Credit: Bigstock

By Martin Khor
PENANG, Feb 27 2017 (IPS)

Recently a very interesting article on why there are inequalities in access to health care and how  medicine prices are beyond the reach of many people was published in The Lancet, one of the most prestigious medical journals in the world.

The authors, who are eminent experts in development and public health, pinpointed trade and investment agreements for being one of the greatest health threats.

Reading their powerful commentary leads one to think:  What’s the point of having wonderful medicines if most people on Earth cannot get to use them?   And isn’t it immoral that medicines that can save your life can’t be given to you because the cost is so high?

The article picks on the Trans-Pacific Partnership (TPP), together with the Transatlantic Trade and Investment Partnership (TTIP) as the worst culprits.  It says the TPP’s chapter on intellectual property is “particularly intrusive to health and restricts access to the latest advances in medicines, diagnostic tools and other life-saving medical technologies.”

Martin Khor

This agreement, say the authors, contains many provisions that “strengthen patent protection that provides monopolies and inevitably leads to high prices.”   They mention provisions that extend the patent terms beyond 20 years required by the WTO; lower the criteria of what can be granted  patents; and “data exclusivity” provisions that put up barriers to generic manufacturers entering markets after the expiry of patents.

This viewpoint article was co-authored by Prof Desmond McNeill (University of Oslo), Dr Carolyn Deere (Oxford University); Prof Sakiko Fukuda-Parr (The New School, New York, and formerly the main author of the UNDP’s Human Development Report for many years), Anand Grover (Lawyers Collective India and formerly the Human Rights Council’s Special Rapporteur for the Right to Health); Prof Ted Schrecker (Durham University, UK) and Prof David Stuckler (Oxford University).

They said that growing evidence suggests that the agreements “will have major and largely negative consequences for health that go far beyond earlier trade agreements.  This situation is particularly disturbing since the agreements have created blueprints for future trade agreements.”

The Nobel Peace Prize winning medical group, Medecins Sands Frontieres (MSF), is even more scathing in its criticism.  “The TPP represents the most far-reaching attempt to date to impose aggressive intellectual property standards that further tip the balance towards commercial interests and away from public health….  In developing countries, high prices keep lifesaving medicines out of reach and are often a matter of life and death.”

This condemnation is just as relevant despite President Donald Trump withdrawing the United States from the TPP. There are efforts underway for the remaining 11 countries to put the TPP into effect without the US.

Moreover, these countries have prepared changes to their laws and policies to comply with the TPP’s provisions, and may implement these even if the TPP actually never comes into effect.

This would be an immense tragedy for public health, because most of these countries did understand that the chapter on intellectual property would have negative effects, but they accepted it as part of a bargain for getting better market access, especially to the US.

Since the TPP is now in suspension, it does not make any sense for the countries to change their patent laws when the benefit of market access is no longer available.

During the TPP negotiations, the other countries managed to dilute some of the very extreme demands of the US, but only to a small extent.  The final intellectual rights chapter still reflects the extreme proposals of the US.

With the TPP in limbo and perhaps in perpetual suspension, there is really no reason why the provisions that have adverse effects should be implemented in the countries that had negotiated the TPP, when there are no benefits to be obtained to offset them.
Moreover, the major developed countries can be expected to make use of the TPP’s intellectual property chapter to inject into negotiations for new trade agreements, for example the RCEP, the Asian regional agreement.

Negotiators, especially from developing countries, and civil society groups should thus be vigilant that the TPP’s provisions that have adverse effects on health are not reproduced in other trade agreements.

Members of the World Trade Organisation are required to implement its intellectual property agreement, known as TRIPS, but they are not obliged to take on any additional obligations.

There are many provisions in TRIPS that allow a country to choose policies that are pro-health.  The TPP has clauses that prevent a country from making use of many of these options because they are “TRIPS-plus”, going beyond what the TRIPS obligations.

First, there is a TPP provision that lowers the standards a country can adopt to grant a patent.  Some patent applications are not for genuine inventions but are only made to “evergreen” a patent, to enable its term to continue after it expires.  Under TRIPS, a country can choose not to grant secondary patents for modifications of existing medicines.

The TPP (Article 18.3) requires countries to grant patents for at least one of the following modifications:  new uses of a known product, new methods for using a known product or new processes for using a known product.  Examples include a drug used for treating AIDS is now granted a new patent for treating hepatitis, or a drug in injection form is given a new patent in capsule form.

Second, a provision that enables extending the patent term beyond the 20 years required by TRIPS.   Most countries now count this 20 years from the date of filing the patent application.

The TPP requires the patent term to be extended beyond that if there are “unreasonable” delays in issuing the patents (Article 18.46) or if a delay is caused by the marketing approval process.”  (Article 18.48).     Extending the patent term means delaying affordable treatment for patients for so many more years.

Third, a provision (Article 18.50)  to create “data exclusivity” or “market exclusivity”, that prevents drug safety regulators from using existing clinical trial data to give market approval to generic drugs or biosimilar drugs and vaccines.   Under TRIPS, the clinical test data of a company can be used by a country’s drug regulatory authority as a basis to give safety or efficacy approval for generic drugs with similar characteristics, thus facilitating the growth and use of generic drugs.

Under the TPP, the data of the original company is “protected” and approval of similar drugs on the basis of such data is not allowed.  The period of “exclusivity” is at least 5 years for products containing a new chemical entity, or 3 years for modifications (a new indication, new formulation or new method of administration) of existing medicines.

Fourth, a provision on Biologics (Article 18.51).  For the first time in a trade agreement, the TPP  obliges its members to undertake data protection obligations for “biologics”, a category of products for treating and preventing cancer, diabetes and other conditions.  They are very expensive, some priced above $100,000 for a treatment course, and the clause will enable the prices to remain high for longer periods.   The exclusivity for biologics is for at least 8 years, or 5 years if other measures are also taken.

These provisions on exclusivity give drug companies extra protection, even if the product is not patented or if the patent has expired.  The drugs will be out of reach except for the very wealthy for longer periods.

Fifth, a provision (Article 18.76) that requires TRIPS-plus extra enforcement of intellectual property.  Countries are obliged to provide that the right holder can apply to detain any imported product that is suspected to be  counterfeit or having “confusingly similar trademark”.

This can block legitimate generic medicines from entering the country.   There have already been many cases of drugs being detained and later released when no infringement was found, thus needlessly delaying treatment to patients. The provision will increase the incidence.

All in all, these TRIPS-Plus TPP obligations would make it more difficult for patients to obtain cheaper generics. If these clauses are widely adopted in other trade agreements and made into national laws, this would shorten the lives of millions of people who would be denied treatment.

For example, many millions of people worldwide are afflicted with Hepatitis C, which can lead to liver failure and death. They need the new medicines that have nearly 100% cure rates close but the prices are over $80,000  for a 12-week treatment course.  Even with discounts, very few can afford this.

Some developing countries, making use of TRIPS flexibilities, are able to provide treatment with generic drugs at around $500 per patient, a very small fraction of the original drug’s price. But if the TPP clauses are translated into domestic law, this access could be blocked.

People in the developing countries are the most affected by patent over-protection, but patients in developed countries are not spared. The mainstream Time magazine in October 2016 listed the need to “Reform the Patent Process” as one of the issues the US Presidential election should address.

The Time article commented that many people believe drug companies are “gaming” the system.  “Instead of focusing on developing new cures, they are spending millions tweaking the way existing drugs are administered or changing their inactive ingredients.  Those moves have the effect of extending a drug’s patent and upping the amount of time it can be sold at monopoly prices, but they don’t necessarily help consumers.”

It is high time for a re-think to the system of drug patents.  At the least the situation should not be allowed to worsen further, which would happen if TRIPS-Plus measures are adopted.

The lives and health of millions are at stake.  Sometimes this is forgotten or put as a low priority when pitted against the promise of getting more exports in a free trade agreement.

But with the TPP in limbo and perhaps in perpetual suspension, there is really no reason why the provisions that have adverse effects should be implemented in the countries that had negotiated the TPP, when there are no benefits to be obtained to offset them.

More generally, in all countries, policy makers and people should be on guard not to agree to TRIPS-plus clauses in the trade agreements that they negotiate or sign.

Excerpt:

Credit: Bigstock

By Martin Khor
PENANG, Nov 24 2016 (IPS)

Even before taking office, President-Elect Donald Trump and the policies he promised during his campaign are already having a worldwide impact in at least three areas —  global finance, trade and climate change.

If his election is described as an earthquake, the aftershocks are now being felt.

Global funds are starting to move out of many developing countries, reducing the value of their currencies and causing great economic uncertainty.

The Trans Pacific Partnership (TPP) looks like it will fade away, as Trump has said he would give notice of the US withdrawing from the pact on his first day of office.

Earlier, President Obama, seeing the signs on the wall, gave up on efforts to give it a final push through Congress.

And delegates meeting at the two-week annual UN climate conference that ended in Marakesh on 19 November were all speculating whether a President Trump would carry out his campaign threat to pull the US out of the Paris Agreement and what then would happen to future international climate action.

Trump has since softened his stand, telling the New York Times on 22 November that he has “an open mind” on the Paris agreement.  But he has also indicated he won’t follow through on the Obama administration’s domestic measures to reduce Greenhouse gases.

Martin Khor

These are only some of initial effects in anticipation of a Trump presidency.   As the President Elect  begins to fill in his cabinet positions, the world also wondered what is in store with regard to new US policies on immigration, the UN, the Middle East, Asia and even NATO.

The first concrete real-world effect was on currencies and the flow of funds in developing countries. Equities and currencies in many countries in Asia and elsewhere have taken a hit since the Trump election victory.

The US dollar has strengthened significantly in expectations that Trump will embark on massive spending on infrastructure, thus increasing expectations of inflationary pressures and of the Federal Reserve raising interest rates earlier than expected.

Many billions of dollars of funds that had moved to emerging economies in search for higher yield are returning to the now-attractive USA, and this reverse flow is expected to continue or increase.

This can cause volatility and havoc in many emerging economies, in the wake of an exit of a sizable portion of the hundreds of billions of dollars of foreign funds.

Many developing countries are vulnerable as foreign funds in recent years have increased their ownership of their government bonds denominated in domestic currencies, and there is also higher participation of foreigners in their stock markets.

This makes them even more susceptible to high outflows of capital, and to the weakening of their currency levels, making it more difficult to service external debt.   The lesson from the boom-bust financial cycle is that what comes in as short-term funds will most likely move out when conditions change.

On the TPP, the effects of the US elections came swiftly. The US Congress must ratify the TPP for it to come into effect and the last opportunity is during the “lame duck” session before Trump’s inauguration on January 20.

But immediately after the elections, Senate majority leader Mitch McConnell Dougall announced there would be no vote on the TPP during this year.

Sensing there is no hope for a TPP bill to succeed, Obama signaled he would give up the effort.  As Obama is the true, and often lonely, champion of the TPP, while Trump had pledged to kill it during his campaign, there is almost no prospect for the TPP to be ratified in the US.

Many billions of dollars of funds that had moved to emerging economies in search for higher yield are returning to the now-attractive USA, and this reverse flow is expected to continue or increase
At the recent summit meeting of the Asia-Pacific Economic Cooperation held in Lima, leaders of the TPP countries, including Obama, were holding on to the possibility that Trump on taking office would change his mind on the TPP.

After all, President Bill Clinton pushed through the North American Free Trade Agreement (NAFTA) though he opposed it before becoming President and Obama had signed the TPP although he too had earlier been against such agreements.

However, Trump dashed hopes that he too would do an about-turn when he announced on 20 November that on his first day as President he would issue a notification of intent to withdraw from the TPP which he called a “potential disaster.”

Without the US on board the TPP cannot survive, as at least six countries with 85% of the combined GDP of all the 13 TPP countries need to ratify the agreement for it to come into effect.

The near-certain death of the TPP is due not so much to Trump as to the public mood in the US that has become so strongly against such trade agreements that it was unlikely there would be enough votes to get it through the Congress, whoever won the election.

A larger issue is what overall trade policy Trump will adopt.  It is almost certain that the other big agreement, the US-European Union Transatlantic Trade and Investment  Partnership (TTIP), will also cease negotiations.

And NAFTA may be re-negotiated, as this was a Trump campaign promise, though no one knows the parametres of such a re-negotiation.

Trump has also vowed to slap on huge tariffs on imports from China and Mexico.  Doing so would be against basic World Trade Organisation rules, so Trump might have to discard his campaign threats – or else hell will break loose at the WTO.

In any case, the future of the WTO’s negotiating agenda will have to await the unveiling of President Trump’s overall trade policy.

Thus the Trump presidency will have a huge impact on the future of the multilateral trading system as well as on bilateral trade agreements.

Even more is at stake in climate change, widely described as the biggest crisis facing the world.  During the campaign, Trump described climate change as a hoax and vowed to pull the US out from the Paris Agreement, which Obama had joined with other countries to ratify and which came into force in record time on 4 November.

There was a sombre mood at the UN Climate Change Convention conference in Morocco that ended 19 November.  Delegates and activists alike speculated in the corridors on what would happen if the US leaves the Paris Agreement or even the Convention altogether.

French President Francois Hollande told the conference that “the United States, the second largest greenhouse gas emitter, must respect the commitments it has undertaken,” stressing that the agreement was “irreversible”.

If the US leaves the Paris Agreement, the effects could be disastrous.  When the US under President George W. Bush withdrew from the Kyoto Protocol in 2001, it didn’t have an immediate effect on other countries.

But by 2011, Japan, Russia and Canada had also either pulled out of the protocol or refused to participate in its second commitment period, and the protocol is now hardly operational.  There are legitimate concerns the same fate may befall on a Paris Agreement without the US.

Freed from the commitment the US made under the agreement to cut its Greenhouse Gas emissions by 26-28 percent below 2005 levels by 2025, a Trump administration might more easily un-do Obama’s executive orders and the Environment Protection Agency rules to cut emissions from existing power plants.

A ray of hope was lit on this depressing scenario at least temporarily when Trump told journalists at the New York Times that “I have an open mind on it”, when asked about the Paris agreement.

The chances of Trump becoming a climate co-operant if not exactly a champion are not however bright.  He has announced that his choice for EPA head is Myron Ebelle, known for his skeptical views on the “myths of climate change.”

And one of his priorities on assuming office would be to pump more oil and gas and restore the coal industry.  Reversing Obama’s climate change regulations are expected to follow.

If the US remains in the Paris Agreement, the other countries will struggle with it to try to hold it to its commitments.  And at some point, if it is clear it no longer believes in meeting its pledged targets, it may decide to leave, or to weaken the agreement to accommodate its new position.

Unless there is a change of heart when Trump becomes President, these are the gloomy prospects on climate change cooperation.  We may be back to the pre-Obama days when the US under Bush was in denial of the need to act on climate change either domestically or internationally.

This time the situation is much more serious, as the next few years constitute the last window of opportunity for action to prevent a global climate change catastrophe.

These three aftershocks after the election earthquake are quick signs that confirm that not only Americans but the world at large are in for uncertain and uncomfortable times ahead.

We are in for a roller coaster ride, and the world as well as the world order may never be the same again.

Excerpt:

Activists from Chile, Mexico and Peru opposed to the Trans-Pacific Partnership (TPP), during a meeting in January in the Mexican capital, which was also attended by representatives of civil society from Canada and the United States. Credit: Emilio Godoy/IPS

By Emilio Godoy
MEXICO CITY, Jun 20 2016 (IPS)

Civil society organisations from Chile, Mexico and Peru are pressing their legislatures and those of other countries not to ratify the Trans-Pacific Partnership (TPP).

The free trade agreement, which was signed in New Zealand on Feb. 4, is now pending parliamentary approval in the 12 countries of the bloc, in a process led by Malaysia. Chile, Mexico and Peru are the three Latin American partners.

The treaty will enter into effect two months after it has been ratified by all the signatories, or if six or more countries, which together represent at least 85 percent of the total GDP of the 12 partners, have ratified it within two years.

“We are seeking a dialogue with like-minded parliamentary groups that defend national interests, and we provide them with information. We want to use the parliaments as hubs, and we also want dialogues with organisations from the United States, Canada and the Asian countries,” Carlos Bedoya, a Peruvian activist with the Latin American Network on Debt, Development and Rights (LATINDADD), told IPS.

Civil society groups in Peru created the “Our Rights Are Not Negotiable” coalition, to reject the most controversial parts of the agreement.

With similar initiatives, “A Better Chile without TPP” and “A Better Mexico without TPP”, non-governmental organisations and civil society figures are protesting the negative effects that the treaty would have on their societies.

The activists complain that the intellectual property chapter of the agreement stipulates a minimum of five years of data protection for clinical trials for Mexico and Peru. And in the case of biologics, the period is three years for Mexico and 10 years for Peru.

In Chile, in both cases it will be five years of protection, in line with its other free trade agreements.

These barriers delay cheaper, generic versions of drugs from entering the market for a longer period of time.

Another aspect criticised by activists is that the member countries must submit disputes over investments to extraterritorial bodies, like the International Centre for Settlement of Investment Disputes (ICSID).

The alliances against the TPP also criticise the provisions for Internet service providers to oversee content on the web in order to control the distribution of material that violates copyright laws.

Latin American activists complain as well about the U.S. demand that the partners reform domestic laws and regulations to bring them into line with the TPP, in a process separate from or parallel to ratification by the legislature.

In addition, they protest that Washington was given the role of certifying that each partner has faithfully implemented the agreement.

The TPP emerged from the expansion of an alliance signed in 2006 by Brunei, Chile, New Zealand and Singapore, within the framework of the Asia-Pacific Economic Cooperation (APEC) forum. These countries were later joined by Australia, Canada, Japan, Malaysia, Mexico, Peru, the United States and Vietnam.

A girl holds a sign saying the TPP means Transferring Fully our Powers, during a protest against the trade agreement in Santiago, Chile. Credit: Courtesy of “A Better Chile without TPP”

The agreement encompasses areas like customs, textiles, investment, telecommunications, e-commerce, dispute settlement, and labour and environmental issues.

The economies in the bloc represent 40 percent of global GDP and 20 of world trade.

The TPP “has negative effects on health and economic development. It won’t benefit our countries. But there will be a lengthy debate, because it contains issues that generate conflict,” Carlos Figueroa, a Chilean activist with his country’s coalition against the treaty, which encompasses 99 organisations, prominent individuals and five parliamentarians, told IPS.

Among its actions, the “A Better Chile without TPP” organises mass email campaigns to petition the government against the accord, promotes campaigns over the social networks, holds public demonstrations and is lobbying in parliament to block approval of the treaty.

In Mexico, conservative President Enrique Peña Nieto has enough votes in the Senate, which is responsible for ratifying international accords, to approve the treaty, with the votes from the governing Institutional Revolutionary Party, its ally the Green Party, and the opposition right-wing National Action Party.

In Chile, socialist President Michelle Bachelet’s centre-left alliance will be able to count on enough votes from the right to ratify the agreement.

And in Peru, the party of President-elect Pedro Pablo Kuczynski, a former World Bank economist and Wall Street banker in favour of free trade, has only a small number of seats in Congress. But a rival right-wing party, Fuerza Popular, which has a broad majority in the legislature, will approve the TPP, after the new government takes office in July and the new lawmakers are sworn in.

But furthermore, in Peru, the content of any free trade agreement does not require legislative approval unless it goes beyond what was agreed in 2009 with the United States.

Despite attempts by governments of the countries in the bloc to promote the positive impacts of the TPP, recent reports call the supposed benefits into question.

“Global Economic Prospects; Potential Macroeconomic Implications of the Trans-Pacific Partnership”, a report published in January by the World Bank, projected that the treaty could boost the GDP of its members by 1.1 percent and their trade by 11 percent a year on average by 2030.

In the case of Canada, Mexico and the United States, which have their own free trade agreement, NAFTA, since 1994, the benefit is just 0.6 percent of GDP.

And for Mexico, the positive impact would be even more reduced, because the cuts in import duties give other members of the TPP greater access to the U.S. market, the document says.

Economists from Tufts University in the U.S. state of Massachusetts had a more negative view of the trade deal, predicting “increasing inequality and job losses in all participating economies.”

“Trading Down: Unemployment, Inequality and Other Risks of the Trans-Pacific Partnership Agreement”, a study by the Global Development and Environment Institute at Tufts University, estimates that the TPP would lead to employment loss in all member countries, with a total loss of 771,000 jobs, including 448,000 in the United States alone.

In Mexico, 78,000 jobs would be lost, and in Chile and Peru, 14,000.

The authors estimate that by 2025, Mexican exports will grow 6.2 percent and GDP one percent; Peru’s exports will grow 7.1 percent and GDP 1.4 percent; and Chile’s exports will grow 2.5 percent and GDP 0.9 percent.

For its part, the U.S. International Trade Commission stated May 18, in its report “Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors”, that by 2032 the TPP would boost the U.S. economy by an average of 0.01 percent a year and employment by 0.07 percent.

Enrique Dussel, coordinator of the China/Mexico Studies Center at the National Autonomous University of Mexico, questions Mexico’s involvement in the TPP without evaluating the consequences of further freeing up trade.

“There has been a 20-year learning process to know what works and what doesn’t,” he told IPS. “TPP partners without free trade agreements represent one percent of trade with Mexico and one percent of investment. The question is what do I do with the remaining 99 percent, what focus do I give trade and investment.”

NGOs in Latin America are hoping the U.S. election campaign will limit the debate on the TPP to Congress until the winner of the November elections takes office.

“That gives us a little time to fight against ratification. It will be a long battle,” said Bedoya.

Dussel anticipated three possible scenarios. “In two years it goes into effect; there will be no TPP; or in the United States the new president will call for substantial changes.”

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

By Daya Thussu
LONDON, Jul 1 2015 (IPS)

As the leaders of the BRICS five meet in the Russian city of Ufa for their annual summit Jul. 8–10, their agenda is likely to be dominated by economic and security concerns, triggered by the continuing economic crisis in the European Union and the security situation in the Middle East.

The seventh annual summit of the large emerging economies – Brazil, Russia, India, China and South Africa – also takes place with a background of escalating tensions between Russia and the West over Ukraine and the eastward expansion of the North Atlantic Treaty Organisation (NATO), as well as the growing economic power of Asia, in particular, China.

Daya Thussu

Nearly a decade and a half has passed since the BRIC acronym was coined in 2001 by Jim O’Neill, a Goldman Sachs executive, now a minister in David Cameron’s U.K. government, to refer to the four fast-growing emerging markets. South Africa was added in 2011, on China’s request, to expand BRIC to BRICS.

Although in operation as a formal group since 2006, and holding annual summits since 2009, the BRICS countries have escaped much comment in international media, partly because of the different political systems and socio-cultural norms, as well as stages of development, within this group of large and diverse nations.

The emergence of such groupings coincides with the relative economic decline of the West.

This has created the opportunity for emerging powers, such as China and India, to participate in global governance structures hitherto dominated by the United States and its Western allies.

That the centre of economic gravity is shifting away from the West is acknowledged in the view of the U.S. Administration of Barack Obama that the ‘pivot’ of U.S. foreign policy is moving to Asia.“The major countries of the global South have shown impressive economic growth in recent decades … [it is predicted that] by 2020 the combined economic output of China, India and Brazil will surpass the aggregated production of the United States, Britain, Canada, France, Germany and Italy”

And there is evidence of this shift. In the Fortune 500 ranking, the number of transnational corporations based in Brazil, Russia, India and China has grown from 27 in 2005 to more than 100 in 2015. China’s Huawei, a telecommunications equipment firm, is the world’s largest holder of international patents; Brazil’s Petrobras is the fourth largest oil company in the world, while the Tata group became the first Indian conglomerate to reach 100 billion dollars in revenues.

Since 2006, China has been the largest holder of foreign currency reserves, estimated in 2015 to be more than 3.8 trillion dollars. According to the International Monetary Fund (IMF), China’s gross domestic product (GDP) surpassed that of the United States in 2014, making it the world’s largest economy in purchasing-power parity terms.

More broadly, the major countries of the global South have shown impressive economic growth in recent decades, prompting the United Nations Development Programme to proclaim The Rise of the South (the title of its 2013 Human Development Report), which predicts that by 2020 the combined economic output of China, India and Brazil will surpass the aggregated production of the United States, Britain, Canada, France, Germany and Italy.

Though the individual relationships between BRICS countries and the United States differ markedly (Russia and China being generally anti-Washington while Brazil and South Africa relatively close to the United States and India moving from its traditional non-aligned position to a ‘multi-aligned’ one), the group was conceived as an alternative to American power and is the only major group of nations not to include the United States or any other G-7 nation.

Nevertheless, none of the five member nations are eager for confrontation with the United States – with the possible exception of Russia – the country with which they have their most important relationship. Indeed, China is one of the largest investors in the United States, while India, Brazil and South Africa demonstrate democratic affinities with the West: India’s IT industry is particularly dependent on its close ties with the United States and Europe.

Although the idea of BRIC was initiated in Russia, it is China that has emerged as the driving force behind this grouping. British author Martin Jacques has noted in his international bestseller When China Rules the World, that China operates “both within and outside the existing international system while at the same time, in effect, sponsoring a new China-centric international system which will exist alongside the present system and probably slowly begin to usurp it.”

One manifestation of this change is the establishment of a BRICS bank (the ‘New Development Bank’) to fund developmental projects, potentially to rival the Western-dominated Bretton Woods institutions, such as the World Bank and the IMF. Headquartered in Shanghai, China has made the largest contribution to setting it up and is likely that the bank will further enhance China’s domination of the BRICS group.

Beyond BRICS, Beijing has also established the Asian Infrastructure Investment Bank (AIIB), which already has 57 members, including Australia, Germany and Britain, and in which China will hold over 25 percent of voting rights. Two other BRICS nations – India and Russia – are the AIIB’s second and third largest shareholders.

Such changes have an impact on the media scene as well. As part of China’s ‘going out’ strategy, billions of dollars have been earmarked for external communication, including the expansion of Chinese broadcasting networks such as CCTV News and Xinhua’s English-language TV, CNC World.

Russia has also raised its international profile by entering the English-language news world in 2005 with the launch of the Russia Today (now called RT) network, which, apart from English, also broadcasts 24 hours a day, 7 days a week in Spanish and Arabic.

However, as a new book Mapping BRICS Media – which I co-edited with Kaarle Nordenstreng of the University of Tampere, Finland – shows, there is very little intra-BRICS media exchange and most of the BRICS nations continue to receive international news largely from Anglo-American media.

The growing economic cooperation between Moscow and Beijing – most notably in the 2014 multi-billion dollar gas deal – indicates a new Sino-Russian economic equation outside Western control.

Two key U.S.-led trade agreements being negotiated – the Transatlantic Trade and Investment Partnership (TTIP) and the Trans Pacific Partnership (TPP), and both excluding the BRICS nations – are partly a reaction to the perceived competition from nations such as China.

For its part, China appears to have used the BRICS grouping to allay fears that it is rising ‘with the rest’ and therefore less threatening to Western hegemony.

The BRICS summit takes place jointly with Shanghai Cooperation Organization (SCO) Heads of State Council meeting. The only other time that BRICS and the SCO combined their summits was also in Russia – in Ekaterinburg in 2009.

Apart from two BRICS members, China and Russia, the SCO includes Kazakhstan, Kyrgystan, Tajikistan and Uzbekistan. SCO has not expanded its membership since it was set up in 2001. India has an ‘observer’ status within SCO, though there is talk that it might be granted full membership at the Ufa summit.

Were that to happen, the ‘pivot’ would have moved a few notches further towards Asia.

Edited by Phil Harris    

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

Rally outside the TPP talks in Sydney, Oct. 25, 2014. Credit: SumOfUs/cc by 2.0

By Carey L. Biron
WASHINGTON, Nov 11 2014 (IPS)

For the third year in a row, government negotiators for 12 Pacific Rim countries have missed an internal deadline to reach agreement on a controversial U.S.-led trade deal.

And though negotiators for the accord, known as the Trans Pacific Partnership (TPP), say the process is nearing completion, critics of the deal are expressing optimism that both public opinion and political timing are increasingly against the deal.“TPP proponents know they’re under the clock. The resistance against the TPP is as strong as it’s ever been, and is only growing stronger.” -- Arthur Stamoulis of the Citizens Trade Campaign

“The reason the Obama administration keeps missing deadline after deadline, year after year, is that it’s pushing an extremely unpopular agenda that benefits a handful of big corporations at the expense of the economy, environment and public health in each TPP country and beyond,” Arthur Stamoulis, executive director of the Citizens Trade Campaign, an advocacy group that opposes the TPP, told IPS.

“People and parliaments across the Pacific Rim are starting to realise that the TPP would be bad news for their countries. That includes here in the U.S.”

TPP negotiators confirmed the news on Monday at a regional summit in Beijing. President Barack Obama’s administration, which has been spearheading the TPP talks, had set the meeting of the Asia-Pacific Economic Cooperation (APEC) grouping as a key target for agreement.

President Obama has made the TPP a central part of his attempt to reorient the United States towards Asia – and to economically circumscribe China, which isn’t party to the talks. On Monday, the president himself was in Beijing, where he acknowledged that the TPP process now needed additional political pressure.

“During the past few weeks, our teams have made good progress in resolving several outstanding issues regarding a potential agreement. Today is an opportunity at the political level for us to break some remaining logjams,” the president told trade ministers in Beijing.

“To ensure that TPP is a success, we also have to make sure that all of our people back home understand the benefits for them – that it means more trade, more good jobs, and higher incomes for people throughout the region, including the United States.”

The president said the TPP talks have the possibility of resulting in a “historic achievement”. A statement released by the 12 countries party to the talks suggested that “the end” of the negotiations is “coming into focus”.

Yet disagreements remain, with media reports pointing to agricultural protectionism as proving to be particularly thorny. Others say that substantive frustration remains over a raft of disparate issues, many far from traditional trade concerns – including environmental impact, labour safeguards, medicinal pricing, patent rules and investors’ ability to circumvent national law, among other concerns.

In many ways, it is the broad scope of issues on which the TPP touches that is responsible for strengthening public concern. Now, with President Obama down to his final two years in office, critics are increasingly confident in their ability to stave off agreement.

With the U.S. 2016 president elections likely to heat up as early as the middle of next year, passage of any major trade agreement by U.S. lawmakers would be improbable until 2017 at the earliest.

“TPP proponents know they’re under the clock,” the Citizen Trade Campaign’s Stamoulis says. “The resistance against the TPP is as strong as it’s ever been, and is only growing stronger.”

Corporatist concerns

Last week’s national election here in the U.S. did change the discussion around one issue that would be key for any eventual TPP agreement: whether President Obama is allowed to negotiate unilaterally, or whether he would need Congress’s point-by-point approval of a proposed accord.

Because trade agreements typically touch on so many domestically sensitive issues, U.S. presidents in the past have asked for approval to negotiate without input from lawmakers. Such “fast track” authorities then allow Congress only a single up-or-down vote at the end of the process.

Yet due to concern among U.S. constituents over the potential impact of the TPP on the domestic economy, both houses of the U.S. Congress has been reluctant to approve President Obama’s requests for these authorities. Still, last week’s election some have suggested that this could change.

The issue could now come down to a debate that is taking place within the Republican Party, which increased its majority in the House of Representatives and in January will take over control of the Senate. Yet while the House has consistently opposed passage of fast track authorities for President Obama, the new Republican Senate leadership has suggested that such legislation could now be a key priority early next year.

“Most of [President Obama’s] party is unenthusiastic about international trade. We think it’s good for America,” Mitch McConnell, the top Republican in the Senate and the figure who will set the body’s agenda this coming year, said at a press conference following last week’s election.

“And the president and I discussed that … and I think he’s interested in moving forward. I said, ‘Send us trade agreements. We’re anxious to take a look at them.’”

The new potential movement on fast track authorities has sparked a furious debate among conservatives, particularly between those who have traditionally supported big business and those increasingly concerned about globalisation’s impact on U.S. workers. This division has strengthened since the 2008 economic downturn.

“It’s only in the past few years that we’ve seen a small cabal of internationalist, Big Business-allied Republicans emerge, and it is this corporatist wing that has pushed for free trade,” Curtis Ellis, a spokesperson with the American Jobs Alliance and executive director of ObamaTrade.com, a conservative watchdog site, told IPS.

“If we’re going to move all of our factories overseas, the American people are going to get stuck with the short end of stick. And really, even supporters of the TPP admit that it’s not about trade but rather about investment – about securing overarching global governance rules on investment.”

Indeed, of the TPP’s 29 proposed chapters, just five deal directly with trade, according to Public Citizen, a consumer interest group here.

“[T]he non-trade provisions would promote lower wages, higher medicine prices, more unsafe imported food, and new rights for foreign investors to demand payments from national treasuries over domestic laws they believe undermine the new TPP privileges they would gain,” Lori Wallach, the head of the group’s Global Trade Watch programme, said Monday.

“Despite the intense secrecy of the negotiations … many TPP nations have woken up to the fact that the deal now on offer would be damaging to most people, even if the large corporations pushing the deal might improve their profit margins.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

A worker, farmer and doctor are hanged in the “Suicide Zone” outside of Taiwan’s national legislature, in a street theater protest by student groups against government efforts to establish “Free Economy Pilot Zones” across Taiwan. Credit: Dennis Engbarth/IPS

By Dennis Engbarth
TAIPEI, Sep 11 2014 (IPS)

The Taiwan government’s plan to liberalise tariff-free imports of agricultural produce from China and other countries for processing in free economic pilot zones, which will then be exported as ‘Made in Taiwan’ items, may mean suicide for Taiwanese farmers if approved by the national legislature.

The Chinese Nationalist Party (Kuomintang or KMT) government of President Ma Ying-jeou conceived the Free Economic Pilot Zone (FEPZ) plan in 2012 as a way to urge Taiwanese investors in China to relocate value added operations back to Taiwan, through tax and other incentives.

In early 2013, the KMT government re-packaged the plan to feature components for the promotion of value-added agriculture and international medical services, among others, and submitted required changes in the legal code to implement the plan in a draft Free Economic Pilot Zone Special Act to the KMT-controlled Legislature in December 2013.

“The intention of the Ma government to lift the ban on Chinese agricultural commodities through the FEPZ special act violates his own promise in the 2008 and 2012 presidential elections, but dovetails with Beijing’s objective of cross-strait economic integration." -- Lai Chung-chiang, convenor of the Democratic Front Against Cross-Strait Trade in Services Agreement
The special act offers investors in FEPZs business tax exemptions, tariff-free importation of industrial or agricultural raw materials, eased entry and income tax breaks for foreign professional workers, including from China, and streamlined procedures for customs and quarantine checks, labour safety inspections and environmental impact assessments.

Social movement groups have warned that the China-friendly KMT government aims to use the FEPZ programme as a back door to realise full deregulation of trade between Taiwan and the People’s Republic of China, and avoid the need for legislative ratification of trade pacts after the Sunflower citizen and student occupation movement in March derailed a controversial service trade pact between the two governments.

Lai Chung-chiang, convenor of the Democratic Front Against Cross-Strait Trade in Services Agreement, observed that the Sunflower movement spurred the formation of a consensus in Taiwan that the Legislature should enact a law strictly governing the negotiation of cross-strait agreements before reviewing the ‘trade in services’ agreement or other pacts with China.

Fearing indefinite delays in future China trade deals, the Ma government tried to ram a first reading of the draft FEPZ special act through the national legislature’s economic affairs committee in two extraordinary sessions in July and August, but opposition lawmakers blocked this push.

Lai told IPS that the core of the FEPZ concept is to arbitrarily grant tariff-free entry for raw materials and products from all countries into Taiwan’s six main seaports and its major international airport in order to display Taiwan’s interest to enter the Trans-Pacific Partnership (TPP) and other regional free trade pacts.

Instead, this act will sell out Taiwan’s economic future, warned Lai, adding, “Our major trade partners will have no reason to engage in negotiations with us to further open their markets as our government will have surrendered all of our bargaining chips even before talks begin.”

“The intention of the Ma government to lift the ban on Chinese agricultural commodities through the FEPZ special act violates his own promise in the 2008 and 2012 presidential elections, but dovetails with Beijing’s objective of cross-strait economic integration,” Lai added.

Despite a high-powered advertising campaign, the Taiwan public is not visibly enthusiastic about the FEPZ plan. Nearly 63 percent of respondents in a poll carried out by the opposition Democratic Progressive Party (DPP)’s Public Survey Center in June said they were worried about the scheme’s impact on Taiwan’s economy.

Labour organisations are leery of further liberalisation of foreign workers, including white-collar professionals from China, while medical and educational organisations object to plans to offer health and educational tourism programmes that would spur the commodification of public services.

Raw deal for local farmers

Chen Chi-chung, a professor at the National Chung Hsing University Agricultural Policy Center, stated, “Taiwan may become the first producer of agricultural goods that will permit agricultural produce from all over the world, including China, to be used for processing in its own factories free of tariffs or business taxes.”

Article 42 of the draft special act would fully lift the current ban on import from China of 2,186 types of raw materials, including 830 types of agricultural commodities, while Article 38 would exempt FEPZ enterprises from tariffs, cargo levies and business income taxes. Article 41 would exempt most such commodities from customs or health inspections.

Moreover, makers of processed agricultural goods or foods exported from FEPZs will be able to attach ‘Made in Taiwan’ labels to their products.

Rural Life Experimental Farm Director Liao Chih-heng told IPS that instead of helping farmers cope with the unfair competition from producers in China due to state subsidies and lower labour and environmental costs, the Ma government is inviting such unfair competition into our home market.

Tai Chen-yao, a farmer of squash and lemons in Kaohsiung City in southern Taiwan, told IPS, “If Taiwan sells processed Chinese agricultural goods as Made in Taiwan, food processors as well as farmers will be hurt since there will be no way to guarantee the safety or quality of raw material and thus the food safety for consumers of such products.”

Su Chih-fen, Yunlin County Mayor for the opposition DPP, echoed these sentiments, telling IPS that a rising share of Taiwan farmers, including youth who are returning to the countryside, are absorbing new knowledge and creating innovative agricultural products that can out-compete imports, which may be cheaper but have higher food safety risks.

The value-added agriculture plan would deprive this emerging cohort of new style farmers of access to export markets and divert resources away from assisting the majority of farmers to upgrade, said Su, who is mayor of Taiwan’s agricultural capital.

Agriculture accounted for 1.7 percent of Taiwan’s gross domestic product (GDP) in 2013. Primary sector workers in agriculture, forestry, fishing and livestock accounted for nearly five percent of Taiwan’s 10.97-million-strong workforce or 544,000 persons as of May 2014.

Su further warned that the government’s plan would effectively punish farmers who kept their roots in Taiwan and have worked to upgrade and grow high quality produce.

In the wake of such widespread criticism, the official National Development Commission (NDC) has announced modifications including dropping the provision that 10 percent of agriculture value-added goods made with raw materials from China could be sold on the domestic market.

However, Chen Chi-chung declared that the changes, along with the NDC’s claim that processed foods made in the FEPZ using imported materials from China or other low-cost suppliers would not enter or affect Taiwan’s domestic market, were deceptive semantics.

Using imported raw agriculture materials, such as tea or peanuts, to make processed food products in Taiwan will surely reduce the demand for domestic agricultural products and thus the income of Taiwan farmers, said Chen.

According to the Council of Agriculture’s statistics, average annual income for a farm household in 2012 was about 33,200 dollars; however, the net income from farming activities was only 7,200 dollars.

KMT Legislative Caucus Convenor Fei Hung-tai told IPS that the majority KMT caucus aims to actively promote passage of the FEPZ statute during the upcoming session.

Noting that civil society organisations and opposition parties have called for the elimination of Articles 38, 41, 42 and other provisions harmful to the interests of Taiwan farmers, workers and public services, Lai told IPS, “If the KMT pushes passage of this act, it will have to either have to accept major concessions in the final content of the bill or face an intense backlash in civil society and public opinion.”

Edited by Kanya D’Almeida

The Trans-Pacific Partnership (TPP) negotiations have been hitting headlines recently, but not for all the right reasons.

The media provides an incomplete picture of its implications, focusing mainly on its process and pre-occupations of the main parties to the negotiations. These negotiations, including the most recent meetings that took place in Ottawa, Canada, in July 2014, have been criticised by Canadian and international media for being veiled in secrecy.It is important that these negotiations do not create systems which are exclusionary, fragmenting and adversely affecting overall economic opportunities.

There have been, however, leaks and statements which show the broad contours of the ongoing talks covering the large number of subject areas which aim to develop a “21st century” trade and investment regime.

There is little attention, if any, to the adverse market conditions that the TPP will generate, for countries not part of these negotiations; countries which are significantly contributing to the prosperity of those who are negotiating TPP.

The TPP is a proposed regional free trade agreement (FTA) being negotiated by 12 countries in the Asia-Pacific region, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam (contrast this with 160 members of World Trade Organisation).

The TPP nations together account for about one-third of world trade and foreign direct investment. Thus, there is a larger interconnected world outside the coverage of TPP which is economically crucial for all concerned. It is important that these negotiations do not create systems which are exclusionary, fragmenting and adversely affecting overall economic opportunities.

Today’s trade negotiations focus significantly on issues commonly referred to as non-tariff barriers. These include standards which specify requirements for products to be sold in specific markets.

These standards could have a larger general impact, such as environment or social standards, or have product-specific effects such as specifications for cars, electric gadgets, textiles and clothing, fruits, etc. The focus of TPP negotiations suggests that there is a strong possibility for markets and economic opportunities to get fragmented.

That would create major difficulties for all. This can be prevented through specific steps to create inclusive systems, which are essential in our increasingly inter-dependent world.

In the next five to seven years, the rapid growth of middle class in regions outside the TPP and global links between trade and sustainable development could create significant potential conflicts without inclusive systems.

Photo by Jamie Levine

Just recently, I was in Beijing, China for a workshop that discussed the Implications of TPP for China and India in detail. At the event, co-organised by the International Institute for Sustainable Development (IISD), the International Centre for Trade and Sustainable Development (ICTSD) and the China Society for WTO Studies (CWTO), I made two strong recommendations for India, China and even other developing nations: (i) that these countries should upgrade their capacities for policies and meeting evolving standards, so that their access to major markets could continue without significant problems, and (ii) that non-TPP countries should combine forces to push for the development of more inclusive trade systems, and suggest ways of doing so.

However, the main action to develop inclusive systems within TPP has to be from those negotiating the agreement, so as to maintain substantive and effective linkages with the rest of the world.

While some additional countries may join the TPP, whenever concluded, others which may find it more difficult to do so would nonetheless be important parts of a trading system providing opportunities for sustained prosperity for all economies. Restraining their effective participation would mean restraining the positive potential of the system as a whole.

Various countries are in different stages of preparedness with respect to higher standards likely to arise from TPP. In late 2013, South Korea announced its interest in joining in TPP. There is a strong debate in China on whether or not to join TPP.

In Brazil, parts of the private sector seem open to joining this new mega-FTA, while the government appears to be reticent about it. In India, the policy makers have begun a process of upgrading domestic capacities, but it is very unlikely that India would be able to join an agreement such as TPP, for several years.

All African economies are outside the process of any of the mega-FTAs such as TPP. Their state of preparation is in general much less than the larger economies of other continents. In some instances, there is a view that TPP may not be concluded, so why worry about it!

However, progress in TPP negotiations is continuing, though at less than the desired pace of participants. It is expected to pick up in the months ahead.

Recognising the advent of the contours of a new trade regime in large parts of the global markets, China is already moving ahead with policy reform to better equip itself for a world of new trade and investment regulations.

This will help consolidate its existing position as an important hub of global value chains and its desire to move forward in the value chain to produce higher value items with state-of-art technologies. Interestingly, this preparation for a post-TPP world enmeshes well with its next stage of domestic reform.

However, even a relatively advanced developing nation such as China would find it difficult to have market access post-TPP unless the agreement incorporates an inclusive system. This task would be much more difficult for lesser developed nations. The content of standards under TPP is likely to be high, and lead to considerable cost escalation for exports of several developing nations.

In TPP, these would likely reflect standards prevailing in the U.S.; simultaneously with TPP we have the Trans-Atlantic Trade and investment Partnership (TTIP) negotiations between EU and the US which have an important focus on standards. The results of TPP cannot be too different from that of TTIP in this regard.

Studies have shown that impediments to market access by standards are recognised by even exporters from the U.S. and the EU to each other’s market. Similarly, in a recent discussion of Korean emission standards for automobiles, U.S. Ford Motor Company argued that Korea’s standards and related system would raise cost by 7,000 dollars for each Ford Explorer vehicle.

Given that trade and investment play an important role in their growth performance, losing access to TPP and TTIP countries, which together account for about half of world trade, would be highly damaging for India, China or other non-member countries.

Ultimately, the most suitable action that the emerging developing economies (China, India, Brazil and others) can take at this point, would be to pool their collective energies together to press for conditions which ensure that the emerging international trade system works better for all countries, including those not part of the large free trade agreements such as TPP and TTIP.

Such synergies would be useful even for up-gradation of domestic capacities, working together with co-ordinated and cooperative programmes.

Common efforts are crucial for developing inclusive systems because each of these countries on its own will make little impact for changing the evolving regulatory regimes. A more formalised collective response would empower them to press the negotiating nations to develop more inclusive, rather than exclusionary, systems.

Dr. Singh has been with IISD as a senior fellow since October 1, 2013 and provides advice and support to the Institute’s work in China, and on multilateral trading systems.Before joining IISD, Singh served as deputy director-general at the World Trade Organisation from October 2005 to September 2013.

Edited by: Kitty Stapp

The proposed Trans-Pacific Partnership (TPP) agreement covers 12 Pacific Rim countries that collectively account for about 40 percent of the world economy. Credit: Amantha Perera/IPS

By Richard Heydarian
MANILA, Jun 14 2014 (IPS)

Amid simmering territorial conflicts across the Western Pacific, specifically between China and its neighbours in the South and East China Seas, coupled with China rising to the rank of top trading partner with Japan, South Korea, Australia and the Association of Southeast Asian Nations (ASEAN), the Obama administration has been hard-pressed to re-assert its strategic footprint in the region.

Since 2009, Obama has turned Washington’s strategic focus towards the Asia-Pacific region, which has gradually emerged as the global center of gravity in both economic and geopolitical terms.

The “Pivot to Asia” (P2A) policy, formally announced in late-2011, represents Washington’s renewed attempt to tap into booming markets of Asia and check China’s rising territorial assertiveness in the East and South China Seas.

The P2A policy contained both trade as well as security pillars, designed to maintain the U.S.’ strategic primacy in Asia and aid its post-recession economic recovery. The cornerstone of the Obama administration’s economic policy in Asia is the proposed Trans-Pacific Partnership (TPP) agreement, which excludes China and covers 12 Pacific Rim countries that collectively account for about 40 percent of the world economy.

In security terms, the Obama administration has sought to deepen the U.S. military footprint across Asia by exploring new basing agreements and gradually redeploying 20 percent of its naval assets from the Atlantic to the Pacific theatre.

Obama’s latest trip to Asia, however, underlined the inability of Washington to balance its economic and geopolitical initiatives in the region. While Obama managed to strike new strategic agreements with leading Southeast Asian countries, namely Malaysia and the Philippines, and strengthen bilateral military alliances with Japan and South Korea, there was, in turn, no concrete development vis-à-vis the ongoing TPP negotiations.

“I’ve been very clear and honest that American manufacturers and farmers need to have meaningful access to markets that are included under TPP, including here in Japan,” said Obama during his trip to Tokyo, hoping to encourage Japan to make necessary concessions in the TPP negotiations.

“That’s what will make it a good deal for America — for our workers and our consumers, and our families. That’s my bottom line, and I can’t accept anything less.”

As the world’s third largest economy, with a GDP of six trillion dollars, Japan is central to the conclusion of the TPP negotiations, which missed its late-2013 deadline and has struggled to gain momentum in recent negotiation rounds. But Japanese Prime Minister Shinzo Abe only promised to “energetically and earnestly continue the talks.”

The disagreements were initially over Japan’s trade barriers on agricultural imports; but the U.S. has increasingly focused on Japanese restrictions on the imports of beef and pork and the opening of Japanese automobile market to American manufacturers.

Amid rising territorial tensions in Asia, Obama went the extra mile to reassure Japan of Washington’s full military commitment if a war were to erupt between Tokyo and Beijing over the disputed Senkaku/Diaoyu Islands in the East China Sea.

In Malaysia, Obama oversaw the formalisation of a bilateral “comprehensive partnership” agreement, which marked the end of decades of frosty relations. Above all, Obama’s visit to the Philippines coincided with the signing of a new security pact, the Enhanced Defense Cooperation Agreement (EDCA), which grants the U.S. military 10 years of access to the Philippines’ top five military bases, namely the three former U.S. bases of Clark airfield, Subic bay, and Poro Point as well as Camp Aguinaldo and Fort Magsaysay in Metro Manila.

On the TPP front, however, Obama faces tremendous opposition at home and across Asia. Long shrouded in secrecy, a growing number of businesses, concerned citizens, and civil society organisations have come to oppose what they see as a lopsided free trading agreement (FTA), which grants multinational companies (MNCs) extensive control over public services such as healthcare and internet.

Among developing countries in East Asia, particularly Malaysia and Vietnam, there is a growing fear over the potential impact of the TPP on the production and importation of cheap, generic drugs, with global pharmaceuticals poised to more vigorously protect their Intellectual Property Rights (IPR), which have contributed to the exorbitant costs of conventional drugs across the wold.

In the industrialised world, especially the U.S., many labour unions and big businesses are worried over the proposed reduction of strategic protectionist barriers, especially in the automobile manufacturing sectors, allowing export-driven countries such as Japan to displace domestic manufacturers.

Japan, for instance, has insisted on retaining high tariff barriers on its agricultural sector, while Vietnam has resisted the proposed privatisation of state-owned textile companies.

The late-2013 revelation of the draconian IPR provisions of the TPP by the anti-secrecy group Wikileaks dealt a huge blow to the ongoing negotiations, further strengthening opposition to the proposed trading regime.

Among the most worrying provisions are proposals that allow MNCs to sue sovereign governments in international courts and override domestic laws on both trade and non-trade matters; relaxation of environmental regulations; greater policing and monitoring of internet; and restrictions on access to public services due to more strict investment rules in utilities and strategic sectors of the economy.

Fearful of domestic backlash, Asian countries such as Japan and Malaysia have hardened their negotiating positions, more explicitly demanding trade concessions from the U.S. In fact, leaked documents reflect the growing isolation of the U.S. within the ongoing negotiations, with Obama struggling to gain enough support within his own party over the proposed Fast-Track Trade bill to expedite the trade negotiations with limited legislative scrutiny.

“Japan’s aim is geopolitical in the first instance, i.e., contain China. I doubt if the leadership has really thought [the TPP] through economically,” Walden Bello, a leading expert on trade issues and co-founder of the organisation Focus on the Global South, told IPS, underscoring how the TPP lacks any compelling economic rationale and is “doomed to fail.”

“Once [Japanese] corporations encounter the same old hard-nosed demands of the U.S. for structural reform…the Japanese government will hem and haw, as it did with the APEC free trade area in the 1990’s.”

Meanwhile, an economically-ascendant Beijing has managed to progressively eclipse Washington in trade and investment terms, with China pushing for an alternative Free Trade Area of the Asia-Pacific (FTAAP), which is increasingly seen as a more viable and inclusive alternative to the TPP.

“China does not even have to initiate a counter-bloc. It just needs to sit quietly and see the TPP fall apart,” said Walden Bello, dismissing the TPP as an ineffectual attempt to counter growing Chinese economic influence in Asia “The benefits of trade accruing to corporations…with what will soon become the world’s biggest economy [China] will undermine the US’s geo-economic objective.”

Aside from being the top trading partner of almost all countries in East Asia, China has emerged as a major source of development aid and soft loans in recent years, contributing as much as 671.1 billion dollars in the 2001-2011 period.

Given China’s continued economic expansion, the country is expected to accelerate its development assistance to neighbouring countries. China is already establishing a 50-billion-dollar Asian Infrastructure Investment Bank, which is poised to directly compete with the Japan-dominated Asian Development Bank (ADB).

Overall, the poor prospects of the TPP underline the U.S.’ weakening economic influence in Asia, with the Obama administration primarily occupied with strengthening Washington’s military footprint in the Pacific waters to hedge against a rising China.

(END)