So China and the US both have competing trade deals on offer – the TPP for the US and the RCEP for the Chinese – each of which pointedly exclude the other superpower. That fact alone should signal that these deals are not primarily about mere trade access. In their desperation to get the TPP passed, US lawmakers have been describing the contest as an apocalyptic struggle for regional dominance. As President Barack Obama claimed in a recent Washington Post op ed:
America should write the rules. America should call the shots. Other countries should play by the rules that America and our partners set, and not the other way around.
New Zealand is one of those US “partners” that belong to both deals and last week, the latest round of RCEP talks concluded in Auckland. So far, the Key government hasn’t provided the public with much in the way of a reasoned comparison of what benefits – and drawbacks – these two deals hold for New Zealand. The RCEP after all, includes our main trading partner (China) and a major economy (India) with whom we currently do not have a free trade deal. Moreover, the RCEP is focussed more on traditional “trade” issues – such as tariff levels – and has relatively few of the anti-trade gifts and advantages to corporates (on copyright terms, pharmaceutical patents etc) that are such a poisonous feature of the TPP.
Even so, the government is plainly far more keen on the TPP, and seems to see its role as being to make the Chinese deal look more like the American one, over time. Last week for instance our trade minister Todd McLay made that pretty clear:
Mr McClay said New Zealand would not sign up to the Regional Comprehensive Economic Partnership (RCEP) unless there were tangible benefits for it, and he urged negotiators to be more adventurous and ambitious.
“For New Zealand to be interested in a deal we need to see a lot more liberalisation and some of the offers around better goods access increase from all countries.”
More “adventurous”. More “ambitious.” With “more liberalisation” in the offers on the table. These are code words we have come to know so well from the TPP talks, as signalling fresh advantages for First World economies within developing ones. That is deemed to be New Zealand’s role, as explained by US commentators:
Finally, the U.S. should pressure its TPP partners which are also negotiating the RCEP (there are seven: Australia, New Zealand, Japan, Vietnam, Malaysia, Myanmar, Brunei) to press for standards and regulations in the RCEP that can be consolidated with the TPP.
Does it make any sense at all for New Zealand to be dutifully trying to make the Chinese-led deal more compliant with the US-led TPP deal – when the TPP is in such dire peril?
Ways and Means Committee member Devin Nunes (R-CA) said on June 9 that the Trans-Pacific Partnership does not have the votes to pass the House and must be renegotiated. He also strongly signalled that Congress will not vote on TPP this year when he said that members would have to work with the next president to fix the agreement.
“As it stands right now, [TPP] can’t pass the Congress because there’s not the votes,” Nunes said at the Council on Foreign Relations. “So the deal is going to have to be changed…..”
Nunes also accused the Obama administration of not putting enough effort into engaging members of Congress on advancing the trade deal despite the White House’s recent unveiling of a potential fix to the carveout of financial services from TPP’s data localization ban.
House Republican leadership aides have also said in closed-door meetings that Speaker Paul Ryan will not bring TPP up for a vote unless he is certain the deal will be approved.
TPP supporters this week said there seems to be little urgency behind resolving issues beyond the financial services carve-out, such as the period of market exclusivity for biologic drugs, and Republican leaders have said that unless the administration addresses their complaints, a TPP vote will not be held.
Last minute attempts to cobble together a deal with the Republicans on the contentious patent term for the new and expensive ‘biologics’ class of pharmaceutical also seem to have failed:
Senate Finance Committee Chairman Orrin Hatch (R-UT) on June 15 spoke with President Obama about the Trans-Pacific Partnership, but the two were unable to reach an agreement on how to satisfy Hatch’s demand that the trade deal provide 12 years of data exclusivity for biologic drugs. “I don’t feel better after talking to the president,” Hatch said when asked about the call with Obama following a Senate Finance Committee hearing on combating the trade of counterfeit goods.
As this article on the Politico site explains, there is a (narrowing) range of options facing the White House. Re-writing the TPP in any substantial way to meet Republican objections (on pharmaceutical patent terms and tobacco advertising bans) is not one of those options, and has been publicly ruled out. On financial services, it has been a somewhat different story. As I’ve already mentioned in this column, the White House is using the TISA trade deal to drive right over the top of the safeguards that the TPP provides on data privacy, and the data localization regulations enacted by TPP member countries. Slate magazine has a good article on the threat that TISA poses to the Internet.
That TISA gambit seems bound to deliver only an isolated victory for the TPP partisans in the White House. Moreover, none of the commentaries on the potential ‘lame duck’ vote are factoring in the effect that the election outcome is likely to have on the way a lame duck’ vote would unfold. If Hillary Clinton wins the Presidency would the outgoing Republican majorities really be likely to gift her with an incoming pre-confirmation success, and also provide outgoing Barack Obama with a farewell victory on trade to add to his Obamacare legacy achievements? That’s very hard to imagine. And if Donald Trump wins, all bets on what Trump has described as a “bad” TPP deal are off.
Footnote : The RCEP too, is a flawed document. (This column has been writing about the RCEP since 2012.)
Soon however, the RCEP may be the only trade deal bridging the Asia-Pacific region that’s still on the table. While the RCEP lacks many of the noxious corporate giveaways contained in the TPP, it does contain the same old investor-state mechanisms that enable corporations to sue nation states. These ISDS measures are increasingly obsolete. As Werewolf pointed out in February, the European Union Trade Commissioner Cecilia Malmstrom is intent on replacing the current ISDS system of secretive arbitration trade tribunals with a process more akin to open court procedures.
While such proposals are open to criticism, the greater transparency and fairness they contain do mark a distinct improvement. The Malmstrom measures have just been inserted in the long-running EU/Canada trade deal and have also been added to the EU deal with Vietnam.
Perhaps Trade Minister Todd McClay can clarify whether New Zealand supports the old ISDS process of arbitration set out in the RECP and TPP – or the new dispute resolution process being advocated by Malmstrom? For example, is the intention that this new arbitration formula will be contained in the NZ/EU free trade agreement that McClay is currently touting? And if so, why are we still supporting the old ISDS procedures within the TPP and the RCEP – which ad nauseam, we have been told are brand new trade deals of high quality for the 21st century? It would be helpful to know what arbitration process – and level of transparency – New Zealand is fighting for in the various trade negotiations within which it is currently entangled.
Judee Sill, recalled
The recent supergroup album that has united k.d. Lang, Neko Case and Laura Veirs is wildly uneven. Yet on this track Veirs pays a welcome tribute to the ill-fated 1970s singer/songwriter Judee Sill.
With luck, this may draw a few more people back to Sill herself. Here’s her solitary hit, a song that dared to suggest that even Christ himself had a talent for self destruction :
Not that Sill didn’t have a sense of humour. “Lamb Ran Away With The Crown” was among the best and airiest of her quasi-religious songs.
Most of the time though, Sill had a furtive severity that made it seem as if her songs were being grudgingly bestowed, and yet were all the more precious for it. Both the severity and the sensitivity are evident in this live performance of “ The Kiss….”