News Analysis Trade

TPP – the Trans Pacific Powerplay

Trans Pacific Partnership (TPP) – the biggest trade deal in history, which threatens to trample the fledgling Asean Economic Community (AEC) under foot

“America should write the rules. America should call the shots. Other countries should play by the rules that America and our partners set, and not the other way around”. – US President Barack Obama [2 May 2016, Washington Post]. No ambiguity there; this is Obama’s statement of intent in delivering the Trans Pacific Partnership (TPP) – the biggest trade deal in history, which threatens to trample the fledgling Asean Economic Community (AEC) under foot, and split Southeast Asia, destroying any hope it has of full economic integration.

And where does all this leave the Philippines? Virtually high and dry if this construct comes into effect. Broadly, if TPP is introduced – and it will be if Hilary Clinton becomes the next US president, despite her recent denials – the AEC will be polarised. Regional harmony in trade and foreign direct investment which the AEC seeks to achieve across its 10 member states will be replaced by rivalry and division. It will be faced with competing trade agreements, alternate standards requirements, conflicting rules and regulations, tariff discrepancies – and the list goes on.

A key element of the nine-month-old AEC is regional unity in trade, achieved via a collective trade-negotiating platform that would end inter-state rivalry. That would have no chance of succeeding if TPP insinuates itself into Southeast Asia. It would be a case of one region, two trade blocks with some Asean members in one and some in both. The Philippines, along with Cambodia, Indonesia, Laos, Myanmar and Thailand are AEC members but are not signatories to TPP, while Brunei, Malaysia, Singapore and Vietnam would be members of both trade blocs if TPP is implemented.

More galling is the fact that while the AEC has been formed to benefit each of its member states equally, TPP – another Obama brainwave – seeks to benefit, first and foremost, the US domestic economy. The US president doesn’t make any pretence about that either. As he wrote in that same Washington Post article: “Increasing trade in this area of the world would be a boon to American businesses and American workers”. And no doubt it would. But at what cost to Asean?

Of course, the US is not concerned about that; if it was the TPP would never have been considered – or at least it would have been explored first with the AEC as a grouping, not by sneaking around signing up countries where it could. Regional harmony be damned though; American trade, it would seem, is far more important.

So there we have it. The Trans Pacific Partnership is not actually a partnership at all; it is a mechanism for commerce that is specifically designed by the US for the US. And if it becomes a reality it will subsume this region under a Made-in-Washington global trade umbrella in which the likes of the Philippines will ultimately have to opt in and comply with all the US terms and conditions and regulations – at who knows at what cost – or compete as best it can along with the remnants of the AEC.

So what the TPP is really all about is the US asserting its dominance in this region. It has decided – based on the flimsy pretext that it has a Pacific coastline – that it can move into a different hemisphere to the one it occupies and become the beneficiary of all the trade traffic and goods production that emanates from it and create a massive market for its products.

And, of course, as we should know by now, trade is often a euphemism for far more – the European Union is a classic case of this. Geopolitical goals are what lie thinly veiled beneath. Control the economies of the region’s individual states, ergo control the region’s trade and its markets, ergo control the region. If that’s not hegemony, then the dictionary’s got it wrong. This is colonisation by commerce.

Little wonder, then, that President Rodrigo Duterte is seeking closer ties with China and Russia – both of which, ironically, also have Pacific coastlines. Of course there are other reasons for this apart from trade considerations – not least, Duterte’s determination to throw off the American yoke – but it will be interesting to watch now if other non-TPP signatory members of Asean will also look to the northeast for their trading futures.

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