Worry over global anti-trade sentiments

Commentators examine trade issues from US opposition to the TPP to Australia's move to block China's bid for its energy grid and worries in Indonesia about the impact of free trade on e-commerce ventures. Here are excerpts:

Rising tide of US protectionism ?

Editorial The Japan News

There is a pressing need to stem a surging tide of protectionism in the United States, a nation that has long served as the standard-bearer of free trade.

Both the Republican and Democratic presidential nominees oppose the Trans-Pacific Partnership (TPP) free trade pact.

In the US, there is growing antipathy among low-income white Americans and other groups towards economic globalisation, reflecting the eclipsing of middle-income groups resulting from the hollowing out of the manufacturing sector.

If both nominees escalate their protectionist assertions as part of their electoral tactics aimed at pandering to the masses, it could leave the root of a calamity untouched for the future.

Signed by 12 countries including Japan and the US in February, the TPP accord would go into force after it is ratified by at least six countries that together account for 85 per cent or more of the signatories' combined gross domestic product (GDP) - a minimum requirement for enforcement of the pact.The US accounts for 62 per cent of the signatories' GDP; Japan, 16 per cent. Given this, ratification by both nations would be indispensable.

President Barack Obama hopes to complete ratification procedures during his administration. Doing so would require him after the election to obtain TPP ratification at a lame-duck session of Congress convened towards the end of the year, before the inauguration of the new administration. This would entail an extremely tight schedule for congressional debates on the accord.

Furthermore, the TPP pact lacks wide support from members of Congress, partly because the pharmaceutical industry, which has strong political clout, opposes the deal over the period of time set for the exclusive right to sell pharmaceutical products.

"As long as we don't have the votes... the President has to renegotiate some critical components," House Speaker Paul Ryan said recently. His Republican Party holds the majority in both chambers of Congress.

However, the TPP agreement, which has resulted from complicated negotiations between the 12 nations, has been likened to a piece of glassware. If the accord begins to crumble, it could eventually fall apart. Prime Minister Shinzo Abe had every reason to emphasise that his government "will never accept any renegotiation, whatever happens".

The US needs to see the whole issue from a broad perspective so it will promote economic development of the TPP bloc and use the bloc as a tool for its own economic growth.

Japan must secure TPP ratification at an extraordinary Diet session to be convened in autumn to send the US a strong message, urging the US to make it possible for the pact to take effect at an early date.

Poor logic in Australia's move to block grid bid

Editorial China Daily

Since the mid-2000s, Australia has rejected a number of Chinese investments - some because of procedural rules, others on national security grounds. In response, Chinese companies have been studying their potential targets in detail to avoid a clash of interests with the host government.

Australian Federal Treasurer Scott Morrison said the government would veto, again on national security grounds, two Chinese companies' US$7.7 billion (S$10.4 billion) bid to buy a controlling stake in the country's largest energy grid, AusGrid. Mr Morrison's decision was applauded by politicians in Australia as well as the United States, even though the US is unlikely to ratify any time soon the Trans-Pacific Partnership (TPP) signed in February and benefit from the move.

Understandably, some Chinese companies were shocked, and the Ministry of Commerce said the move smacked of trade protectionism. Yet, even more shocking was the act of the individuals who celebrated Australia's decision by fear mongering and saying that China's strategy is to use Australia's civil power grid to propel its future "military expansion" plan.

What sort of globalisation is this? If globalisation means a game in which a country is allowed to play its part if it follows the rules, then no country can best China. If it means China has to be thrown out of the game simply because someone else's game, like the TPP, is not making any progress, then it's a fixed game.

Would TPP bring dangerous levels of deregulation?

Ronald Eberhard The Jakarta Post

Amazon, Lazada, Grab, Uber and the Trans-Pacific Partnership (TPP) share a common interest in Indonesia. All favour openness and competition in e-commerce. 

The intention behind opening up the economy is surely to attract more investment in e-commerce. However, it will come at a cost that is not low, as opening up the economy for competition surely will reduce the policy space of the government. The government needs policy space to regulate for the public interest. It remains to be seen how the TPP will influence future regulation in e-commerce. It concerns not only Amazon, Lazada, Grab, Uber and Facebook, but also many other companies such as Twitter and Google. 

The TPP has set high standard obligations that favour openness and competition over the government's policy space. In return for the expectation of foreign direct investment inflows, it is obliged to deregulate and regulate in a number of issues related to e-commerce. Deregulation entails market access commitments, such as easing requirements and restrictions for service providers to open their business. 

The TPP will also oblige states to develop regulations pertaining to personal data protection. The communications and information minister issued a draft regulation recently that obliges techno giants such as Facebook, Google, Twitter and Netflix to establish local representative offices or permanent establishments in Indonesia. If we join the TPP, we are certainly prohibited from requiring such establishment here. Another deregulation move might entail scrapping the obligation that computing facilities must be located in Indonesia to conduct e-commerce here. Fair competition between local and international companies is a prerequisite for joining the TPP. The public will see for itself whether we are up to joining the TPP or not.

  • The View From Asia is a weekly compilation of articles from The Straits Times' media partner ANN, a grouping of 21 newspapers. For more, see
A version of this article appeared in the print edition of The Straits Times on August 27, 2016, with the headline 'Worry over global anti-trade sentiments'. Subscribe