The debate about the Trans-Pacific Partnership (TPP) has gotten far, far ahead of itself.
On Friday morning, the US House of Representatives voted down the Trade Promotion Authority (TPA), a legislative agreement between Congress and the president that would effectively delegate trade negotiation authority to the latter.
The idea was to help “fast track” the TPP negotiation. The president’s authority could quickly be yanked back if Congress decided he was exceeding his mandate. Either way, the whole agreement or each individual parts would have to be voted on by Congress after the diplomacy was over.
In trade policy, acronyms build up very quickly. The TPA isn’t the TPP. But everyone knows without the TPA an American president is unlikely to get any final TPP through Congress. So it’s been used by American opponents as a proxy for the broader agreement.
The US union movement thinks “fast track trade deals” lead to “fewer jobs, lower wages, and declining middle class”. In Australia, GetUp! describes the TPP as “the dirtiest deal you’ve never heard of”.
This sort of hyperbole is likely to derail the TPP (if it hasn’t already been derailed by the US Congress) with very real and damaging consequences for the global economy and anti-poverty efforts in the developing world.
Because the potential benefits from a regional free trade deal are enormous. Analysis by the US-based Peterson Institute for International Economics finds that there are potential economic gains from the TPP in the order of US$1.9 trillion. A further analysis argues that by far the biggest winner out of the TPP would be Vietnam – that is, a poor, developing economy.
Now, there’s a standard caveat when we talk about bilateral or multilateral trade agreements. The benefits of free trade accrue to countries that liberalise their own trade barriers. This means unilateral liberalisation is best. But as I argued in The Drum last November, there are strong political reasons to welcome multi-country agreements, insofar as they create the political conditions often necessary for domestic reform.
There’s another caveat specific to the TPP. Right now, the TPP is highly secretive. A lot of the detail that we know about the TPP we know through WikiLeaks. Legislators who want to take a look at the negotiating text have to sign a rather absurd confidentiality agreement.
This secrecy is excessive and is damaging the free trade cause.
But trade negotiations are usually held privately between the upper levels of foreign governments. Diplomacy is about compromise, and the process of compromise is easier when kept off newspaper front pages.
The TPP negotiations are not much more secret than any other legislative agenda prepared by a bureaucratic department “secretly” before being introduced into the legislature.
The second stickler with the TPP is intellectual property. I find it hard to get agitated about what might possibly be in the final version of the TPP regarding intellectual property, given what the Australian Government is proposing to do in the copyright space right now.
With or without a TPP, advocates of increased patent terms or copyright penalties need to demonstrate these measures would inspire new innovations or creative works.
Still, it would be lot better – and the negotiation process a lot smoother – if intellectual property was not in the TPP. Copyright harmonisation is not going to boost economic growth. Copyright harmonisation is not going to do anything for poor people in Vietnam.
The devil of these multilateral trade agreements is that they rest on dozens of quid pro quos.
So the questions we may have to face if the TPP is finally concluded are not easy ones to answer. For instance, would we accept longer copyright terms in Australia if it meant other countries lower tariffs, which, in turn, would boost the incomes of poor Vietnamese clothing manufacturers? Maybe. Maybe not.
Figuring out whether the trade-offs in a huge deal like the TPP are worth it is only possible once the negotiations are finished and the document as a whole is up for public scrutiny.
If the US Congress has already killed the TPP by voting down the TPA, that chance may never come. The TPP will remain a secret bogey-treaty, on which special interests can project their deepest, wildest fears.
But if agreement can be found, there’s a lesson there too. The Australian public should not accept the argument made after the Australia-United States free trade agreement was signed a decade ago – that the enabling domestic legislation had to be passed because its terms had already been agreed to at the international level.
Because, ultimately, it is Parliament that decides what is in the best interest of the people of Australia, not our trade negotiators.