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Gigantic foundation stone or tiny pebble?

HONG KONG (SE): The Australian prime minister, Malcolm Turnbull, has described the Trans-Pacific Partnership, an agreement that was signed by 12 nations in New Zealand on February 4 that could affect the lives of 800 million people and over 40 per cent of the world economy, as a gigantic foundation stone that will deliver more jobs, absolutely!

But on the other side of the coin, the World Bank predicts that it will be more like a tiny pebble than a gigantic foundation stone.

Writing in the Sydney Morning Herald on January 12, Peter Martin quotes a paper prepared by staff at the World Bank as saying that the so-called Trans-Pacific Partnership would boost Australia’s economy by just 0.7 per cent by the year 2030 and the United States of America’s (US) by even less, as neither country is heavily trade dependent.

Australia knows that its 10-year-old Free Trade Agreement with the US has cost it US$53 billion ($344.5 billion) in deals with the rest of the world and that it only stands to pick up a few peanuts from its recently signed bilateral agreement with China.

Its agreement with the US did not guarantee free entry into markets, as the US placed restrictions on imports of its sugar and dairy products and, undoubtedly, will continue to do so.

A 2010 report from the Productivity Commission of the Australian government says that there is little evidence from business to indicate that bilateral agreements provide substantial commercial benefits.

However, Martin notes that the big economic winner in the Trans-Pacific Partnership will be Vietnam, which relies heavily on trade, and the big loser would have been Thailand, where the deal was expected to have had a negative impact, but it pulled back from the race before the finish line.

Significantly, the partnership rules out China, which is a major trading partner of several of the countries involved in the elite Pacific Rim club and, although observers note that the partnership offers little protection for workers and the environment, even these low bars may be too high for the Middle Kingdom.

In addition, Indonesia, whose economy is mooted to become the fourth largest in the world by 2050, is also significantly absent.

Member states of the partnership may also lose significant freedom in striking trade deals with these two emerging giants.

So what will be built on Turnbull’s gigantic foundation pebble?

Pharmaceutical and other transnational companies are in for an increase in protection for their products from five to eight years. This is a far more defining agenda than freeing up trade and was kept secret until the final hours of negotiations.

Transnational conglomerates also get the ability to sue national governments over legislation made in the public interest, but cut into their profit lines.

The tobacco giant, Philip Morris, has already filed a case against the Australian government in Hong Kong claiming compensation for lost profits because of a trade agreement signed between the Land Down Under the former British colony over legislation demanding plain packaging of cigarettes.

Under the partnership, it would be able to file the case in Australia as well.

Relatively unrestricted movement of personnel by transnational corporations may also see some loss of control of national immigration programmes, especially in the area of labour market testing quotas.

The transnational corporations will also get freer access to natural resources, with reduced restrictions on environmental regulations and labour protection, as well as easier movement of capital, even though individual member nations may gain little, or nothing economically.

But perhaps most significantly, the absence of the two emerging economic giants, China and Indonesia, ensures a solid clamp on their ability to develop political influence in 40 per cent of the world’s production zone, which may also negatively affect the economies of member states in the partnership.

Shiro Armstrong, from the Japan Research Centre at the Australian National University, notes, “Deals that are struck in haste for primarily political reasons carry risk of substantial economic damage.”

Ian Verrender, the business editor of the Australian Broadcasting Corporation, says that the partnership is not about trade at all, but entrenching the interests of major corporations at the expense of ordinary citizens.

Nobel Laureate, Joseph Stiglitz, from Columbia University in the US, calls it an agreement to manage trade investments on behalf of each country’s most powerful business lobbies, not free trade.

Nor have these ramifications have not been missed by international missionary societies.

The Maryknoll Office for Global Concerns in the US says, “This trade deal will put the rights of investors over the rights of people, allowing corporations to sue governments when they protect public interests and the common good with environmental and public health laws.”

On top of that, it adds, “The Trans-Pacific Partnership will limit access to affordable medicines, suppress the little wages small farmers earn and allow for toothless protections for the environment and workers.”

The Columban Justice and Peace Office in the US says, “Weakening environmental regulations, creating new powers for transnational corporations and threatening human rights are just a few of the Trans-Pacific Partnership’s potential consequences.”

It adds, “We have seen trade deals like this before—the North American Free Trade Agreement and the Central America Free Trade Agreement—and we know the poverty, pollution and suffering they can bring to poor communities.”

The office suspects that Barack Obama, the president of the country with the most to gain from the political hegemony and the freedom offered to the transnational corporations by the partnership, will use his fast track authority and give the congress only 90 days to decide to ratify the so-called trade deal.

“This deal was negotiated in secret and now the congress will decide if it approves,” the Columban statement says.

However, all 12 countries involved must still ratify the partnership in their own parliaments for it to come into effect.

The 12 countries that signed up to the partnership at the New Zealand gathering are the US, Brunei Darussalam, Chile, Japan, Australia, New Zealand, Peru, Canada, Malaysia, Singapore, Vietnam and Mexico.

Countries that sniffed around the edges, but pulled back from joining include, Taiwan, The Philippines, Colombia, Thailand, Laos, Indonesia, Cambodia, Bangladesh and India.

The demand to loosen their protectionist trade policies in order to join the elite club seems to be the major stumbling block, or maybe they just did not want to walk with a pebble in their shoe.

 

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