by
Mike Head
China Rising (Tianjin, China)
Photo courtesy Wikimedia Commons, author Shubert Ciencia
Despite bullying and cajoling by the US, closed-door talks in Singapore this
week on its Trans-Pacific Partnership (TPP) trade pact broke up without a final
agreement, failing to meet the Obama administration’s deadline for a deal by
the end of 2013.
It was a visible blow to the White House, which was intent on finally pushing
through the agreement pact as a key part of its “pivot” to Asia to combat
China’s rising influence. The TPP seeks to open the region’s markets and
financial systems to unfettered exploitation by US banks and corporations, at
the expense of China—which is not a TPP member—and America’s European rivals.
Negotiations will resume in January, but there is no guarantee of completion by
April, when Obama is scheduled to tour the Asia-Pacific to reinforce his
government’s “rebalancing” to the region.
The TPP, first conceived in 2003 by Singapore, New Zealand and Chile, was
literally taken over by the Obama administration in 2009. The treaty’s 29
chapters now go far beyond traditional trade issues.
As a US Congressional Research Service report in August 21 stated: “[I]t is the
leading trade policy initiative of the Obama Administration, and is a
manifestation of the Administration’s ‘pivot’ to Asia. If concluded, it may
serve to shape the economic architecture of the Asia-Pacific region by
harmonizing existing agreements with US.”
Reshaping the “economic architecture” includes abolishing all tariffs that
limit US exports and any curbs that affect American investment, particularly in
financial services. The TPP also radically extends copyright and patent
protections, especially for medicines, music, films and IT, thus boosting the
profits of the pharmaceutical, media and technology giants. It aims to break up
state-owned monopolies and gives US firms the power to sue governments whose
decisions cut across their profit-making.
President Barack Obama, backed by Wall Street, has identified himself closely
with the TPP, describing it as the economic centrepiece of renewed US
engagement in Asia. But this is the second year in a row that his proposed
end-of-the-year deadline has not been met.
Apart from the US and the original three members of the TPP, the other eight
countries involved in the negotiations are Vietnam, Peru, Mexico, Malaysia,
Japan, Canada, Brunei and Australia.
Leaked documents obtained by WikiLeaks, and published on the eve of the
Singapore talks, show that the US adopted heavy-handed tactics in an effort to
meet the 2013 deadline, while refusing to budge on its key demands. Two
documents outlined the state of negotiations after earlier talks in Salt Lake
City during November.
“The US is exerting great pressure to close as many issues as possible this
week,” one memo stated. “One country remarked that up until now there had been
no perceivable, substantial movement on the part of the US, and that is the
reason for this situation.” The pressure would “increase with each passing
day.”
The document also revealed that “600 ‘trade advisers’—lobbyists guarding the
interests of large US corporations such as Chevron, Halliburton, Monsanto and
Walmart—are granted privileged access to crucial sections of the treaty text.”
These are just some of the corporate interests seeking to draw massive profits
from the TPP. The US Trade Representative estimates that the agreement would
boost US exports by $123.5 billion a year by 2025.
Because the contents of the TPP talks are highly-secretive—shielded from any
scrutiny by ordinary working people—few details have emerged of the
disagreements that led to the breakdown. An official statement claimed that
“substantial progress” was made. Media reports suggest, however, that sharp
rifts emerged with Japan, which had previously been working closely with US, as
well as with Vietnam and Malaysia.
Japanese Prime Minister Shinzo Abe, who has closely aligned himself with
Obama’s “pivot” and used the rising tensions with China to push for Japan’s
re-militarisation, has been anxious to back the US on the TPP. Publicly, he
insisted that “it is important for Japan to cooperate with the United States.”
However, any agreement to scrap agricultural tariffs would shatter the rural
base of his Liberal Democratic Party. During last year’s elections, the LDP
pledged to retain existing high tariffs on rice, wheat, beef and pork, dairy
products and sugar.
According to the Wall Street Journal, a “US-Japan impasse” dogged the
Singapore talks. It noted that Japan initially made a series of concessions,
including easing restrictions on US beef imports and allowing the US more time
to phase out its tariffs on Japanese auto shipments. Yet, the US was “putting
pressure on Japan to expand market access for US firms in as many industries as
possible.” Vice President Joe Biden visited Tokyo this month, the newspaper
reported, in part to press Abe to “open up sensitive markets, including rice
and other farm products.”
Japan’s vice economy minister, Yasutoshi Nishimura, said negotiators in
Singapore agreed on about 65 percent of the outstanding points. He pointedly
asked the US for more “flexibility” on “certain sensitive issues” where “their
stance hasn’t changed.”
Japan was not alone in voicing concern. In a media interview, Malaysian Prime
Minister Najib Abdul Razak threatened to walk out of the talks, rather than bow
to US demands for the dismantling of state-owned enterprises (SEOs), which
represent half of Malaysia’s stock market capitalisation. “That is the worst
situation,” but “if people can’t accept it, we have no choice,” he said.
Vietnam, where SEOs account for 40 percent of output, raised similar
objections.
There are also fears in Asian capitals that Obama, whose standing was dented by
not attending key Asian summits in October because of the US government
shutdown, lacks the political authority to overcome opposition to the TPP from
protectionist elements within the US Congress. Congress has so far not given
Obama “fast track” authority to finalise the TPP, so any deal could be
overturned by Congress.
According to the WikiLeaks documents, Australia—Washington’s staunch ally in
the “pivot”—has stood almost alone with the US on some crucial TPP clauses,
including to make people pay more for movies and software.
Together with Japan, Australia has also backed the US on extending
pharmaceutical patents. Australian Trade Minister Andrew Robb insists that the
Abbott government will not compromise the Pharmaceutical Benefits Scheme that
subsidises many medicines. But Australia has worked behind the scenes with the
US and Japan to reintroduce rejected clauses that would give the drug companies
greater power.
The TPP’s membership does not include some major Indo-Pacific economies,
notably India, South Korea and Indonesia. But even among the 12 countries that
have signed up to the process, major differences remain, underscoring the
tensions created by the Obama administration’s aggressive drive to reassert the
domination of US imperialism in Asia.
This article first appeared on World Socialist
Web Site (WSWS) on 14 December 2013, and was republished with permission.
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