Ground control to Major Tom? Your circuit’s dead, there’s something wrong. Can you hear me, Major Tom? Can you hear me, Major Tom?
Apologies to the late lamented David Bowie. But the bullshit from the National government on the Trans-Pacific Partnership Agreement (TPPA) since the Trump administration formally pulled out in January is really off the planet (apologies, I don’t usually swear in blogs, but I couldn’t find a suitable acronym).
A week ago, Prime Minister Bill English and his ever-so-earnest trade minister Todd McClay have been in Japan talking up a supposed consensus to proceed with the deal, mainly as a way of enticing the US back to the fold. This followed McClay’s tiki tour across a number of countries trying to resurrect the zombie TPPA.
McClay admits that he has nailed New Zealand’s colours to the mast without any reassessment of the supposed benefits of the deal without the US; he has only now asked officials to do the numbers. Presumably that will mean more of the shonky modelling they used to claim benefits from the original deal (which the media still often quote without acknowledging how bogus they are), and which failed to assess any corresponding costs (even the super-neoliberal Australian Productivity Commission said there was no net benefit to Australia once they were factored in). But National didn’t even bother to any research before jumping on the bandwagon to rescue the deal. Ideology rules.
ACT’s leader David Seymour, ever-eager to cement his credentials as a loyal lapdog, attacked Labour, the Greens and New Zealand First for criticising the move and claimed that ‘a renewed TPP would mean access to enormous overseas markets for New Zealand businesses’. So much for ACT’s commitment to evidence-based policy! Equally telling was his endorsement of the handcuffs the TPPA would put on governments’ ability to re-regulate areas where successive governments have abdicated their responsibilities, something New Zealand sorely needs. According to Seymour: ‘New checks and balances against harmful regulation are a positive for New Zealand businesses and consumers.’
There is now a scaremongering campaign directed at the opposition parties. Labour could have pre-empted this by building on their position in Parliament last year and front-footing their rejection of the zombie TPPA issue as soon as it was proposed. Instead, they dragged their heels, giving National and ACT the space to create a negative narrative and put Labour on the defensive. It was good to hear Andrew Little reaffirm Labour’s concerns about the agreement, saying ‘the focus has to be on reducing the trade barriers and promoting and enhancing trade, not going behind the border and interfering with government processes.’ But until we hear Labour, and especially the invisible trade spokesperson David Parker, unequivocally reject the zombie deal there is nothing to guarantee they will have any backbone.
Ironically. Labour may prove more reliable on this than New Zealand First. I remember well how Winston Peters become BFF with Condi Rice once he became foreign minister and the prospective new powerhouse of NZ First, Shane Jones, is pro-TPPA. It was reassuring to see NZ First shift from the initial press release where Winston said New Zealand needed a better deal from a free trade agreement with Japan than offered in the TPPA, with passing reference to the rest of the problems with the deal that Winston highlighted in the Northland by-election, to a more robust rejection of the Lazarus strategy as lacking in credibility.
Even then, people have good cause to be nervous about whether opposition parties will maintain their campaign position after the election, unless their members hold their feet to the fire. National (and ACT) have explicitly said they plan to have the revival of the TPPA so far down the track that an incoming government can’t derail it. Expect them and their corporate allies to stir up the threat of another crisis of business confidence, as they did with Labour in 2000-2001, and play up the spectre of Trump and Brexit to greatest effect. That’s how shallow and toxic the politics around these agreements has become, and why we need to reinject some principle into how these agreements are dealt with in the parliamentary arena.
A report in the NZ Herald even has McClay speaking like Trump: “We are very, very united”. But united about what? Not about implementing the TPPA before the end of the year, which was the NZ/Japan game plan.
The TPPA ministers, minus the US, met on the margins of the APEC meeting in Hanoi last Sunday. Despite some New Zealand media portraying it as a victory for English and McClay, the statement was carefully worded (we don’t yet know if it differs from the draft that was leaked to media in Japan during English’s visit there).
The ministers said they were ‘united in the process and want to get to a place where there is something we can agree to collectively, for leader[s] then to agree.’ In other words, the ministers of all eleven countries agree there needs to be a process. But they agreed to that when they met in Chile in March. And they agree that the process needs to get them to a point they can agree on what to do together, and that their leaders can agree to as well. In other words, there is no agreement among countries on what should happen with the TPPA minus the US.
Whatever happens in New Zealand, we pose just one obstacle to achieving the game plan. There are ten other countries remaining in the pact, most of whom will have to play ball for it to become viable in a legal sense.
Two will be occupied elsewhere. Last week the Trump administration gave 90 days’ notice of its intention to renegotiate NAFTA, which means they process could begin in August. Canada and Mexico have taken no steps to implement the TPPA to date. The incoming US Trade Representative Robert Lighthizer (basically, the US trade minister) has said many of the TPPA rules will be the starting point in negotiations, aside from those affecting not involving market access for goods and agriculture. Why would Canada and Mexico begin implementing those outcomes voluntarily and invite the US to set a starting point even further up the feeding chain?
Equally, Vietnam and Malaysia don’t want to adopt potentially crippling rules on SOEs and medicines in the TPPA, which they reluctantly agreed to in the expectation of some market access gains to the US. Chile and Peru are looking to China. Singapore and Brunei are playing a watching game.
That leaves Australia, New Zealand and Japan leading the charge. Japan and New Zealand have already agreed to strip themselves naked. But Australia can’t guarantee it can implement the original deal. The government doesn’t control the Senate, which didn’t support the TPPA even when the US was involved, although there was never a vote on implementing legislation. Now the Australian Labor Party has said that it won’t support the zombie deal.
In an attempt to defuse opposition to the TPPA, Australian trade minister Steven Ciobo has said Australia wants to revisit the ambiguously worded obligations that gives Big Pharma at least five years’ guaranteed monopoly rights over the marketing of new generation biologics medicines. Republican Senator Orrin Hatch, who is pivotal to any vote being taken in the Senate, has railed against the compromise wording and demanded a twelve-year monopoly on behalf of the US pharmaceutical industry. In other words, the Australian Liberal wants (and may need to pass the TPPA through the Senate) a TPP-minus revision on one of the issues where the US is guaranteed to demand more.
The US can also be expected to roll back the provision that would prevent tobacco companies from challenging policies under the TPPA, and a few other hard fought compromises in the final text. America First will mean America First under Trump, Pence or whomever is the next President.
They will push for new rules on so-called currency manipulation and tighter restrictions on SOEs that will deter other countries.
The driving rationale being given for all of this is the Holy Grail to re-engage the US in the TPPA. They may be betting on the impeachment of Trump and his replacement by pro-TPPA Vice President Mike Pence. Or they may be playing the long-game until after the 2020 election.
But they need a reality check. This is not just about Trump!!! Obama could not get the original TPPA through the US Congress because it was opposed by both Democrats and Republicans, for very different reasons. Both will demand changes. Mike Pence was a supporter of the original TPPA, but the political climate has changed. He would have to demand more as the price of re-engaging the agreement, even if he took over as President.
There will be a stocktake over the next couple of weeks about what all this means and the most effective ways to ensure that the TPPA is forefront in the election campaign and beyond. Practical and constructive ideas are very welcome!