January 25, 2016
TPPA: Trade and Geo-Politics
by Dr. BA Hamzah
THOSE familiar with the literature on international trade will appreciate the symbiotic relationship between trade and geo-politics. Take the case of US-led economic sanctions against Iran and Cuba. They were not imposed for solely economic reasons. On the contrary, it is normal for major powers to use economic sanctions as a tool in making foreign policy. The tool can manifest in the form of trade barriers and restrictions on financial transactions to punish a state for “misbehaving”.
The Trans-Pacific Partnership Agreement (TPPA) is no exception. World renowned Professor Noam Chomsky (pic above) of Massachusetts Institute of Technology (2015) believes the TPPA is designed to carry forward the neo-liberal project to maximise profit and ensure America’s domination of the world. So does Nobel Prize-winning economist Joseph Stiglitz who views the TPPA as a managed-trade agreement of “unequal partnerships with the US dictating the terms”.
In Stiglitz’s view, partnership agreements like the TPPA “go beyond trade, governing investment, intellectual property as well, imposing fundamental changes to countries’ legal, judicial and regulatory frameworks without input or accountability through democratic institutions.”
Under the TPP, the status of the MNCs has been elevated to that of a nation state. MNCs have used and intend to use the controversial investor-state dispute settlement (ISDS) mechanism as an instrument in public international law to sue sovereign states for non-compliance with the agreement. In the opinion of many, the ISDS has elevated trade to a new geo-political height.
Should Malaysia not be concerned with the above observations as it hurries to ratify the TPPA before President Obama leave office in 2017? Obama minces no words on the geo-politics surrounding the TPPA as much as it is about international trade. He proclaimed to the world on October 5, 2015 that “this partnership (TPPA) levels the playing field for our farmers, ranchers, and manufacturers by eliminating more than 18,000 taxes that various countries put on our products.
The US President adds, “[I]t includes the strongest commitments on labour and the environment of any trade agreement in history, and those commitments are enforceable, unlike in past agreements.It promotes a free and open Internet. It strengthens our strategic relationships with our partners and allies in a region that will be vital to the 21st century. It’s an agreement that puts American workers first and will help middle-class families get ahead.”
America needs the TPPA to compliment Obama’s foreign policy of pivoting or rebalancing its military deployment (2011) to prevent its rival (read China) from dominating the Asia-Pacific region.
In a statement on the TPPA, President Obama asserted that “we can’t let countries like China write the rules of the global economy. We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment.”
In endorsing the TPPA, Secretary of State John Kerry told students at Indian State University (October 14, 2015) that the TPPA “matters for reasons beyond trade”. His remark that the Asia-Pacific region “will have a big say in shaping international rules of the road on the Internet, financial regulation, maritime security, the environment and many other areas of direct concern to the United States” clearly defines the US geopolitical agenda in the TPPA.
Secretary of State John Kerry
I really don’t understand why some continue to deny the geo-political genesis and content of the TPPA. It is okay for Malaysia to adopt a pro-US policy to balance the rise of China but we should not plunge head on without reconsidering the consequences of becoming a party to the US strategic foreign policy of using the TPPA to contain China, our largest trading partner in South-East Asia. It may be perilous to our long-term geo-political interests to undermine China.
Like the US proposal for the Transatlantic Partnership in Investment and Trade for Europe, the TPPA is a tool of US foreign policy to retain its pre-eminence by writing the rules of the global trade and international security.
There is nothing sinister about the TPPA if Malaysia is prepared to embrace a trade deal that helps promote US foreign policy.Acknowledging the geo-political ramifications of the TPPA on Malaysia will result in greater policy transparency and reduce the trust deficit between the rakyat and the Government.