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Will China Kill the TPP (the secret fair trade treaty you never heard of)?

stuartbramhall's picture

Auckland anti-TPP protest (3News)

Auckland anti-TPP protest (3News)

(This is the second of two posts about a “classified” free trade treaty called the Transpacific Partnership and a Chinese-friendly alternative the Regional Comprehensive Economic plan. As I outlined in my last post Will the RCEP Kill the TPP?, the TPP will virtually obliterate the right of member countries to protect labor rights, enforce environmental and food safety standards and otherwise protect their citizens from amoral and rapacious corporate profit-seeking.)

Who Hasn’t Joined TPP Negotiations?

In November 2011, New Zealand antiglobalization lawyer and activist Jane Kelsey was the first to first to alert activists to Obama’s real objective in promoting the Transpacific Partnership (TPP): namely to totally isolate China economically. Originally limited to eight pacific rim nations and the US, the countries currently participating in TPP negotiations include Australia, Darussalam, Cambodia, Indonesia, Laos, Burma, Philippines, Singapore, New Zealand, Peru, Vietnam, Canada and Mexico Darussalam.

Both Japan and Korea have been invited to join TPP but have declined. In general, Japan prefers signing free trade agreements with non-agricultural exporting countries, rather than trying to compete with agricultural powerhouses like Australia, New Zealand and the US. (see Why is Japan lagging on the TPP)

Korea, which already has or is negotiating free trade agreements with all potential TPP participants, has no incentive to join and worries that with TPP membership would cost them concessions they have already won from these countries (see South Korea's regionalism )

Thailand has been reluctant to join out of concern the US would use the TPP to protect big American pharmaceutical companies and block availability of low-cost medicines, a major pillar of the Thai healthcare system. (see Why Thailand reluctant to join TPP)

Obama’s China Bashing

The Obama administration has deliberately excluded China, Asia’s largest (and the world’s second largest) economy, from TPP negotiations. As Kelsey notes in her article, The TPP as a Lynchpin of US Anti-China Strategy, Obama’s real agenda was obvious from Hillary Clinton’s speech to the November 2011 Asia Pacific Economic Cooperation (APEC) Leaders’ Summit in Honolulu. In it, she talks about “managing the relationship with China, economically and militarily” and employing TPP “as the economic limb of “American statecraft” to “lock in a substantially increased investment – economic, strategic and otherwise in the Asia Pacific region.”

As Kelsey points out, Obama underscored his efforts to remilitarize the Asia Pacific (and isolate China militarily) during a visit to Australia later that month. He chose this occasion to announce the US troop build-up in Australia, Singapore and the Philippines. Kelsey goes on to give numerous examples of overt China-bashing by US officials and corporate heads during the 2011 APEC summit. None of this was lost on Chinese representatives.

Why ASEAN Nations Prefer China as a Trading Partner

In Post-US World Born at Phnom Penh, David P Goldman (author of Why Civilizations Die and Why Islam is Dying Too), outlines why potential TPP members are flocking to sign up for the ASEAN (Association of Southeast Asian Nations)-initiated RCEP instead. First and foremost is declining US influence in Asia, in contrast to China’s rising importance. In 2002 China imported five times as much from Asia as from the US. Ten years later the value of Chinese imports from Asia is ten time the value of their US imports. Meanwhile Chinese exports to Asia have jumped 50% since 2007. Exports to the “moribund” US economy are virtually stagnant.

Why? As Goldman elaborates, with the decline of American manufacturing (US orders for manufactured goods are 38% below their 1999 peak), the US has stopped investing in the sort of high-tech, high-value-added industries providing the type of manufacturing Asia requires to build their industrial capacity.

It’s also of note that RCEP negotiators are putting special emphasis on “the spirit of openness” (potential partners aren’t obliged to keep the RECP negotiations secret from their citizens) and doesn’t limit the number of participants. Moreover the overall vision for RCEP (“trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement and other issues”) is less narrow and corporate-friendly. It’s also more committed than the pro-corporate TPP to honoring the UN’s UN Millennium Development Goals

Is the TPP Dead?

Given all the advantages of the RCEP for most Asian countries – and for Australia and New Zealand – it’s no surprise that the corporate media is keeping ASEAN’s new and improved alternative to TPP a secret. I know Australia and New Zealand, whose economies both depend heavily on exports to China, will definitely be at the table when RCEP negotiations start next year. Whether they continue to participate in US-led TPP negotiations remains to be seen. Despite the outcome of this week’s TPP negotiations in Auckland, I strongly suspect Obama’s secret negotiations to use TPP to undo fifty years of hard won labor, environmental and health and safety protections may be dead in the water.

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