May US expand influence in region through TPP?

Source:Xinhua Published: 2012-12-3 17:16:37

The latest round of negotiations for the controversial Trans-Pacific Partnership agreement (TPP) begins in New Zealand on Monday with US trade representatives expected to further expand American influence in the proposed regional economic alliance.

While many leading observers consider the TPP as a blunt instrument to block India and China from equal access to key Pacific Rim markets, few can actually claim to have deep insider knowledge due to the secrecy of the negotiations.

Almost 500 delegates from 11 countries have headed Down Under, behind closed doors, in an attempt to make progress on some of the 26 chapters in this so called "free trade" deal.

Former New Zealand Prime Minister Dame Jenny Shipley has cast doubt on the viability of the TPP agreement, telling Xinhua that such an agreement would need to integrate China's economy to become an effective international trading platform.

Independent director of the China Construction Bank, Dame Shipley, questioned whether such a mechanism can attract the region's key economic power and now the world's second largest economy.

"In my point of view I think China only is likely to come to a Trans Pacific Partnership if it were a much bigger arrangement. I think it's probably a second, third or fourth step.. frankly there 's still a big question to whether this project will get off the ground anyway," Shipley said.

Four years ago the United States announced its entry into the TPP as "a pathway to broader Asia-Pacific regional economic integration." Many saw the move as a transparent attempt to isolate China and gain ground on the lucrative markets of the world's economic engine.

There is of course intense competition to cash in on the Asia- Pacific Rim. The US trade with ASEAN totaled $178 billion in 2010 while Chinese trade with ASEAN was valued at $300 billion last year. Today the TPP has expanded to include 11 nations: the United States, Canada, Mexico, Peru, Chile, New Zealand, Australia, Brunei, Singapore, Vietnam and Malaysia, with the possibility of several more joining in the future.

What makes the TPP unique is not its claim as the largest "free trade agreement" but that its negotiations are conducted in backrooms with no public oversight.

In May this year, more than 30 scholars from countries around the world signed a letter expressing "profound concern and disappointment at the lack of public participation, transparency and open government processes in the negotiation" of the TPP.

One month later 130 members of the US Congress followed with an announcement stating: "We are troubled that important policy decisions are being made without full input from Congress."

Transparency aside, the gravitational pull of Asia-Pacific's dominant economies creates a policy tightrope for middle powers like Australia. Australia began negotiations in 2008 following the lead of the United States, and President Barack Obama has since made the treaty a priority, after US economists have posited that region-wide integration in the Asia Pacific would generate about $2 trillion in additional trade by 2025, with an additional $290 million for US exports.

Renowned Indian economist Jagdish Bhagwati was more straightforward in his assessment for Australia of the consequences of signing the TPP and "alienating China".

"I think Australia in particular has to look toward the region and toward the US, it should not have a false choice.. I think the Prime Minister (Julia Gillard) ought to take this under advisement and say 'we cannot afford to alienate China'," Bhagwati said.

While the details of each agreement remain obscure to a public focused on domestic issues, the Federal Labor Government is projecting Australia's participation in both the RCEP (or Regional Comprehensive Economic Partnership, an agreement that incorporates regional players including China) and the TPP as natural, advantageous and in no way conflicting. While Prime Minister Gillard visited Cambodia last week at the East Asia Summit (EAS) which kicked off the RCEP talks, Australia's Trade and Resources Minister Dr. Craig Emerson told local media that Australia was going to have its cake in Asia and it eat it too. "We now look like we're going to have two pathways to the one destination: a free trade area of Asia in the Pacific," Emercon told the ABC

One expert based in Canberra said that there are tectonic ruptures between trade blocs centered on Southeast Asia and a US- led Pacific Rim. Moreover, it is not clear whether these regional agreements will promote free trade or lock-down protectionism.

Matthew Rimmer, associate professor in IP at Australian National University says the fracturing of regional systems is equally critical, with a growing danger that countries are pulling against each other rather than in harmony.

"There is a concern that the energies of member states have been diverted by regional discussions. Arguably, there should be greater diplomatic efforts by nation states in multilateral discussions over trade," Rimmer said.

Bhagwati has constantly warned that the inclusion of the United States would inject clauses covering unrelated issues from human rights, labor processes and intellectual property that would hobble the TPP's efficacy.

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