Globalization it’s not a bad word, but it starts with regional integration.
The Trans Pacific Partnership was finally signed on Thursday in a paralyzed Auckland, while activists protested against it blocking roads and marching through the streets.
Its defensors say reducing the tariffs is going to boost the economies and create new opportunities for business and therefore, jobs. But the global level of tariffs is already pretty low, and its unlikely that a drop on four or five percent points is going to bring the promised prosperity. Just recently a published study estimated that “extrapolating from current growth rates, GDP would increase by 47% by 2030 without the TPPA or 47.9% with the TPPA.”
Detractors of TPP center their critiques on the expansion of big companies power over the governments. Unification of intellectual property regulations means that countries (and even the US) will have to alter their laws to meet the requirements defined on the negotiations. Once the TPP is ratified by the countries, congresses will need to pass amendments to legislation, introducing the changes packed into the agreement: a take it all or leave it pack. ‘It’s an attack to our national sovereignty’ say the detractors, and effectively it does.
But national sovereignty has been detracting for a long time now, the concept of the nation-state on itself is on decline. Globalization proposes problems of a scale such that countries just can’t control without cooperating, joining forces and creating bigger blocks. On the path towards the utopia of humanity unification, the sacrifice of national sovereignty is a must.
Even despite this necessary weakening of countries governments powers, we shouldn’t let neoliberalism disguise as the natural way towards the broadening of borders. First, the sovereign of the people can’t be resigned. The TPP was negotiated on secret, its details and advances on negotiations kept in the dark, justified cause the need of discretion and confidentiality to keep the negotiation fluid, far away from the tension public opinion may cause. Seeing public consultation as an obstacle towards governability is a step back of some hundreds of years of states evolution.
The fading of the state-nation implies some of its powers will move layers down, decentralizing the decisions over administrative social matters by giving more power to local governments, while others will step up, creating unified regional policies on big scale problems such as environment, fiscal policy, human rights and, concerning TPP, regulation of private activity. The introduction of extra-national courts is a needed answer to the emergence of multinational corporations, but the TPP takes a wrong approach and instead of enforcing weak local institutions which can’t compete anymore with the huge resources this companies allocate to confront them, it shapes the Investor-state dispute settlement as a way to protect the companies from the supposed potentially arbitrary and discriminative local governments. With TPP, corporations can sue governments to obtain compensations for loss of expected profits due to goverment actions. The state is no longer seen as the guarantor of the social cohesion that ultimately allows the private activity to take place, but rather as its disruptor.
True, viable and stable integration is not just economical, it needs something more than the undermining of local governments and the creation of huge free-trade zones. Since the firm of the NAFTA more than twenty years ago, Mexico, who was a autosuficient on corn production, couldn’t compete with the importations from the US. Two millions of farmers left behind their cultivates to emigrate to the US. But while merchandises freely cross the Rio Bravo from one country to the other, people is not allow to do it. If economic integration has the unavoidable consequence of concentrating the industrial production on certain areas while limiting others to farming and extractive industries, then the citizens should be granted freedom of movement between this areas. Similarly, countries may devaluate their curreny to gain a trade advantage and benefit its exportations, leading to currency wars. There’s no mechanisms, neither from the WTO or IMF to control currency manipulation, and TPP just rely on multilateral engagement and public pressure.
Integration calls for more integration to address these issues: free movement of goods calls for free movement of labor and cordinations on economic policy towards a currency union, and once a region accept to use the same currency, a fiscal union is the next necessary step to ensure its performance. There are examples of progress on integration all around the world: the European Union has long been the most developed model from which to analyze its successes and errors, the Mercosur and the Andean Community joining to create a South American block, enormous progress shown by ASEAN in a region marked by its cultural diversity and historic confrontation, and the Eurasian Economic Union trying to leave behind the ghost of the Sovietic Union and the list goes on. Regional integration is today the next step, the natural evolution of the nation-state to face the globalization challenges, while maintaining certain degree of development parity and culture cohesion between its members.
Contrary to this regional tendency, the TPP together with the other two agreements proposed and promoted by the United States, the TTIP with the EU and the liberalization of services on a global scale with TiSA, don’t follow any relevant geographical or self-identification reason. There’s no future for them as a platform for further integration, so different are the realities of their participants that there’s no prospect of harmonization. Moreover, the TPP compromises already existing regional integration efforts by promoting the creation of supply chains among its members. A set of rules of origin are included, to determine whether or not a given product originates within the TPP region, and therefore qualifies for preferential tariff treatment. In the case of textiles, the industries are just forced to buy yarn within the TPP, even if the US yarn, the only large scale provider member, is more expensive than the chinese one.
But the real threat of TPP to regional integration on the western coast of the Pacific is the exclusion of China, not the only but certainly one of the region leaders. “TPP allows America — and not countries like China — to write the rules of the road in the 21st century” stated Obama when signing the agreement, seeming to forget for one moment the official White House rhetoric, that one which constantly repeats that deeper engagement rather than confrontation is the right way forward in US-China relations. Keeping a good relation between China and ASEAN nations is key to ensure disputes over the South China Sea don’t escalate into armed conflict, but TPP compromises this pulling its signatories economically closer to the US, thus reducing the China influence on the region.
Regional cooperation and integration shouldn’t be challenged by the use of free trade agreements as geopolitical instruments to expand influence, and neither China nor America should alone write the rules of global trade for the century. This is a task all countries should face together on the World Trade Organization, with a negotiation open to the society. Negotiation efforts should be placed on the realization of the Doha round, and not on the conformation of private membership clubs. The negotiations of the Doha Development Round, the current trade-negotiation round of the WTO, commenced on 2001 and froze on 2008, failing to conciliate the interests of developed nations which promoted the opening up of industrial markets with those of the developing countries, who called for the cut of farming subsidies.