Gordon Campbell on Bill English’s bizarre new/old trade deal

So, according to the Prime Minister, we all have an obligation to get in behind his zombie TPP deal, because of all the “jobs and income” it will bring in its wake. Really? That’s hilarious. This new “TPP 11” deal is entirely a pig in a poke. English has not got the foggiest idea what benefits this deal stands to bring right now, in a month’s time, or by year’s end - much less longer term out until 2030.

That’s partly because we have no way of knowing just how many TPP member countries will line up alongside Japan and NZ. The simple truth is that some countries –eg Vietnam and Malaysia – made concessions in the TPP negotiations on the basis of benefits that the US would deliver, and the US has now left the tent. Even if everyone did stay onside, I'd seriously doubt whether English can tell us what level of economic activity his new TPP variant would now deliver. Reportedly, by some measures the trade within this smaller bloc – this so-called “TPP 11” – is only a quarter of what it is between the original 12 members.

So English cannot credibly demand compliance from Labour and the Greens on the basis of trade benefits that he cannot quantify, or deliver. This whole “TPP 11” bizzo is decidedly weird. Having pushed the idea that we had to be in the TPP because the Americans were in it, we’re now feeling compelled to enact the whole thing, even though the Americans aren’t in it. To repeat: New Zealand - and other nations - made concessions and spent their political capital in order to meet American corporate demands. The likes of English are still promising to observe these commitments to the letter, even though the Americans won’t be there to keep their side of the bargain. The TPP has literally become a cargo cult ritual that’s being performed in the hope that someday, one day, the Americans will return, bearing gifts.

What’s far more likely – even if Japan and New Zealand could hold the other TPP member countries to the original terms – is that Donald Trump would look at the deal sometime early next year and make a fresh set of unilateral demands. He’s already loudly denounced this deal in its current form as being bad for America. The worst. Why on earth does Bill English think that (a) Trump would look at it afresh again early next year (b) would not wish to alter a line of the text and (c) would obediently get in behind it? Already, we know that’s not how Trump rolls.

So what’s going on here? I thought it might be useful to collate a few of the overseas reactions to what Bill English and Shinzo Abe have been cooking up. The consensus seems to be that this is mainly just shadow boxing, as most of the TPP countries – including Japan – are treating the “TPP 11” as a positioning gambit as they pursue their own bilateral trade deals with the USA sample:

Vietnam
Here’s Asia Nikkei’s take on the implications for Vietnam.

Vietnam, which had finally won from the U.S. the concession of lower textile product tariffs via the TPP, in particular is clearly shifting focus to a bilateral free trade agreement.

In Canada, the Toronto Globe and Mail makes a similar observation about Vietnam, adding that even Japan’s avowed interest in the “TPP 11” is strategic and for its own ends, and is not a substantive commitment:

Vietnam would have been one of the biggest beneficiaries of the original TPP because of lower tariffs and more investment from the United States…. Pushing TPP forward could help Japan’s position in negotiating a bilateral deal with the United States, said Nguyen Xuan Thanh of the Harvard Kennedy School. The same would apply for Vietnam, he said.

“It’s part of the game,” he said. “You don’t want to be seen as desperate for bilateral deals.”

Canada

Canada was a reluctant recruit to the original TPP, given its interest in protecting its dairy industry. Besides, it had existing trade deals with most of the main TPP players. It was there because the US was there. It seems likely to be even less enthusiastic about the “TPP 11” model – and it has the Trump-driven revamp of NAFTA more at the forefront of its thinking right now. Besides, it considers the actual value of a “TPP 11” deal without the Americans as being something of an unknown.

Jerry Dias, the national president of Unifor, Canada’s largest private sector union, questioned why Canada would pursue the deal given the U.S. has withdrawn….

But what any final deal without the U.S. will look like is still unknown. Trade officials from the 11 countries are also reportedly exploring the possibility of bilateral deals among one another.

The business press in Canada is also looking sideways at a TPP deal without the Americans.

Keeping the TPP alive is not simply a matter of asking the 11 remaining nations to ratify the deal. All trade agreements are the product of a balance of concessions between the participating countries. Much of the current TPP text would reflect bargains that were struck to accommodate the U.S.

Mark Warner, a Toronto-based international trade lawyer, said re-opening these talks could unwind the concessions that made the deal possible, such as Canada’s decision to open up its dairy industry.

“I guess it’s great for Canada to sit down with these folks,” Warner said. “But at the end of the day, the TPP is kind of like a sweater. If you pull on one of those threads, whether it’s dairy or rules of origin, the whole thing comes unravelled rather quickly.”

Exactly. But there are a few believers:

Joy Nott, chief executive of the Canadian Association of Importers and Exporters, said she believes a “TPP 2.0” is viable. During the U.S. presidential election, there were fears the TPP would not survive the exit of either the U.S. or Japan. Nott said having the remaining stakeholders at the table in Toronto this week shows that it might be possible to work something out. “Do I think anything would come of this? Yes, I do. I honestly do.”

As mentioned though, Canada has some rather more pressing trade concerns:

The TPP talks come at a crucial time for Canada on the trade front. Canada is gearing up to engage in three-part talks with the U.S. and Mexico about renewing the North American Free Trade Agreement. After an initial meeting with Canadian Prime Minister Justin Trudeau in February, Trump said he merely wanted to “tweak” the NAFTA deal. More recently, Trump has harshly criticized Canadian trade policies. ….his administration [has] imposed duties on Canadian softwood lumber shipments.

Basically, why would Canada want to go into its NAFTA rewrite by supporting a TPP deal that Donald Trump really, really hates?

Chile

Chile’s centre left government has been a somewhat sceptical TPP member from the outset, and its recent statements have signalled that it would prefer a TPP with China included – and not a TPP model that serves the strategic goals of the Obama administration, whereby the US would write the rules of regional trade at China’s expense. Clearly, Chile’s trade policy priorities include winning access to China’s vastly lucrative One Belt, One Road initiative. A “TPP 11” deal would pale by comparison.

Australia

Australia has been a keen driver of the ‘TPP 11’ and Malcolm Turnbull originally helped get Bill English on board with the idea. Here’s what the Australian newspaper was saying this week:

Australian Trade Minister Steve Ciobo, who will attend the weekend talks in Hanoi on the sidelines of an Asia-Pacific Econo¬mic Co-operation forum meeting, said he was hopeful a new TPP deal could be agreed in the first half of next year.

“It’ll be an opportunity around APEC for us to come together as trade ministers to look at … whether or not we can put in place a TPP2,’’ Mr Ciobo said. “Maybe not by the end of the year but certainly in the first half of next year. But there’s a lot of process that we’ve got to work through and of course, with the US withdrawing, it’s changed the metric for countries.”

Indeed. And one of the countries wanting to revisit the “metrics” of the original TPP deal is Australia itself:

A contentious part of the original deal for Australia were concessions to America’s pharma¬ceutical industry involving longer intellectual property protections for biologics medicines. In the US, these medicines are protected from companies producing generic medicines for 12 years.

Therefore, Australia is seeking to change the original TPP text:

The Japan Times reported that in TPP2, Australia was keen to shorten the data exclusivity period for biologic pharmaceutical patents from eight years under the original TPP to five years.

This weekend’s APEC meeting in Hanoi, Vietnam – which be attended by the new US Trade Representative Robert Lighthizer - will shed more light on the future prospects for any “TPP 11” deal.

Here finally, is yesterday’s take by the Japan Times on this Sunday’s APEC meeting in Vietnam. Japan’s sudden enthusiasm for the “TPP 11” idea, the Japan Times suggests, has had little to do with trade per se – and has more to do with Japan’s rivalry with China for regional supremacy:

Tokyo wants to enact the TPP soon, with Abe aiming to take the lead in establishing free trade rules within the Asia-Pacific region, as China’s massive economy gives the country inherent advantages, the government officials said. Beijing is not a signatory to the TPP.

Earlier this week, China hosted a two-day “One Belt, One Road,” international forum, a program under which Beijing is trying to widen its economic influence in Europe and Africa. “Taking China’s move into account, Japan has to grab a leadership position to establish free trade rules in the Asia-Pacific region,” one of the officials said.

And here’s how the Japan Times currently reads the levels of support for Bill English’s pet trade idea:

Australia and New Zealand have aligned with Japan, but Vietnam and Malaysia have indicated disagreement with Tokyo’s proposal as they had hoped to take advantage of increased trade with the United States in order to expand their economies.

Canada and Mexico have been unwilling to irritate Trump by joining the 11-nation TPP, as they stare down a possible renegotiation of the North American Free Trade Agreement with Washington in the near future.

“At this juncture, it is very unclear whether we can pave the way at the upcoming gathering for the conclusion of the TPP without the United States by November,” when the APEC summit will be held in Vietnam, the Japanese official said.

All that’s really happening right now is the cargo cult ritual:

“The only thing the 11 nations have agreed is that we will make efforts to persuade the United States to return to the TPP,” he added. At Sunday’s meeting, the 11 responsible ministers are expected to discuss the creation of new procedures that would enable Washington to easily return to the free trade pact if circumstances were to change.

Even if by some miracle, a “TPP 11” deal of some sort did emerge by year’s end, it would be only a shadow of its original self – whose benefits to this country by 2030 were not exactly overwhelming in the first place. If English wants to use this zombie deal for political purposes, perhaps he should begin by quantifying what its benefits stand to be, based on the inevitably smaller volumes of trade that a deal without the US would deliver. Are we looking at “TPP 11” to deliver half the benefits of the original TPP deal? A third? A quarter?

And if we’re hoping the US will rejoin the TPP in 2018, what will be our response if Donald Trump makes a fresh set of unilateral demands?

Moon Duo

Talking of pipe dreams… psychedelia never really went away. Moon Duo are a case in point. Not only does the music by Ripley Johnson and Sanae Yamada sound gauzily trippy, but the videos by Micah Buzan are like some amazing late 60s fever dream. Here’s the duo’s lovely “Lost In Light”.

And here is its more menacing twin track “Cold Fear”.

Obviously, the creative force behind these videos is Micah Buzan – and if you want a wider sample of his work, here’s his 2017 animation showreel:

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