What now for the Trans-Pacific Partnership?

Monday 15 June 2015
Nic Crowther's picture
Co Editor
The Shaker

If there’s one thing that importers and exporters are keenly aware of (and know almost nothing about) it must be negotiations for the Trans-Pacific Partnership (TPP).

Currently underdevelopment with the involvement of 12 governments representing some 40% of global trade, it’s seen as the USA economically reinserting into the Asia Pacific region following the announced military pivot of 2013.

Conducted utterly in secret, little is known of the contents of this complicated series of negotiations. There have been leaks (such as the proposed ability for corporations for changes in law that impact profits) and tales of secret internet portals where only high-level officials are permitted to see the contents of the agreement to date.

 

 

This all came to a screaming halt over the weekend as President Obama failed to pass a key piece of legislation to provide compensation for workers who might be affected by employment restructure in the US as a result of the agreement. As a result, the lead protagonist of the TPP is without the desired domestic safeguards to implement the necessary reforms.

What’s interesting about this is that despite a personal plea from the President to pass the bill, it was in fact the Democrats who sealed the fate of the legislation.

For long-serving Democrats in both Houses, a sour taste still remains more than 20 years after the signing of the North American Free Trade Agreement (NAFTA) between the USA< Canada and Mexico. Then-President Bill Clinton forecast great benefits (including 5 million new jobs), but in reality the American manufacturing industry was subsequently decimated as labour-intensive industry south across the border.

 

 

So, with Democrats deserting the TPP and no other country with the economic might to turn momentum back towards finalising an agreement, where does it leave the TPP? Well, nowhere, it would seem – Obama’s authority on the matter has been decimated as the lynchpin of his second term agenda is lying in a smouldering pile following rejection in both houses.

For Australia, which has Free Trade Agreements with the USA, Japan, and Korea – as well as their centrepiece agreement with China – probably has less to gain than other states such as Peru, Vietnam and Brunei. Perhaps the current state of play is good enough for our economy in the meantime – but without any idea of what is actually inside the TPP, it’s rather difficult to know.

 

Header image: The Nation

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