The ABC’s business editor, Ian Verrender, has penned a timely piece today arguing that scrapping the Trans-Pacific Partnership (TPP) trade deal will actually reduce protectionism by halting the creep of non-tariff barriers:
So, how much worse off will we all be now that it [the TPP] has been consigned to the dustbin? Err, the short answer is it will not make a lick of difference. In fact, we may be better off.
…the supposed benefits to Australia from the TPP were always illusory and were never subjected to proper analysis.
In fact, the Federal Government refused point blank to allow its own Productivity Commission to cast a critical eye over the deal.
The only immediate loss is that of face by the politicians who artificially inflated electoral expectations over the supposed super trade deal…
The TPP primarily was a United States regional diplomacy document — a way to cement diplomatic and defence ties around the Pacific and shut China out of the picture.
The secondary objective, from America’s point of view, was to get a better deal for its intellectual property rights, particularly for pharmaceutical, communications and entertainment corporations…
It wanted to extend patents on US products in order to shut generic manufacturers out for longer.
Plus, it argued to maintain tariffs and quotas for its rural industries unable to compete on the world stage.
That is anti-competitive, highly protectionist and certainly does not qualify as free trade.
Then there was the thorny issue of Investor State Dispute Resolutions.
That is a measure that allows a foreign corporation to launch legal action against a sovereign government if it enacts legislation or regulations that harm a company’s business interests.
The hearings are held in secret at a secret location — an idea that does not quite gel with the concept of “free” or democracy.
The combined effect of all these measures was to elevate the legal status of multi-national corporations, any of which openly flout their tax obligations, above the rights of citizens in the countries in which they operate…
Spot on analysis. And a view shared by Australia’s Productivity Commission (PC).
The PC has previously claimed that Australia’s trade negotiations have been “characterised by a lack of transparent and robust analysis, a vacuum consequently filled at times by misleading claims”, and has called on the “final text of an agreement to be rigorously analysed before signing”.
The PC has also frequently derided the efficiency losses associated with preferential FTAs, as well as the hidden protections embedded in deals like the TPP (e.g. extending patents and copyright protection).
And the PC has also explicitly requested that the government “seek to avoid the inclusion of Investors-State Dispute Settlement (ISDS) provisions in bilateral and regional trade agreements that grant foreign investors in Australia substantive or procedural rights greater than those enjoyed by Australian investors”.
Unfortunately, there is no acknowledgment from the Coalition of these issues, and certainly no indication that it will implement better processes towards future trade negotiations.
Instead, Trade Minister Steve Ciobo has signalled that the Coalition will continue its ad hoc, evidence free, approach and attempt to conclude more trade deals this electoral term, presumably for political rather than economic reasons, and without due regard for longer-term consequences.
