New US President Trump signed an executive order demanding the US formally withdraw from the Trans-Pacific Partnership. Anti-TPPA campaigner Edward Miller tells us why his dreams haven’t quite come true…
On January 23, 2017, US President Donald Trump pulled the US out of the TPP.
That kills the agreement, which requires countries making up 85% of the total economic area (in effect the US and Japan) to ratify the agreement before it comes into force. As a trade union organizer working across the Asia-Pacific region, who has been very actively involved in the campaign to stop the TPP (to which I credit a small yet alarming exposed patch on the top of my head), I should be thrilled, right?
While I’m grateful to have a bit of time for my comrades and I to regroup and think about how we meaningfully oppose these deals, I’m concerned that what will follow will be even worse.
Trump’s trade policy
Trump consistently attacked the TPP on the campaign trail, on the grounds that it was a bad deal for American workers. This may be true, but there is no evidence that its potential replacement it will be a better deal for American workers, or anyone else outside of the billionaire class that had already communicated their discontent with the concluded deal and didn’t want to see it advance through the US Congress. The stated preference of Team Trump has always for bilateral negotiations with those same partners, as well as for the US’ existing free trade partners (which has the Mexican government, according to informed sources speaking off the record, rightly terrified). The US’ TPP partner countries will, in all likelihood, end up worse off in a bilateral negotiation on the same issues, as they lose the benefit of strength in numbers.
Take the intellectual property chapter, for example, which contained provisions covering data exclusivity for biologic medicines. Put simply, pharmaceutical companies wanted governments to shoulder the obligation of preventing any entity but the firm who owned the proprietary information behind “biologic” medicines – new super-effective (and super-profitable) treatments – from obtaining and producing material based on them. The US was demanding a twelve-year period of protection, whereas a group of six nations – Australia, Malaysia, Vietnam, Peru, Chile and New Zealand – thought this was too long and were advocating a period of five years instead. While the final provision is unclear, legal experts argue that it effectively requires eight years of data protection, a compromise of sorts. Strength in numbers brought this figure down; Chile alone, for example, would lack the negotiating strength to broker this kind of a compromise.
Another factor influencing some of the deal’s concessions is the fact that TPP was meant to be a regional agreement, and we cannot speak about the Asia-Pacific without talking about China. Many of TPP’s provisions are intended to specifically target China’s sources of commercial advantage. Take for example the state-owned enterprises chapter, a chapter novel to the TPP. It is designed to prevent countries from providing “non-commercial assistance” to state-owned enterprises (SOEs,) and can be enforced through TPP’s investor-state dispute settlement provisions. Malaysia, however, which has many large SOEs, had secured significant carve-outs from the chapter. This has little to do with Malaysia’s negotiating nous, and much more to do with a) securing Malaysia’s political consent to the deal while b) restricting China’s scope to pursue its existing economic agenda inside Malaysia (which, the evidence seems to indicate, is continuing quite nicely).
Trump’s China problem
A week before Trump took office his nominee for Secretary of State T-Rex Tillerson adopted an aggressive tone over Chinese territorial claims in the South China Sea, stating that Chinese access to the artificial islands it has built on rocky shoals throughout the region “is not going to be allowed”. China’s island-building agenda has been declared illegal by a UN arbitration tribunal. However, any act by the US to prevent access would be considered an act of aggression by Beijing,which perhaps is exactly what newly-crowned member of the National Security Council Steve Bannon was driving at in suggesting that the South China Sea will be an epicenter of conflict in a decade’s time. Make no mistake, however, China’s increasing economic dominance, not just in Southeast Asia but more broadly across the Asian continent and beyond, has US policymakers terrified. It may have got them elected, but killing the TPP might have been the incoming administration’s worst move in the game of empire.
China’s economic agenda is the next reason we are not out of the woods yet. That agenda is animated by a massive expansion of China’s enormous SOEs throughout the world, plonking large-scale infrastructure projects across Asia, Africa, Latin America, and even Europe. In some instances these are in exchange for access to resources. However, of equal importance to China is stoking political favor, and eventually economic interdependence. The establishment of new financial institutions like the Asian Infrastructure Investment Bank are allowing China to simultaneously recycle its enormous capital surplus while providing work to its SOEs, whose chronic overcapacity can no longer be absorbed in China alone.
And, some of these potential projects may have a truly transformative impact. Take the Kra Canal for example, a project which the new Thai King is believed to be very supportive of. It would cut across the Thai peninsula and remove the geostrategic choke hold of the Strait of Malacca from the equation, through which 80% of China’s imported oil and gas currently has to travel, as well as a significant proportion of its manufactured exports. Singapore’s relevance could see a marked decline as a transport and financial services hub, while a deep-water port under construction in Cambodia, where wages are cheap and the government is close to China, could see its star rising. These are but individual nodes on China’s sprawling “Belt and Road initiative”. The “Belt” is the “Silk Road Economic Belt”, a series of overland trade routes through Russia and Central Asia to Europe, whereas the “Road” refers to the Maritime Silk Road, a series ports and maritime trade routes travelling from Africa to Southeast Asia. It is an ambitious plan, that threatens to decisively re-route Asia’s circuits of accumulation away from Washington.
These unfolding developments are putting the US “Pivot to Asia” under serious pressure. For these reasons, rival trade negotiation in the Asia-Pacific arena – the Regional Comprehensive Economic Partnership (RCEP) – does not contain a chapter on SOEs. Since 2012, 16 Asia-Pacific nations have negotiated the RCEP in TPP’s shadow, and negotiators are aiming to wrap it up this year (just like they were last year…). While China has not dominated the talks in the way the US did, it is making sure its strategic interests are preserved. Unlike TPP, it does not have a labor or environment chapter (these tend to be weak concessions in the agreements anyway, however it is telling they receive no mention whatsoever), and there is little likelihood of side agreements on labor, which Vietnam and Malaysia had received in the course of the TPP negotiations.
Furthermore, close observers of the RCEP negotiation have noted that some of the TPP’s most dangerous chapters are actually being recycled into the RCEP. The bloc of wealthy countries – Australia, Japan, New Zealand, and South Korea – are all pushing to ensure that the poorest countries are locked into the most restrictive trading regime as possible, and these observers have cited examples from the goods, investment, and e-commerce chapters that have been transferred across.
A TPP With No US?
In the meantime, world leaders from the remaining TPP countries have done their best to make it seem like everything is gonna be alright, and are considering a way to continue the path to implementation without the US. At the moment this bastard negotiation is being dubbed the TPP 12-1 (as in the 12 TPP signatory countries, minus the US). Given that so much of the agreement is structured around the specific demands of the US, this would put most of those countries at a significant disadvantage in regard to achieving the measurable gain of access to the US market. Not only can the agreement not be implemented under current conditions, it would be a real shot on the foot to do so without considerable renegotiation.
Talks have been tentatively announced for the TPP 12-1 to come back to the table in Chile, slated for 14-15 March. Only two countries have ratified that agreement at this stage – New Zealand and Japan – however, it is expected that a renegotiated 12-1 agreement would, or at least should, contain substantially different implementing provisions. Japan would likely play a much more decisive role as the predominant nation. However, it is possible that other countries could be invited into the fold. My expectation, therefore, is that any outcomes from Chile would be substantially different from that which heads of state signed in Auckland in February 2016. The most likely outcome is, therefore, another meeting, and another…
Where to from here?
We are seeing an historic shift, as the US now seeks to reject multilateralism in favor of bald-faced profiteering. To a certain extent this shift indicates the US is actively conceding its hegemonic role throughout the Asia-Pacific; it is increasingly relying on military and economic coercion alone, rather than consent to its agenda. And, while I have painted a picture of China as an ascending superpower, I believe that its mounting debt bubble (both private and public) mixed with its fragile labor and social relations could very possibly bring the ascent crashing to a halt (not to mention a series of mounting environmental catastrophes).
So how should we as campaigners respond? It’s crucially important that we don’t play the game of picking winners in the game of empire, but to stick up for the rights of working people wherever they are. We must be equally hard on the burgeoning Trump bilaterals as we are on the RCEP negotiation as it accelerates toward its endgame. And, looking to the future, we must be realistic about what is happening to our planet. Ours must be a form of resistance that draws its strength from its sense of connectedness – both to the planet and across borders.
Trump’s inauguration has already seen an historic upswing in activism among liberals, and the challenge for us is to find a way to sustain that energy while redirecting it toward a structural critique. And of course to make sure ideas like “structural critique” have an actual meaning beyond our words and are reflected in our actions everyday.