The Trans-Pacific Partnership (TPP), so long a happy hunting ground for critics (and still is), has finally landed. Now that the most significant trade deal in history has been sealed on a broad framework, US President Barack Obama must credit his steadfastness in navigating the troubled waters he was in for quite sometime. The pact that is believed to affect 40 per cent of the world economy still requires ratification by the US Congress and parliaments of other signatory countries. The TPP, otherwise well-known for the secrecy with which it has been negotiated for long eight years, is believed to set new terms for trade and investment among the United States and 11 other Pacific Rim countries. These are: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. These countries constitute a formidable group with an annual gross domestic product (GDP) of nearly $28 trillion, representing roughly 40 per cent of the global GDP and one-third of world trade. The deal is set to cover trading and manufacturing operations of everything from dairy products and pharmaceuticals to automobiles and banking. To many, the pact is a major component of President Obama’s aggressive focus on Asia. It is seen as a way to bind Pacific trading partners closer to the United States while raising a challenge to China. It is also seen as a means to address a number of issues that have become stumbling blocks to e-commerce, financial services and cross-border internet communications. There are also traditional trade issues involved. Moreover, as attempts at global trade deals have faltered (such as the World Trade Organisation’s Doha Round), the TPP is viewed as an “open-architecture” document meant to facilitate other initiatives underway, like the Transatlantic Trade and Investment Partnership (TTIP). Supporters of the TPP say that it would be a platform for economic integration by bringing large-scale deregulation in countries surrounding the Pacific. They also contend that it would be a boon for all the nations involved, and that it would “unlock opportunities” and “address vital 21st-century issues within the global economy.” Although the text of the deal is still shrouded in ‘nondisclosure’, a number of its key issues are being debated. Will it really boost global trade and commerce? Is it a sellout to big businesses and corporations that will cost jobs? Critics of the treaty range from trade experts to environmentalists. The latter have already voiced their concern in perhaps the strongest manner possible. They hold that the TPP is a ‘potential danger to the planet’, subverting environmental priorities, such as climate change measures and regulation of mining, land use and bio-technology. From the secret draft text of the Environment Chapter released some weeks ago by WikiLeaks, it appears that the environmentalists do have reasons to worry. The environment chapter of the TPP covers what the contracting parties propose to be their positions on environmental issues, including climate change, biodiversity and fishing stocks, and trade and investment in ‘environmental’ goods and services. But critics say that the Environment Chapter is notable only for its absence of mandated clauses or meaningful enforcement measures. Activist groups vowed to continue their protest against the deal. “The TPP,” they said, “is a wish-list for monopolistic corporations that inherently benefits giant multinational companies while undermining small businesses and startups.” The final round of the TPP negotiations in Atlanta, however, was not very smooth. In fact, it almost got stuck over the question of how long a monopoly period should be allowed to next-generation biotech drugs, until the United States and Australia negotiated a compromise. The United States had sought 12 years of protection to encourage pharmaceutical companies to invest in expensive biological treatments like Genentech’s cancer treatment Avastin. Australia, New Zealand and public health groups had sought a period of five years to bring down drug costs and the burden on state-subsidised medical programmes. This issue was of serious concern for pharmaceutical companies including Pfizer Inc, Roche Group’s Genentech and Japan’s Takeda Pharmaceutical Co etc. The TPP would give Japan’s automakers, led by Toyota Motor Corp, a freer hand to buy parts from Asia for vehicles sold in the United States but sets long phase-out periods for US tariffs on Japanese cars and light trucks. The United States, Mexico, Canada and Japan have also reportedly agreed on rules governing the auto trade that dictate how much of a vehicle must be made within the TPP region in order to qualify for duty-free status. Although much of what the TPP encompasses is still shrouded in secrecy, it is fairly clear that once operational, inclusion of Vietnam in the treaty might result in negative implications for Bangladesh. Tariff preference that Vietnam is likely to gain from the treaty may throw a potentially big challenge for Bangladesh’s apparel exports. Compared to Bangladesh, Vietnam is currently less competitive in apparel exports mainly due to its higher cost of production and soaring wages. However, provided with tariff preference and flexible rules of origin, there is a possibility of considerable trade diversion from Bangladesh to Vietnam. Besides apparel products, items that have high tariff in the USA — textiles, footwear and leather goods — are also expected to experience trade diversion from many of the trading partners in the developing and least developed countries. All these are still speculative. To have a full view of the text, one has to wait for the dense 30 chapters of the agreement to be made public. Everyone — from lawmakers to unionists, corporate houses to lobbyists — is eager to get their hands on a copy of the deal to see what exactly it contains, or more precisely, what is there for the contracting Parties and what could be the fallout for those not in the partnership.
