It is no surprise that lifting trade barriers and international economic integration took centre stage at the Asia-Pacific Economic Cooperation summit held in Bali earlier this month. In the Leaders' Declaration released at the end of the summit, the goal of achieving a Free Trade Area of the Asia-Pacific (FTAAP) was reaffirmed and the benefits of such an agreement were lauded. But what is disturbing is the continuing secrecy surrounding negotiations for a major stepping stone along the way to an FTAAP _ the Trans-Pacific Partnership (TPP), which includes 12 Apec members including the US and Japan who make up almost 40% of the global economy.
High-level representatives of the dozen countries involved said they had made "significant progress" in Bali towards a deal and predicted it would likely be wrapped up by the end of the year. The US is a main driver of the TPP, and Prime Minister Yingluck Shinawatra told visiting US President Barack Obama in November last year that Thailand is interested in joining the partnership but has some reservations and needed to study its details.
Ms Yingluck knows that free trade agreements have become a hard sell in countries around the globe, both developed and developing, and she was right not to commit Thailand without broad support in all sectors of society. A lack of transparency in the negotiations is precisely why such support will be hard to come by in Thailand and across the Asia-Pacific region. An article published at the end of September on the website of the think-tank Global Research says "the TPP has been drafted with an unprecedented degree of secrecy. While information has been kept from the public more than 600 corporate advisers have access to the treaty's text including companies such as Halliburton, Monsanto, Walmart, and Chevron. The Obama administration has kept the TPP classified, making it the first-ever classification of a trade agreement. In addition to denying public access to its text, the president has urged Congress to use Fast Track to pass the treaty".
In the absence of transparency, the Trans-Pacific Partnership is viewed by many as an instrument to increase multinational corporations' profits and avoid responsibility on labour and the environment. Opposition to the easing of cross-border investment, a key component of the TPP, is just as fierce in the US, where protesters aligned with labour unions are furious over the wholesale export of jobs overseas, as it is in Kuala Lumpur, where activists fear the TPP would lead to a loss of sovereignty.
Opposition leader Anwar Ibrahim said Malaysia needs foreign investment and transfer of technology, but these cannot be achieved by signing an agreement that which would give US and Europe-based multinational corporations control and unfair advantage over the local economy. Protesters also raised concerns over the lack of disclosure in the TPP talks and over intellectual property rights regulations that could, among other things, see the cost of medications skyrocket.
FTAs stress the importance of respecting intellectual property rights, but give little regard to the reality of corporations shutting down factories in developed countries and paying workers in developing countries a pittance to produce their goods while still charging the same excessive prices. It is ironic that these goods are often sold as expensive "imports" in the countries where they are actually manufactured.
All this is not to say that free trade agreements are inherently bad. The upcoming AEC has potential to greatly benefit the Southeast Asian region. Such far-reaching agreements as the FTAAP and TPP are in a different category as they involve so many widespread interests, but they too may be beneficial. The key is whether the framework is designed to benefit people or corporations, although of course this need not be mutually exclusive. Point 3 in the Leaders' Declaration from Bali says: "We share the urgency for region-wide partnership to create better quality and more productive jobs, attract private investment, reduce poverty, and improve living standards." But while some corporations have strived to incorporate these principles, an honest assessment of the performance of existing FTAs indicates this has not been a priority for most multinationals and there are few built-in mechanisms to reverse the trend.
Until FTAs are dedicated to upholding fair trade, environmental standards and workers' rights in both developing and developed countries they will remain a hard sell around the world, and the framers of these agreements would do well to consider this before negotiating them behind closed doors.
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