The TPP – is the US trying to pull one on China?

ImageNOTES ON THE NEWS: To the uninitiated the acronym TPP sounds like a nasty new medicine. Most people have never heard of it.  It certainly will not often be uttered by Julia Gillard or Tony Abbott in the election campaign now well underway. Yet its future is much more important than that of most of the issues separating the main combatants.

TPP is not a medicine, but already it promises a nasty taste for many who do not wish to embrace it. These include political leaders in China and Indonesia, and a fairly large number of those in Australia and New Zealand who see the TPP as a crafty Washington plan to force American values – and products – on to an unsuspecting public.

The TPP, or Trans Pacific Partnership, is actually much more than that.  It’s a proposed set up like the old European Community before it morphed into the European Union, and got messed up by the Maastricht Treaty and the Eurozone.

At its heart, it is a free trade zone, devoid of tariffs and other obstacles to business, creating a single market for its members, drawn from both sides of the Pacific Ocean.

Eleven countries joined the negotiations that started in Lima last week – Australia, Brunei, Chile, Canada, Malaysia, Mexico, New Zealand, Peru, Singapore, Thailand, the United States and Vietnam.

You will have spotted already that China, Indonesia, South Korea, and the Philippines are not in this list. John Keys, the New Zealand prime minister, has already said he wants China in, that the negotiations are complex, and that the deadline should be extended beyond October.

Mr. Keys is correct. The deadline is hopelessly unrealistic. The TPP has not been debated in the Australian Parliament, nor will it be this side of October.

Given the complexity of the TPP, even October 2014, one year on, is untenable.

There are two main reasons for this. First, the TPP involves those signing up to it surrendering a degree of sovereignty. Secondly some of the countries in the Association of South East Asian Nations (ASEAN), led by Indonesia, believe that the free trade area should be formed an Asian one, and then negotiating bilterals with the EU and NAFTA (the US, Canada and Mexico).

Common policies need to be agreed on such controversial subjects as intellectual property, foreign investment guidelines, banking legislation, and the role of state-owned enterprises. Once agreed – if agreed – the new rules will need to be enforced, which means a new TPP bureaucracy.

Questions will be asked. What, for example, what will happen to Australia’s heavily subsidized motor industry? Will Japan’s farmers accept open trade in the rice market?

Already there are rumbles of discontent in Australia. Public health advocates have argued that the TPP will open the door to the import of unhealthy food products – and advertising to match – from the United States, damaging the livelihoods of local growers.

An article by three female health academics in The Conversation argues that the TPP will weaken the ability of government to protect public health by, for example, limiting imports and domestic manufacturing of unhealthy foods and drinks.

But the compelling question to be discussed is whether the TPP is an ambitious plan to advance American business to the disadvantage of the Chinese – and the Indonesians, the Indians and the Koreans?

This issue will be discussed at the AIIA NSW on Tuesday May 21, when the speaker will be Dir. Stephen Greville, a trade policy expert.

Dr Grenville is a visiting fellow at the Lowy Institute for International Policy. Between 1982 and 2001, he worked at the Reserve Bank of Australia, for the last five years as deputy governor. Before that he was with the OECD in Paris, the International Monetary Fund in Jakarta, the Australian National University and the Department of Foreign Affairs.

Entry: AIIA Members: $15.00, Senior/Student members $10.00
Visitors  $25.00   Student visitors: $15.00

Colin Chapman is the President of the AIIA (NSW).


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