Sunday, May 19, 2024

TPP plots to cripple China

Five years in the making and involving 40 percent of world’s trade, the Trans Pacific Partnership (TPP) has been signed between United States and 11 other countries, namely, Canada, Mexico, Chile, Peru, Australia, New Zealand, Japan, Malaysia, Singapore, Vietnam and Brunei, concerning over 800 million people.

The deal is a thinly-disguised attempt by the United States to encircle China and cripple its plan for One Belt, One Road (OBOR) which aims to integrate Asia by the Asians for the overall growth of the region. US, who finds it economic, political and military grip on Asia slipping, have thrown its last dice. Other nations have primarily agreed to invest in US’ crumbling proposition.

Don’t take my word alone for it. No less than President Barack Obama claimed to Wall Street Journal: “If we don’t write the rules, China will write the rules,” Senator Charles E. Schumer has professed the deal’s stated goal is to “lure” other countries “away from China.” A prominent US columnist has described the deal as a “comprehensive trade pact that could help cement our dominance over China in Asia.”

This TPP is no ordinary trade agreement.

It’s focus is to dismantle “non-tariff barriers” to business and kick out any regulatory measure to protect labour, consumers and the environment. All countries involved will have to submit themselves to multinational corporations and that’s why its largest proponents have been big Silicon Valley firms, Hollywood studios and the pharmaceutical industry.

The deal, under Investor-State-Dispute Settlement (ISDS) process, allows corporations to seek restitution against states in an international arbitration court if their profits are hurt. The protection thus offered, say to a pharmaceutical giant, wouldn’t allow any generic, cheap drugs to be made available to masses. Tens and thousands of Vietnamese HIV patients, for instance, would be deprived of live-saving drugs within their means.

Another provision allows corporations to use the long arm of law to crack down on any leak through a computer system. It would turn whistleblowers into an outlaw. For TPP, corporations, and not the people, are the priority. Sovereignty would pass on from states to corporations. The TPP has been achieved in secrecy and the world wouldn’t know the details for years.

It’s primarily a deal to isolate China from the rest of Asia. Most Asian nations have begun to invest in closer ties with the Beijing. China is the top trading partner of over 120 countries. It’s aiming to internationalize its currency renminbi as an alternative to dollar; it has invested in multilateral institutions, such as the Asian Infrastructure Investment Bank (AIIB) to counter the might of IMF and World Bank. US, through TPP, seek to scuttle such moves. If TPP succeeds, then US would look to bring more nations under its umbrella in the second round in a bid to bring China on its knees.

Under TPP, American multinationals would look to off-shoring, low-cost alternatives to China. Southeast Asian nations—Malaysia, Singapore, Vietnam and Brunei—are strategically key nations. They get preferential access to US markets and it would hurt China’s export competitiveness. Vietnam, for instance, could redress its spiraling trade deficit against China. Its textile and garment industry relies on Chinese material. Nations such as Brunei and Singapore can’t wait for TPP to get operational. They possess enormous capital but their domestic market is limited. Singapore would be a magnet for investment as it strictly enforces intellectual property rights and has favourable tax climate. Its financial, shipbuilding and petrochemical industries could zoom ahead. Malaysia would benefit with greater access to new export markets for its natural resources.

The biggest obstacle to regional trade in Asia is the inadequate network of infrastructure—and not high tariffs and protectionist policies. World Economic Forum concluded in 2013 that world GDP could rise by up to six times by reducing the supply chain barriers instead of removing all import tariffs. China’s stress on infrastructure and its AIIB initiative is a step in this direction. TPP holds no such promise.

The AIIB will become operational in 2016 with $100 billion initial budget. It’s a sign of its merit and lure that despite pressure from the United States, a host of US’ key allies—Australia, France, Germany, Saudi Arabia, South Korea and the United Kingdom—have joined Beijing’s development bank. The AIIB is intended to push China’s OBOR initiative—an attempt to modernize two ancient trade routes—the Silk Road Economic Belt lining China with Europe through Central Asia; and the 21st century Maritime Silk Road, aligning China with Southeast Asia. If China succeeds it would become the engine of world’s development growth—a prospect which US abhors.

The entire premise of US’ pivot to Asia is that it alone can bring peace and stability in the region—a kind of protection racket run by low-grade thugs, as geopolitical analyst Tony Cartalucci put it. Ironically, it’s only the US which has made Asia unstable with its multiple wars and disruptions in the region. By not including China in TPP, a country which is region’s largest economy and trading partner of Asia-Pacific countries, US have shown its hand.

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