Is the Trans-Pacific
Partnership Agreement(TPPA) just a new way of colonizing Malaysia by the US?
ASEAN plans to be a single ASEAN community by 2015 - but why is ASEAN not in the TPPA as ASEAN, a region with over half a billion population(consumers and labour force) and a lot of natural resources. Are we just wasting time with this ASEAN initiative which many hoped may one day be like the European Community.
The ASEAN Economic Community (AEC) shall be the goal of regional economic integration by 2015. AEC envisages the following key characteristics: (a) a single market and production base, (b) a highly competitive economic region, (c) a region of equitable economic development, and (d) a region fully integrated into the global economy.- ASEAN website
Unfortunately, governments like that in Malaysia, is really not concerned about the individual and individual family well-being. Obvious is the Malaysian government disinterest in uplifting the wealth and security of its people - look at the erosion of labour rights, the still very low minimum wage policy as steps are taken to remove subsidies from basic essentials which end of the day increases cost of living - end result a stagnation or reduction in the quality of life of Malaysians as individuals and families.
Foolhardy entry into agreements like the TPPA, without openness, transparency and accountability, really may be just actions that surrender our sovereignity as a nation and the independence we achieved in 1957(1963).
Malaysian BN government leaders lament and tell us that we have not yet achieved the targeted 30% equity ownership by Bumiputras (but this does not include the Orang Asli) - but then many do not realize that foreigners ownership of Malaysia is growing. Take corporate equity ownership as an example, foreigners owned more than 40% in 2011, and it could be more in 2013 and even more later on.Corporate
equity ownership of Malaysians is only 58.3%, and Bumiputra share is
40.3% of Malaysian share. Will Malaysia limit growing ownership by
foreigners?
Now, when they sign the TPPA Agreement, they will surrender Malaysia's sovereignty and freedom to improve the quality of life of Malaysians not to the US and the big countries - but to the foreign investor - Trans National Corporations and foreign shareholders. Malaysia will be crippled unable to implement laws and policies that will improve labour rights, labour conditions, people's rights, etc ...-if such policies/laws will cost the foreign investor to spend monies affecting their projected profits.
Why are we moving away from World Trade Agreements, which naturally gave developing countries and under-developed countries a bigger bargaining power hence able to protect their citizens better, and entering into such agreements like the TPPA. TPPA really is just instruments used by bigger powers to 'bully' smaller nations, and also as a means of undermining other big power influence and economic advancements.
Europe enters into this agreement as European Union, and likewise Malaysia and its fellow ASEAN states should be there as ASEAN not small weak individual nation states.
The
elephant in the room: The geopolitics of the TPPA
In
criticising the leaders of her native New Zealand for their myopia
in treating the TPPA as a depoliticised international agreement, Jane
Kelsey argues that China is the ultimate target of every major
US proposal in this 'new-generation, twenty-first-century agreement.'
THE
term 'competitive imperialism' applies where 'free trade is subservient
to the goal of projecting influence to another country or throughout
a region, and checking actual or perceived reciprocal efforts by another
power'. Last decade, it was used to describe the contest between the
US and the European Union (EU) as they competed to secure new-generation
free trade agreements (FTAs) for strategic reasons. Today, 'competitive
imperialism' is more appropriately used to describe the growing desperation
of the US to neutralise the ascent of the 'BRICS' - Brazil, Russia,
India, China and South Africa. China is preeminent among them, to
the point that, even though it is not a party to the proposed Trans-Pacific
Partnership Agreement (TPPA), it is the elephant that is constantly
in the room and the ultimate target of the US's most aggressive proposals.
The
strategic and foreign policy dimension of the TPPA has especially
serious implications for a country like New Zealand which wants to
remain best friends with both sides. On the one hand, Trade Minister
Tim Groser warned in February 2012 that New Zealand would pull out
of the negotiations if politicians in the United States used them
as a vehicle to try to contain the rise of China. Senior government
representatives from New Zealand and Australia are believed to have
been very uncomfortable with some of Washington's anti-China rhetoric.
As detailed below, that rhetoric continues unabated, but predictably
Groser has not walked away.
At
other times, political leaders and journalists resort to that happy
place where New Zealand can claim neutrality as an independent small
power and play on both teams. In late 2012 Prime Minister John Key
welcomed the talks for a mega-deal involving China and the Association
of South-East Asian Nations (ASEAN), 'but TPP is the big game for
us at the moment'.
New
Zealand's approach is to treat the TPPA as a depoliticised international
economic arrangement and float above the geopolitics. That may be
achievable in the early stages, but if this becomes a Cold War by
proxy each side will expect friends to become allies. A similar studied
myopia informs the grand plan for all members of the Asia-Pacific
Economic Cooperation (APEC) forum and their other agreements to 'dock'
onto this US-centred treaty and form one regional APEC free trade
agreement. Repeated attempts to achieve that goal have foundered since
it was first proposed in the early 1990s because there are divergent
economic models and strategic relationships among APEC's 23 members.
It is true that all the TPPA countries have their own reasons for
being in this game, and some, such as Vietnam, see it as constructing
their own bulwark against China. But there is no evidence to suggest
those decades of resistance to a binding and enforceable US template
for the Asia-Pacific will simply melt away.
The
US Pacific century
US
President Barack Obama and Secretary of State Hillary Clinton left
no doubts at the APEC meeting they hosted in Honolulu in November
2011 about the drivers behind the TPPA. The US aims to revive its
geopolitical, strategic and economic influence in the Asian region
to counter the ascent of China, in part through constructing a region-wide
legal regime that serves the interests of, and is enforceable by,
the US and its corporations. In the TPPA context, what the US wants
is ultimately what counts.
Expanding
on her article entitled 'America's Pacific Century' in the November
2011 issue of Foreign Policy magazine, Clinton said the security and
economic challenges that currently confront the Asia-Pacific 'demand
America's leadership'. Officials described the US role as 'the anchor
of stability in the region', committed to 'managing the relationship
with China, economically and militarily'.
According
to Obama's advisers, he made it 'very clear' during his bilateral
discussions with China's President Hu Jintao 'that the American people
and the American business community were growing increasingly impatient
and frustrated with the state of change in the China economic policy
and the evolution of the US-China economic relationship'.
China had failed to show the same sense of 'responsible leadership'
as the US had tried to do.
At
the TPPA leaders' meeting Obama had talked about establishing international
norms that would 'be good for the United States, good for Asia, good
for the international trading system - good for any country in dealing
with issues like innovation and the discipline of state-owned enterprises
(SOEs), creating a competitive and level playing field'. Above all,
the TPPA would create international norms that would be good for resurrecting
US strategic and economic hegemony.
The
bellicose tone intensified during the 2012 US presidential election
campaign. Republican candidate Mitt Romney complained that Obama had
not been tough enough with China and then endorsed the TPPA as a 'dramatic
geopolitical and economic bulwark against China'. Obama was equally
belligerent. While China could be a partner, America was 'sending
a very clear signal' that it is a Pacific power and intended to have
a presence there. In a coded reference to the TPPA he said 'we're
organising trade relations with countries other than China so that
China starts feeling more pressure about meeting basic international
standards. That's the kind of leadership we've shown in the region.
That's the kind of leadership that we'll continue to show'.
There
is some tension between the antagonistic foreign policy position of
the State Department and the commercial drivers of the TPPA. China
is the ultimate target of every US major proposal in this 'new generation,
twenty-first century agreement', in particular stricter protection
for intellectual property rights, disciplines on 'anti-competitive'
state-owned enterprises, and processes and rules to stop 'unjustified
and overly burdensome' regulation. It is unclear how they intend to
get China to adopt these rules. Sometimes it sounds like an encirclement
strategy, creating a model that dominates the Asia-Pacific and forces
China first to adjust, and ultimately to accede to the TPPA. At other
times, the target seems to be China's alliances and operations in
third countries to undercut its economic foothold and strategic influence.
The
US's potential leverage over China stepped up a notch with the announcement
in February 2013 of negotiations for a Trans-Atlantic Free Trade Area
(TAFTA) between the US and the EU bloc of 27 countries. There is a
synergy between the EU's Global Europe strategy to externalise its
internal regulatory regime and the US goal for the TPPA to provide
a seamless regulatory environment for capital, goods, services, data
and elite personnel throughout the Asia-Pacific. But there is the
sticky question of whose regime would rule, given their longstanding
conflicts in areas such as agriculture, food safety, telecommunications
and intellectual property. The commercial and strategic attractions
of a trans-Atlantic pact are obvious, especially for the US. If they
were able to pull it off, America would span the powerful TPPA and
TAFTA blocs, massively boosting its power in the face of the BRICS.
China's
diplomatic counter
China's
public response has been measured. In late September 2011, China's
Ambassador to the World Trade Organisation (WTO) said diplomatically
that they had 'no objections to the TPP' and were waiting to see whether
there was a possibility that China might be involved in the discussions.
Speaking immediately before the APEC Summit in 2011, a senior Chinese
official more sharply criticised US goals as 'too ambitious' and called
for a balance between the TPPA and 'other paths to achieve multilateral
and regional trade liberalisation'. The TPPA negotiations should be
'open'; China had not been invited to participate. The US replied
that any country must apply to join and demonstrate that it is prepared
to operate by the TPPA's gold-standard 21st-century rules.
China
has a number of options. Ignoring the TPPA in the hope that it stalls
and goes the way of the Doha Round of WTO negotiations and the moribund
Free Trade Area of the Americas carries too high a risk. China could
seek to join the talks indirectly through its Hong Kong proxy, but
that would bring the extensive holdings of China's SOEs in Hong Kong
under the TPPA disciplines. It would also expose Hong Kong's governance
processes to unpalatable obligations on process, disclosure and external
participation.
China
could make a direct request to participate in the TPPA. That would
set off a feeding frenzy among the TPPA negotiating countries that
do not have a free trade agreement with China: the US, plus Canada,
Japan, Mexico and Australia. But accession involves a lengthy and
demeaning process of bilateral discussions and endorsement by each
existing participant, then a collective decision to allow them entry,
followed by a 90-day notification to the US Congress. The process
for Canada and Mexico took a year. They were told they had to accept
everything that had been agreed by the time they formally joined the
negotiations, but they were not permitted to see the text itself before
then. Even though the US ensured that Japan's accession was expedited,
it will come to the table in late July 2013 on the same terms: Japan
will not have had access to the formal texts and will not be able
to reopen anything that has already been agreed in negotiations. In
reality, many of the chapters of greatest interest to Japan will not
have been concluded, which guarantees that an October deadline is
unachievable.
It
seems inconceivable that China would agree to a process of bilateral
discussions and arduous preconditions simply to get to the table,
and accept a raft of US-drafted rules that are designed to cripple
China's principal sources of commercial advantage.
The
most realistic option is for China to grow its own mega-group. That
is already in play. China has a free trade agreement with ASEAN whose
scope has progressively expanded from goods to services to investment.
It is in bilateral negotiations with South Korea, and the first talks
for a China-Japan-Korea FTA were held in March 2013. These relationships
are crucial for China. There are ongoing foreign policy tensions with
Japan over the disputed Diaoyu/Senkaku islands and this was clearly
a factor in Japan joining the TPPA talks, despite vigorous domestic
opposition. However, South Korea has said it will not follow suit
at this stage because it is focusing on the China negotiations and
the three-way deal with Japan.
China's
other major counter-play is the 16-country Regional Comprehensive
Economic Partnership (RCEP), which brings China and the 10 ASEAN countries
together with India, South Korea, Japan, Australia and New Zealand
- but not the US. The talks were launched in November 2012. The rhetoric
is similar to the TPPA, with supporters describing it as 'a framework
within which business can use the region's resources to best effect
in generating higher living standards and welfare for the region's
people'. There are similar expectations around services and investment
liberalisation, supply chains and connectivity, but they are weaker
in relation to intellectual property, domestic regulatory reforms,
environment, labour, government procurement and non-tariff measures
such as consumer protection laws.
Whereas
the US sees the TPPA as a vehicle for American leadership in the Asia-Pacific,
ASEAN researchers assert 'it is in the interests of East Asia and
the world as a whole that East Asia should be the engine of growth
for the world economy', while being open to the rest of the world.
The RCEP negotiations and agreement itself should follow the precedent
set by the ASEAN Economic Community and should be guided by the 'ASEAN
way'.
The
ethos of the China and ASEAN-led project is fundamentally different
from the US-led TPPA. Rather than a uniform commitment to a 'gold-standard
twenty-first century agreement', the RCEP will recognise 'the individual
and diverse circumstances of the participating countries'. Whereas
the TPPA has rejected any special and differential treatment for poorer
countries beyond longer phase-in periods and some technical assistance,
the RCEP promises to 'include appropriate forms of flexibility including
provision for special and differential treatment', especially for
least developed countries.
Seven
countries currently span both sets of negotiations: Australia, Brunei,
Japan, Malaysia, New Zealand, Singapore and Vietnam. The timeframe
is to conclude an RCEP agreement by the end of 2015. The US clearly
does not want these negotiations to advance until it has locked the
crossover countries into the orbit of its own TPPA rules, especially
those with which it does not already have a free trade agreement.
That will become more difficult with Japan at the table.
If
both agreements were eventually concluded, countries like New Zealand
that are party to both would face some hard decisions further down
the line. The two agreements will reflect divergent paradigms, as
well as geopolitical allegiances. Parties would be required to implement
quite different sets of obligations, and compliance with them both
would be enforceable by state parties and foreign firms.
Jane
Kelsey is Professor of Law at the University of Auckland in New Zealand.
For several decades her work has centred on the interface between
globalisation and domestic neoliberalism, with particular reference
to free trade and investment agreements. Since 2008 she has played
a central role in the international and national campaign to raise
awareness of, and opposition to, the Trans-Pacific Partnership Agreement.
The above is extracted from her new book Hidden Agendas: What We Need
to Know About the TPPA (Bridget Williams Books, May 2013).
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