No free-pass for TPP

Opposition to the trade pact say it is a way for rich to bully the poor while advocates say it will be good for corporations

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Farmers raise their fists as they take part in a rally against Japan’s participation for negotiations in the US-led Trans-Pacific Partnership, known as the TPP, in Tokyo, Japan. PHOTO: BLOOMBERG

Talks on forming a huge US-led Pacific free trade area is expected to resume next month after the 12 prospective members gave up on meeting Washington’s year-end deadline for a deal last week.

The Trans-Pacific Partnership (TPP) is being negotiated by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam. They make up 40 percent of the global economy.

Observers say the partnership mostly benefits US interests while supporters say it could be a comprehensive boon for all economies involved. The opinions expressed below are their own.

Extreme makeover

Melinda St. Louis, international campaigns director of the Washington-based advocate group Public Citizen:

Vietnam is not the only country that could suffer from these extreme proposals, but as a developing country, many of the implications of these proposals will be even more severe for Vietnam. It is the most vulnerable people who suffer when medicine prices are high or when governments are impeded from enacting policies to protect public health or ensuring the stability of the financial system.

In the TPP, developing countries are required to implement all aspects of the agreement in the same way as developed countries, unlike in the context of the World Trade Organization (WTO). Also, because Vietnam does not already have a Free Trade Agreement (FTA) with the US, Vietnam will likely have to make many more changes to its existing laws and regulatory framework to comply with the agreement than other TPP countries, and will for the first time expose itself to corporate attacks by US corporations to its laws that are designed to the protect the public.

Rushing to conclude a deal is likely to result in a very bad deal for developing countries. Developing countries should look out for their interests to protect their most vulnerable people from rules that would benefit the corporate interests of developed country TPP parties at the expense of government’s ability to regulate in the public interest.

The Vietnamese government should take careful note of the US political situation – particularly the opposition in the US congress to granting “Fast Track” trade authority for the TPP. In the past, the US congress has required governments to make additional concessions to the US after a trade deal was signed, before agreeing to pass the agreement, such as in the case of automobiles and auto parts in the US-Korea FTA.

Business paradise

Deborah Kay Elms, a specialist on the TPP at the S. Rajaratnam School of International Studies (RSIS) in Singapore:

It is true that the US has had-by far-the largest market weight of the TPP countries for most of the negotiations. This has given it more ability to get what it wants than, say, Brunei. But, in general, all of the TPP member states work very hard to ensure that their own interests are met in the final agreement. Each must get benefits from participating and all want the deal done without dragging on for years without a resolution.

I think Vietnam is actually the country that stands to benefit the most from the TPP overall. I think the government is largely focused on the possible gains from increased textile and footwear exports. But I think that businesses are likely to move into Vietnam in a very serious way once this agreement is finalized.

If I were a company manufacturing auto parts like seats or bumpers, I would be very carefully studying the TPP and Vietnam. I would be preparing to move my factory out of other ASEAN countries (in particular) and into Vietnam to take advantage of TPP membership. As a firm, I gain access to many benefits, including: low or zero tariffs for my inputs and materials from other TPP member countries, low or zero tariffs for my finished car parts into other TPP members like Japan or the US, significantly improved services inside Vietnam including (over time) distribution and logistics, better access and protection for my investments, potentially harmonized standards for my parts so I don’t have to have them tested multiple times, faster customs procedures and so forth. As a result, I think Vietnam will be able to attract many new firms with potentially all sorts of new jobs and opportunities for citizens in the future.

Vietnam is being very ambitious in this agreement. It has taken on commitments that many developing countries refuse to make. But I think it has also seen what kind of economic growth was unleashed from joining the WTO, which also involved some difficult decisions. These structural reforms have now reached their limits and, to encourage a new round of economic reform, Vietnam’s leaders have decided to aim high. I believe it will pay off handsomely for most Vietnamese. We will not have to wait very long to see the results.

The bully pulpit

Jamie Choi, campaign director of global advocacy group Avaaz:

The US is bullying other negotiating countries into accepting a bad deal that would hand over our rights on a silver platter. But if countries like Vietnam refuse to be bullied, they can alter the course of the negotiations and ensure there’s proper transparency and oversight in this process.

There are many theories as to why the US is trying to bulldoze through this deal, but my guess is it’s all about momentum. The Obama administration has identified TPP as the president’s top trade priority this year, and it’ll be a symbolic failure to not achieve that. Also, the more they wait, the less likely they’ll be able to pass a deal as public scrutiny and criticism is expected to rise.

The US was hellbent on sealing the super secretive deal this week, but people across the world have blown these talks open, and we’re seeing countries standing strong for what their citizens want. There are still huge splits on access to medicines, Internet privacy and national sovereignty. People power is seeing off big business bullies – it’s great news for democracy.

Corporate interests will push like crazy to seal the deal in January, while doing everything to sell the illusion that they made tremendous “progress” in Singapore. But progress on the TPP is about as real as Santa Claus. The US’s attempt to bully others into riding roughshod over public interest laws – including on health and privacy – will continue to get stiff pushback.

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