Trans-Pacific Partnership Talks Stall

In a crippling blow to Barack Obama’s Trans-Pacific Partnership trade agreement, talks between nations in the partnership have collapsed.

All 12 nations in the pact besides the U.S. failed to reach an agreement late last week, causing Obama and Secretary of State John Kerry to scramble over the weekend. The pact is originally designed to allow more trade between the U.S., Mexico, Canada, and many other nations throughout Asia.

In a crippling blow to Barack Obama’s Trans-Pacific Partnership trade agreement, talks between nations in the partnership have collapsed.

All 12 nations in the pact besides the U.S. failed to reach an agreement late last week, causing Obama and Secretary of State John Kerry to scramble over the weekend. The pact is originally designed to allow more trade between the U.S., Mexico, Canada, and many other nations throughout Asia.

Many of those nations, such as Vietnam, Malaysia, and Brunei, have poor working conditions and median salaries are a fraction of the minimum wage in the United States.

Open Trade

The exact cause of the stalled talks is unclear, but some commentators have cited Japan Trade Minister Akira Amari’s comments as a suggestion that some countries feared a lack of protectionism could put their poorest citizens at risk. Amari noted that the pact focuses on letting “people, goods, capital, and information to flow freely through the zone,” raising concerns that wealthier Japan, U.S., and Canada could find it difficult to maintain current living standards amidst a net outflow of capital and inflow of workers.

The conference, which took place in Hawaii on Friday, became somewhat acrimonious because of American demands for greater intellectual property protections. One anonymous source told the Associated Press that U.S. drug manufacturers were pushing for greater protectionist policies that would keep drug patents in place for 12 years, while all other nations disagreed. “The U.S. was on one side of the issue, while practically every other country was on the other side,” the source said. At the same time, the U.S. has pushed for less protectionist policies to support labor wages in both America and other nations in the TPP.

Australia Balks

The sternest response against American demands came from Australia, and the state-owned Australian Broadcasting Corporation has published a lengthy editorial praising the government for walking away from the TPP.

The focus in Australia is about agreements that allow foreign corporations to sue governments if they make decisions or pass legislation that harms their business operations in that country. Citing a clause from an old trade agreement Australia made with Hong Kong, the ABC noted that tobacco giant Philip Morris was able to sue the Australian government for passing litigation that hindered the sale of cigarettes.

“Under that clause, the company has the legal right to challenge decisions made by a democratically elected government and to seek damages should it win. To ensure it had legal jurisdiction, the company’s Hong Kong subsidiary bought its Australian operations just as the legislation was being prepared,” the ABC said in an editorial.

Additionally, the ABC accuses the American government of hypocrisy, citing that American demands on drug patents are not a way to open trade. “Free trade is supposed to be about removing barriers to competition, not extending them. When it comes to trade, it would appear that modern America’s version is largely concerned with putting as much distance between ‘free’ and ‘trade’ as possible,” the editorial said.

TPP talks will resume this week.