Thursday, March 3, 2016
TPP and Australia.
Robb, who signed the regional trade pact with counterparts from 11 other nations in New Zealand on Thursday, dismissed opponents of the deal as “the usual suspects” who would not be persuaded by a new inquiry.
He also played down the risk of the Australian government being sued under controversial investor-state dispute settlement (ISDS) clauses, pointing to carve-outs for health and environmental measures.
Hundreds of protesters gathered outside the SkyCity building in Auckland to object to the signing of the agreement on Thursday.
Opposition within Australia has also been building. Before the meeting, 59 organisations, including the Australian Fair Trade and Investment Network, World Vision, the Public Health Association of Australia and numerous unions, signed an open letter calling on the government to take up the Productivity Commission’s offer to assess the costs and benefits.
“In the absence of such independent assessments we consider that the TPP poses grave risks to the public interest and ask you to oppose the implementing legislation,” they wrote in a letter to Australian MPs.
But Robb flatly rejected the request. “No we won’t, because they’re all the usual suspects, I’ve got to say,” he told the ABC.
“Most of the people driving that campaign have been opponents of free trade for decades. They’re entitled to that view, but nothing that would come out of an inquiry would change their mind.
“There’s nothing that they’ve said that convinces me that they’re genuine about this ... I think the community accepts that we’ve got 25 years of uninterrupted economic growth in Australia, we’ve got millions of jobs which have come off the back of Australia opening up and participating in these sorts of major agreements around the world with all of our trading partners.”
The prime minister, Malcolm Turnbull, has described the TPP as a “gigantic foundation stone for our future prosperity” but recent World Bank analysis suggested Australia stood to gain only a modest increase in gross domestic product by 2030.
Of the 12 participants, only the US would experience a lower GDP gain, the report said. By contrast, Vietnam’s GDP could rise by 10%, and Malaysia’s by 8%.
Robb told Sky News there was “a war by modelling” occurring. He pointed to a US Department of Agriculture study that showed Australia’s agriculture sector would be the “biggest winner by a country mile”.
“There are so many parts of this agreement that are very difficult to model,” the minister said.
Investor-state dispute settlement clauses allow companies to access an international tribunal if they believe actions taken by a host government breach its investment obligations.
Robb cited the failure of the Philip Morris case against Australia’s plain packaging measures, which the tobacco giant pursued under a Hong Kong investment treaty.
He said the company had lost that case “using one of the older versions of the ISDS, the pre-2000 version [but] it’s got stronger in terms of protecting public policy on health and environment since then”.
“I’m very confident that what is in the TPP which protects public policy on health and environment will ensure that we are safe,” Robb said.
After Thursday’s signing event, the trade deal will be presented to the parliaments of participating nations.
Patricia Ranald, the convener of the Australian Fair Trade and Investment Network, accused Robb of “shooting the messenger” and failing to address genuine community concerns.
“We are not opposed to trade,” she said. “We are making the point that the TPP is not mainly about trade at all. Australia already has free trade agreements with nine of the 12 TPP countries, and a World Bank study shows there will be minuscule trade gains after 15 years.”
But the Australian Chamber of Commerce and Industry said the deal had many potential benefits for Australia, including reducing costs in global supply chains. The chamber’s chief executive, Kate Carnell, said the 2,000-page document was “incredibly complex” and small businesses needed support to understand the new trade arrangements.
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What is interesting is how many of the concerns laid out by Australia in terms of the TPP is almost synonymous and parallel to the concerns economists and politicians have with the TPP here in the United States.
ReplyDeleteOne of the crucial takes from this piece is how key decision makers within the Australian government are refusing to provide alternative information to opposing parties. Their logic that certain parties have a cultural opposition to the TPP and will not be "satisfied" regardless of the information provided is a dangerous logic because any information that can corroborate both the TPP's efficacy, legitimacy and credibility is important in any policy setting. For example, the World Bank analysis showed that Australia "stood to gain only a modest increase" in GDP by 2030 - I would argue that this type of information would be seen as very important in the dialogue surrounding the TPP talks.
Further, the delineations between the gravity of effects - the agricultural sector being affected more for example - is an important consideration an imbalance in the TPP's effects could understand or overstate the aggregate effects on Australia's economy.
The TPP trade deal is looking better and better for countries such as Vietnam, Malaysia, Singapore, and New Zealand, however Australia faces a much different economic position. The simple facts that the trade deal will expand Australia’s economy by less than 1%, trade gains will be small in size, and will interrupt years of economic stability and prosperity will surely cause an uproar from those it will effect. Like the United States, Australia is not opposed to free trade but the do not see projected or future benefits from this agreement. For example, the article states that “Australia already has free trade agreements with nine of the 12 TPP countries” making the need for this even less necessary for them as a nation. Many are opposed and even skeptical over the ISDS clauses because of Australia’s history with using them and having them fail. Because Australia will barely benefit, their legislature may seek to not ratify or sign the agreement and in essence will negatively impact the 11 other reliant countries.
ReplyDeleteThe TPP agreement in Australia seems to have small benefits in the eye of the public and raises many concerns for the citizens. The questions and reservations regarding the TPP agreement has been brought to the attention of Australian MPs, however they have been overlooked due to their opposition against free trade in Australia. They are not however raising the question of whether Australia should engage in free trade as they are already trading with a majority of the TPP countries, but the gain that the TPP agreement would have on Australia's economy overall. The costs may outweigh the benefits and an analysis of the agreement is a fair trade to accept for the sake of the citizens and small businesses that will be affected by the agreement.
ReplyDeleteIt seems like Australia is giving another reason for this trade pact to be forgotten about. The Australian government is poised to gain a single percentage of GDP growth, while protestors are lobbying for the bill to be rejected. Malcolm Tumbull is calling this pact the foundation for future prosperity, but he will not release all of the reasons for this. It seems as if this is another example of the government knowing a lot more about this pact that the public, as even in the US it is being heavily supported by the government. What confuses me is the fact that this article mentions Australia already has free trade agreements with 9 of the 12 nations in the TPP. What's the big deal about this pact from Australia's perspective? This article is extremely similar to that of the United States because the governments believe that the gains will be amazing yet the data and analysis is not matching up with the word of mouth.
ReplyDeleteThis article is clear that Australia looks to gain almost nothing in the TPP agreement. Also looking at other Australian media sources such as the Sydney Morning Herald who also claim that the TPP agreement will boost Australia's economy by only 0.7 percent by the year 2030. It's understandable why they won't benefit greatly from the agreement just like the United States, because these two countries already count on individual free trade agreements with the countries they import and export from, so the agreement will only lightly broaden the number of countries under their agreements. One of the biggest problems in signing the TPP agreement is allowing companies under the Investor-state dispute settlement to sue governments that may harm public interest and cause larger financial risk.
ReplyDeleteThe TPP agreement does hold enormous benefits, but not for all participants. The reason growth will only be 1% for Australia, is because, like the United States, free trade is present with a majority of the trading partners. Australia has seen substantial economic growth in the past few decades, and opposing the TPP deal is a measure to ensure that the economy is not disrupted and put at risk. However, by Australia not agreeing to the TPP, other countries such as Vietnam and New Zealand will not benefit as much as they potentially could.
ReplyDeleteTPP has been battered around between the countries for a long time, especially her in the US. When Robb mentioned "there is a war by modeling" I think it is true because the economic gain mentioned by most countries is much higher from one US model. How would trade be affected if instead only 11 or 10 countries participated in a trade agreement. Additionally the politics surrounding the matter raise the question of whether or not there is an underlying purpose related to the agreement if only meager gains are projected. Why with hold information from participating parties on an agreement that is intended to increase the the flow of goods between them? The whole story has not reached the public and the potential benefits related to an agreement has not been properly valued.
ReplyDeleteThe idea of a joint venture from a business perspective is so that both sides achieve positive gains, usually by a significant margin above what they could do without a venture. It is unwise to enter into that kind of an agreement if all parties do not gain. Same thing applies in a trade pact and it is important to note the transparency of each member.
With the reports referenced in the article citing a modest at best level of GDP growth for both Australia and the US, it seems as though the opposition faction in both countries are positing a similar argument to the administration in both countries. I am sure much of that stems from the projection that some of the developing countries party to the agreement would likely see a much more robust growth in GDP than nations like the US and Australia. Though, I suspect much of that can be attributed to the nature of being a developing nation in the first place.
ReplyDeleteI’ve read some of my classmates dissatisfaction with the Australian government’s refusal to pause pushing the legislation forward and engage in further discussion and independent studies — Which the opposition is calling for. Though at first glance this may seem unfair and not in the spirit of a democracy, I would guess the government has good reason for making this decision. I imagine that the opposition would be more than happy to use this as a stalling tactic instead of wanting a genuine conversation about the substance of the agreement — Much like what we see here in the US with our legislative bodies. So with that in mind, I would be hesitant to write the government’s position off as unfair or cynical; recognizing when a political adversary has no intention of engaging in an honest discussion is important in politics and leadership.
It is uncertain how the TPP agreement would benefit Australia. On one hand we have the very small trade increase (0.7%), second only to the U.S. (0,3% growth). On the other there are secondary benefits to adhering to the TTP such as a reduction of costs in the global supply chain.
ReplyDeleteAlthough the increase in trade for Australia is minimal but existent companies are worried that this agreement may affect their current trade agreements already in existence and therefore slowdown the country’s current economic growth. This dispute may grow into a lawsuit under the Investor-State Dispute Settlement (ISDS) if companies believe these government actions are hurting them.
If Australia doesn’t adhere to the TTP agreement countries such as New Zealand and Vietnam would not be able to take advantage of the full potential of the agreement. The World Bank has foreseen that thanks to this agreement Vietnam could achieve a 10% trade growth, Malaysia 8%, and New Zealand 3%. Nevertheless this agreement would hurt non-adhering countries since trade would be more focused between the adhering ones.
Regardless of all the pros and cons of the TTP agreement the Australian government states that is thanks to these sorts of agreements that they were enabled to achieve the economic development they have achieved in the last twenty years and are spurred to adhering to it.
As the article states "the community accepts that we've got 25 years of uninterrupted economic growth in Australia." With that being said why fix something if its not broken. It is clear that Australia will not benefit much from this partnership. The World Bank analysis suggests that Australia will only gain "a modest increase in their GDP by 2030. Mean while, Vietnam's GDP could rise by 10%, and Malaysia's by 8%. The articles continues to stress the benefits that the country will receive, such as this partnership will protect public policy on health and environment; but then again Australia is still risking that their growth will be worse than 11 of the other 12 countries in the deal. Is it worth risking it?
ReplyDeleteI personally believe that the Australian government is rushing their domestic passage of the TPP in order to avoid any long-lasting inquiries into its full language and thorough analyses of its consequences. We've seen skepticism of the TPP by the citizens of several of the member nations, particularly the United States and the other more developed nations like Australia. Given the limited predicted benefit the TPP will have for the larger members of the agreement like the US and Australia, it is justifiable that the public would not be fully in support of its passage. What really surprises me, is that the Australian government is intentionally avoiding having to accept the Productivity Commission's offer to assess the costs and benefits to Australia if the deal is implemented. The unwillingness of the Australian government to listen to any alternative takes on the TPP's consequences is shocking, but not completely unexpected. Even more shocking is the fact that over 50 organizations signed this open letter petitioning the Australian government to further research the deal and its domestic impacts, and the government still won't acquiesce to their request. Although the government may not hear what it wants to hear if the TPP is researched by a third-party, it is something that I believe they need to hear. It is integral that a deal this large be thoroughly researched, vetted and simulated before its actual implementation, and it seems that Australia has no interest in doing so. You would think that the proposed 0.7% GDP growth researched have estimated for Australia, compared to the 10% growth in Vietnam and 8% growth in Malaysia would raise some red flags, but apparently the Australian government (and also that of the United States) are more eager to see actual results than to mull over theoretical figures.
ReplyDeleteThe TPP is a the biggest trade agreement of the last twenty years, comprising 40 percent of the world's economic activity. However, Australia already has free trade agreements with nine of the 12 TPP countries” making the need for this even less necessary for them as a nation which brings up the question of if they really need to be a part of this deal. The World Bank shows that Australia is likely to experience a gross domestic product increase of less than two percentage points by 2030 as a result of the increased business flowing from the trade deal among 12 countries. The article states that By 2030, Australia’s gross domestic product could increase by just 0.7% as a result of the historic trade agreement. By contrast, Vietnam’s GDP could rise by 10%, and Malaysia’s by 8%, the World Bank finds. Not only will the financial benefit be minimal, the Australians given the power to US companies to sue them for making laws to protect their community. The Australian financial sector is the largest single sector of the Australian economy. For Australia, the pros and cons of its membership in the TTP have received significant media coverage, both balanced and scare-mongering. The proponents for the TPP clearly see more benefits than downsides in cross border deregulation and co-operation in the Pacific region
ReplyDeleteAustralia is unsure it the Trans Pacific Partnership is going to benefit them or not, The TTP trade deal will only expand Australia economy by less than 1% of the World Bank reveals. The World Bank has also reported that Australia will gain only a modest increase in GDP product by 2030.In addition, Austria has already had free trade agreements with nine of the 12 TPP countries and a world bank study that shows there is going to be minuscule trade for the next 15 years. However, the Australian Chamber of Commerce and industry believe that the deal will provide lots of potential benefit to Australian such as reducing costs in global supply chains.
ReplyDeleteThe Australia and Trans-Pacific Partnership is a new one, leaving a lot to the unknown. Many are protesting the bill being passed and view the TPP as a risk to public interest. If this bill is successful, it can bring about an economic boost with increased trade but protestors feel it is risky and without much benefit. Risks involve the investor-state dispute settlement. This settlement allows companies to access an international tribunal if they feel as though the government is in breach of their investment obligations. If companies wish to sue their host government of Australia, it would lead to even more debt for the country than before this partnership existed. Backers of the TPP, such as Malcolm Turball, believe this deal to be a foundation for the future prosperity of Australia. As in all partnerships, only time will tell.
ReplyDeleteIt still seems very uncertain whether or not the benefits of the TPP will extend to Australia. Like the article states, they already have free trade agreements with nine of the 12 participating countries and the World Bank has recently revealed that it will only boost the economy by 1%. I think what is important to look at is the upside the other countries will gain based on the analysis. Vietnam's economy would be 10 per cent bigger by 2030, Malaysia's 8 per cent bigger, New Zealand's 3 per cent bigger, and Singapore's 3 per cent bigger. Australia and the US will suffer the greatest by growing less than a percent, but on the other hand it is still growth and Australia and the US are more developed in trade as is.
ReplyDeleteAustralia stands to pick up nothing from the uber exchange bargain fixed with 11 different countries including United States, Japan, and Singapore, the primary complete financial examination finds. Arranged by staff from the World Bank, the study says the purported Trans-Pacific Partnership would help Australia's economy by only 0.7 for each penny by the year 2030. Australia stands to pick up nothing from the uber exchange bargain fixed with 11 different countries including United States, Japan, and Singapore, the primary thorough financial examination finds. Arranged by staff from the World Bank, the study says the alleged Trans-Pacific Partnership would support Australia's economy by only 0.7 for every penny by the year 2030. Different individuals from the TPP stand to advantage a great deal all the more, as per the investigation. Vietnam's economy would be 10 for every penny greater by 2030, Malaysia's 8 for each penny greater, New Zealand's 3 for every penny greater, and Singapore's 3 for every penny greater. Australia and the United States advantage the minimum from the Trans-Pacific Partnership. The study says it would support the US economy by just 0.4 for every penny by 2030. Non-individuals would endure as individuals guided exchange to different individuals. The greatest failure would be Thailand, whose fares are set to fall 2 for each penny while Vietnam's grow 30 for each penny.
ReplyDeleteI think that if 59 Australian organizations ask that their government to re-assess the pro’s and cons of the TPP going into effect, they should take the time to listen. Realistically whether the opposed parties have a history of doing so or not, it’s a fair notion to entertain the oppositions with solid proof as to why it would in fact be a good idea to enter into the TPP agreement. If the argument is that the gains are so miniscule that it proves to be insignificant, that shouldn’t be hard to disprove if it is in fact such a fantastic move.
ReplyDeleteIf they already have agreements with 9 of the 12 TPP countries, I can understand why it seems unnecessary to enter into the TPP agreement. However, the logic of potentially lowering long-term costs is an attractive idea. So what ever isn’t made in profit can be made back in savings I suppose. Realistically, if “modest increases” isn’t enough to convince opposers that it’s a good idea, maybe the idea of being a team player for long-term relationship building and benefits can be a convincing factor. But hey, I could be wrong.