Pacific 'free trade' deal threatens poor

A protests against the TPP in Auckland last year.

The United States government hopes that negotiations for the Trans-Pacific Partnership (TPP) will reach a final agreement this year. If completed, it will create the world’s largest “free trade agreement” — with serious consequences for the hundreds of millions of people living in the affected countries.

The 18th round of TPP negotiations will take place in Malaysia on July 15-25. This will be the first time Japan has taken part, joining the US, Australia, Singapore, New Zealand, Chile, Brunei, Canada, Malaysia, Mexico, Peru and Vietnam.

The discussions are being held behind closed doors. What we know of the contents of the TPP has only come from leaks, and they aren’t good news for ordinary people.

Leaks indicate the TPP would: limit the ability of participating governments to regulate foreign investment; impose strict intellectual property regulations; hamper production of cheap generic medicines; create incentives for multinational corporations to send jobs offshore; and make signatory countries accountable to international trade tribunals.

This would give foreign corporations the ability to demand compensation for any expected future profits that may be lost or hindered by national laws.

Along the lines of other “free trade” agreements, it promises to shift power even further towards corporations based in the rich nations, at the expense of the underdeveloped world.

The total secrecy of the TPP talks is unprecedented. There have been no official publications for the public. Even former US president George W Bush published the drafts for the then-proposed Free Trade Area of the Americas (FTAA) in 2001.

Besides government officials, there does seem to be enough space at talks for at least 600 or so “trade advisors”. They are representatives of the corporate stakeholders who would benefit from the sweeping agreement.

Even the legislative assemblies of the countries involved are being denied access to information. US Democratic Senator Elizabeth Warren said the US “should not be moving forward on trade agreements without making more information public”.

But despite growing outcries about the lack of transparency, there is bipartisan support in both major parties the US and Australia for the TPP.

However, former US trade representative Ron Kirk admitted the rest of us might not be so keen on the TPP when he told Reuters that making the negotiation texts public would raise such opposition it could make the deal impossible to sign.

Such opposition would no doubt build on anger at the effects of the North American Free Trade Agreement (NAFTA), which encompasses Canada, Mexico and the US and came into force in 1994.

As a result of NAFTA, in the past 10 years, Canada lost 500,000 manufacturing jobs to Mexico. Precarious, unstable or part-time employment has risen by 50% in the past 20 years. Canada is also facing more than C$2.5 billion worth of legal suits by corporations that claim loss of profits due to Canadian laws.

The effects on Mexico are far worse. Millions of small farmers were displaced when NAFTA came into force, as government regulation was no longer able to protect domestic agriculture.

This raised unemployment, drove down wages and created a huge push for migration to the US.

Inside the US, the peak labour organisation AFL-CIO in February said that since NAFTA began, “the growth in the trade deficit with Mexico has cost the United States nearly 700,000 net jobs”.

But such free-trade deals are not bad news for everyone — they open the way for multinational corporations make record profits.

Take the example of Wal-Mart, which shifted much of its production to Mexico when NAFTA began, eventually becoming the largest private employer in Mexico, leading to enormous profits.

We can expect the TPP to spread the devastating effects of NAFTA to the Pacific rim, worsening conditions for working people and ever-rising profits for the multinationals.

There is also a geopolitical aspect to the TPP. The TPP is an economic wing of the US’s strategic pivot toward Asia and a bid to counter China’s growing economic influence.

China is certainly wary of this. Professor Cai Penghong, director of Apec Research Center at the Shanghai Academy of Social Science, said: “It seems that US is using the TPP as a tool as part of its Asia Pacific strategy to contain China … it is unbelievable that the TPP negotiation activities are secretly conducted and non-members [find it] hard to assess what will happen.”

While China is the target in Asia, on its own side of the Pacific, the US faces the growth of left-wing movements and governments in Latin America. These governments, notably Venezuela, Ecuador, Bolivia and Cuba, have led a shift against US hegemony, replacing the traditional US-centric diplomatic and trade relations with cooperative initiatives designed to create a more unified region, excluding the US.

The US-proposed FTAA was defeated in 2005 due to opposition from the governments of the Market of the South (Mercosur — Brazil, Argentina, Paraguay and Urugauy) as well as Venezuela.

In recent years, there have been a range of new bodies pushing Latin American regional integration. Mercosur has expanded to include Venezuela with Bolivia becoming an “accessing member”. Venezuela and Cuba formed the anti-imperialist Bolivarian Alliance for Our Peoples of the America in 2004, which now has eight member-states and also seeks to incorporate social movements across the region.

New political bodies, the Union of South American Nations and the Community of Latin American and Caribbean States, have also formed.

Former Bolivian ambassador to the UN Pablo Salon said: “Projects such as the TPP aim to revive the FTAA and extend it to Asia, beginning with the inclusion of 'friendly' governments.”

At the moment, TPP talks include Mexico, Chile and Peru. The US has also signed bilateral free trade agreements with other countries, including Colombia.

This push is seen as a threat to the ongoing efforts in Latin America to create a cohesive bloc against US domination. Solon said: “The fate of these initiatives will be decisive for the emergence of alternative social movements.”