The TPPA is dead - what next?
The United States has now formally pulled out the TPPA, killing the agreement.
The TPPA as we know it might be dead, but the ideas it was based on and the powerful interests behind them are not. There is no doubt that threats similar to the TPPA will emerge in the coming months and years.
Petition against a Zombie TPPA
On 14-15 March 2017 the New Zealand Trade Minister Todd McClay is meeting with the remaining TPPA countries in an attempt to revive the agreement.
It’s Our Future and our friends at Action Station have prepared petition telling Minister McClay that we don’t want any sort of zombie TPPA. Please add your name here and share widely.
More information on the upcoming Chile ministerial meeting the risks of a zombie TPPA are set out later on in this bulletin.
Contents of this Bulletin
Now that the TPPA has fallen apart their are a number of possibilites about how the TPPA governments and the corporate lobbyists that back them will reorganise themselves. There is also an important question about how China — the United States’ main rival for influence in the Asia-Pacific region — will respond to the death of the agreement.
There has been a lot going on in the last couple months, on many different fronts. So you don’t have to wade through all of it if you don’t have the time, here’s a quick list of the topics covered:
TPPA without the United States?
- The possibility of some sort of zombie TPPA going ahead without the United States and why this is a bad idea;
- Donald Trump’s hint at a one-on-one trade agreement with New Zealand;
- New negotiations for an expanded agreement with China;
- An introduction and update on both the Regional Comprehensive Economic Partnership (or “RCEP”, a set of trade negotiations led by China);
- An introduction and update on the Trade in Services Agreement (TiSA); and — most importantly —
- What you can do to stop our Government getting New Zealand tangled-up in another mess like the TPPA.
There is talk from the remaining TPPA countries about continuing with the agreement without the United States, particularly from Australia. The New Prime Minister, Bill English, has also indicated that he would like to pursue this possibility, first in a press conference and more recently in a prepared statement following a meeting with the Australian Prime Minister Malcolm Turnbull.
Trade Ministers from all the TPPA countries except the United States are due to attend a meeting in Chile on 14-15 March 2017 in an attempt to resusitate some, or all, of the TPPA.
It’s concerning that the New Zealand government still hasn’t got the message that the TPPA was a bad idea and that New Zealanders don’t want it. Without the United States, the TPPA is an even worse idea.
The whole point of the TPPA for New Zealand, according to its backers, was to gain access to heavily protected US markets. The motivation of the United States, on the other hand, was to freeze or rewrite the rules of New Zealand and the other TPPA countries to better suit the interests of its corporations.
New Zealand got a bad deal in the TPPA. The economic benefits that we would potentially have gained were marginal, and the costs to the New Zealand public and our natural environment would have been enormous.
It makes no sense for the National-led government to now consider chaining New Zealand to a set of rules written to meet the needs of corporate America without gaining anything in return.
As Professor Kelsey has written (also well-reported on RNZ):
The economic modelling the government relied on to sell the TPPA last year had zero credibility and failed to account for the costs. Take the US out of that equation and any attempt to pitch the agreement as having net benefits to New Zealand is risible.
Similarly, former IOF co-ordinator, and current Green Party MP Barry Coates has also put it well in a recent blog post:
Most of the very small economic gains to New Zealand from the TPPA were going to come from trade with the USA, and these benefits were offset by the economic costs of the deal. The economics were never worth the risks of being sued by multinationals, the loss of government powers to regulate business, the threats to the environment and human rights, and the loss of our sovereignty. A TPPA without the USA makes even less sense.
The TPPA contains rules that are specifically there because the USA insisted on them. For example, new rules on issues like patents and copyright are not good for New Zealand, but we were told we’d have to accept them as the cost of getting greater access to American markets for our agricultural exports. Without the USA on board, we face all the costs of these patent and copyright rules, but none of the supposed benefits we were supposed to get in return.
Much of the TPPA text was drawn from the US template. Updating it for a new deal without the USA would be in the interests of the US, but not in our interests. We’d be better off starting from scratch and developing a new type of fair and sustainable trade agreement.
Finally, even conservative commentator Patrick Smellie has written a scathing opinion piece (entitled “Enough already on the TPPA”) on Stuff.co.nz where he rightly asks:
[W]hy our Government would allow the political agenda in the first serious week back at work to be dominated by a zombie trade deal. Why would Bill English, so early in the process of stamping his identity on the prime ministership, give all that air-time to reminding a large swathe of the population that he supports a deal that most New Zealanders had convinced themselves was not just a bad one, but a symbol of everything they think is going wrong with the world?
The TPPA is dead. Let’s keep it that way. It’s Our Future and Action Station have prepared a petition to Trade Minister Todd McClay reminding him that New Zealanders didn’t want the TPPA in the first place and that we will resist any half-baked zombie agreement, both in the streets and in the polling booth.
One-on-one negotiations with the United States?
When Donald Trump pulled the US out of the TPPA, he also directed that the US :
[D]eal directly with individual countries on a one-on-one (or bilateral) basis in negotiating future trade deals … [and to enter into] wherever possible, bilateral trade negotiations to promote American industry, protect American workers, and raise American wages.
Trump’s top trade advisor Peter Navarro has also been clear that he intends to maintain US influence in the Asia Pacific region by negotiating one-on-one trade agreements with the TPPA countries, mentioning New Zealand by name.
Over the last 30 years New Zealand has been a strong supporter of multilateral (big group) or plurilateral (small group) trade negotiations — the idea being that, as a small country, we have very little bargaining power and are better off working in a rules-based system alongside lots of other countries. With so little to work with, a bilateral (one-on-one) trade agreement between New Zealand and the United States would be a disaster. A bilateral trade agreement negotiated under the Trump administration would be worse still. So far, Trump has hinted that a condition for any trade deals under his watch will require protections for the profits of big US Pharmaceutical companies (i.e. goodbye PHARMAC) and may include a clause allowing the US to pull out on 30 days notice if it thinks fit.
For now, at least, both Bill English and Trade Minister Todd McClay are skeptical about a one-on-one trade agreement with the US. If these negotiations ever happen, New Zealanders will need to raise huge resistance like we did last February to stop what would surely be a bad deal.
Regional Comprehensive Economic Partnership
The Regional Comprehensive Economic Partnership, or “RCEP” is an agreement being negotiated between the 10 ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and Australia, China, India, Japan, New Zealand and South Korea. Up to date information on RCEP can be found here at the excellent www.bilaterals.org website.
Prior to the death of the TPPA, RCEP was viewed as a competing trade agreement to shape trade in the Asia-Pacific region away from US influence and towards China. With the US out of the TPPA, it is unknown whether the RCEP negotiations will speed up (to fill the void left by the TPPA) or go on the backburner (because there is no longer any need to compete against the TPPA). The next RCEP negotiating round is scheduled to be in Japan in late February. For now at least, there appears to be little chance of RCEP negotiations being concluded in the near future and no negotiating texts have yet been leaked.
Interestingly, China and South Korea — two of the major powers in the the RCEP negotiations —have accepted invitations to attend the Chile ministerial meeting with the TPPA parties. It is too early to draw any strong conclusions from this, but it would appear that there is at a least a possibility of future negotiations between the remaining TPPA countries and the RCEP grouping.
An updated trade agreement with China
New Zealand and China have had a bilateral trade agreement in place since 2007. In November last year, the government announced that it was negotiating an expansion of the agreement. Earlier this month both Foreign Minister Murray McCully and Bill English met with the Chinese Foreign Minister Wang Yi to discuss: “the upgrade of the nations' bilateral free trade agreement, China's possible involvement in what remains of the Trans-Pacific Partnership (TPP) negotiations, and New Zealand's role in China's One Belt, One Road strategy”. McCully announced afterwards that a series of negotiations would begin in the near future. The scope and timeline of these negotiations are still under wraps.
Trade in Services Agreement
The Trade in Services Agreement (“TiSA”) is a proposed agreement to roll back regulation of international trade in services. There are 23 countries involved in the negotiations, the most significant being the EU (who negotiate as a single bloc) and the US.
While TiSA is a narrower agreement than the TPPA (it doesn’t deal with border tariffs on goods and it doesn’t include some of the worst parts of the TPPA like Investor State Dispute Resolution) if it is agreed to, it will have a big effect on New Zealand’s ability both to regulate in the public interest and to support local organisations to provide service to the New Zealand public.
In a nutshell, the idea of TiSA is to make it easier for service providers (such banks, insurance companies, internet service provider, freight companies and healthcare providers) to sell their services to consumers in another country. This would be done by stripping away regulations and other practices which get in the way of corporate profits. This deregulation would then by locked in by the TiSA agreement so that future governments are bound to protect corporate interests rather than the public good. One of the areas which TiSA would have a huge impact on is the regulation of financial services. Weak regulation of banks, finance companies and insurers brought the global economy to its knees in the 2008 global financial crisis. Now, after countless millions of public money has been spent bailing out corporations that were “too big to fail”, the same corporate interests are trying to lock in the same regulatory approach which led to the GFC. TiSA would also have huge implications for the protection and storage of online data, which has led to strong opposition from privacy watchdogs, particulary in the EU.
A good summary of what TISA represents is available on the www.bilaterals.org website: Ten things you need to know about TiSA. The most recent negotiating texts have also recently been leaked and there will be expert analysis available in the coming weeks.
TiSA was rumoured to be close to completion in late 2016. However, with Trump coming into power it appears that no more negotiating rounds will be held until the new US position becomes clear. The most recent leaks (above) also reveal that the negotiating countries are still a long way apart on some issues.
Future campaign for a progressive trade policy
With the immediate threat of the TPPA gone, we now have an opportunity to reframe the discussion around trade away from corporate greed, unlimited growth and ecological blindness towards a new economic system centred around the needs of ordinary people and environmental protection.
In the lead-up to the New Zealand Parliamentary election, It’s Our Future will be running a campaign pushing for future trade agreements which reflect a different and more progressive set of values than what we have experienced for the last 30 years.
We want to hear from you about what an alternative model for international trade could look like, and / or what values would underpin this. Please send your ideas to firstname.lastname@example.org. We will share these ideas back in upcoming bulletins and use them to develop a set of campaign demands.
A lot of the same ground as this Bulletin is covered in Professor Jane Kelsey’s excellent blog entry from 5 February: One year on from TPPA mass protests – how we can shape trade for the 99% not the 1%?
Former IOF co-ordinator Edward Miller has also written about his views about the death of the TPPA and what we can expect in the coming months and years: Why I’m Not Thrilled the TPPA Has Been Trumped
Congratulations if you made it to the end of this (very long) Bulletin, please don't forget to sign the Action Station petition against a zombie TPPA before the Chile ministeral meeting on 14-15 March.
Ngā mihi koutou, please get in touch at email@example.com if you have any questions or comments.
It’s Our Future Coordinator