Asian powerhouses · Developing nations and LDCs · Recent Updates · Regional Trade Agreements/FTAs · Western World

Let’s talk about the TPP: Part I

The TPP is definitely the talk of the town. It’s mentioned everywhere. In newspaper op-eds to academic articles. You may have heard of it – a massive “free-trade” pact between 12 (majorly pacific-rim) countries, spearheaded by the United States. Apart from Vietnam, Trans-Pacific Partnership (TPP) members include countries like New Zealand, Australia, Brunei, Singapore, Peru and Mexico.

The double-quotations around the words free-trade are not just for theatrical effect. Much of the debate surrounding the agreement is centred on the question of intent – what really is the purpose of agreement? Is it really just a classic tariff-cutting agreement seeking to further the noble cause of trade liberalization? At least thats the stand of its proponents. But does it also intend to go beyond tariffs and break new ground in a variety of sensitive matters like investment and IP rights?

There was a time we don’t know anything the agreement. The negotiations were conducted in complete secrecy and this caused many interest groups to vociferously complain. The pact was finalised in Atlanta on 5th October and the complete text can be accessed through whistleblower WikiLeaks’s website. The release on 16th November shows that the agreement is gigantic, including 30 chapters and 4 annexures. While many countries have busied themselves translating the text into multiple languages, trade law experts are still trying to chew out the details. [See here and here for some discussion on the applicability of WTO cases and provisions to disputes that may arise under the TPP]. The agreement has something to say about everything- from Rules of Origin to SPS measures to Dispute Settlement.

And what it says is problematic according to a lot of people. Hence it is worth accessing the pact more deeply. Experts are doing it provision by provision and chapter by chapter. But a simpler  way to do it through the prism of one or the other TPP country – to see how various aspects of the deal would effect it. The large percentage of the TPP membership is developing countries. Naturally, trade impacts would be felt more in these nations. Why not see what the TPP holds for these countries in the future?

Take for example, and this is going a bit off-topic, the case of pharmaceutical patents. In its final form the IP chapter of the TPP imposes severely restricting obligations with regard to the production of generic medicines, known as “TRIPS plus” obligations. Though production of such generic drugs is essential to fulfil public health objectives, stricter IP protection for medical patents (largely produced in Western economies) has the potential of causing irreparable harm to developing countries like India. Last year, Andrew Mitchel Tania Voon and Devon Whittle wrote a brilliant piece in the Asian Journal of International highlighting these very concerns. The article can be accessed here. There’s also the problem of endorsing higher standards of patentability, thereby expanding the scope of what can be patented. What the TPP seeks to achieve goes much beyond what was agreed under the TRIPS Agreement, vide Article 27. In several drafts the TPP has attempted to to condone what is known as “evergreening” of patents, unnecessarily expand the scope of industrial utility and provide for patents on plants and therapeutic methods. All this is not only over and above the minimum standards as provided by the TRIPS agreement, but the operation of the same can cause obstacles in the achievement of public health objectives – something that the very agreement (TRIPS) seeks to protect. Kilic and Brennan have a paper on this very issue in the Yale Journal of International Law, accessible here.

In any case, the debate that I want to begin today isn’t about IPR. It’s about something even more human. The debate is about labour rights in developing countries. Vietnam is currently being displayed as the poster-boy for all that is right with the TPP. Proponents claim that the South-Asian country, historically infamous for huge tariff walls, will be one of the biggest “winners” emerging from the TPP finalization. But the question is (or at least, should be) whether such countries are ready for the sort of increased manufacturing strain that these agreements entail? Now, it is one thing to say that as a sovereign country, it reserves the right to do whatever it deems fit in order to boost the economic well-being of its people. If that takes partnering up with a 40 year-old enemy, so be it. It’s only looking out for its best interests. Fair enough.

But one must look deeper into the issue. Increased liberalization and “modernization” has not always been handled by emerging economies. Take the case of China, which charred its skies black and drained industrial pollutants down every river possible. This is not to mention the dark underbelly of the Chinese worker-market. China, in fact, is a very interesting example to take here. This is because the TPP is actually, on the macro-level, an attempt by the US to curtail Chinese influence in the Pacific area as a part of its “Pivot to Asia” policy [See here and here]. While the eyes of Western manufacturers are slowly moving from China to countries such as Vietnam, economical advantage is one thing; ecological damage and labor exploitation is quite another reality. The primary problem with Vietnam seems to be the latter. While there is a general sentiment of optimism surrounding the increased investment that it will receive, there have been ample number of calls surrounding the problems that labor faces.

The follow-up post will be a consolidation of some of the opinions on the question of whether Vietnam will be a “winner” or “loser” of the TPP deal. All this is to further the discourse on the future of the multilateral trading system as well as that of the entire Asia-Pacific region.

[Picture source: http://qctimes.com/news/opinion/editorial/columnists/esther-cepeda/trade-deal-has-health-consequences/article_2684cff0-f8e9-5193-b0d6-dabbc0c1a421.html]

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