| THE TPP NEGOTIATION AND ITS FIRST IMPACT
ON LATIN AMERICA.
It is a credible possibility, a confusing reality and a mirage at the same
by Félix Peña
English translation: Isabel Romero Carranza
As a credible possibility, the TPP has entered fully
into the reality of the contemporary debate on international trade. It
has done so through the strategic, offensive or defensive, agendas of
multiple stakeholders, be they government, business, political or social
sectors. This has obviously been the case of the countries that are part
of the TPP. But it is has also happened in other Latin American countries.
The Brazilian press has reflected the intensity of the impact that the
announcement of October 5 produced in the country. It is an impact that
leads to the perception that Brazil, and its companies, might be isolated
if they fail to adapt to the new reality of international trade. This
reality would be reflected, precisely, by the TPP and the criteria that
it would be setting in terms of the scope and the quality of the rules
governing international trade.
Being perceived as a credible possibility and as a
new -although unclear- reality, the "TPP event" can lead to
illusions in international trade relations. These illusions can have both
positive and negative effects. They would be positive if they translate
into a willingness to reach constructive goals. They would be negative
if, on the contrary, they end up arousing passions reflected by contradicting
perceptions of an ideological nature.
The TPP and its possible derivations to other mega-preferential
agreements, such as the Trans-Atlantic Trade and Investment Partnership
(TTIP) between the US and the EU, can lead to a fragmentation of the international
trading system, with its ensuing adverse impact on global governance and
the national interests of developing countries.
The main concern stems from a situation that is possible
to see today. It would result from the cumulative effects of two trends:
on the one hand, the proliferation of mega preferential agreements, which
in fact work as private clubs and therefore discriminate against non-members;
on the other hand, the weakening and irrelevance of the multilateral WTO
system. In this regard, the Nairobi Ministerial Conference, to be held
in December, takes on greater significance in the light of the eventual
enactment of the TPP.
These are two trends that, in their eventual contradiction,
need to be regarded in a perspective that transcends the economic and
international trade level. They require to be viewed, both by analysts
and by protagonists, in terms of their effects on the exhaustion of the
world order that emerged at the end of the Second World War, and the attempts
to replace it with a new global governance.
The Trans-Pacific Partnership (TTP) was always a possibility, but it
has now become a credible one. And as such it is now perceived as part
of a reality, albeit an unclear one, at least in the member countries.
But it is also so in those countries who are discussing its effects and
whether they should follow the same path. The risk is to be deceived by
a mirage produced as a result of the need to "sell" the product,
i.e.: to convince public opinion -in the member countries and internationally-
that the agreement that has been reached, but whose specific contents
are still unknown, is opening up a new era for world trade and, therefore,
for the development of every countries. Or it can be viewed as the equivalent
of evil, highlighting its potential negative effects.
The fact is that the process leading to the TPP has entered a new phase
which aims to be definitive, at least in the perspective of those who
promote it. On October 5, in Atlanta, the twelve countries participating
in the negotiations took a significant step towards the conclusion of
the Agreement. These countries are: Australia, Brunei, Canada, Chile,
United States, Malaysia, Mexico, Japan, New Zealand, Peru, Singapore and
Vietnam. It is estimated that South Korea and Taiwan could be the next
to follow suit.
The negotiations which led to the TPP started in 2010, based on the clause
of accession of the Trans-Pacific Economic Partnership Agreement-the Pacific
4 or P4-, that had been signed in 2006 by Chile, Brunei Darussalam, New
Zealand and Singapore (for the Pacific 4 full text go to https://www.aduana.cl/.
View the information from the Government of Chile on the background, contents
and scope of the P4, on http://www.sice.oas.org/
and on http://www.direcon.gob.cl/).
But there is still a long way to go in order to reach the ultimate goal,
which is the entry into force of the agreement, and the factors that have
fueled uncertainty about the final outcome are still present.
First, the phase of finalization of the text agreed in Atlanta must be
completed. This is a highly technical and legal step but easy to take,
at least from a political point of view. It is estimated that it will
be completed in a few weeks. When announcing the conclusion of the negotiation
stag, the Ministers of the twelve countries pointed out that "to
formalize the outcomes of the agreement, negotiators will continue technical
work to prepare a complete text for public release, including the legal
review, translation, and drafting and verification of the text".
Later on, they added: "we look forward to engaging with stakeholders
on the specific features of this agreement and undergoing the domestic
processes to put the agreement in place" (see https://ustr.gov/).
Only after having concluded this technical and legal phase each country
may begin in-depth discussion on the contents of the agreement, which
will then be subject to final approval as per their corresponding constitutional
processes. Access to the text is important because we know that, as in
any international trade agreement, it will be in the fine print and in
the details where the real scope of what is agreed will be fully appreciated.
Giving an opinion on a trade agreement without having seen its full text
does not seem advisable.
So far, there has not been much transparency regarding what has been
negotiated. This is the opinion of some representative institutions of
the civil society of the countries participating in the negotiations.
The only way through which those who are not part of the negotiations
could access information about the agreement, even in the case of some
of the most sensitive chapters, such as intellectual property and investment,
was WikiLeaks (see https://wikileaks.org/
The issue of transparency carries more political weight in this final
stage of the process of approval of the agreement. This is so precisely
because there is a widespread notion that it is not a coincidence that
the most relevant texts are still unknown. On the contrary, it is believed
that this is due to business interests that want to avoid an open debate
on what should be agreed regarding several sensitive issues. Some sectors
in the larger countries and especially in the US are often held accountable
for the lack of transparency. It should be noted that the countries with
the most economic weight, the US and Japan, along with Australia and Canada,
account for a high percentage of the 40% of world output that is attributed
to all twelve countries together. This fact is relevant when trying to
convey through the media the global impact that the agreement would have.
Moreover, these are the countries with the greatest weight in each of
the main economic indicators of the area covered by the agreement, particularly
of those indicators used to highlight its importance and its impact on
world trade and the global economy.
Being familiar with the contents of the TPP also becomes important due
to the fact that it seeks to go beyond what has been agreed in other multilateral
or regional free trade agreements, and especially of what has been agreed
within the framework of the WTO. Its WTO plus condition, along with the
fact that it aims to be functional to the development of value chains
of global scope, is precisely one of the main arguments being used to
explain and justify its existence.
Moreover, the dominant story among the most enthusiastic promoters of
the TPP indicates that it is only a first step towards a new generation
of agreements, among which the following most important would be that
being negotiated between the US and the EU. And that this first step is
setting the standards for new-generation international commitments on
issues such as, among others, intellectual property, investment, regulatory
frameworks, government procurement, new technologies, environment and
working conditions, which would then be very difficult, if not impossible,
to avoid in future agreements (for a summary of the contents of the agreement,
What would be at stake, then, is something that transcends the scope
of the international trading system per se. It would delve deep into the
geopolitical dimension of international trade relations. It would allow
us to see clearly who the rule-makers are in the international system.
But the redistribution of world power, which was made evident in recent
years, does not lead to imagine that those countries endowed with powerful
resources would passively accept being left out from the process of creating
rules that might affect them. The cases of China and India are just a
few examples to consider in this regard. And so far, both countries have
been marginalized from the TPP.
In any case, the conclusion of the negotiations of the TPP already has
an importance which transcends its member countries. Hence, the relevance
of noting that, following the announcement of October 5, the TPP is seen
as a credible possibility. As such, it cannot be ignored in the negotiations
and the strategy for international trade integration of any country that
aspires to compete with its goods, services and investments in global
markets (See the article by Simon Evenett listed as Recommended Reading).
This also applies in the case of Latin American countries. Three countries
of the region are full members of the TPP: Chile, Peru and Mexico. Others
countries aspire to be members in the future. In fact, the possibility
of joining the TPP has been mentioned in Brazil, in particular among business
sectors. Another issue is whether this would be a possibility in the perspective
of the TPP member countries.
Also, being perceived as a real possibility and not just a remote one,
the issue of the TPP has entered fully into the reality of the contemporary
debate on the future of the international trading system. It has done
so through the strategic, offensive or defensive, agendas of multiple
stakeholders, be they governments, businesses, political or social sectors.
This is clear in countries that are part of the TPP. But, it can also
be increasingly observed in other Latin American countries. The Brazilian
press has reflected the intensity of the impact that the announcement
of October 5 produced in the country. It is an impact that leads to the
perception that Brazil and its companies might be isolated if they fail
to adapt to the new reality of international trade. This reality is reflected
precisely by the TPP and the criteria that it would be setting regarding
the scope and quality of the rules associated with relevant aspects of
Being a credible possibility and being perceived as a new -although still
unclear- reality, the "TPP event" could lead to illusions in
international trade relations. These illusions could have positive and
negative effects. They would be positive if they eventually translate
into a willingness to reach constructive goals. They would be negative
if, on the contrary, they end up arousing passions that translate into
perceptions and discussions of an ideological nature. Perhaps the experience
gained in recent years with the FTAA negotiations can be useful in this
regard. The most emotional and ideological connotations of this experience
could even make a reappearance in relation to the TPP.
Going forward, the main concern arises from a situation that is possible
to see today and that would result from the cumulative effects of two
opposing trends: on the one hand, the proliferation of mega-preferential
agreements, which in fact turn into a sort of network of private clubs
and, therefore, discriminatory against non-members; on the other hand,
the weakening and irrelevance of the multilateral WTO system. In this
sense, the results of the December Ministerial Conference of Nairobi take
on greater significance, in the light of the eventual enactment of the
TPP. These are two trends that, in their eventual contradiction, need
to be regarded in a perspective which goes beyond the limited economic
and international trade level. On the contrary, they require to be viewed,
both by analysts and by protagonists, in terms of their effects on the
exhaustion of the world order that emerged at the end of the Second World
War, and the attempts to replace it with a new global governance.
In any case, it would seem advisable that the trend towards the proliferation
of mega preferential trade agreements, be they regional or interregional,
is inserted into the overall framework of a strengthened multilateral
trading system. This would involve a lot of political, business and intellectual
leadership in order to favor in the multiple fronts the idea of convergence
in diversity. It would involve reviewing the ground rules of the multilateral
system so as to specifically provide mechanisms that lead to convergence
in a context of pluralism.
To this end, two key elements appear to be necessary. One is transparency
in the agreements to be negotiated, not only once they have been completed.
The other is that of an independent technical arbitration mechanism -a
kind of ombudsperson of the WTO- that helps assess the effects of possible
deviations and signal roadmaps leading to convergence.
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Gabriel; Roldán-Pérez, Adriana, "Dimensiones y Efectos
Económicos de la Alianza del Pacífico", Ifo - Konrad
Adenauer Siftung, Santiago de Chile 2015, en http://www.kas.de/.
- Banik, Nilanjan, "Development through Connectivity. How to Strengthen
India-ASEAN Trade and Commerce", CUTS International, Jaipur, August
2015, en http://www.cuts-citee.org/.
- Bartesaghi, Ignacio, "Efectos del TPP en Asia-Pacífico
y Latinoamérica", en Foreign Affairs Latinoamérica,
Vol. 15, Nro.3, Julio-Septiembre 2015, en http://www.fal.itam.mx.
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Argentina. Políticas e Trajetórias de Desenvolvimento",
E-Papers - CNPq - FAPERJ - INCT/PPED, Rio de Janeiro 2015.
- Busanello, Horacio, "China El Gran Desafío ¿Conquistador
o Socio Estratégico?", Prólogo de Bernardo Kosacoff.
Planeta, Buenos Aires 2015.
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Crônicas do Lulopetismo e outros Escritos", Civilizaçâo
Brasileira, Rio de Janeiro 2015.
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Ricardo, "Fé em Deus e pé na tábua. Ou como
e porque o transito enloquece no Brasil", Editora Rocco, Rio de
- Eltis, David; Richardson, David, "Atlas of the Transatlantic
Slave Trade", Yale University Press, New Haven & London 2010.
- Evenett, Simon, "What does the TPP deal mean for outsiders",
ICTSD-WEF E15, October 2015, en http://e15initiative.org/.
- Krist, William, "Negotiations for a Trans-Pacific Partnership
Agreement", Wilson Center, Program on America and the Global Economy,
Washington DC., December 2012, en https://www.wilsoncenter.org/.
- Laprévote, Francois Charles; Frisch, Sven; Can, Burcu, "Competition
Policy Within the Context of Free Trade Agreements", ICTSD-WEF
E15 Expert Group on Competition Policy and the Trade System, Think Piece,
Geneva, September 2015, en http://el5initiative.org.
- Milani, Carlos R.S.; Echart Muñoz, Enara; Duarte, Rubens de
S; Klein, Magno, "Atlas da Política Externa Brasileira",
Eduerj - CLACSO, Rio de Janeiro 2015.
- Operti Badán, Didier, "Ideas para reformar al Mercosur
en lo Institucional", Consejo Uruguayo para las Relaciones Institucionales
(CURI), Estudios del CURI, N° 09/15, Montevideo, 22 de septiembre
2015, en: http://curi.org.uy/.
- Soares Alsina Júnior, Joao Paulo, "Rio-Branco. Grande
Estratégia e o Poder Naval", FGV Editora, Rio de Janeiro
- Souza Teixeira, Eduardo Ariel; Borges Correa, Silvia (organizadores),
"Economia Criativa", Coleçâo Contextos e Pesquisas,
ESPM - e-papers, Rio de Janeiro 2015.
- UNCTAD, "Non-Tariff Measures and Sustainable Development Goals:
Direct and Indirect Linkages", UNCTAD, Policy Brief N° 37,
Geneva, September 2015, en http://unctad.org/.
Félix Peña Director
of the Institute of International Trade at the ICBC Foundation. Director
of the Masters Degree in International Trade Relations at Tres de Febrero
National University (UNTREF). Member of the Executive Committee of the
Argentine Council for International Relations (CARI). Member of the Evian
Group Brains Trust. More