Economy

TPP has been trumped

Donald Trump's first priority is to withdraw the US from the Pacific Rim mega trade pact—and that's good news

 
By Latha Jishnu
Last Updated: Wednesday 28 December 2016
Illustration: Tarique Aziz
Illustration: Tarique Aziz Illustration: Tarique Aziz

The Trans Pacific Partnership (TPP) is dead in the water. It died effectively on November 11 when Republican and Democratic leaders in Congress categorically told the White House they would not advance it. For President Barack Obama, it was a major slap in the face as his ambitious plan to bind Asia and the Pacific in one of the biggest trade agreements unravelled. But for the rest of the world and specially for civil society movements in the 12 nations that comprise TPP, it was celebration time because of the receding threat of restrictive measures on a host of critical economic and social sectors that the mega trade agreement would have imposed.

And on November 21 came still sweeter news. President-elect Donald Trump made TPP’S rollback a priority as he announced a series of measures that his administration would take in the first 100 days to “make America greatº. The first of these would be a note of intent to withdraw from the TPP agreement which he described as “a potential disaster for our country”. He would instead “negotiate fair bilateral trade deals that bring jobs and industry back”.

That is undoubtedly the final nail in TPP’S coffin because the other countries are unlikely to find it worthwhile to push ahead with the deal without the US. As Japanese Prime Minister Shinzo Abe—who is among its fervent cheerleaders—admits, TPP would be “meaningless” minus the US. For the Obama administration, it is a humiliating defeat given that TPP was a top priority for it. Since TPP was signed in February 2016, the White House has been lobbying relentlessly for it, with Obama even making it part of Hillary Clinton’s campaign.

The sigh of relief which was palpable after the setback in Congress should have turned into a loud cheer after Trump’s promise that was carried in a brief clip posted on YouTube. Why we did not hear those shouts of approval is that most liberals do not like the incoming president and his agenda—and admittedly for perfectly valid reasons. Yet, for another lot of liberals who look at Trump from a global aspect, he spells hope, not least because he is anti-war. That he is against mega trade blocs, too, is another point in his favour.

Civil society movements across Asia, Latin America, Oceania, and North America that have come to fight TPP for over seven years, say the agreement would have “expanded corporate power to destroy peoples’ livelihoods, undermine human rights and the environment, threaten financial stability, increase the cost of life- saving medicines and attack health and other pro-people safeguards”.

The underlying reason is that TPP is not about free trade but the reverse: a sharp increase in protectionism by way of stronger and longer patent and copyright protection. This kind of protectionism, which strives to enforce standards higher than that required by WTO rules, is aimed at helping multinationals increase profits. This would be significant in the case of products such as medicines and software. The bigger threat from TPP is that it would have become the blueprint for other such trade pacts. A dead giveaway is the following statistic: the gain for the US is just 0.23 per cent of GDP.

India is not likely to respond to the demise of TPP. For a country that was not part of the pact but was threatened by it, the relief is certainly immense. Although conclaves have been held on the impact of TPP on India’s trade, there was little it could do to oppose it. The biggest worry was the impact it would have on the generic medicines industry and the undermining of public health. For the time though, the Modi government’s cheers for Trump will have to be muted.

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