The Trans-Pacific Partnership An example of global governance David Redfern Philip Allan Publishers © 2016

Background The Trans-Pacific Partnership (TPP) is a trade agreement reached in October 2015 between 12 nations around the Pacific Rim. It is set to become a major new trade bloc Trade blocs are groupings of countries. Examples of such blocs are the European Union (EU), the North American Free Trade Area (NAFTA) and the Association of South East Asian Nations (ASEAN) Philip Allan Publishers © 2016 Countries within a bloc reach agreements which reduce taxes, tariffs and quotas in trading between them. This allows much freer trade within the blocs and deepens integration between member states Trade blocs are examples of global governance Ag visuell/Fotolia

Global governance Global governance refers to the rules, norms and laws that make and remake global systems and the geographical consequences for citizens, ecosystems and human and physical environments in different places Rules refer to standards for activities, norms refer to expectations about what is considered to be ‘normal and reasonable’, and laws refer to obligations and duties on signatories What makes global governance a complex affair is that parties signed up and committed to global governance systems can and do differ on how they interpret, engage and enforce these rules, norms and laws This can have important consequences for the ways in which people live Philip Allan Publishers © 2016

The TPP deal The 12 nations are: USA, Canada, Japan, Malaysia, Chile, Peru, Mexico, Brunei, Singapore, Vietnam, Australia and New Zealand These countries have over 800 million people, and cover about 40% of the global economy Philip Allan Publishers © 2016 The deal cuts trade tariffs between these nations and aims to set common standards in member countries. Under the deal, 98% of tariffs will be eliminated on a wide range of products including dairy products, beef, sugar, wine, rice, horticulture and seafood, manufactured products and energy Unclesam/Fotolia

US trade with TPP countries Philip Allan Publishers © 2016 Source: Congressional Research Service (2013 )

US balance of trade with TPP countries (2013) CountryImports ($ bn)Exports ($ bn)Trade balance ($ bn) Australia Brunei Canada Chile Japan Malaysia Mexico New Zealand Peru Singapore Vietnam Philip Allan Publishers © 2016 Source: Congressional Research Service (2013)

Further points on the TPP Supporters say the deal could be worth billions of dollars for the countries involved, but critics say it was negotiated in secret and is biased towards large transnational corporations (TNCs) The TPP has yet to be ratified by lawmakers in each country One of the major beneficiaries is Japan which stands to reap huge economic benefits. For the USA, the benefits are largely political, with increasing ties with the Pacific One major drawback is that China was not involved, though China did give the deal a cautious welcome, stating that it hoped the TPP ‘could contribute to the Asia-Pacific region's trade, investment and economic growth’. Another important non-signatory is South Korea Philip Allan Publishers © 2016

Issues for the TPP At an individual country level, Japan has made concessions to open its market wider to food exporters, including Australia, New Zealand and the USA. Canada and Japan have agreed to allow greater access to their tightly controlled dairy markets, while New Zealand convinced the USA to accept more of its milk products. However, there are some issues: Australian sugar cane-growers were unhappy because they wanted more access to the US market than was agreed upon A major area concerns how long pharmaceutical TNCs can keep the patent on their drugs – the time ranges from 12 to 5 years. This will prevent cheaper generic drugs being available in this time. Philip Allan Publishers © 2016 Dinostock/Fotolia

Attitudes to the TPP in the USA: political/economic Not everyone thinks it is a good deal: Donald Trump, the Republican presidential candidate, denounced it as a ‘terrible deal’ Hilary Clinton, the Democratic presidential candidate, stated it does not meet the ‘high bar’ that should be applied to trade pacts On the other hand: Matthew Goodman of the Centre for Strategic and International Studies, a think-tank, says ‘The White House feels this is a big one. It validates their definition of TPP as a 21st- century agreement.’ The Peterson Institute for International Economics, another think-tank, estimated that it would boost the world economy by $223 billion by Philip Allan Publishers © 2016

Attitudes to the TPP in the USA: environmental An independent television news channel, Democracy Now, said in October 2015 that as Indonesia has joined the TPP, it will have greater problems dealing with the huge fires in the country: ‘In order to stop the fire problem, you have to change the way the economy works. By Indonesia joining the TPP,...Indonesia will be losing much of the capacity they would need to regulate the corporations, because a lot of the burning takes place on corporate plantations to produce palm oil and other things....The corporations, under TPP, if Indonesia tries to restrict them, will now be able to go to the TPP, say this is a restraint on trade, and try to get these regulations knocked down. This setting of fires to clear the underbrush for plantations and farming is actually market-driven, because that’s the cheapest way to do it.’ ironmental Philip Allan Publishers © 2016

The TPP on video A video produced by the BBC explaining the deal can be found at: Some other environmentalists are against the TPP: Some health specialists are against the TPP: Philip Allan Publishers © 2016

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