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The TPPA is dead – what next for trade?

By   /  November 10, 2016  /  Comments Off on The TPPA is dead – what next for trade?

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MIL OSI – Source: Green Party – Press Release/Statement

Headline: The TPPA is dead – what next for trade?

Top of the “to do” list for incoming President Trump (it will take a while to get used to writing that) are changes to trade policy. Number one is rejection of the Trans-Pacific Partnership Agreement (TPPA). He will be supported by a Republican Congress and Senate, so it is now clear that the TPPA, as negotiated, is dead. So what?

Firstly, it’s not a big deal to our economy. The benefits of the TPPA would be tiny – tariff reductions would have been around 2.2% of export revenues to TPPA markets by 2030 and less than 1% GDP growth overall. This is less than monthly fluctuations in exchange rates or price movements at most GlobalDairyTrade auctions. By contrast, although the costs and risks are hard to quantify, concessions like extending copyright from 50-70 years would have been substantial. As other countries have found, the costs of Investor-State Dispute Settlement (ISDS) cases brought by foreign corporations against our government could be far higher.

There has been the usual scare-mongering from those pushing the TPPA that it was crucial to New Zealand’s ability to trade internationally and there would be a collapse of trade without the TPPA. This over-inflated rhetoric, along with the grossly exaggerated forecast of economic benefits, was hype. The reality is that nothing has changed. Exporters who are selling into US markets, and those of the other ten countries in the TPPA, will sell into those markets with no change.

The context is that, in a world where tariffs are low, free trade deals deliver few economic benefits. Yet they continue to be symbolic of government efforts to boost exports. This government has made them the highest priority for New Zealand foreign policy, to the neglect of action on climate change, conservation of oceans, peace and security, poverty reduction and respect for human rights. Shady deals like the Foreign Minister paying Al Khalaf $11 million for a scheme that has resulted in little more than dead sheep have been justified against the holy grail of a free trade agreement. It’s not worth it.

Green Party trade spokesperson Barry Coates

Secondly, it is likely that there will be increased protectionist pressures, particularly targeted at China and the emerging economies. We should resist those, not by new agreements that further extend the rights of big business, like the Trade in Services Agreement, but by focusing on sound rules for the core issues of market access through low tariffs and quotas.

Finally, there are now opportunities to re-think our approach to trade and investment deals. The European Union has already signalled that they will not accept ISDS, and countries like India, South Africa and Indonesia are reviewing their ISDS agreements. Now would be an ideal time to re-think trade negotiations and ensure that trade supports our broader aims, including boosting local economic development and jobs, environmental sustainability and protection of human rights.

My hope is that with the TPPA dead in the water, we can set about developing a new standard of trade agreements that are truly beneficial.

In developing future agreements, it is important to note that the Green Party does not agree with President Trump on why we should oppose the TPPA.  For example, much of the key Republican opposition is from congressmen and senators in tobacco growing states, who don’t like the anti-tobacco public health protections in the TPPA. The Green Party supports those and would ensure that governments’ right to regulate in the public interest would be protected.  Other Republicans want more freedom for American pharmaceutical companies to make big profits, whereas the Green Party wants to see a balanced approach to patents that would reduce the cost of medicines.

Another reason we’re opposed is that the TPPA would hinder, not help, action on climate change. It is of deep concern that Trump doesn’t seem to care about climate change at all.

Ironically, Trump has complained that the TPPA is “over 5,000 pages long — every country that’s in that partnership has studied every word, every comma, every sentence, every paragraph; our guys probably haven’t even read it.” But quite the opposite is true. The US had huge influence over the content of the TPPA and the final text was developed with corporate lobbyists without any opportunity for public or parliamentary scrutiny. This excessive secrecy needs to change. It is now time for fundamental reforms.

Photo: brianscantlebury.com on Flickr | CC BY-SA 2.0

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