TEATINOS ONE/EIGHTY

TPP11 Will Return, So Here Are 9 Points To Consider

Lawmakers shelved the TPP11 (or CPTPP) until June at least. After heated debate in Congress, they parked the deal in a commission. Once thought a done deal, the agreement triggers ever more resistance.

After easily sailing through negotiations, signing, and much of Chile’s political institutions, the mega deal hit a roadblock its promoters didn’t expect. Public and political resistance forced lawmakers to postpone a vote and discuss the tract again, but this is likely only a tactic to smooth tensions by letting other topics take over the news cycle.

TPP-11 takes lower house hurdle

Considerations

Trade agreements never govern just economic exchange. They influence the lives of citizens and are therefore political. TPP11 will alter citizens’ lives more deeply than previous deals, so here are nine non-conclusive points on the matter.

1) Free trade isn’t free. Economic exchange creates winners and losers and political power can exacerbate or mitigate these impacts. Many governments opt for the non-intervention intervention, arguing that ‘globalization’ advances mechanically. It originates elsewhere but not somewhere, and countries must adapt but can never control let alone change it.

2) Free trade is power politics. The original TPP formed part of the Obama administration’s ‘pivot to Asia’ with which Washington tried to counter China. Unlike previous Asian success stories, China’s economy highly depends on US capital. One measure to manage this dependence in the economic system includes increasing China’s influence in the geopolitical one, and especially in its neighborhood. In response, the US aimed to set the economic terms under which China would have to trade with the crucial US market and its neighbors.

3) The US withdrawal weakens US influence on China’s economic development but not China’s economic dependence on US capital.

The TPP and Chile’s Foreign Policy Options

4) Through the TPP, Washington made its Asia-Pacific allies an economic offer that would come with a renewed security umbrella. These allies, especially Japan and the Philippines which believe in free trade and face ever more aggressive Chinese imperialism, accepted wholeheartedly.

5) Latin American players, above all Chile, didn’t bother with such questions. They wanted to participate out of a religious belief in anything labeled free trade. This belief reflects especially in defenses of the deal, which don’t take up criticism and instead push platitudes like ‘digital,’ ‘21st century,’ or ‘protectionism.’

6) The TPP in Chile is not a right-wing plot; it’s ruling class consensus. Former president Michelle Bachelet and then foreign minister Heraldo Muñoz have not only been the fiercest advocates of the deal, but also key to reanimate it after Donald Trump pulled the US out. All former foreign ministers and political heavy hitters strongly support the deal.

7) Free trade ideologues assume movement of capital is desirable in itself and spurs growth, which is presented as progress not as cancer. Copper and agri-business are prime examples of the resulting contradiction: Commodity export and capital import create some material wealth while destroying the ecological foundations they rest on, including lives.

8) Building on that ecological paradox, the agreement creates an economic one: It restricts the state’s ability to invest in domestic businesses, i.e., the public can’t spend its money the way it wants or needs to. Companies can sue the Chilean government if their profit expectations aren’t met. They don’t have to proof anything, just make a legal case that, for example, the regular Codelco capitalizations give the company an edge over private competitors which therefore have less chance of marketing copper and generate less profit. This will create a suing industry on the private side, and it will consolidate lawyers’ influence on foreign policy matters, further restricting other modes of thinking.

9) When it comes to commerce, sovereignty erosion is not a problem, neither with Chile’s politicians nor the general public. Things only get tense with international treaties, like the UN migration pact, that don’t threaten sovereignty but involve non-commercial engagement with foreigners.

 

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