Friday, 5 August 2016

Singapore PM's stern reminder: TPP worth more than petty US politics

A new study shows 90% of the investment chapter in the US-Oman trade agreement is located in the Trans Pacific Partnership (TPP), yet no one is complaining on podiums or in newspaper editorials about that deal.

Either anti-TPP crowd is still reading its way through back-catalogues of every US FTA in existence and hasn’t yet noticed, or the TPP attracts a special hatred for political reasons. My bet's on the latter.

Anti-TPP rhetoric and general noise from the US election campaign drowns out rational debate about the deal, which is a shame because most people missed two calm warnings this week if the faltering agreement fails. Both US presidential candidates have left plenty of room in their negative statements on the TPP to make tactical political pirouettes if they eventually enter the White House. And because of those negative views, the media think the TPP is dead. That may not be the case.

Hillary Clinton says the deal “doesn’t meet her high standards,” indicating it’s her standards that could be lowered, not the details of the TPP. While Donald Trump wisely says he will only support a TPP “that is good for American workers.” That particular loophole stretches wider after the release of a paper by Todd Allee and Andrew Lang at the University of Maryland.

The two academics compared the language in the TPP with 74 existing US free trade agreements and found significant sections are lifted nearly verbatim. They find the deal is written predominantly by Washington pens, lending some truth to US President Barack Obama’s position that the strategy behind the TPP is a US goal of “writing the rules of the road” for trade in the Asia Pacific.

Their text-as-data analyses (similar to university plagiarism-detection software) show the “ten preferential trade agreements (PTAs) that most closely match the TPP are all US PTAs. Moreover, the contents of controversial chapters, such as the one on investment, are drawn even more heavily from past US treaty language,” according to the paper’s abstract.

“These revelations about widespread copy-pasting do not necessarily mean the TPP is unquestionably positive for the US. One’s (re-)assessment likely depends on how one views the earlier US agreements that are now embedded in the TPP as well as globalisation in general,” the paper’s authors told the Washington Post.

“But it now seems difficult to claim the US performed poorly in the TPP negotiations, since much of its preferred language was inserted into the landmark new agreement by virtue of a few simple keystrokes.”

Also this week, while in Washington on a state visit, Singapore’s prime minister Lee Hsien Loong delivered a sobering geopolitical warning to the US about the consequences of not passing the TPP.

Mr Lee began by saying Singapore was the first to trigger the TPP process, along with Brunei Darussalam, Chile and New Zealand. He called the ultimate deal a “hard-fought process,” an “economic big deal” and outlined how it is a remarkable achievement “all the members of the TPP at the end of this are still with us, nobody has dropped out.”

But then shifting his tone, Mr Lee talked directly to undecided politicians in the US Senate about how economics doesn’t fully describe the importance of the TPP. The deal is part of a decades-old promise and responsibility to Washington’s Asia Pacific partners – one they shouldn’t be so quick to undermine.

“In terms of America’s engagement of the region, you have put your reputation on the line. It is the biggest thing America is doing in the Asia Pacific, consistently over many years of hard work and pushing.

“Your partners and friends who have come to the table, each one of them overcoming some domestic political objection, sensitivity and political cost to make this deal. And if at the end, waiting at the alter, the bride doesn’t arrive, I think there will be people who are very hurt – not just emotionally but really damaged for a long time to come,” says Mr Lee.

For instance, when Japan joined the TPP discussions, members were concerned the historically protectionist East Asian nation would scuttle the talks. But prime minister Shinzo Abe spent significant political capital to join the talks and convince Japanese agriculture and horticulture interests to open their markets in unprecedented ways.

The final acceptance of TPP came down to quiet, back-room talks between US and Japanese trade representatives as the two sides assured each other their liberalisation efforts would be supported politically. The last thing Japan wanted was for domestic arm-folding in the US to scorch Japan’s exhaustive cooperation.

“Several of [Mr Abe’s] predecessors thought seriously about and decided not to participate in the TPP. They came very close, they prepared the ground and walked away. But Mr Abe came through and decided to commit. Why? Because he wants to help. He wants his country to benefit and open up its markets. And [TPP] is one way to do it,” says Mr Lee.

“And then [the US] doesn’t do this. Well, it hurts Mr Abe is one thing, but it hurts your relationship with Japan, your security agreement with Japan. And the Japanese, living in an uncertain would, depending on an American nuclear umbrella, will have to say, on trade, the Americans could not follow through.

“If it’s life and death, whom do I have to depend on? It’s an absolutely serious calculation, which will not be said openly, but I have no doubt will be thought,” Mr Lee cautioned.

Singapore’s prime minister Lee Hsien Loong in Washington this week
And in saying what no US politician can, Mr Lee described both the enormous responsibility of the US and the importance of the TPP from the perspective of the 11 other members. The US may not feel like it is superpower, and avoids talking about itself in such terms. But statement’s like the above show how many countries still see Washington as precisely this.

The TPP, from Singapore and Japan’s perspective, may actually be a “life and death” calculation. The continental US is thousands of miles away from the tension in the East and South China seas. The US Navy sails through those seas, but it can leave. The countries on its rim cannot leave. TPP members have to deal both with a rising China and every other Asian state responding to that rise as they build their own forces. Friction in the region is bound to increase.

Free trade agreements have been called the “rules of the road” by Mr Obama and “as important to US Pacific strategy as another aircraft carrier” by US Secretary of Defence Ashton Carter. That is about as close as US officials and politicians get to talking about grand strategy.

For some reason, the Obama administration has refused to package its actions over the past eight years actions as part of an overarching grand strategy, so his manoeuvres tend to look haphazard and ad hoc. That worries allies and friends. Patterns can be deceptive, but noise is terrifying.

The fact that it takes a Singaporean leader to tell US politicians that the world relies on its responsible decisions is a reminder that letting domestic battles over who controls Washington is eminently short-sighted.

It also highlights the desire for an international trading system is as much an Asia Pacific goal as it is an American goal, regardless of whose fingerprints smudge the deal’s 2700 pages.

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