The Obama administration has scored a new success by achieving the necessary consensus to sign the most ambitious free trade agreement negotiated so far. The Trans Pacific Partnership (TPP) agreement liberalizes trade, labor and environmental standards, but, above all, it is guided by the geopolitical chess game between the US and China.
By: Eduardo Lucita / Source: Laarena.com.ar / The Dawn / October 16, 2015
On the 10th anniversary of the defeat of the FTAA (Free Trade Area of the Americas) at the historic meeting in Mar del Plata City (Argentina), the US achieved the necessary agreements to sign the Trans-Pacific Partnership Agreement with eleven countries of the Pacific Rim (Japan, Australia, Brunei, Canada, Malaysia, Chile, Mexico, Peru, New Zealand, Singapore and Vietnam). The agreement must be ratified by the parliaments of each member country.
President Barack Obama counts on the US Congress to accept the rapid processing of the trade pacts. That is, whether it is approved or rejected, there is no possibility of amendments.
It was in the 50’s of the last century that, as a counterpart of the rise of Keynesianism, new ideas began to circulate. Those ideas would later gave shape to neoliberalism. The idea of “free trade”, driven by neoclassical theorists and large multinational corporations, was the center of these developments.
The new political scene that opened with the implosion of the USSR and the fall of the Berlin Wall —which ended the confrontation policy between the socialist and the capitalist world— facilitated the spread of the Free Trade Ideas, and shaped a new array of international relations in which the opening of markets, a growing interdependence and the formation of regional economic blocs were the key components. This was a new phase in the worldwide process of the capital, which we know as globalization.
In 1994, the North American Free Trade Agreement (NAFTA), was created. It was a free trade agreement between the US, Canada and Mexico. Immediately the FTAA begun to be negotiated. In 1995 the World Trade Organization (WTO) was created, an institution emerged from the increasing neoliberal hegemony, and replaced the General Agreement on Tariffs and Trade (GATT) that had been created 40 years before.
In such way, the rules of the Global Market were established. To define a permanent export policy has since then become a necessity for nations and the international competitiveness has become increasingly important. Comparative advantages have been gradually replaced by competitive advantages; the Welfare State mutated into what some authors have called the Competition State. Large countries and multinationals were the main drivers of these structural changes that focus on the free movement of goods and capital.
A new neoliberal Offense
The fall of the FTAA and the unfinished open global crisis in 2008 led to the stagnation of the negotiations in the WTO and opened a period of transition in some countries, such as Argentina, where they made attempts to protect their own markets, always within the limits imposed by the WTO, of course. Meanwhile, the US imposed bilateral agreements, such as the NAFTA, with several Latin American countries.
But since last year, everything was accelerated and a new offensive took form. The EU’s member States gave in to US pressure to revive the Transatlantic Trade and Investment Partnership (TTIP) and instructed the European Commission to retake the negotiations, Since then, its dynamism grew quite a lot and so the agreement is expected to be signed before President Barack Obama ends his mandate. Also known as the North Atlantic Treaty Organization (NATO) of the economy, it has a geo-strategic value in itself for the US, since the EU market is the most affluent in the world and the leading destination for US exports.
Despite the secrecy if the agreement, the contents of TTIP are known to us: the lowering of tariffs until their elimination, the opening of markets and investment services, free access to public procurement, the deregulation of labor, environmental and health markets and favorable legal rights for corporations against sovereign states (investment protection). Nothing different from what the FTAA intended.
Now, is time for the Treaty on Trans-Pacific Partnership (TPP) that covers twelve countries (China excluded itself, but it may be temporary, because it has already signed Free Trade Agreement’s with several countries in the region), involving 40 percent of the world’s economy (30 percent of exports and 25 imports). Together, the TPP and TTIP explain more than 60 percent of the world economy and 75 percent of the international trade.
As if something was missing, more than 50 countries are negotiating an agreement on Trade in Services (TISA). These negotiations are always secret, without any transparency and, are presented as a fait accompli.
The advances made by the United States has a contradictory effect on our [Latin American] region. Firstly, it isolates Brazil, Argentina and Venezuela, who refused to sign FTAs, but also puts pressure on the signing of the free trade agreement between Mercosur and the EU, which was delayed. Clearly this is also not a panacea.
What is at stake is the equality of conditions for competition between the US, the EU and the Pacific countries. Therefore, it is about the capital/labor relation (wages, working conditions, level of employment), the remains of the welfare state (welfare cuts), regulations on the goods and services market (regulations on environmental and plant health), protection of investments (for the multinationals) and certain aspects of intellectual property and the privacy of citizens.
The geopolitical dimension
It seems contradictory that when international trade is stagnant and has failed to pull the economies of the industrialized and emerging countries, hard liberalizing tendencies reappear. Within all these agreements, and the speed that the U.S. is imposing, is the geopolitical dimension and inter-imperialist dispute it implies.
China is on its way of becoming the 1st leading economic power, and has already replaced the US in the podium as the first trading power in the world (it is the largest exporter and second largest importer) and marches on with investments in Africa and Latin America. For the US, it all comes down to drawing a line against the progress and consolidation of the Asian power in the international arena. The American empire seeks to regain economic hegemony and in this regard it has gone for the resumption of relations with Cuba and the nuclear deal with Iran, which are previsibly sources of accumulation of capital in the near future.
It is in this context that the creation of the Pacific Alliance should be analyzed. In Latin America, it is comprised by Mexico, Chile, Colombia and Peru, countries that have signed FTAs with the US in the past, that share the economic logic of neoliberalism and have the keys for future export outlets for the Pacific.
In geopolitical terms, the US tied relations with the EU, a former competitor and now it’s ally, to isolate Russia, strongly condition China’s progress, limit the BRICS and, in addition, weaken the Mercosur, the ALBA and the CELAC.
All of this is setting a new world stage with new threats and challenges to our countries , and especially for the workers and popular sectors.