Zombie TPP without the US even worse for Australia
August 29, 2017:
Trade negotiators from 11 of the original 12 TPP countries met in Sydney from August 28 for their fourth set of talks to see if the TPP can be revived without the US, aiming to complete talks by November this year. The 11 countries are Australia, New Zealand, Japan, Canada, Mexico, Peru, Chile, Singapore, Brunei, Malaysia and Vietnam.
Trade Minister Steve Ciobo is leading the charge, arguing for endorsement of the TPP with minimum changes to the text. But this is not in the interest of most Australians.
Strong community opposition to the TPP in the US meant the U.S. Congress did not support it before the election and both main presidential candidates opposed it. Donald Trump only dealt the final blow by withdrawing after the election. Opposition from a broad range of Australian community groups meant an Australian Senate inquiry refused to endorse the TPP, and the Australian Parliament has not passed the implementing legislation.
Community groups oppose the TPP because it gives pharmaceutical companies stronger monopolies on costly biologic medicines, delaying the availability of cheaper forms of those medicines. It gives special rights to foreign investors to bypass national courts and sue governments for millions of dollars in unfair international tribunals over changes to domestic laws. It would also restrict future governments from re-regulating essential services like energy or financial services, despite demonstrated market failures, and it would result in more vulnerable temporary migrant workers, without testing if local workers were available. In short, the TPP is a US-driven agenda for greater corporate rights at the expense of people’s rights.
Many of the 11 other governments only agreed to this agenda because the US demanded it in return for access to US markets. They will not give a free ride to the US without that market access. Malaysia and Vietnam have said that, without the US, the terms of the TPP need to be renegotiated. They do not want stronger monopolies that would result in higher medicine prices, nor to enable foreign corporations to bypass their courts and sue them over domestic regulation. But Japan, Australia and New Zealand are pushing to retain these provisions. That is why there is still no agreement about how to renegotiate the deal, with the November deadline fast approaching.
The Japanese government has different interests from Australia because it does not have a free trade agreement with the US, and fears worse outcomes from bilateral negotiations.
But why should our government want to retain TPP provisions for stronger medicine monopolies and foreign investor rights to sue governments? Australia already has free trade agreements with the US and all but three of the other ten TPP countries, and the TPP delivers minimal extra market access. Studies showed the TPP with the US would deliver hardly any economic growth to Australia after 15 years. The government has refused to do any studies on the impact of the deal without the US, but any economic benefit would be even less.
Australia’s rhetorical defense of the TPP with minimal change appears to be based on the vain hope that Donald Trump might return to the TPP, which most commentators agree is politically impossible.
In practice, Australian government has quietly conceded that a TPP without the US is unlikely by starting separate bilateral negotiations with Peru and Mexico, two of the three TPP countries without FTAs with Australia. If it really believed that the TPP could be revived this year, these negotiations would not be necessary.
The current text of the TPP is dead because it requires ratification by the US as the largest economy. Even with the minimal change of deleting the US, it would be a new agreement, and would have to be signed, tabled in Parliament and reviewed by Parliamentary committees before any implementing legislation. If the text were substantially the same, there would still be strong community opposition and the majority in the Senate is likely to reject it again. We don’t need the zombie TPP, but we do need progressive fair trade policies that will benefit most Australians.
- Dr Patricia Ranald, Convener of the Australian Fair Trade and Investment Network, and Research Associate, University of Sydney.
Send a message to the Australian Trade Minister Steve Ciobo urging him not to revive the failed TPP.