Andrew Hudson of the Export Council of Australia yesterday told the Joint Standing Committee on Treaties (JSCOT) that Australia must ratify the Trans-Pacific Partnership (TPP) trade agreement, as failure to do so would bolster the protectionist movement, which he argued is gaining support in many parts of the world. From The Australian:
“There’s also been a lot of anti-trade rhetoric or anti-free trade rhetoric going around, not just in the United States but throughout other parts of the world as well,” said Mr Hudson, who is also on the board of the Food and Beverage Importers of Australia.
“Even on that level the TPP would operate as a counterweight to that and would provide significant benefits”…
Mr Hudson said that Australia not ratifying the deal “would have a very negative impact”.
“It would certainly play right into the hands of the anti-TPP interests elsewhere in the world, in particular perhaps in the United States, whose support is needed … it would assist those who have this increasing anti-trade rhetoric which is going on at the moment,” Mr Hudson said.
Earth to Hudson: the TPP is the antithesis of “free trade”. Why? Because it contains a whole bunch of measures, like the strengthening of patent and copyright laws, as well as controversial investor-state dispute settlements (ISDS) provision that would permit foreign corporations to sue sovereign governments.
These types of provisions are protectionist, not supportive of freer trade.
But don’t just take my word for it. Here’s Nobel Prize winning economist, Joseph Stiglitz, speaking about the TPP in the latest episode of Planet Money:
Interviewer: So is the TPP even a trade deal?
Stiglitz: Not really. It’s mostly about other things than trade.
Interviewer: So is it possible to be pro-free trade but anti-TPP? Is that a consistent view?
Stiglitz: Yes.
Stiglitz goes much further in this in recent interview on CNN Money:
“Let me explain to you why I and a lot of other people are against the TPP. It’s not that we are against trade. Way back to Adam Smith economists have talked about expanding markets, opening up advantages of economies of scale, and taking advantage of comparative advantage.
[But] this is not a trade agreement. Even the [Obama] Administration’s economists have come to calculations that the effect on GDP is minuscule. And more realistic estimates say that the effect on the economy is actually negative.
What people care about is the provisions on intellectual property that will drive up drug prices. What they call the investment provisions, which will make it more difficult to regulate, and actually harm trade”.
The bottom line is that the TPP is an agreement that will grant greater power to multinational corporations – particularly big pharma and Hollywood – and do very little (if anything) to open-up trade and investment or spur jobs.
And yet the Coalition Government and other vested interests have enthusiastically embraced the TPP with both arms under the charade of “free trade, jobs and growth”. This comes despite modelling so far not showing material benefits, and maybe even costs, for Australia.
For example, modelling by the Global Development and Environment Institute at Tufts University has found that the TPP “would lead to losses in employment and increases in inequality”, with employment in Australia contracting by 39,000 jobs.
Ultimately, there’s only one way to properly assess the TPP: get the Productivity Commission (PC) to undertake an assessment before the Parliamentary vote to ratify the agreement.
The TPP is an incredibly complex agreement whose text numbers some 6,000 pages and 30 chapters. It is far too complex for JSCOT to comprehensively review.
Moreover, under the terms of the TPP, member countries have two years to assess the deal before it must be ratified. Therefore, there is still time for a thorough assessment by the PC.
