Report: Trans-Pacific Partnership of almost no benefit to Australia
“There’s never been a more exciting time to be an Australian!” claimed the newly-minted Prime Minister Malcolm Turnbull on the night of his ordination by the Liberal Party. With the Trans-Pacific Partnership (TPP) expected to be signed and ratified on 4 February in Chile, what’s in it for Australia?
Perhaps not a lot. The US-based World Bank has released an economic report on the TPP and, for Australia and the United States, their predictions on the agreement’s effect on GDP appears minimal.
How small? Well, according to analysis of the report by Peter Martin, less than 0.05% per annum out until 2030.
Huh? What?
This is far below what we were promised last year as the government scrambled to follow the lead of the US Administration and add the finishing touches to the agreement. At the conclusion of negotiations last year, Trade Minister Andrew Robb issued a release highlighting access to the US sugar market and the export of mining and resources technologies as key benefits for Australia.
The reality is that these are relatively small parts of the economy – especially when compared to the mining & energy, agriculture, tourism and education sectors. Given our existing Australia United States Free Trade Agreement and other agreements recently signed with China, Korea and Japan, Australians are probably rightly concerned about what has been given away in return for almost no gain, as the perception has always been that the Australian Government was a little too keen to be at the table.
While the World Bank’s report is far from glowing, it’s fair to expect that the benefits of the TPP might not be immediate. The emerging countries that form part of the agreement – Chile, Mexico, Peru, Vietnam and Malaysia – are very small players in regard to Australian trade, but that doesn’t prevent them from increasing their share to 2030 and beyond.
The real question will be whether other markets on their continental doorstep will prove much more lucrative than our island down at the bottom of the world.