Since the beginning, Nobel Prize winning economist, Joseph Stiglitz, has been an outspoken critic of the Trans-Pacific Partnership (TPP) trade agreement.
In 2014, Stiglitz posted an open letter whereby he questioned negotiators’ secrecy and warned about “grave risks on all sorts of topics” posed by the TPP, as well as claiming that it contained “many of the worst features of the worst laws in the TPP countries, making needed reforms extremely difficult if not impossible”.
Now Stiglitz has published an article questioning the strategic rationale of the TPP for the US. From Medium:
With few people buying the argument that the Trans-Pacific Partnership… will bring more jobs and higher wages, proponents of TPP now argue that it is a critical front in the geopolitical conflict between the United States and China. President Obama made this case in his State of the Union address: “With TPP, China does not set the rules in that region; we do.”
Such rhetoric, reminiscent of Cold War containment strategies, is not constructive for the world’s most important bilateral relationship. The truth is that this strategic rationale for TPP makes little sense… the ship has sailed on containing China’s influence. This should have been obvious from last year’s failed attempt by U.S. policymakers to block the Asian Infrastructure Investment Bank, created under China’s leadership…
President Obama’s rhetoric obscures the reality that “we” did not write these rules. More than 500 official advisors — overwhelmingly representing corporate interests — had special access to U.S. negotiators and TPP texts to advance their own special interests, not the national interest, but Congress, the public, and the press were shut out of seven years of closed-door negotiations…
These corporations have lobbied for decades to make offshoring production and jobs easier while opening U.S. markets to their imports from China and other low-standard countries for goods previously made here. They are concerned with their own bottom line, not with America’s bottom line. And low wages and meager environmental, health, and safety strictures are perceived as good for their bottom lines no matter how bad they are for workers here and abroad, for our economy, or for the planet…
Rather than checking China’s economic power, TPP would actually afford China substantial benefits via generous “rules of origin”…
This is the worst of both worlds: goods sourced from countries that do not commit to TPP’s labor, environmental, and other standards or reciprocate market opening to our goods can still get free access to TPP markets. This asymmetry is no technical flaw…
Worse, rather than elevating standards, TPP grants new rights for foreign investors to dispute government actions, which will effectively lock in the abysmal state of environmental, health, consumer safety, and worker protections that define today’s global economy…
Rather than strategically countering China’s influence, TPP will hand a win to China’s companies and the multinational corporations that have put China at the heart of their global business strategies. This should be no surprise given who wrote the rules and the secrecy with which they were written — not “we” the people, but the battalion of lobbyists working tirelessly with the U.S. Trade Representative, who now hope to ram it undemocratically through a lame duck Congress later this year.
So here we have 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 has 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 for Australia.
For example, modelling by the World Bank found that “by 2030, the TPP will raise member country GDP by 0.4-10 percent, and by 1.1 percent, on a GDP-weighted average basis”. This might sound impressive, but these are cumulative increases to 2030. Of this, Australia would receive a cumulative bump-up in GDP of just 0.7% by 2030, or 0.07% extra growth annually if we assume that the agreement comes into place by 2020.
Worse, other 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 the Joint Standing Committee on Treaties (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 plenty of time for a thorough assessment by the PC.
Let’s hope the ALP refers the deal to the PC in the event that it wins the upcoming election.
