1. Negotiations
2. CPTPP

International forum on the present and future of the Trans-Pacific Partnership Agreement

International Strategy Center | 2014.5.7

International forum on the present and future of the Trans-Pacific Partnership Agreement

Research Paper 11

by Song, Daehan
Translated by ISC

On April 18 and 19 2014, organizers, activists, and intellectuals from New Zealand, the United States, Taiwan, Japan, and Korea gathered in Seoul to discuss the implications of the Trans-Pacific Partnership Agreement and to strategize ways to stop it. The international forum was set in advance of US President Obama’s visit to Korea on the 25 th as it was expected President Park would officially announce South Korea’s joining the TPP.

Professor Jane Kelsey, of the University of Auckland in New Zealand, laid out the overall framework for the TPP: “Before Japan joined, it was the US + ten other countries, now it’s the US and Japan + 10 other countries.” Even as countries pursue their own interests, they must do so within the framework of these two countries. Mashima Yositaka of Nounminren added that while Japan is attempting to spread a less virulent type of free trade agreement than the US, it is nonetheless virulent.

TPP Goes Beyond the KORUS FTA

Presenters took turns debunking the popular belief in Korea that since the KORUS FTA – upon which the TPP is modeled – has already been implemented joining the TPP will result in few additional costs to South Korea. The TPP contains both provisions not in the KORUS FTA and joining would also require concessions to each member country. Thus, South Korea will not only be forced to bear costs greater than the KORUS FTA, but also greater than the TPP.

Professor Kelsey noted that the TPP contains provisions not included in the KORUS FTA: regulatory coherence, state owned enterprises, and currency manipulation. Regulatory coherence goes “behind the border” and into domestic regulations and policies. It attempts to standardize regulations and policies among the participating countries. Given the TPP’s deregulating thrust and its various tools for corporate and investor intervention in policy making, [1] the regulations and policies would cohere around greater protections for and deregulation of corporations and investors. The chapter on state owned enterprise (SOE) would reduce government’s ability to give preferential treatment for SOEs. Given the additional public and social responsibilities of SOEs, forcing them to compete on an equal level with corporations whose sole concern is profit maximization will be setting them up to fail and eventually be privatized. Korean SOEs such as Korea Post (i.e. postal service) and the National Health Insurance Corporation would be hurt.

Jejun Joo, of the National Task Force on the TPP and FTA in Korea, also mentioned that signing the TPP would eliminate any possibility of renegotiating the elimination of the KORUS FTA’s ISD provision, since the TPP would further commit Korea to it. After opposition to the rushed ratification of the KORUS FTA in 2011, the Lee Administration promised to renegotiate the ISD in three months. In April 2014, the Park Administration canceled this unfulfilled promise. The Korean government has already spent 30 billion won (about 30 million dollars) fighting an ISD arbitration suit brought by Lonestar in 2012. If it loses, the Korean government may have to pay out 4.6 trillion won (about 4.6 billion dollars). Seo Sang Beom of the Korean Minbyun (Lawyers for a Democratic Society) added that the ISD has already discouraged corporate regulations.

Secondly, Lori Wallach, of Trade Watch in the US, predicted that in the bilateral negotiations process, the US would demand various concessions such as the elimination of the bonus-molus system [2]; the weakening of consumer privacy laws to allow the off-shoring of Korean consumer financial data; and the enforcement of organic certification. Furthermore, the US will likely target other “trade barriers”: industrial subsidy policy (i.e. policy-oriented lending by the Korea Development Bank); elimination of screen and broadcast quotas; elimination of policies lowering medicine prices; and the elimination of investment barriers.

Furthermore, concessions will likely take place even after negotiations are finalized. This is because for the TPP to come into effect in the US, it must be ratified by the US Congress. Since President Obama does not have Fast Track Authority [3] and is not likely to get it, [4] Congress can refuse to accept concessions already made by the US while demanding further concessions from other countries to ratify the agreement. For example, majorities in both houses of Congress have stated that they will demand measures against currency manipulation, which the Obama Administration has not brought up as a US demand during negotiations. Given the definition of currency manipulation, [5] this will hurt Japan, Malaysia, Vietnam, and South Korea once it joins.

Impact upon Japan

Ichimura Dadahumi, of the Movement of People Against the TPP, provided a brief history of the TPP in Japan. Prime Minister Kan Naoto, of the Democratic Party of Japan, first expressed interest in joining the TPP on October 2010 amidst heightened tensions between Japan and the US around the US base in Okinawa. He later admitted to not knowing what he was getting into. Anti-TPP movement formed in December of that year. Later, Prime Minister Shinzo Abe, of the Liberal Democratic Party, announced Japan’s joining of the TPP in 2013, despite his campaigning against the TPP. He held talks with the US and accepted most of its demands on auto and beef.

Masima Yositaka, of Nounminren a member of Via Campesina, presented on the impact of the TPP on Japanese agriculture. The opening up of Japan’s markets by the TPP would impact Japanese people by decreasing food self-sufficiency (based on calories) from 39% to 13%. This would violate Japan’s food sovereignty and likely aggravate global hunger as Japan already consumes 10% of the global food market while only comprising 2% of its population. In addition, the US also wants to remove Japanese restrictions on US mad beef and GMO labeling.

Joining the TPP is in line with the government’s plan to reduce wheat, rice, and sugar production and shift the remaining farming from peasants to large scale farmers. This would undo the agricultural reforms carried out after World War II, when Japan eliminated the landlord system and focused food production on thousands of small peasant families. This would also decrease land productivity, as peasant agriculture has higher productivity per hectare than industrial farming. Small peasant agriculture in Japan and Korea feed up to 9 and 5 people per hectare, unlike large scale farming in the US and Australia which feed 0.9 and 0.5 people per hectare. In addition, it would have devastating effects on rural areas in Japan like Hokkaido which produce Japan’s five top agricultural products: rice, pork, beef, sugar, and wheat.

Current State of TPP negotiations

According to Professor Kelsey, little was achieved in the last TPP ministerial meeting on February due to the unresolved issue of agricultural access to US and Japanese markets. Yet, before the agricultural access issue is resolved, an agreement must first be reached between the two countries. Secondly, four main issues remain: medicines, state owned enterprises, investment, and the environment. However, the latter issues are likely to be resolved through political tradeoffs once agricultural access is resolved. Given the latest announcement that President Obama and Prime Minister Abe failed to reach an agreement, it appears that progress is stalled.

Political Landscape in Japan and the United States

After coming into power, the Liberal Democratic Party (LDP) had changed its stance to supporting the TPP. The Democratic Party of Japan contains proponents and opponents. Yet, many of the opponents failed to get re-elected. About 50% of Japanese people support the TPP, but many of them do not fully know what it is about because the media only focuses on the agricultural aspects without covering its impact on the lives of Japanese people. Mr. Sakaguchi from the National Federation of Trade Unions of the Agricultural Cooperative Association added that by framing the TPP as only negatively impacting the 5% of the farming population, the government is attempting to divide and conquer the public. Lori Wallach spoke on the impact of the 2007 granting of Fast Track Authority for the KORUS FTA on Congress’s current unwillingness to grant Fast Track Authority to the President again. As mentioned above, majorities in both houses of Congress have stated their unwillingness to ratify the TPP without further concessions such as regulations against currency manipulation and greater access to Japanese agriculture.

Anti-TPP Struggles in New Zealand, Japan, and the US

Professor Jane Kelsey covered the struggles currently taking place against the TPP. The strongest have been in the US, New Zealand, Australia, Malaysia, and Japan. While the campaigns shared a common understanding on the TPP’s attack on democracy, its secrecy, and its impacts on health and the internet, they are also each tailored on the issues most relevant and compelling to each country. For example, the protest that took place in 2010 in Auckland, New Zealand focused on the TPP’s pharmaceutical provisions and foreign investment. In the United States, campaigns have been waged to get Congress to deny President Obama’s request for Fast Track (i.e. Trade Promotion) Authority as a way to throw a wrench in the multilateral negotiations.

Ways to stop the TPP

Jejun Joo echoed other participants’ strategy of attacking the secretive nature of the TPP negotiations within Korea. He also emphasized the need for peasants, workers, and consumers to fight together against the TPP. Given the great impact of the TPP on small scale agriculture, peasants have been leading the struggle. However, there is great potential in mobilizing workers against the TPP. First, joining the TPP will have the same effect as entering into an FTA with Japan. Japan’s cheaper auto prices will have a negative impact on the Korean auto and auto parts industry and thus create the conditions for auto worker mobilization. Furthermore, given the TPP attack on state owned enterprise and the great pressures to privatize, it is possible to mobilize public workers. In addition, consumers can also be organized around the TPP impacts on sanitary and phytosanitary measures which will allow the entry of GMO crops and beef older than 30 months (and hence more vulnerable to mad cow disease). Jejun also emphasized the importance of planning long term fights in addition to short term ones. Given the protracted struggle to ratify the KORUS FTA, the ratification of the TPP will likely also be a long drawn out one.

Professor Jane Kelsey covered the various steps in the negotiation process and possible moments of struggle. Currently, countries are working to establish a political deal which would afterwards need to be translated into legal texts. Thus, the first step would be to make a political deal impossible. Yet, even after a political deal is reached, there would be a 6-9 month window when it is being translated into legally enforceable text. This would offer another time window for anti-TPP movements to stop it. In addition, the Malaysian government promised to release the official document before it signs it. Once the document is released it would be analyzed and disseminated for use by local anti-TPP movements.

Future TPP Meetings

Professor Kelsey laid out a possible timeline for future TPP negotiations: Obama’s trip to Japan, Korea, and Malaysia April 22-28; chief negotiators meeting in Vietnam May 12-15; APEC ministers meeting in China May 17-19; G20 trade ministers meeting in Sydney mid- July; and an APEC meeting in China on November 7-11. If nothing is achieved by the end of the year, the negotiating parties will likely settle for an agreement lacking substance that is just a cosmetic framework to sign on to.

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