Trans-Pacific Trade Deal: Divisions Over US Agenda and Social Movement Opposition May Frustrate End
Ministers and Leaders of the 12 governments involved in the Trans-Pacific Partnership (TPPA) negotiations met on the fringes of the meeting of the 21-member APEC meeting in Bali on October 4-8. The outcomes of the non-binding APEC leaders’ Forum received extensive media coverage, with less attention on the TPPA, which aims to be a legally binding trade agreement.
The TPPA is the economic side of the US pivot into the Asia-Pacific, part of US strategic rivalry with China in the region. The negotiations involve 12 governments: the US, Australia, New Zealand, Canada, Mexico, Chile, Peru, Malaysia, Singapore, Brunei, Japan and Vietnam. Six of these have bilateral free trade agreements with the US. The US objective is not mainly about trade in goods, but to build on these bilateral agreements as a step to establish US style regional regulatory frameworks which meet the demands of its major export industries and corporations. These industries include pharmaceuticals, media and information technology, agribusiness and financial services, all of which are demanding changes to other governments’ domestic regulation. The agreement is described as “building the architecture of a 21st century trade agreement in the Asia-Pacific”, but it is clear that the details of the architecture are designed to meet US economic interests. The negotiations have been underway for three years, and the aim is to persuade other Asia-Pacific governments to join after the negotiations are completed.
The US determined pursuit of its agenda has created its own contradictions and has prolonged the negotiations. Community groups and unions in the US, Australia and other countries have been able to mobilise strong opposition to this agenda, based not only on the substantive issues but also on the secretive nature of the process. Our knowledge of the negotiations comes mainly from leaked documents, industry submissions and media reports. These negotiations are dealing behind closed doors with domestic policies which would normally be decided by domestic public and parliamentary debate. This pressure from civil society and perceptions of their own national interest has led many other governments to resist key US proposals. These include stronger patents and higher prices for medicines, reduced rights of governments to regulate medicine prices, giving foreign investors the right to sue governments over health and environmental policies, (known as Investor-state Dispute Settlement or ISDS) and reducing the ability of state-owned enterprises to operate commercially. Detailed negotiations on market access for goods and services have scarcely begun. These have been slowed in part by the historically predictable reluctance of the US government to increase market access to its own domestic markets, and by the relatively recent addition of Japan, which has a similar history and which only joined the negotiations in July this year.
The meeting of TPPA leaders in Bali revealed these contradictions. The meeting was to be chaired by US President Obama, and was supposed to announce substantial progress in dealing with the sticking points in the TPPA negotiations. But Obama was unable to attend because the Republicans in the US Congress blocked the annual budget, leading to a shutdown of the US government and layoff of hundreds of thousands of US government workers. Moreover, this reminder of the unpredictability of the Republican-dominated Congress reduced the credibility that Congress will grant the Trade Promotion Authority needed for US Congressional approval of the TPPA, in the event that agreement is reached in the negotiations. Obama’s absence and its cause undoubtedly reduced the US leverage at the meeting. But the major reason for lack of progress was that there are still deep disagreements with the US proposals.
The final statement which emerged from the TPPA leaders meeting was extremely bland, failed to mention these ongoing disagreements, and claimed that substantial progress had been made on other issues. It announced that TPPA Ministers would meet again on the fringes of the WTO Ministerial Meeting in Bali on December 3-6, and reaffirmed the goal finishing the negotiations by the end of the year. The Malaysian government and many commentators expressed serious doubts that the latter goal can be achieved.
I was in Bali during the negotiations because I was invited to speak at a seminar on the social impacts of globalisation, APEC and the TPPA at the Udayana University of Bali. The seminar was organised by broad coalition of Balinese students, academics, environment organisations, women’s organisations and unions which are part of a national network under the banner of the Indonesian People’s Alliance, and which will also organise civil society events for the December WTO meeting. 200 people attended the seminar, and there was lively discussion. Indonesia is not involved in the TPPA, but will be one of the governments pressured to join if the negotiations are completed.
Australia’s role in the negotiations has changed with the election of the Coalition government. While the previous ALP government participated in negotiations, they had responded to unions and civil society pressure and were resisting US proposals on medicines, and on increased foreign investor rights though ISDS. These policies were also justified by a Productivity Commission report which argued that there would be no economic advantages and huge costs for the Australian Government if it agreed to stronger patent rights on medicines and to the right of foreign investors to sue governments. This policy had been strengthened by the experience of the Philip Morris tobacco company using an obscure Hong Kong- Australia investment agreement containing ISDS to attempt to sue the Australian government for damages over the tobacco plain packaging legislation.
The Coalition election policy announced that, in contrast to the labour government, it is prepared to negotiate on ISDS, while remaining silent on other issues. The government is now facing pressure from public health groups, unions, environment groups, pensioners, development and others. They have been joined recently by coal seam gas activists from many rural areas, which are part of the National Party constituency. Fifty-four of these groups recently wrote to the Trade Minister, urging him to oppose ISDS, based on the example of a US mining company suing the Canadian Québec provincial government for $250 million because it dared to conduct an environmental review of shale gas mining. These groups have recently pressured the Coalition government in New South Wales to conduct a similar environmental review and to introduce regulation of coal seam gas mining, and they fear that this would be undermined if the Australian government agreed to ISDS in the TPPA or other trade agreements.
The Australian Fair Trade and Investment Network is intensifying its campaign leading up to the December meeting, with increased media coverage, electronic petitions and messages to the Minister and a rally in Sydney on November 29. For more information and actions you can take, see www.aftinet.org.au.
About the author
Dr Patricia Ranald is an honorary Research Associate at the University of Sydney Her Doctoral thesis in International Relations at the University of NSW was a comparative study of the World Trade Organisation and regional trade agreements. She was formerly a Senior Research Fellow at the University of New South Wales, and has also worked for unions and community organizations.
Dr Ranald has published widely in academic and popular media on the health, social and environmental impacts of globalisation and trade agreements. She is Convener of the Australian Fair Trade and Investment Network (AFTINET), a network of community organizations, including public health groups, church groups, human rights groups, unions and environmental organizationswhich advocates for fair trade based on human rights and environmental sustainability www.aftinet.org.au.
Disclaimer: Dr Ranald did not receive any funding from institutions, public or private, in the preparation of this post, and the views expressed are her own and do not necessarily reflect those of the Journal of Australian Political Economy, Sydney University or the Australian Fair Trade and Investment Network.
