to debate. That may prove to be the costliest mistake of all.


Binoy KampmarkDr Binoy Kampmark is a former Commonwealth Scholar who lectures at RMIT University, Melbourne.

Image: GlobalTradeWatch, Flickr CC

Topic tags: Binoy Kampmark, Trans Pacific Partnership, free trade

 

 

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Existing comments

Thank You Binoy How about ES readers contact their Senators and urge them not to approve the enabling legislation until they debate the provisions thoroughly? Don't rush this through.
Anne Lanyon | 07 October 2015


I believe you are being far too pessimistic. Trade barriers are just a race to the bottom. The failure of GATT has been due to premature open disclosure of treaty provisions, allowing special interest groups and rent-seekers galore to get in there and frighten everyone. Free trade and optimal use of capital internationally is an enormous force for good, and has pulled literally billions of people out of poverty. Sure, that has been accompanied by "simple" low-skill jobs moving from richer to poorer countries and it means that developed countries need to maintain high levels of education, high level of occupational skills, and high productivity to compete and to move up the technology scale. Consumers benefit enormously. Countries need to use tax regimes and targeted social spending to maintain internal economic and social equity. Thankfully, I suspect that Mr Turnbull understands all this.
Eugene | 07 October 2015


A great topic for economic discussion but having read the reference articles the science to calculate these values appears to be severely lacking. I started the article not understanding the detailed calculations behind the economic cost/benefit and I finish the article in the same state. You may be correct but the article does not convince on the presentation of economic science.
Where is the detail | 11 October 2015


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