TPP doubters should see big picture
Published on Jul 1, 2014 7:53 AM
THE message on the Trans-Pacific Partnership (TPP) trade deal that the Prime Minister conveyed on his Washington stops was plain and direct. Being the largest economy whose related security role in Asia could be decisive as the continent undergoes change, a successful conclusion to the negotiations would be of benefit all round. This would seem self-evident but it is not to be assumed that it is readily understood in America, or accepted if it is.
Protectionism is clear in the opposition to the deal from sections of Congress whose home-district industries are vulnerable to competition. The dairy sector is a vocal opponent, seeing that Japan and Canada are resisting substantive tariff reductions for the sake of their producers. There have even been mutterings that Japan, a latecomer to the negotiations, be asked to make an exit to save the TPP from collapse. Intellectual property, which includes pharmaceutical patents and sales, is also a prickly issue.
PM Lee Hsien Loong's main concern is about US congressional stonewalling, or outright refusal to ratify the deal, when and if it is concluded and signed by the signatory nations. US President Barack Obama has not obtained the fast-track authority he will need to ensure a document placed before Congress is not amended to such an extent other TPP partners would object to having to deal with two entities in the same treaty state. It is thought the Japanese negotiators are hanging tough because they do not want to be ambushed by additional congressional demands made on their car and dairy industries, if the White House does not have overriding authority to get a deal approved.
Mr Obama's confidence that the TPP could be wrapped up by November (when he travels to Asia for meetings) may in the circumstances seem optimistic. He faces congressional elections in November and opposition to the TPP has come mainly from his own Democratic Party lawmakers, not the pro-business Republicans. Doubters also say the TPP is no big deal as global trade is already fairly free.
There are other niggling difficulties. Malaysia does not want its state procurement privileges for government-supported firms disturbed. New Zealand, one of the TPP originators together with Singapore, will not accept a deal that would allow pharmaceutical giants to challenge its sovereign right to offer subsidised medicines. Vietnam complains US inspections on its fish exports are an actionable non-tariff barrier. These form the usual nitty-gritty of negotiations. Against that, the macro picture of job growth through increased trade should carry the day. Momentum ought now be placed behind compromise and the acceptance of trade-offs to bring the TPP to fruition.