On October 4, 2015, negotiations for the above was concluded.
A couple months ago I have written on this topic and concluded that many hoped that Malaysia will not sign it and if we walk away, we would not lose everything – the experience gained in the negotiations is priceless.
As of today, our negotiators have agreed to it.
Immediately after the conclusion, a statement released by the White House, the President said "I've spent every day of my presidency fighting to grow our economy and strengthen our middle class. That means making sure our workers have a fair shot to get ahead here at home, and a fair chance to compete around the world. Creating a level-playing field for American workers and businesses so (that) we can export more products stamped Made in America all over the world that support higher-paying American jobs here at home".
John Kerry’s press statement states, “The TPP will spur economic growth and prosperity, enhance competitiveness, and bring jobs to American shores. It will provide new and meaningful access for American companies, large and small. And by setting high standards on labor, the environment, intellectual property, and a free and open Internet, this agreement will level the playing field for American businesses and workers. The TPP will provide a near-term boost to the US economy, and it will shape our economic and strategic relationships in the Asia-Pacific region long into the future.
It will also eliminate more than 18,000 taxes that member countries put on US products.
This is a compelling agreement as it includes the strongest commitments on labour and the environment of any trade agreement in history and those commitments are enforceable unlike past ones. It would also entrench new international trade standards in Asia, setting a template should any other countries want to join.
It is a dangerous blueprint for future agreements.
Although it is called a "free trade" agreement, it is not mainly about trade. Of its 29 chapters, only five deal with traditional trade issues.
New Zealand helped create the TPP project a decade ago to sell more butter in North America. US, however, will not open its own agriculture sector until getting some assurance that American producers could sell more in Canada and Mexico. They also do not want to make it too easy for New Zealand to sell more dairy products in the US because it could threaten their less-competitive dairy farms. It is estimated from now until 2030, New Zealand would see the TPP adding only about 1% per annum to the country’s GDP.
A critical analysis of the above statements shows that TPP countries have agreed to the US government and US multinational company demands. It will raise the price of goods especially medicine for millions by unnecessarily extending monopolies and further delaying price-lowering generic competition.
TPP will go down in history as the worst trade agreement for access to medicines in developing countries, which will force them to change their laws to incorporate and suit abusive intellectual property protections for pharmaceutical companies.
It is also a strategy for the administration’s re-balancing of foreign policy toward supposedly fast-growing economies in Asia.
In 2013, Joseph Stiglitz, a Keynesian economist, warned that the TPP presented "grave risks" and "serves the interests of the wealthiest."
US labor unions and their allies among consumer and environmental groups are among the biggest critics of the TPP. They argued that the trade deal would largely benefit corporations at the expense of workers in the manufacturing and service industries.
The biggest test would come in a few months when US Congress votes on the deal and conflicting pressures from the political left and right threaten to make that vote a nail biter.
We have yet to see the full details of the agreement.
It seems the final draft is reasonably palatable but there are always some ugly compromises or some dead rats to swallow in deals.
The Exceptions Chapter ensures that flexibilities are available to all TPP Parties and includes a self-judging exception. It also defines the circumstances and conditions under which a Party may impose temporary safeguard measures (such as capital controls) and to ensure that governments retain the flexibility to manage volatile capital flows.
The Final Provisions chapter specifies the procedures under which a Party can withdraw from the TPP.
I would strongly urge our law-makers to carefully consider before they sign on the dotted line.
The near-term boost to the US economy may have a negative impact on our already weak currency.
By the way, the cost-benefit analysis (CBA) study on the TPP is long overdue. Hopefully, Teraju can give an update.
But, how can I be so naive. How in the world can we have a CBA report if we do not have full details of the agreement?