Page 2 of
2 Asia's
free-trade bandwagons to
nowhere By Peter
Lee
Easy victories outside Canada and,
possibly, compliant legislatures in Brunei and
Singapore, may be hard to come by and it may be
harder to sustain the momentum when the
make-or-break votes comes up.
Even in the
United States, where the major beneficiaries of
the TPP presumably reside, the TPP may get caught
in the legislative bog.
Assuming that
President Obama achieves re-election and the TPP
comes up for a vote, the agreement will probably
be opposed reflexively by his Republican political
enemies anxious to deny him a victory for any
reason, seconded by agitated anti-world
government Tea Partiers
on the right and by liberals uncomfortable with
the expansion of corporate rights and influence on
the left.
Indeed, judging by the leak of
only one of the 20 chapters of the draft TPP
agreement - a wish list of the US Trade
Representative concerning intellectual property
rights - the TPP is a greasy corporate document
largely composed at the behest, if not actually
written by, pharmaceutical and media industry
lobbyists. [5]
Judging from the IPR draft,
a distracting rumpus over intellectual property
and a replay of the politically calamitous SOPA
("Stop Online Piracy Act") debate is virtually
guaranteed as the Western world's aggrieved and
astute netizens fight efforts to impose censorship
(in their view) or fight piracy (the perspective
of corporations seeking to gain the maximum
leverage from their intellectual property through
aggressive enforcement of measures against
copyright infringement) including demands that
Internet Service Providers take responsibility for
and police their content.
The United
States is not the only country in which a divided
government holds out the promise of a rancorous
debate over TPP ratification.
Chile
already gets most of what it wants in terms of
access from its free trade agreements with the
United States and the other TPP participants, and
the opposition could make profitable political hay
over the unpopular and perhaps unnecessary
inconveniences that the TPP would impose upon
Chilean law.
There is plenty of grist for
the political mill.
A rebuttal to the only
one element of the leaked section - on patent
protection - uses 17 pages to highlight how
Chilean law would have to be re-written in order
to accommodate upgraded protections for foreign
pharmaceutical patent holders under TPP. [6]
For Japan, TPP is a political conundrum.
TPP is a centerpiece of the United States
pivot to Asia, and tighter integration of
America's allies (and China's adversaries) is in
principle a good idea both for Japan and the US.
Therefore, Japan has expressed an interest
in joining "discussions about" - but not
negotiations on - the TPP.
In practice,
however, the key level playing field concession
for Japan to make is a dismantling of
agricultural, forestry, and fishery tariffs that,
according to the Japanese government's own
estimates, will cost 3.4 trillion yen (US$43.1
billion) per year in reduced domestic production.
[7]
Joining the TPP is, therefore, not
just a football for the Japanese opposition
parties. It provokes significant unease within
factions of the ruling DPJ concerned about
political fallout from aggrieved farming
interests.
The Wall Street Journal
editorial page tried to push Japan off the fence
(and Prime Minister Noda, apparently no favorite
of the WSJ, out of his job) with a clarion call
for some Japanese politician to seize the
once-in-a-century TPP opportunity.
Not for nothing has the prospect of
TPP been characterized as Japan's third great
opening, after Commodore Perry's arrival and the
American occupation after World War II … There's
still time for enterprising leaders to sell TPP
to voters as a tough but necessary step to shake
off a two-decade malaise. Mr Noda couldn't make
the sale. Someone needs to. [8]
Ironic
kudos to the Wall Street Journal for pointing out
that Japanese society can only advance through
forcible intrusions by foreign forces. However,
the deployment of the Journal's less than
infallible political and economic judgment on
behalf of the TPP in particular and tough choices
in general is perhaps a harbinger of its eventual
demise, even if Japan makes the politically
unpalatable decision to participate in the
negotiations.
The TPP is long on benefits
for business but surprisingly short on exports and
jobs - the twin suns around which national
politics revolve these days.
The People's
Republic of China has decided to counter-program
against the TPP with the RCEP - the Regional
Comprehensive Economic Partnership, a proposed
free trade zone encompassing ASEAN, China, Japan,
India, Australia, and South Korea.
Ostensibly, other than the absence of the
Americas in RCEP and China in TPP, the two trade
pacts share similar goals, according to an AFP
report on an interview with ASEAN Secretary
General Surin Pitsuwan:
The pact will aim to eliminate trade
barriers, create a liberal investment
environment and protect intellectual property
rights, according to the negotiation
guidelines.
In principle, however,
RCEP has several advantages over TPP.
One
is the participation of China, a major growth
engine for the region.
The second is the
presumption that RCEP will not fetishize corporate
rights and access (or human rights, labor rights,
or environmental quality, for that matter), and
will achieve a modus vivendi with the cozy
intermingling of government and business that has
characterized the Asian economic miracle thus far.
The third advantage, one that does not
gain much recognition in the West for obvious
reasons, is that it displaces the United States -
now a destabilizing economic force looking to
increase exports into the region - with China,
which is now better prepared to assume the
traditional US role of demand-generating importer
and aid-bestowing sugar daddy to the nations of
East Asia.
Staunch US ally New Zealand
stood boldly ready to hedge its bets:
"This is a bold move to deepen
integration in the most dynamic region in the
world," New Zealand Trade Minister Tim Groser
said in a statement on his government's website.
"It shows that despite the economic
difficulties in other parts of the world, Asia
is actively pursuing trade liberalisation."
[9]
Indeed, the whole ASEAN exercise
was an exercise in political bet-hedging.
After the America-pleasing handwringing
over the South China Sea at the foreign ministers'
ASEAN meeting in Phnom Penh, the ASEAN economic
ministers got together in Siem Reap to offer an
olive branch to China with an endorsement of the
RCEP.
Signing on to the RCEP - and
eschewing a policy of trade hostility with China -
maybe the price that the PRC insists upon in
return for not making an issue out of
participation in the exclusionary TPP by its
trading partners.
Therefore, the net
effect of the battling trade agreements, if they
ever go into effect, may be zero.
The true
test of the RPEC initiative will occur next year.
Surin Pitsuwan will be gone, his
legacy-burnishing activities on behalf of RCEP
forgotten, and his position as Secretary General
taken by a representative from China's fervent
antagonist, Vietnam, as part of ASEAN's mandated
leadership rotation.
It is a reasonable
assumption that, even as the TPP struggles in the
political bog of Western legislatures, ASEAN
relations with China - and discussions concerning
the RCEP - will tiptoe uncertainly along the fine
line between contention and cooperation.
Grand plans in Washington and Beijing for
free trade zones may both fall victim to the
politics of division.
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