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Originally posted on Clyde V. Prestowitz on Trade
Are Free Trade Agreements (FTAs) really about free trade or are they just war by other means?
Anti-TPP Rally in Leesburg, Virginia (Photo: GlobalTradeWatch / Flickr)
The 14th round of negotiations for the Trans Pacific Partnership (TPP) was launched last week in the Virginia suburbs of Washington D.C. If concluded, the deal would establish what it calls “free trade” between the United States, Canada, Mexico, Peru, Chile, New Zealand, Australia, Malaysia, Brunei, Singapore, and Vietnam. It would be the biggest FTA of which the United States is a member.
Just the week before, however, agreement on the start of negotiations for a Comprehensive Regional Economic Partnership (CREP) was announced in Siem Reap, Cambodia. This deal would be between the ten members of the Association of Southeast Asian States (ASEAN) plus New Zealand, Australia, India, China, Japan, and South Korea. In other words, six of the TPP countries would be in CREP and that could grow to eight if Japan and Korea join TPP as has been rumored. So the outliers would be the countries of the Americas (United States, Canada, Mexico, Peru, Chile) and the Asian giants, India and China.
But wait. It gets even more complicated. The annual meeting of the Asia Pacific Economic Cooperation (APEC) (one wants to say “forum” but it really just stops with Cooperation) is has just concluded in Vladivostok. This twenty one member grouping of Asia Pacific countries pledge in 1994 at Bogor, Indonesia to achieve free trade and investment between its developed country members by 2010 and between all members by 2020. So presumably all the members of CREP and TPP except India (which is not a member of APEC) already enjoy free trade among themselves or will do so by 2020.
Nevertheless, the apparent desire for free trade is so strong that still other groupings are moving ahead with other agreements. Even as they fight over who owns which reefs, rocks, and small islands in the waters between them, China, South Korea, and Japan are committed in principle to negotiating an FTA among themselves. China also has an FTA with ASEAN and Japan has a comprehensive economic partnership agreement with ASEAN.
Of course, all of these countries have long been members of the World Trade Organization (WTO) and thus, presumably, already pledged to universal free trade.
So why couldn’t they all complete the Doha round of WTO free trade talks? If the developed countries of APEC have achieved free trade already in 2010, how was that freer than the trade of the WTO and why do they need yet more free trade agreements? Or did they not really achieve free trade? How will the free trade of CREP be different from the free trade of the TPP? Why can’t the two groups, already with enormous overlap among their members, simply combine and form one big free trade area. Or better yet, extend to the whole of the WTO and achieve truly universal free trade?
Of course, the answer is that it’s not about free trade at all, or at least, it’s very little about free trade. In Siem Reap last week, U.S. Trade Representative Ron Kirk said that the TPP and CREP are not competitive, but complementary. That is simply not the case. They are totally competitive, not economically but diplomatically and strategically. All these arrangements are about exercising influence. None of them deal with the really key elements of trade and investment. Many of these countries pursue export led growth strategies and manage their currencies to be undervalued as a way of subsidizing exports. Many also operate indigenous industry and technology development policies and make technology transfer a condition of market access. Many also offer big tax breaks and other incentives to lure foreign investment and technology transfer. Despite all the free trade deals, the fact is that the markets of many of these countries are among the most managed and difficult to penetrate in the world. And most of these countries run persistent trade surpluses. Yet, these issues are never on the negotiating agendas.
With regard to the TPP, U.S. officials have told me that the main purpose of the deal is to demonstrate American commitment to Asia and to make a statement that “we’re back.” Of course it would be nice if it expanded U.S. exports, reduced the U.S. trade deficit and created jobs. But that’s not the main point.
It really is pretty much war by other means.
http://my.firedoglake.com/clydeprestowitz/2012/09/14/dueling-free-trade-agreements/
2 Comments
And who is this war against?
Us wildly overpaid US workers, that’s who. That’s why it’s so important to reelect Obama – Only a Democrat can get the damned things through congress. Clinton got NAFTA after HW Bush failed, Obama got Panama, S. Korea and Columbia after W failed. And for the first time since FDR, wages have been going down.
HOORAY FOR OBAMA!
Because war is “politics by other means”, that means that free trade agreements are politics by other means. So exactly who is involved in that politics? Likely in both cases it is the national 1% conspiring to rip off their own 99% even more. And struggling politically to be the first nation to lock in those agreements.
It’s not just Obama, it’s all of the leaders in both of those sets of trade talks.
BTW, wages have been going down since the Nixon recession in 1970. And a not insignificant bunch of union members have been voting for the guys that were sending them down because they were against affirmative action and stood up for traditional heterosexual male white values. When the workers don’t put real pressure on, of course the Democratic president and Congress move toward free trade. The delusional promise of exports is the only part of the GDP equation that they can still manipulate. Austerity and free trade–the bipartisan approach to peace and prosperity. Just so long as you don’t cut military spending one whit.