Monday , December 18 2017
Informed Influential Indispensable | newzealandinc.com

Show Up or Hand the Keys to China? – TPP in 2013

Comment  Watching TPP in 2012 was watching a chess game in slow motion.  It was clear that a lot of thinking was going on, there was much jostling for position and it got a bit personal at times as people seemed to be plotting feverishly to get all the pieces they didn’t like off the board. The somewhat tedious nature of the process was exacerbated by the lack of any even half way creative NGO malarkey.  Their failure to create any new conspiracy theories and erroneous misinformation was deeply disappointing.  The badges looked old, the slogans positively Palaeolithic.

Other than the largely unremarkable entry of Canada and Mexico, the high point of the proceedings seemed to be a much heralded announcement that the chapter on small and medium enterprises (SMEs) was practically finished.  Beat the drums!  Send up the white plume of smoke!

Or not.  In the context of TPP, the SME outcome was akin to saying “we’re trying to build an amazing new generation house to be a model for the rest of the world.  We’re not sure who will live in it.  We don’t know what to put in it.  In fact, we’re divided as to whether it should be built at all (but we’re not going to admit that to the neighbours).  No one can decide on the fundamentals like whether it should have windows and a roof and it may not get domestic resource consent.  But golly gosh you should see the small to medium sized garden shed we just completed in the back yard.”

So where does this position us for 2013?  It positions us exactly where we were last year but with a little more hope and realistic potential for momentum.  Because it’s all about the U.S.  The TPP mantra is that everyone is equal and the word “plurilateral” is thrown around like confetti.  However, the only true equality that exists in this process is that everyone is equally able to walk away.  In terms of getting an outcome, there is no equality.  It depends on whether the US is actually prepared to talk market access and stop its own parochial and vested interests from treating the process like a fairground shooting gallery where the goal is to knock off as many things as possible that you want with as much force as possible.

It’s fine for US representatives to reference the access they have to the White House and the President’s desire for an outcome.  Given he said as much himself in the State of the Union address that is all believable.  But that only counts if desire is translated into a process where everything is on the table and where the immense resources of government and private sector trade advocates are invested in changing domestic perceptions and banging heads on Capitol Hill.  Essentially, what happens in the U.S. is vastly more important than what happens elsewhere on most issues and the same goes for TPP.

If he is prepared to spend his political capital on trade, President Obama and his team can sort this out.  He can tell his negotiators that they can be serious about putting on the table tariffs and other barriers the US maintains to imports.  Convince people a fortress mentality will weaken the US economy, not protect it from recession woes.  Negate the self-serving and economically disastrous desires of the unions which have bought some US sectors to their knees.  And probably most importantly to convince the more nepotistic and naïve Capitol Hill incumbents that it’s their call whether the U.S. becomes more integrated into Asia or simply hands over the keys to China.  Of course ideally China would join TPP and this nonsense of China vs. the US could be put to bed but that’s another story.  Regardless, even little economies have choices and the US market is immensely valuable but it’s not the only option.

I hope it works.  I’m cautiously positive about 2013 because, having being involved in trade for years in Washington DC, I know there are enough good people to make this happen if the potential deal is a good deal.  If it doesn’t work then I’m also positive.  Because I know our government has the guts to walk away.

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