Tuesday, 19 May 2015

TPPandTheCaribbean: Trans-Pacific Partnership Facts and How the Caribbean will be affected

Mainstream Messed Up

Before I do delve into 'the need to knows', I must call out any mainstream media that either under-reported this issue or ignored it, but I am especially disappointing in the Jamaican mainstream media as they have left the Jamaican masses especially the disfranchised  members of the society who have no other resources other than the mainstream media be it print or electronic to enlighten them about local and global affairs.

There is no for the media not follow and report on such a established topics such as the Trans-Pacific Partnership (TPP) and the other less popular United States(US)-EU(European Union) Transatlantic Trade and Investment Partnership(TTIP). Even as Pres. Obama maneuvers his Trade Bill  through the US House of Representative and Senate that would see the implementation of the TPP in the US within a period of 6 years, along with other negotiation nations from the Americas include: Mexico, Canada, Peru and Chile. 

TPP Members 

TPP Facts

What is the Trans-Pacific Partnership 

The TPP or TPP12 is an a game changing  Free Trade Agreement that was originally signed by Brunei Darussalam, Chile, New Zealand and Singapore under its former name "Trans-Pacific Strategic Economic Partnership" and came into effect in 2006 with a vision of comprehensive trade liberalization being implemented by 2015, but between 2010-2013 the other 8 nations( including Japan, Australia, Malaysia,Vietnam) had joined led by the USA, of course making it 12 nations in total. 

TPP Objectives

The TPP stated objective is  to achieve extensive liberalization of both goods and services, and entails comprehensive coverage of trade in services, investment, government procurement, non-tariff measures, and many other regulatory areas 
including Intellectual Property.

Size and Power  

This Partnership is looked upon as another geopolitical power struggle between the US and China's emerging influence in the Americas and Asia-Pacific hence we must asses its economic size and power to really gain an appreciation of its impact on global trade, but also consider the possibilities of more Asian-Pacific nations joining the TPP.

Although the United State is almost twice the size in population and economy of the other members: Trade among TPP partners amounted to more than $2 trillion in 2012, which can be compared to World Trade Organization (WTO) global trade valued $18.3trillion for that period, TPP trading would equal 11% of all trade.

TPP nations are a 40% share of all United States world trade with the North American Free Trade(Canada,Mexico,USA) and Japan the majority of that trade.

In terms of populations according to the Population Reference Bureau (PRB) 2014 World Population Data Sheet, .the total American TPP members which stands at 555 million, more than half the total population of the Americas (971 million), is significantly larger than the Asian population figures which amount to no more than 256.6 million (285 if you add Australia and New Zealand), compared to Asia’s total population of 4.3 billion: almost half of the Asian contingent is accounted for by one member, Japan: Converted to percentage of worlds population would be 12%.

Criticism and Concerns 

Opponents of the Trans-Pacific Partnership says its a secretive, multinational trade agreement that threatens to extend restrictive intellectual property (IP) laws across the globe and rewrite international rules on its enforcement. 

The fear the deal may extend the scope of patents in sectors such a medicine and prevent the distribution of generic drugs.

With the certain deregulation of the Private Sector seen also as negative by pro consumer advocated; there will easier flow of companies and their revenue, leading to possible loss of  employment and outsourcing of local jobs.

Continued currency manipulation by some members;currency manipulation is characterized by persistent current account surpluses, and accumulation of massive quantities of foreign currency reserves.

And with the rigidity of trade and harmonization regulation to ensure equality being proposed, opponents say that smaller economies will have less room to grow and develop.

How TPP will Affect The Caribbean

The  magnitude of the affect that the Trans-Pacific Partnership is still hard to predict as nations still negotiate and hence we await the final agreement, if they are successful in reaching there:
The European Center for International Political Economy(ECIPE) report: "Mega-Regional Trade Agreements: IMPLICATIONS FOR THE AFRICAN, CARIBBEAN, AND PACIFIC COUNTRIES" has provided some insight into how these two Free Trade Agreements would affect the African, Caribbean and Pacific(ACP) countries and provided some recommendations going forward:
For the Caribbean specifically, ECIPE said that the TPP may have a significant impact on trade, with the USA accounting for close to 35% of the Caribbean’s exports while the EU and the rest of the TPP account for 11% and 8% respectively. 

Also that there are a number channels through which mega-regional agreements such as the TPP can impact on ACP countries. The first is the direct effect that mega-regional agreements can have on existing ACP access to EU and USA markets on preferential terms not available to middle and high-income countries. The second channel is the impact that the reduction of non-tariff measures and the harmonization of standards within the TPP can have on either raising or reducing export costs for ACP countries. 

What Must We Do

Some ECIPE recommendations for ACP countries include:

ACP countries continuing to push for increased and more targeted aid for trade, development and should also bolster their domestic systems for receiving and utilizing this assistance these tools should be used to cater for the country’s domestic institutional, political economy, and governance constraints.

Conducting national assessments of how we are positioned in the mega regionals “game”- domestic reform imperatives could best be pursued so that the country is not left too far behind.

Strengthening and widening regional economic integration:  enlarging the regional economic space will provide some attraction to outside investors, particularly if the transactions costs of accessing regional markets can be made less burdensome or, even better, attractive.

Without "high-level" government and policy intervention Caricom and its Caricom Single Market and Economy (CSME) will be on the receiving end of whatever trade deals, regulatory  changes, environmental and intellectual property rights agreements result from this new arrangement with no way out. 

Next Time we analyze the Transatlantic Trade and Investment Partnership(TTIP).

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