TPP should be deferred until major parties negotiate: Senate committee

Ratification of the TPP should be deferred until further negotiations with the remaining nations take place, and Australia's treaty-making process should be reformed, the Senate committee has said.
Written by Corinne Reichert, Contributor

An Australian Senate committee has recommended that Australia undertake further negotiations with its "major trading partners" prior to taking any binding treaty action on the Trans-Pacific Partnership (TPP), with an additional recommendation that the government also reforms its treaty-making process.

The TPP, signed by its 12 member states in February 2016, was designed to regulate trade between the US, Australia, New Zealand, Canada, Singapore, Vietnam, Malaysia, Japan, Mexico, Peru, Brunei, and Chile.

However, the TPP was dumped by new United States President Donald Trump on his first week in office; with US withdrawal, it cannot come into force, as it was negotiated under the condition that a minimum of six countries with a combined GDP of 85 percent of the 12 signatories must ratify it.

As the US accounts for 60 percent of the combined GDP, the TPP cannot come into effect without either changes being made to the conditions -- or another large economy taking the US' place.

The Senate report, tabled in Parliament on Tuesday night by the Foreign Affairs, Defence and Trade References Committee, pointed to several "troubling aspects" of the TPP, including provisions that would have the effect of locking in Australia's intellectual property regime -- following concerns from Australia's copyright industry -- and "ambiguity" in the data protection provisions, as well as a lack of independent economic analysis.

However, the committee said its inquiry had been "overtaken by events"; namely, the withdrawal of the US. Given this, the committee said the TPP will not enter into force in its current form, with any revived trade deal between the remaining 11 participants to require a new inquiry.

"The committee's view is the Australian government should defer any binding treaty action in relation to the TPP and focus on engaging with its trading partners to negotiate multilateral, regional, or bilateral trade agreements which are in Australia's interests and can be agreed and implemented in a timely manner," the committee said.

In addition, the Senate committee backed up a recommendation by the Joint Standing Committee on Treaties, which suggested that the government look into altering its free trade agreement-negotiating process so as to allow security-cleared business and civil representatives to take part, and to consider allowing an entity such as the Productivity Commission to conduct an independent analysis of any possible trade agreement -- and that the government expedite these reforms.

In additional comments, the Coalition senators said they support these treaty-making reforms, and referred to "the responsibility of the Australian government to take the next steps in relation to strengthening Australia's trade relationships with the participating countries".

"In the future, this may include the introduction of implementing legislation as a strong signal of support to our major trading partners for a broad regional trade agreement," the Coalition senators said, adding that it is "vital" that all sides of Australian politics continue rejecting "protectionism" in favour of open trade.

Greens senators, meanwhile, called for "definitive and permanent rejection" of the TPP's implementation, saying it is "foolish and wasteful" to continue considering negotiations with the remaining nations after the withdrawal of the US, also objecting to the secretive way in which the treaty was negotiated.

"The TPP is a dumb deal," independent Senator Nick Xenophon added, also endorsing a change to the treaty-making process.

Australian Prime Minister Malcolm Turnbull last month argued that the TPP can still be salvaged, and could be opened up to China joining the trade deal, given that it is unlikely the US will change its policy. Turnbull added that some of the other TPP signatories have even "urged" Australia to begin domestic ratification of the treaty.

Australia's Treaties Committee last year also recommended that the federal government ratify the TPP, but said work needs to be done to convince an increasingly "nationalist and isolationist" public of this.

This nationalist viewpoint persevered in the US after Trump cited an "America first" attitude that involves returning "millions of jobs to America's shores" by using one of his first executive orders to back out of the TPP.

The US' withdrawal occurred in spite of repeated warnings that Trump risks "abdicating" trade leadership in the Asia-Pacific region by refusing to ratify the TPP, as it would create an opportunity for China to step in with its RCEP deal and consequently put millions of jobs across the US at risk -- and consequently, at least half of the nations involved in the TPP have said they will instead consider Chinese-led multilateral trade deals, such as the Regional Comprehensive Economic Partnership (RCEP).

The RCEP is being negotiated between China, Australia, India, Japan, South Korea, New Zealand, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

New Zealand, Singapore, Chile, Australia, Peru, and Malaysia have all referred to continued conversations and negotiations with the remaining TPP nations, as well as considering RCEP or other trade deals with China.

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