United

How will the world go without the TPP? It will be a shame if we have to find out

Latest News
Friday, 07 October 2016

EARLIER in the same day I wrote this article, I appeared before the Joint Standing Committee on Treaties (JSCOT) on behalf of the Export of Australia (ECA) Inquiry into the Trans Pacific Partnership Agreement (TPPA), writes Andrew Hudson.


Over time, I have come to actually enjoy these experiences, especially the idea that members of parliament (or their staff) have actually read the submissions and comments and will try and turn those either for or against the issue before the relevant committee or inquiry.  When those submissions or comments find their way into a final report or a recommendation then there is a sense that all the effort has been worth while and the group that’s represented has actually made a difference in some fashion.  Which just serves to underline the importance of associations engaging in the review process in the first instance.

During the questions, there were questions on a couple of topics – should Australia consider ratification of the TPP when the position in the US is unclear – and what would be the outcome if the US approval for the TPP could not be secured.  In response to those questions and in no particular order, the following responses were provided.

•  Australia is an independent sovereign nation, recognised for its commitment to liberalising trade.  It has undertaken an important role in bringing the negotiations to a conclusion and acted as a ‘bridge’ between many nations.  There is no reason why Australia should not proceed with its own ratification processes as promised in the TPPA.  There is no way that Australia should defer its processes until ‘big brother’ in the US has determined its position on approving the TPPA.  

• Australian ratification of the TPPA may actually benefit the entire process for adoption of the TPPA, both in the US and elsewhere, especially in the US.

• Much of the ‘anti – trade’ and ‘anti – TPPA’ rhetoric in existence comes without direct evidence of the adverse consequences of the TPPA.  I have written before of my confidence that none of the ‘conspiracy theories’ regarding the TPPA have any support – and that those who negotiated the TPPA for Australia did so in good faith and with significant skill and diplomacy.  I have come to know many of those who negotiated the TPP and firmly believe that they have achieved a wonderful outcome in difficult circumstances.

• The focus on the World Bank estimation of additions to GDP for Australia under the TPPA is very limited – it assumes that the TPPA will only stay with the current parties when the reality is that there are many countries eager to join in the TPPA, in which case the benefits will only increase.  It also only looks to direct and measurable benefits as opposed to indirect benefits that could accrue from such issues as added work in the region and the new chapters on SME, environmental and labour standards and anti-corruption and anti-bribery.  Yes, other smaller nations such as Vietnam are scheduled to enjoy more increases in GDP – which is not surprising given that they are still developing nations still coming into full integration with the international economy.

• The focus on GDP alone also ignores that the TPPA would deliver new trade agreements for Australia with Canada, Peru and Mexico – important trading partners with whom we could develop relationships without the need for separate independent FTAs, removing the addition to the world’s ‘spaghetti bowl’ of FTAs.

• The TPPA with a variety of strong trading partners would be entirely consistent with the intended outcome of international trade facilitation and would act as a strong counterpoint to the rise in international rhetoric against FTAs and trade generally.

• There is significant independent research from the US, from the Peterson, Brookings and Cato Institutes that points to significant benefits from the TPPA.

• The failure for the TPPA to secure the required approval in the US would be a tragedy given the work and commitments found in the TPPA.  It would also reduce the US’s claim to primacy in the international world of trade if it could not secure its own approval to a deal it was to the fore in negotiating.  However, it would not be the end of the story.  Even though we would have lost our opportunity to advance our interests in the US, we have still achieved enhancements in our relationships with the other TPPA parties including Canada, Mexico and Peru, where we have no decent bilateral deals.


Ultimately the ‘failure’ to secure TPPA approval in the US would be a great shame but it will not be the end of the game. We may need to resort another round of other bilateral FTAs (more spaghetti to the FTA spaghetti bowl, to use to the vernacular) which will only complicate the agenda but I am confident that the other parties are capable of striking their own outcomes based on all the work behind the TPPA and perhaps even improve the outcomes!

HACTL
Cathay Cargo
United

How will the world go without the TPP? It will be a shame if we have to find out

Latest News
Friday, 07 October 2016

EARLIER in the same day I wrote this article, I appeared before the Joint Standing Committee on Treaties (JSCOT) on behalf of the Export of Australia (ECA) Inquiry into the Trans Pacific Partnership Agreement (TPPA), writes Andrew Hudson.


Over time, I have come to actually enjoy these experiences, especially the idea that members of parliament (or their staff) have actually read the submissions and comments and will try and turn those either for or against the issue before the relevant committee or inquiry.  When those submissions or comments find their way into a final report or a recommendation then there is a sense that all the effort has been worth while and the group that’s represented has actually made a difference in some fashion.  Which just serves to underline the importance of associations engaging in the review process in the first instance.

During the questions, there were questions on a couple of topics – should Australia consider ratification of the TPP when the position in the US is unclear – and what would be the outcome if the US approval for the TPP could not be secured.  In response to those questions and in no particular order, the following responses were provided.

•  Australia is an independent sovereign nation, recognised for its commitment to liberalising trade.  It has undertaken an important role in bringing the negotiations to a conclusion and acted as a ‘bridge’ between many nations.  There is no reason why Australia should not proceed with its own ratification processes as promised in the TPPA.  There is no way that Australia should defer its processes until ‘big brother’ in the US has determined its position on approving the TPPA.  

• Australian ratification of the TPPA may actually benefit the entire process for adoption of the TPPA, both in the US and elsewhere, especially in the US.

• Much of the ‘anti – trade’ and ‘anti – TPPA’ rhetoric in existence comes without direct evidence of the adverse consequences of the TPPA.  I have written before of my confidence that none of the ‘conspiracy theories’ regarding the TPPA have any support – and that those who negotiated the TPPA for Australia did so in good faith and with significant skill and diplomacy.  I have come to know many of those who negotiated the TPP and firmly believe that they have achieved a wonderful outcome in difficult circumstances.

• The focus on the World Bank estimation of additions to GDP for Australia under the TPPA is very limited – it assumes that the TPPA will only stay with the current parties when the reality is that there are many countries eager to join in the TPPA, in which case the benefits will only increase.  It also only looks to direct and measurable benefits as opposed to indirect benefits that could accrue from such issues as added work in the region and the new chapters on SME, environmental and labour standards and anti-corruption and anti-bribery.  Yes, other smaller nations such as Vietnam are scheduled to enjoy more increases in GDP – which is not surprising given that they are still developing nations still coming into full integration with the international economy.

• The focus on GDP alone also ignores that the TPPA would deliver new trade agreements for Australia with Canada, Peru and Mexico – important trading partners with whom we could develop relationships without the need for separate independent FTAs, removing the addition to the world’s ‘spaghetti bowl’ of FTAs.

• The TPPA with a variety of strong trading partners would be entirely consistent with the intended outcome of international trade facilitation and would act as a strong counterpoint to the rise in international rhetoric against FTAs and trade generally.

• There is significant independent research from the US, from the Peterson, Brookings and Cato Institutes that points to significant benefits from the TPPA.

• The failure for the TPPA to secure the required approval in the US would be a tragedy given the work and commitments found in the TPPA.  It would also reduce the US’s claim to primacy in the international world of trade if it could not secure its own approval to a deal it was to the fore in negotiating.  However, it would not be the end of the story.  Even though we would have lost our opportunity to advance our interests in the US, we have still achieved enhancements in our relationships with the other TPPA parties including Canada, Mexico and Peru, where we have no decent bilateral deals.


Ultimately the ‘failure’ to secure TPPA approval in the US would be a great shame but it will not be the end of the game. We may need to resort another round of other bilateral FTAs (more spaghetti to the FTA spaghetti bowl, to use to the vernacular) which will only complicate the agenda but I am confident that the other parties are capable of striking their own outcomes based on all the work behind the TPPA and perhaps even improve the outcomes!

HACTL
Cathay Cargo
HACTL
Cathay Cargo