The TPP was never all about the economic gains, even for the most dedicated rent seekers. The strategic planners – especially in Australia, Japan and South Korea – saw the original TPP as a means of locking America involved in Asia as a permanent bulwark against the dominance of China, whose government was pointedly excluded.
Malcolm Turnbull is back from Japan and spruiking – indeed insisting, demanding that the Trans-Pacific Partnership Mark II must be implemented, legislated and ratified without delay because it will yield billions of dollars and thousands of jobs.
We had thought that the head had been lopped off the beast when Donald Trump pulled America out. But now, like a modern day Frankenstein, Turnbull has exhumed enough body parts to fabricate a new monster – not quite as scary as the original, but still quite threatening enough to keep the squeamish cowering under the blankets.
At least we believe that is the case; as always our open and inclusive government won’t tell us what is actually in it – that privilege is reserved for the big corporations, which may provide a clue to the pact’s real purpose.
The rebadged title certainly doesn’t: the Comprehensive and Progressive Agreement on the Trans-Pacific Partnership is neither comprehensive nor progressive, cannot yet be described as a firm agreement, and may not even be trans-Pacific; our enthusiastic Trade Minister Steve Ciobo says that post-Brexit England could be included, if the beleaguered Poms have nothing better to do,
And the partnership bit, as already hinted, seems confined to a small group of rich and powerful politicians and and moguls the latter expecting huge windfall gains, some of which may or may not trickle down to the masses. And if they don’t what they want, they will have the right to sue national governments until they do, which suggests that, as is so often the case with such deals,, the real winners will be the lawyers.
This was the outcome when one of the tobacco merchants of death, Phillip Morris, took the Australian government to court over its plain packaging legislation, using the provisions of the Australia-Hong Kong free trade agreement as its excuse. Eventually the government won, but costs paid by Phillip Morris were a fraction of the expense to our national treasury, even without including the huge diversion of time and resources required in the action.
So we know just what to expect if the CPATPP gets through our parliament. What we do not know is what else may be in the binding documents, but the prospect is not promising. The billions of dollars Turnbull is talking about will have little to do with Australia; even the more optimistic estimates suggest an increase around one half of one per cent of GDP over some 12 years – barely a rounding error for the statisticians. And thousands of jobs? Well, a few more than 5000 over the long term, perhaps five a week if we’re lucky. Not really a reason for dancing in the streets.
But it was never all about the economic gains, even for the most dedicated rent seekers. The strategic planners – especially in Australia, Japan and South Korea – saw the original TPP as a means of locking America involved in Asia as a permanent bulwark against the dominance of China, whose government was pointedly excluded.
The theory was that American economic hegemony would translate into military hegemony which would be regarded a a good thing – or at least a much less worse thing than the alternative. As it turned out the belligerence of North Korea and the somewhat equivocal attitude of China has done the job anyway; against his natural isolationist instincts, Trump has reluctantly remained involved in the region and appears to be stuck there into the foreseeable future.
However, the refurbished (or rather bogged up) CPATPP staggers on, in a slightly emasculated form, and things could be worse – and indeed they may well be. It is reported that Trump is having a bit of a rethink; he may be willing to return to the pact, but only on his terms.
Given that TPP Mark I was generally regarded as absurdly favourable to American corporate interests, especially where copyright and patent law (crucially regarding pharmaceuticals) the idea that Trump wants even more is truly terrifying. America first, he declares, but not America alone – today Mar a Lago, tomorrow the world. Total domination is the plan and if the CPATPP can be harnessed to that end, let’s go for it.
Turnbull says that backing the new agreement will be a test for Bill Shorten; it may well become a far more vital test for him to stand up to the megalomaniac in the White House to protect the Australian national interest rather than slavishly follow American neo-liberalism in the guise of promoting economic growth
However Turnbull is clearly wedded to the idea, as it is part of his master plan for stimulation (meaning the offer of hand outs) for the corporate sector, in the hope that the gains will flow through to the economy more generally. Economic history shows that this has never worked in the past, and there is no reason to think that it might in 2018 just because our Prime Minister once worked for a merchant bank.
In fact he, of all people, should know that if you throw a bucket of money at the top end of town, almost all of it stays there: it is absorbed in profits one way or the other, and while the shareholders (and of course the already obscenely overpaid executives) may benefit, the mob seldom does. The profit share in Australia has been steadily increasing for quite a while, but wages are going backwards and more employers are finding ways to cut staff and conditions than improve them. You only need to look at the big banks to see the pattern.
But Turnbull continues to argue that big cuts in the company tax rate is all that can stand between us and economic oblivion, and his sole evidence for this assertion is apparently that Donald Trump has cut the rates, so we have no option but to follow.
And presumably that will mean that if Trump comes back to the CPATPP on any terms he demands, once again we will have no say in the matter – we have to tickle the tummy of The Donald. Be afraid – be very afraid.