The row over Trans-Pacific Partnership

The much talked-about Trans-Pacific Partnership (TPP) deal is in jeopardy -- so it seems from US Congress' rejection of the 'fast track' mechanism that would have granted President Obama the legal authority to complete the trade deal with his Asia-Pacific allies. However, this in no way should prompt conclusion on the fate of the long-cherished trade pact. What observers think is that the speedy process planned to complete the deal has got stalled for the moment, and that the treaty is still a roll of the dice.  
The US-engineered TPP, when finalised, will be the all-time largest trade pact. It is well known for the secrecy with which it has been negotiated for years. It is believed to set new terms for trade and investment among the United States and 11 other Pacific Rim countries - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. No doubt, these countries constitute a formidable group with an annual gross domestic product (GDP) of nearly $28 trillion, representing roughly 40 per cent of global GDP and one-third of world trade.
To many, the proposed pact is a major component of President Obama's aggressive focus on Asia. It is seen as a way to bind Pacific trading partners closer to the United States while raising a challenge to China. It is also seen as a means to address a number of issues that have become stumbling blocks to e-commerce, financial services and cross-border internet communications. There are also traditional trade issues. Moreover, as attempts at global trade deals have faltered (such as the World Trade Organisation's or WTO's Doha Round), the TPP is billed as an "open-architecture" document meant to  facilitate other initiatives underway, like the Transatlantic Trade and Investment Partnership (TTIP).
Supporters of the TPP say that it would be a platform for economic integration and bring large-scale deregulation in countries surrounding the Pacific. They also contend that it would be a boon for all the nations involved, and that it would "unlock opportunities" and "address vital 21st-century issues within the global economy." Passage of the pact in the Congress is one of President Obama's final goals in office, but he faces stiff opposition from nearly all of his fellow Democrats.
The United States negotiators stress that the agreement would seek to level the playing field by imposing rigorous labour and environmental standards on trading partners, and supervision of intellectual property rights. The US also wants the trade pact to address a number of issues that have arisen since previous agreements were negotiated. One is that countries agree not to block cross-border transfers of data over the internet. Another big aim of the TPP is enhancing opportunities for service industries, which account for most of the private jobs in the American economy. The United States has a competitive advantage in a range of services including finance, engineering, software, education, legal and information technology. Although services are not subject to tariffs, nationality requirements and restrictions on investing are used by many developing countries to protect local businesses.
Critics of the treaty range from trade experts to environmentalists. The latter have already voiced their concern in perhaps the strongest manner possible. They hold that the TPP is a 'potential danger to the planet', subverting environmental priorities, such as climate change measures and regulations of mining, land use, and bio-technology. From the secret draft text of the Environment Chapter released the other day by WikiLeaks, it appears that the environmentalists do have reasons to take a stand against the proposed pact. The environment chapter of the TPP covers what the Parties propose to be their positions on environmental issues, including climate change, biodiversity and fishing stocks, and trade and investment in 'environmental' goods and services. But critics say that the Environment Chapter is noteworthy for its absence of mandated clauses or meaningful enforcement measures. The dispute settlement mechanisms it creates are cooperative instead of binding; there are no required penalties and no proposed criminal sanctions. Julian Assange, WikiLeaks' publisher, said, "Today's WikiLeaks release shows that the public sweetener in the TPP is just media sugar water. The fabled TPP environmental chapter turns out to be a toothless public relations exercise with no enforcement mechanism."
Trade experts, critical of the treaty, consider it a highly controversial deal being pushed by big corporations and negotiated behind closed doors. According to them, the TPP would expand the North American Free Trade Agreement (NAFTA) model that has sparked massive U.S. trade deficits and job loss, downward pressure on wages, unprecedented levels of inequality and new floods of agricultural imports.
Although the draft is cloaked in strict secrecy, some of its leaked texts worry observers even in the US. They fear that if the deal eventually gets firmed up, it would spur adverse fallout in sensitive areas through price spiralling in pharmaceutical products, curbing internet freedom, empowering mega corporations with undesirable authority to interfere with environmental and health safeguards. The TPP, they say, 'would even elevate individual foreign firms to equal status with sovereign nations, empowering them to privately enforce new rights and privileges, provided by the pact, by dragging governments to foreign tribunals to challenge public interest policies that they claim frustrate their expectations.'
Although much of what the TPP encompasses is still shrouded in secrecy, it is fairly clear that if finalised, inclusion of Vietnam in the treaty might result in negative implications for Bangladesh. Tariff preference that Vietnam is likely to gain from the treaty may throw a potentially big challenge to Bangladesh's apparel exports. Compared to Bangladesh, Vietnam is currently less competitive in apparel exports mainly due to its higher cost of production and soaring wages. However, provided with tariff preference and flexible rules of origin, there is a possibility of considerable trade diversion from Bangladesh to Vietnam. Besides apparel products, items that have high tariff in the USA -- textiles, footwear and leather goods - are also expected to experience trade diversion from many of trading partners in the developing and least developed countries.
Although the deal is now stuck, it remains to be seen how the US and its allies plan to stir things ahead.
wasiahmed.bd@hotmail.com