The TPP and Chile’s Foreign Policy Options

By Christian Scheinpflug

This post appeared elsewhere in a slightly different version on August 18, 2016.

In early August, the blog War on the Rocks (WoR) published a favourable opinion regarding the controversial Trans-Pacific Partnership (TPP). This deal is marketed as a free trade agreement initiated by the United States, involving 11 other countries, among them Vietnam and Singapore in Asia, and Peru and Chile in South America.

Despite the free trade label, the WoR piece suggests that TPP also holds geo-strategic relevance. To bolster that claim, it features a video of a press conference Singapore’s President Lee Hsien Loong gave as part of his recent White House visit. He claims that for US allies in Asia, the TPP represents a reliability test, because failure of the agreement would inevitably cast doubt on Washington’s security promise and nuclear umbrella. Countries like Singapore and Japan trust the US will defend them, with nuclear weapons if necessary, should any actor, i.e. China, threaten them.

More important than what Mr Loong said was what he didn’t. His words seemed to carry a subtle threat that countries like Singapore or Japan might have to concede much ground to China for pragmatic, national security reasons. This way he pressured Washington quite audaciously to get the TPP done. Yet, in its current form the agreement will cause damage especially to its Latin American parties.

If ratified, it would entrench courts which handle grievances corporations hold against governments in cases where laws created in the public interest would impede profits corporations expect. Even so, and despite the Chilean government’s efforts to present TPP as economic matter, it touch upon much more than the fines the public would have to pay to corporations and the stuff that can be traded.

Carlos Furche, ex-director of Chile’s General Directorate of International Economic Relations (DIRECON), published an analysis of TPP in 2013, in which, to his credit, he dedicates a section to the role TPP plays in the US’ Asia strategy. Furche rightly questions whether Chile should become a part of Washington’s quest to entrench its position in the system and contain China.

Thus, Furche points out that implementing the TPP will restrict Chile’s foreign policy options. Chile, ostensibly committed to liberal foreign policy, has no scruples to conduct business with autocracies like Russia and China. Such hypocrisy from a so-called champion of human rights aside, as long as consumers remain complacent about their shopping spree here also supporting exploitation and repression there, this approach is basically sustainable. The economistic, not amoral, thinking that drives Chile’s foreign policy may backfire, though.

For example, Chile has signalled its interest in deepening military relations with China. But would China keep such cooperation when Chile settles firmly in the US sphere? Likewise Russia. This country, albeit not really a superpower, manipulates world events decisively. Europe’s security and border policies develop largely in response to Russian manoeuvers in Ukraine and Syria. This shows that Moscow is aware of the levers it needs to pull and punch above its weight, and it will stick to this approach for Latin America as well.

Chileans often assume their country doesn’t carry much weight internationally. Certainly, the country is unable to impose itself to the extent great powers can, but it nonetheless remains important whose trade rules, and therefore points of view, Chile accepts and why. Foreign minister Heraldo Muñoz brushes such details aside and emphasises instead that the negotiators hammered out quite a deal, especially on the question of generic medications. But when pointing that out — ever the astute diplomat-politician — he didn’t allude to the inevitable elephant in the room: What did Chile have to give? Why did it get something Peru for instance didn’t?

Specific geo-economic and -strategic implications that should be more discussed publicly, but are drowned in the swamp of trivialities and advertisement-as-news business model of the Chilean media, relate to the Antarctic and access to Chinese and Russian markets. The latter point is crucial for an export-oriented economy like Chile’s, and it seem imprudent to perceive the TPP favourable in this regard. Critics may argue that the affluent US market remains a key target for Chilean exports. But Chile already has an extensive free trade agreement in place to ensure the unrestricted flow of goods. On the other hand, Russia and China have an interest to keep on top of a committed TPP member, and therefore US ally. They aren’t reliant on Chilean produce and don’t need the country as much as vice versa. Thus they may make stricter demands in future trade negotiations, making Chile pay a price higher than if had it not agreed to the TPP.

On the strategic front, Antarctica will emerge. Liberal thinking and belief in international law push strategic planning for the cold continent to the back. But great power support influences the role Chile can play on the continent, especially when it comes to territory both Chile and Argentina claim. The United States as ally of both countries won’t take sides, because getting involved too much would leave the impression it privileged one ally over another. Washington would issue some declarations of neutrality. China and Russia would happily watch from the sidelines too, for when two allies of an adversary pick on each other, they eventually may make important concessions to gain the support of a key power.

The TPP is far more than a trade deal. Indeed, economic matters aren’t even that important. Yet, the TPP restricts Chile’s rule of law, sovereignty, and strategic options quite severely. True, this country is perhaps always caught in unequal power relationships, no matter who it turns to. But shrewd policy-makers transform weakness into strength, and one way to do this would be to traverse Chile’s international relations outside the corset of the TPP. Currently, they are en route to damage out of belief — not purpose — the country’s (future) foreign policy.

Christian is a columnist at Chile Today. He’s also director at the Chilean Association of International Specialists (ACHEI) and co-editor of E-IR’s book on International Relations Theory. Follow him on Twitter: @ChrScheinpflug

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