TPP Miscellaneous: Geopolitics (Workshop by Sanya Reid Smith)

What happens if we sign or don’t sign, from a geopolitical point of view? What is the TPP’s connection with China, and the Regional Comprehensive Economic Partnership (RCEP), the other FTA currently being negotiated between China, ASEAN, and 5 other countries? What about other countries who have expressed interest to join the TPP? Could the TPPA be used as a political tool by the US towards other countries?

This series is brought to you by based on a recent NGO briefing on the Trans-Pacific Partnership (TPP) in Malaysia by Ms Sanya Reid Smith, an expert on Trade and Investment Rules. She has been monitoring the Trans-Pacific Partnership Agreement (TPPA) since 2011, and is also the resource expert for Bantah TPPA Malaysia. The entire talk is uploaded on YouTube in a seven part series and can be accessed here; this article is drawn mainly from Parts 4 and 6 of the talk. The index of the series is attached at the end of the article.

Video starts at 10:38

TPP can be seen as anti-China

So then we come to the geopolitics of it. So what happens if we sign, or not sign? Remember, China is not in the TPP. And actually, the TPP can be seen as an anti-China agreement. The US has said, ‘We want to encircle China. We want to keep China out of this agreement. This is to restrict China. We are setting the rules of the road, not China.’ And in fact, in most of the chapters, you can see specific anti-China provisions, aimed at Chinese current policies and laws, that are there just in case China ever joins the TPP.

And along the way everybody else has to comply. Too bad, you are collateral damage. China so far has not joined. I think they’re still figuring out if it’s good for them or not. But in some countries, like New Zealand, who are very dependent on the Chinese market for exports, the government of New Zealand has said ‘If the TPP is anti-China, we will not sign, because we need to preserve our relationship with China.’ So then it depends on your assessment on how anti-Chinese it is or not, and how much it has to be before you don’t sign.

TPPA vs RCEP: Which will be the APEC model?

But alongside the TPP, China is also negotiating a free trade agreement, called the Regional Comprehensive Economic Partnership (RCEP). So that is ASEAN plus six: Japan, Korea, China, India, Australia, New Zealand. So Malaysia is in that one as well. So some countries are hedging their bets, they are having it both ways, right? Malaysia is in the TPP, the US model, and it is also in the RCEP.

Both of the agreements are racing to be the model for the APEC free trade agreement, the Asia-Pacific free trade agreement. Do we take the US model, with their 30 chapters, and stronger intellectual property and ISDS? Or do we take the Chinese model? And the Chinese model, generally, has been about trade in goods: let’s just remove the tariffs on our exports between each other, we don’t have the other 24 chapters that the developed countries want.

But we don’t know this time in RCEP because it is also negotiated in secret. And we know what leaked, for example, was that Japan and Korea were proposing stronger intellectual property on medicines and copyright, but hopefully it won’t be in RCEP because India will know to resist, and ASEAN includes least developed countries: Cambodia, Laos, Myanmar. They are so poor… and they don’t have to do any intellectual property protection at the World Trade Organization as long as they are least developed. So it would be very mean for them to have to agree to the Japan/Korea proposals in RCEP.

Countries that want to join: Korea, Indonesia, Philippines…

So the rest of the geopolitics… I’m not an expert on geopolitics, but this is the part that I know. And so, some countries who are thinking of joining the TPP, like Korea, they already have a US free trade agreement, so they’ve already done about 95% of the difficult parts of the TPP, so it’s not very hard for them to join. Indonesia, the president said he wanted to join, but actually it is against many of his own policies, so I’m not sure he knows what the substance of the TPP is when he made the decision to join, and we’ll see if they still join. Philippines has said it wants to join, but its constitution may have to be changed to allow foreigners to own land. The current Philippines Constitution was written by the mother of the current President of the Philippines. So it’s a bit tricky lah, for him to change his mother’s Constitution.

Thailand’s story, which warrants its own subsection

Thailand, under Thaksin the brother, they wanted a Thai-US FTA, then they had tens of thousands of patients and bankers demonstrating on the streets in the negotiations, so that the negotiators couldn’t even get into the venue. They had to move the negotiations to a golf course 20 kilometers away. And afterwards the Thai negotiator came out and he thanked the demonstrators, and he said, ‘Because of you, I could resist the provisions for stronger intellectual property on medicines.’

Then they had a military coup, and the US Government said, ‘We don’t negotiate with the military,’ so they did not sign. Very dramatic. And then the military came in, and the military said, ‘We listen to the people. We will change the Thai constitution so that before we can have one of these US free trade agreements we must consult, Parliament must be involved, it cannot harm the public etc…’ So the military constitution made it harder for Thailand to join.

Then Thaksin the sister came in, and she had briefings every week by her brother, and she wanted the TPP again, but she was restricted by the military constitution which said ‘you must consult, parliament must be involved, it can’t harm the public etc.’ Then she got kicked out and we are back to the military again. So now I’m not sure, if this current military is the same as the last military or not.

Lastly, India and Russia

India hasn’t decided to join. Russia is in APEC, but a bit remote lah. They are still getting to grips with joining the WTO which they did recently.

Video starts at 1:20

What are possible geopolitical and strategic impacts on Malaysia?

I’m not an expert on the security part, but some people do see the links. Because, for example, people ask, why is Vietnam signing the TPP, when they’re so poor, that they need medicines affordably even more than in Malaysia, they also have GLCs which are in trouble, macam-macam… But, for Vietnam, as I understand it, they’re worried about the South China Sea, and the islands, and China taking over the islands, so they say, ‘We go to America, we hope they save us from China.’

So, some countries are thinking about the geopolitics and the strategy, eg US Secretary of Defense Ash Carter said, “The Trans-Pacific Partnership (TPP) is as important to me as another aircraft carrier.”  The other question is whether the TPP could be upgraded like the North American Free Trade Agreement (NAFTA between Canada, Mexico and the USA) into a military pact, and what that would mean for US bases in Malaysia, for example. Maybe that’s something that Malaysia wants, because of its own South China Sea claims.

Existing US FTAs are signed, surprisingly with small countries

So I don’t know all these geopolitics, but one thing that was interesting to me is that, some of those existing twenty US free trade agreements are with quite surprising countries. You would think the US would sign with big markets, right? Where they can invest in or where they can sell to. They have signed free trade agreements with Oman, Bahrain, Jordan, Morocco, Singapore… these are little countries, economically not worth much. So maybe there’s some other consideration about why they’re picking these countries to sign with.

TPPA could be used also as a political tool

There was one more thing I was thinking of. Oh yes. New Zealand, famously, did not want to allow American nuclear submarines to dock in New Zealand, after Greenpeace and the Rainbow Warrior and everything, right? So for a long time the government said no US nuclear submarines, and the US said, ‘Because you don’t let us have nuclear submarines, we don’t give you this wonderful free trade agreement.’ Now, the government in New Zealand said, ‘Ok, your nuclear submarines can come to our ports,’ and suddenly New Zealand was allowed to join the TPP.

So there has been some people making links to the military and the geopolitical strategy, because the US’s pivot to Asia, I think, was partly military, but now this is a trade agreement. So as far as I’ve seen in the 6000 pages, nothing there says ‘military’, but doesn’t mean there isn’t a side deal that goes along with it. But I don’t know what it is. What has been published is the text of the trade agreement, not all of it is about trade, but it is still about economic stuff.

Index of the Series

This series contains 20 articles on the TPP, and can be read in any order:

Transcriptions are kept chiefly ad verbatim, with some minor edits for readability. The text has also been checked by Ms Smith for accuracy.

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