TPP: so bad for everyone, it might be good

I don’t know what’s in the Trans-Pacific Partnership.

It’s a bit of a worry that the public isn’t allowed to see what the 12 trade ministers have signed up for.

And of what is known about this attempt to build a trade bloc, there seems to be enough to annoy citizens of every country involved.

That, somewhat perversely, is more reassuring than any of the instant praise for the deal from the Australian government and its loyal supporters.

Also read: TPP: What's in the deal?

It’s the nature of trade negotiations – just like tax reform – that there are perceived winners and losers, that nobody gets everything they want.

For example, of the scant details available through the PR haze on the TPP, our wine makers should benefit from a sharp reduction in tariffs among signatories, but our sugar farmers are only being promised a tiny chink in the American protectionist wall.

Florida cane farmers remain much more politically powerful in Washington than Australia is.

However, the things that are relatively easy to count and see, tariffs and quotas such as a small increase in the amount of rice we can export to Japan but a fatter cut in beef tariffs, aren’t really the contentious part of this deal. (Unless you’re a rice grower.)

The really hard stuff concerns services, trade rules and legal rights.

This is the shadowy area that worries many Australians who have been following the TPP process as it looks like we are signing away significant areas of sovereignty at the behest of some dubious multinational companies to international tribunals.

But even in this area, we’re not only losing. Tobacco companies will be specifically banned from using trade rules as a means of attempting to undermine public health policy – as Big Tobacco has been trying to do in its fight against our plain-packaging laws.

Also read: Aussie farmers to reap $3.67b from TPP

And our service industries (our growth future) should get easier access to member countries.

While it’s a bit scary that a profits-before-responsibility multinational can take Australia to a foreign court and potentially change our laws, Australian exporters will have the benefit of the same tribunal to settle disputes with countries that do the wrong thing by them.

It is possible Trade Minister Andrew Robb has made a terrible mistake or two along the way. We won’t be able to judge that until the detail is disclosed.

There seems to be a grey area of weasel words around just how long we’ve agreed to allow drug companies to keep secret their biologic drug knowledge. Secrecy always raises suspicion.

But, while waiting for that detail, it is comforting to see that there is plenty of political heat in the US and Canada and elsewhere about perceived loses. If everyone loses something, everyone should be winning something as well.

Which cuts to the chase of what most people miss about the real benefits of trade deals: the big gain for a country generally isn’t the reduction in barriers for its exporters, but the reduction in barriers for its importers.

Never mind the other guy, we benefit from better access and cheaper goods.

That sounds counter-intuitive for many people, but it’s the reality of dismantling what was Australia’s high levels of protectionism over the past four decades.

Also read: 'Enormous' benefits from TPP: ministers

What worries me more about the TPP is America’s political motive for pushing it: it isn’t about enhancing world trade and improving economic growth, it is a key part of US policy to encircle China and to set the rules in Asia to suit itself as part of its so-called “pivot” to the region.

Australian governments of both persuasions have been enthusiastic members of the pivot’s cheer squad, going as far on occasion as making rather silly and provocative comments about the Sino/Japanese dispute over rocks in the East China Sea.

It would be a terrible thing if in weighing the good and the bad about the TPP, that undesirable encirclement of China tipped the balance.

 

Michael Pascoe is one of Australia's most respected finance and economics commentators with 37 years in newspaper, radio, television and on-line journalism. He regularly appears on Channel 7's Sunrise and news programs and is a regular conference speaker, MC and facilitator.