Dr Patricia Ranald from the department of Political Economy at the University of Sydney talks about this new agreement, its social implications and whether it is actually necessary or not.
On November the 11th, a statement was issued by the 11 countries which formed the TPP, indicating that they wish to form a new trade agreement called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This has many core elements of the original 'TPP' (Trans Pacific Partnership) embedded in it, including legislation which allows major corporations to sue governments for non-compliance with a trade agreement, but the US is not participating in this trade pact. A final agreement was not actually signed, because many of the governments with the exception of Japan and Australia did not want to include aspects (discussed below) of the agreement which were very unpopular. The spirit of TPP however lives on, in the form of CPTPP.
Dr Ranald states that CPTPP is not only about reducing tariffs, but about spreading global rules written by global corporations. "The trouble with this is that sometimes the rules don't suit people's rights or people's needs….For instance, the stronger monopoly for medicines means that medicines will cost more for longer. It also contains a special legal right for foreign investors and corporations to be able to bypass national courts and sue governments for damages in international tribunals over laws which might protect health or the environment," Dr Ranald says.
Australia and Japan are conservative governments at the moment, and do not seem to have a problem with this. If you look at it in a broader context, Japan and Australia are both allies of the US, Dr Ranald points out. "President Obama said that TPP was about the US writing the rules for the Asia Pacific, rather than China writing the rules. So this has been part of this broader geopolitical rivalry between China and the US….The other problem for the 11 CPTPP countries is that without the US, for some countries such as Vietnam and Malaysia, without the US, there is really hardly anything in it for them….They only agree to things like medicine monopolies because they thought they were going to get access to the huge US market."
Negotiations are expected to continue over the next few months. Mexico and Canada are not keen to agree to anything until they complete their own negotiations with America within the North American Free Trade Agreement, which is between Canada, Mexico and the US.
It seems unlikely that the US will return to the agreement. "Donald Trump thought that the US didn't get enough advantage or enough penetration of other people's markets and that has been his approach to all of these trade agreements. So he is saying: We want the US to have even more leverage in trade agreements, than it already has at the moment," Dr Ranald says.
China is already part of another agreement, the 'RCEP' (The Regional Comprehensive Economic Partnership?). "That is more of a genuine regional agreement, and those negotiations have been going on for 5 years….Japan has tried to import some of the clauses from the TPP, about medicine, monopolies and investor rights to sue governments into this agreement. That has been resisted by countries like India and the ASEAN countries, and China to some extent….However this agreement will look more like a traditional trade agreement which focusses on reduction of tariffs." Dr Ranald says. There are other agreements which China is involved with, including APEC, the Asia-Pacific Economic Cooperation group, which Russia is also involved with. There are 21 countries in that. It was at the last APEC meeting that the CPTPP countries held their inauguration meeting.
The fact that there are already so many different agreements has raised a lot of issues. When countries make bilateral agreements with other countries and at the same time belong to international trade agreements it becomes difficult to sort out priorities as there may be overlap and contradictory rules. The WTO recently said that we have a: 'Overlapping Noodle Bowl of Agreements.' Businesses and governments already have difficulty establishing which rules they are allowed to export and import goods under. "These agreements are not making trade easier!" Dr Ranald comments.
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