Four ASEAN nations seal TPP deal

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TPP_Auckland_signingFor four countries of the Association of Southeast Asian Nations (ASEAN), formal membership in the Trans-Pacific Partnership (TPP) has become a reality. Singapore, Malaysia, Vietnam and Brunei signed the respective documents in Auckland on February 4.

Together with eight other countries, namely New Zealand, Australia, Japan, Chile, Mexico, Peru, Canada and the US, they now form the core members of what is seen as an “economic partnership of the 21st century” aimed at expanding markets for countries around the Pacific Ocean, reducing tariffs and promoting freer trade.

The member countries make up for 40 per cent of global GDP at about $30 trillion. The signing was the outcome of 19 rounds of tough negotiations over five years. The agreement still needs to be ratified by the respective parliaments or government bodies, though. As per the statutes, the treaty can only take effect if it is ratified by half the participating countries representing 85 per cent of the proposed trade zone’s economy.

The TPP It is also expected to create new opportunities for labour and businesses, contribute to raising living standards of 800 million people, benefit consumers, reduce poverty and promote sustainable growth.

However, there has also been sound criticism of the TPP in the past from a variety of groups, including consumer advocates, ecologists, democratic and liberal politicians and academics, labour unions, activists, as well as professional groups.

Opponents point at the secrecy the TPP has been negotiated in the past, demanding more transparency on various details of the deal. Some are highly critical of the way in which intellectual property covering copyright, trademarks and patents are being dealt with in the agreement. Others fear a huge impact on healthcare in both developed and less developed countries including potentially increased prices of medical drugs due to patent extensions. Environmental groups argue that the TPP could “directly threaten” the climate and environment through new rights that would be given to corporations.

Economist Joseph Stiglitz warned that the TPP presented “grave risks” and “serves the interests of the wealthiest,” which would lead to greater income inequality in the bloc. Organised labour group in the US argue that the trade deal would largely benefit corporations at the expense of workers in the manufacturing and service industries. One big issue for critics is that global corporations under certain conditions could sue governments for a breach of the TPP agreement and through tribunals organised by the World Bank or the United Nations could claim compensation for loss of “expected future profits due to government action,” for example for stricter laws to reduce carbon emissions and global warming or for strict anti-tobacco laws.

No wonder that TPP negotiations since 2012 have been met with protests wherever they have been held. This February 4, a 10,000-strong crowd marched through Auckland’s streets as ministers from the twelve countries met for the singing.

Other countries where discussions whether to join the TPP or not are ongoing are Taiwan, the Philippines, Thailand, Laos, Indonesia, Cambodia, Bangladesh, India and Colombia. Indonesia’s President Joko Widodo in October 2015 declared Indonesia’s intention to join the TPP.

Thailand, one of the largest remaining economies considering joining the TPP, has been encouraged by Japan to do so. But there are domestic disputes whether the agreement will have negative impact on Thailand’s competitiveness as some experts fear “significant losses” in the food export sector. For example, rising quotas for rice exports within the TPP bloc could reduce Thailand’s rice shipments drastically. A shortfall in exports could also lead to a relocation of factories for affected products from Thailand to TPP-member states in the region due to tax and rules of origin benefits within the partnership. Foreign investments are also feared to decrease for Thailand, considering that TPP members in the ASEAN region will catch up due to enhanced trade conditions.

For the Philippines, advantages of the TPP seem to be bigger as the country expects to entice more foreign investment from major corporations and provide skilled, English speaking labourers. However, there are also fears of deteriorating relations to its major trade partner China which is being kept out of the TPP so far. China, together with Russia, has intensified its criticism of the TPP agreement, fearing it that could threaten its regional ambitions.

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Reading Time: 3 minutes

For four countries of the Association of Southeast Asian Nations (ASEAN), formal membership in the Trans-Pacific Partnership (TPP) has become a reality. Singapore, Malaysia, Vietnam and Brunei signed the respective documents in Auckland on February 4.

Reading Time: 3 minutes

TPP_Auckland_signingFor four countries of the Association of Southeast Asian Nations (ASEAN), formal membership in the Trans-Pacific Partnership (TPP) has become a reality. Singapore, Malaysia, Vietnam and Brunei signed the respective documents in Auckland on February 4.

Together with eight other countries, namely New Zealand, Australia, Japan, Chile, Mexico, Peru, Canada and the US, they now form the core members of what is seen as an “economic partnership of the 21st century” aimed at expanding markets for countries around the Pacific Ocean, reducing tariffs and promoting freer trade.

The member countries make up for 40 per cent of global GDP at about $30 trillion. The signing was the outcome of 19 rounds of tough negotiations over five years. The agreement still needs to be ratified by the respective parliaments or government bodies, though. As per the statutes, the treaty can only take effect if it is ratified by half the participating countries representing 85 per cent of the proposed trade zone’s economy.

The TPP It is also expected to create new opportunities for labour and businesses, contribute to raising living standards of 800 million people, benefit consumers, reduce poverty and promote sustainable growth.

However, there has also been sound criticism of the TPP in the past from a variety of groups, including consumer advocates, ecologists, democratic and liberal politicians and academics, labour unions, activists, as well as professional groups.

Opponents point at the secrecy the TPP has been negotiated in the past, demanding more transparency on various details of the deal. Some are highly critical of the way in which intellectual property covering copyright, trademarks and patents are being dealt with in the agreement. Others fear a huge impact on healthcare in both developed and less developed countries including potentially increased prices of medical drugs due to patent extensions. Environmental groups argue that the TPP could “directly threaten” the climate and environment through new rights that would be given to corporations.

Economist Joseph Stiglitz warned that the TPP presented “grave risks” and “serves the interests of the wealthiest,” which would lead to greater income inequality in the bloc. Organised labour group in the US argue that the trade deal would largely benefit corporations at the expense of workers in the manufacturing and service industries. One big issue for critics is that global corporations under certain conditions could sue governments for a breach of the TPP agreement and through tribunals organised by the World Bank or the United Nations could claim compensation for loss of “expected future profits due to government action,” for example for stricter laws to reduce carbon emissions and global warming or for strict anti-tobacco laws.

No wonder that TPP negotiations since 2012 have been met with protests wherever they have been held. This February 4, a 10,000-strong crowd marched through Auckland’s streets as ministers from the twelve countries met for the singing.

Other countries where discussions whether to join the TPP or not are ongoing are Taiwan, the Philippines, Thailand, Laos, Indonesia, Cambodia, Bangladesh, India and Colombia. Indonesia’s President Joko Widodo in October 2015 declared Indonesia’s intention to join the TPP.

Thailand, one of the largest remaining economies considering joining the TPP, has been encouraged by Japan to do so. But there are domestic disputes whether the agreement will have negative impact on Thailand’s competitiveness as some experts fear “significant losses” in the food export sector. For example, rising quotas for rice exports within the TPP bloc could reduce Thailand’s rice shipments drastically. A shortfall in exports could also lead to a relocation of factories for affected products from Thailand to TPP-member states in the region due to tax and rules of origin benefits within the partnership. Foreign investments are also feared to decrease for Thailand, considering that TPP members in the ASEAN region will catch up due to enhanced trade conditions.

For the Philippines, advantages of the TPP seem to be bigger as the country expects to entice more foreign investment from major corporations and provide skilled, English speaking labourers. However, there are also fears of deteriorating relations to its major trade partner China which is being kept out of the TPP so far. China, together with Russia, has intensified its criticism of the TPP agreement, fearing it that could threaten its regional ambitions.

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