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Capitalism
Economics

Why are we silent about signing the TPP?

In September, the Labor Party officially decided to cave in on the Trans Pacific Partnership deal (TPP), leading to the deal passing in the Senate. Since then, there’s barely been so much as a muffled scream about it in the mainstream media.

But this is an agreement designed to completely reshape and redesign global trade, in a way that extends beyond the simple lifting of tariffs, into a complex series of new trade laws. Think the European Union, but imagine it is able to determine financial laws globally.

Will the TPP bring any benefit to Australia’s trade relations? The short answer is: absolutely not.

Theoretically, reducing trade barriers within a new agreement means that all the countries signed up to it experience a greater level of access to the others’ markets. Yet currently, Australia already has free trade agreements in place with a good majority of the countries signed up to the TPP. However, there’s a strong chance that the TPP will further incentivise the offshoring of jobs. A Peterson Insitute for International Economics study in 2016, endorsed by the World Bank, projected a loss of around 771 000 jobs in Australia as a result of the deal. It argued that these jobs will be absorbed by other newly created jobs – but this ignores how much foreign investment is likely to rely on imported labour, and the conditions of this labour.

The agreement would remove current forms of labour-market testing for workers belonging to TPP countries. New migrants would not have to prove specialised skills or in-demand skills to be employed in Australia. And companies would not have to advertise to domestic workers first before hiring, which is largely a move designed to undermine Australian labour laws. International and domestic companies import workers in order to build cheaper workforces, many of whom already working in Australia are currently earning half of the minimum wage.

The offshoring of manufacturing has already hit the Australian Manufacturing Workers’ Union (AMWU) very hard and has drastically decreased union density. In the future, it will be possible to lock unions out of new investment projects, guaranteeing that an entirely new, imported workforce has no representation.

New labourers who are outside of a union’s influence, and who can be scapegoated to put downward pressure on overall industry wages, are obviously enticing for foreign and domestic monopolies.

It’s obvious that Australia as a wealthy nation can provide the conditions for increased immigration, but when this movement is constructed by monopolies to undermine the overall workforce, and with no domestic investment in new industries, no one but these monopolies wins in the long term.

Investor-state dispute settlement

The investor-state dispute settlement (ISDS) is another terrifying arm of the TPP agreement. What countries have agreed to is essentially the establishment of a new international court created by corporations, which can ensure that they are able to sue domestic national governments for anything that falls under the category of ‘harming profits.’

The Hong Kong tobacco company Phillip Morris suing Australia over the plain-packaging legislation has been used an example of what this might look like, but realistically the new legislation would extend far beyond this.

Not only would companies be able to essentially undermine domestic law in terms of the way in which they function inside the country, but reversing privatisation would also become impossible.

A Corbyn-like scheme to nationalise public infrastructure, or reverse parts of the currently privatised healthcare sector, would become null-and-void. So, Bill Shorten kissing a Medicare card in a press conference certainly doesn’t mean the ALP intends to reverse the current government’s slow dismantling of the healthcare system, and they’ve effectively just signed away their ability to even do so.

Not only would national governments taking their fights to these courts be incredibly costly, but the way in which the courts are structured looks undeniably set up in favour of the corporations.

Biological patent law

Under current conditions, pharmaceutical companies producing biologic drugs (the fastest growing segment of the pharma market) experience a five-year protection period after receiving a patent. That means that if other companies want to produce a biosimilar drug (what you would consider a generic version at the pharmacy), they cannot rely on the data provided to the TGA, so they have to repeat the same clinical trials in order to receive marketing approval. In other words, a biosimilar drug will take an average of around six years before it can enter the market and be registered under the Pharmaceutical Benefits Scheme.

If you think this is already bad, then the TPP will heighten the structure of this set up, meaning that companies will have their data completely protected from other companies for five years, and biosimilars cannot even begin to enter into clinical trial processes until after that period. What this will mean is that it will take about eight years before the drug can enter onto the market and receive a price drop under the PBS.

These drugs are so important because they exist to treat things like arthritis and cancer and the TPP will essentially ensure their inaccessibility to most patients for a longer period of time, and guarantee a price rise due to decreased competition.

Containing China

So, why, when there are clearly high levels of threat to Australia’s economic sovereignty, have the government and Labor decided to run us full-steam into this new trading bloc? It seems that Labor has joined the Liberals in taking a Washington directive to move away from our economic relationship with China in wake of the One Belt One Road project, and place perhaps an undue level of optimism in more fledgling yet rising economies like India.

However, China (one of the few countries in the region not signed up to the TPP) is still our clear-majority export/import partner, a relationship Australia fundamentally benefits from, and which no other economy can currently replace. So joining in on a plan that jeopardises our political relationship with China makes even less sense.

US monopolies always had a clear interest in undermining China, simply because China makes it hard for them to extract capital from their domestic markets, but also because the One Belt One Road threatens their ability to negotiate for primary commodities from poorer countries that are now within China’s influence. However, Trump pulled the US out of the TPP deal.

It’s reasonable to guess that given the tone of Trump’s more recent talks with China, he pulled out because he recognised that the growth of monopoly corporations under the TPP would also necessarily be financed by increasing the US deficit. The same problem applies in Australia.

We cannot sweep under the carpet that globalisation in the form of trading blocs like these leads to financialised centres, like the UK and Australia, ending up with a GDP almost entirely made up of debt creation.

Yet, the mainstream media remain wholly uninterested in rhetoric that would unite Australian workers against giant global corporations that are poised to drastically undermine our rights, and right at the precipice of a potential new economic depression.

 

Image: Night Thunderstorm – Louis Vest / flickr

Overland is a not-for-profit magazine with a proud history of supporting writers, and publishing ideas and voices often excluded from other places.

If you like this piece, or support Overland’s work in general, please subscribe or donate.

Jemma Nott is a freelance writer, endometriosis sufferer and has previously been described as an uncharacteristically smiley socialist.

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