Lest we fail to understand what the US-initiated Trans-Pacific Partnership Agreement is all about, one thing is clear: that it is neither a trade agreement nor an agreement to reduce the remaining tariff. Rather, it is a series of restrictions and prohibitions for member-states to comply under the proposed trade partnership. There is no incentive that awaits them in exchange for surrendering their sovereignty. Member-countries like Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Philippines, Singapore, and the United States could no longer exact more like what has been accomplished under the Asean Free Trade Agreement, and the Asia–Pacific Economic Cooperation.
The proposed restrictions and prohibition were all conceived by US negotiators, and are now submitted for the ratification of the member-states. Even if no provision would specifically place the US at an advantaged position, political pundits, nonetheless, see this move as measures to arrest the continuing decline in US economic dominance in Asia that is dangerously pushing its defense capability on the precipice. The specter of being economically overtaken by China, Russia and now India, with its host of multinational corporations placed on the hinge, could eventually displace the US as the leading economic power in the region. Right now, the technological superiority of the US is slowly being eroded by the advancing technological knowhow of Japan, China, Russia, India, South Korea, Taiwan and even Singapore.
With such interlocking trade agreements entered into under Asean, plus China, Japan, and the US; with Apec and even as far as Nafta and EU, it now becomes clear that what many countries grudgingly acceded under the more democratic arrangement of the World Trade Organization (WTO) would now be entrapped once they ratify the membership with TPP. While the emaciated WTO still acknowledges state sovereignty on matters of economic policy, their sovereignty has been abrogated through the years by the various international trade agreements. The creation of the TPP would finalize the withering of the states not to give way to Marx’s prophecy about the universality of communism, but the completion of international monopoly.
The most favored nation clause (MFNC) became the main mechanism that made most international trade agreements, including the WTO, successful. Under that principle, member-states commit to extend the same tariff rates granted to other countries. But under the TPP, it would focus in enforcing a far for stricter MFNC designed to completely erase the remaining traces of sovereignty on how states should run their economy. While the US insists of being impartial, its negotiators, in fact, conceived the idea and doggedly worked hard to incorporate that new mechanism in the TPP. That now would work in favor of the US. There would no trade package the TPP could offer in exchange for membership, similar to that of the Chinese-initiated Asian International Infrastructure Bank.
Rather, the TPP could impose a universal regulatory system of controls and standards favorable and beneficial to the US and to its multinational corporations. Among the target of the TPP under the guise of universalizing controls and standards is the demand to speed up the abolition of state-owned enterprises which many countries used as their launch pad to achieve full industrial and technological development; tightening further intellectual property rights; adjusting labor standards to make production cost expensive and prohibitive, viz. restore US competitiveness; impose new rules that would completely liberalize trade and investment.
All these proposals of the TPP may appear to have universal application and benefit, but in reality, many of the dos and don’ts would be favorable to the US, to its partners in the European Union and to its multinational corporations. The case of intellectual property rights is one contentious issue. Once ratified, the TPP could instantly make many products—such as medicines and electronics, which have contributed much to advance progress in the last 50 years—prohibitive and costly. It will mean a new mode of imperialism, for many companies in the US and Europe would rake in enormous profits on royalty alone that it might even exceed direct but costly investment. That could make the US perpetually rich and powerful with those countries paying their royalties, like vassal states paying tribute to suzerain state for the fact that many of those intellectual properties that have been patented are of American origin, not to say that some of them were originally pirated.
Once ratified, the TPP would then seek to impose prohibition to member-countries from joining other international trade and finance organizations again in the guise that joining outside the framework of the US-controlled institutions would be detrimental to the existence and interests of the TPP. While it may not directly prohibit countries from joining the Chinese-initiated AIIB, and the newly created BRIC Developmental Bank, it could impose sanctions to tighten the financial screw against those states that would attempt to seek “the best of both worlds”; that joining the AIIB or the BRIC Developmental Bank would be in conflict with their membership in the World Bank and ADB. In fact, many suspect that the Philippine decision to back out of joining the AIIB was due to pressure from the US and Japan, fearing that many of the projects funded by the World Bank and ADB could be imperiled or stalled.
Some political analysts believe that the economic integration based on the holistic principle that all will benefit, and nobody will be left out has been unmasked as more of a theory than realty. Despite the years of continued economic integration and free trade, it did not result in the member-states’ economic development. Free trade has only developed the specialization of their exports of specific products for the poor countries. It did not result in tangible progress, but instead exacerbated poverty because trade deficit continues to pile up, not to mention that it has resulted in the drastic reduction of customs revenues.
Free trade was more of a mirage because whatever increase is realized in the volume and in the price of our exports was readily offset by the steeper depreciation in the value of our currency compounded by the continuing low value in our exports. For that, the Philippines has to continually supplement its annual budget caused by borrowing from the Western-controlled financial institutions, otherwise, the country could become a failed state. The neo-liberals failed to consider that the mechanism will only work if the trading goods and services are of equal value and for which the other could not produce.
Likewise, free trade should not merely rely on the concept of assured market and an assured supplier. The US then would merely be developing a global marketing network coyly disguised as free trade. The quest for development could then be sidelined, which is far more important and lasting to which President Xi Jinping said in gist, that “free trade should compliment development, and not otherwise.”
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