Embracing the US-less version of the Trans-Pacific Partnership (TPP) will add less than 0.5% to GDP in a decade’s time, or around one and a half days’ worth of income, to the Australian economy, according to a study commissioned by spruikers of the trade deal.
The report, by two US economists and commissioned by business groups such as the Minerals Council, the Business Council, the Australian Food and Grocery Council, the Australian Industry Group and the Australian Chamber of Commerce and Industry (ACCI), is a humiliation for the business sector, which has long lobbied for adoption of the secretly negotiated trade deal that opens Australia up to litigation by multinationals to obtain compensation for government policy. When even your own specially-commissioned consultants can’t get the numbers to work for you, it’s an admission that the reality is like to be grim indeed. In fact, AIG, the AFGC and ACCI didn’t even issue a media release about the report.
The revised “Comprehensive and Progressive Trans-Pacific Partnership” will add US$12 billion per annum to Australia’s national income in 2030, or 0.46% of forecast income, an increase described by the report’s authors as “relatively modest”. It is also forecast to increase overall foreign investment into Australia by just US$6 billion. However, the Minerals Council decided to hype the report anyway, claiming “Australian workers, jobs and business will benefit significantly from the Trans-Pacific Partnership (TPP-11) trade agreement” and that it would “[lift] real wages with higher wage gains for lower-skilled workers.” The BCA — which has still not even acknowledged the change of prime minister — claimed the deal “can improve living standards, particularly at a time of weak wages growth”.
What does the report say about wages? The only mention is that “[r]eal factor prices — wages, profits — will tend to rise at rates similar to real income changes” with no further detail beyond that unskilled workers would do better than skilled workers. That presumably means that wages would, after a decade, grow by around 0.46%, or $7.60 a week* in current dollars for full-time adults, or about $10 a week in 2030. That won’t be very handy for manufacturing workers, though, since the report acknowledges durable manufacturing will shrink in Australia under the revised agreement by 2% — and even more if other countries join the agreement.
Both the BCA and the Minerals Council emphasised that the agreement would boost exports by US$30 billion, without saying that it would also boost imports by exactly the same amount. As the Productivity Commission’s outgoing chair Peter Harris noted last week about how the benefits of trade agreements are spun, no one ever mentions the additional imports that arise from them, despite the benefits of cheaper imported goods for Australian consumers and business.
*the original text contained a howler: we referred to $7.60 a year not a week. Thanks to the Minerals Council for picking this up.
The ability for multi-nationals to persecute governments for compensation is really a concern, do the signatories not realise that this will lead corporations to pursue legal avenues at the first available opportunity?
Of course they do…. I’m sure there are legal parasites touting potential compo payout strategies long before this deal was ever concluded. And the beneficiaries will be the usual suspects involved in promoting this load of corporatised shit, not the ”unskilled” (457visa?) workers.
Yes they do. Australia has just won, at great expense, the litigation by the cigarette manufacturers seeking to punish us for making them enclose their poison sticks in unattractive packaging.
That judgement did not occur in a corporate court as preposed in the TPP, but rather a WTO ruling. I’m not sure how much the rules have changed since the wikileaks posting but it will be impossible to stop a company demanding equal rights of access to markets and enforce trademark/ copyright on whatever they wish.
The points still remains, legal parasites won the WTO plain packaging ruling and most ever company law case.
Your term ‘corporate court’ is somewhat. It’s 3 business flunkies in a non- legal setting scratching each other’s backs.
I’ve given up arguing this crap. They aren’t free trade at all. They entrench the rigged and pliable USA patent laws on other countries that don’t have bought and paid for pollies, plus extended intellectual property regimes. The ISDS provisions are just the insult on top of the lie.
The supposed benefits aren’t even a rounding error on their broad and nonsensical assumptions.
Used car sales is an honorable profession compared to these econometricians.
This is really only the latest in a long line of articles and considered papers that have stated the TPP was not worth the paper it was written on.
Free trade – one of the great oxymorons of our era.
Sorry – what’s the TPP got to do with free trade?
I’ve always held the view that, even if a trade agreement is neutral, at least there are spinoffs in areas such as less suspicion, less chance of conflict, freer travel, etc. Our trade agreement with Indonesia will, I hope, bring our nations together in a more ‘personal’ way than just being nodding neighbours. Who knows, we might actually become friends.
The TTP has always seemed much more impersonal, missing are the ‘friendly’ meetings and press conferences and above all the spelling out of what’s in the agreement. The secrecy around the TTP is mystifying and very suspicious, the exact opposite of what a trade agreement, or any agreement, between governments should be about.
Even without the trade agreement Australians who have travelled in Indonesia more widely than a few days in Bali usually find out that Indonesians are friendly. They are, though, not as well informed about Australia as they were a few decades ago when the cheerful voices of Radio Australia announcers were broadcast into millions of Indonesian radios in Indonesian. Recently in Indonesia I happened to mention that Australia’s population was only a tenth of Indonesia’s and a friend said, “Really? I thought it was about the same as Japan.” Incidentally the abandonment of short wave is no excuse for Australia not to be broadcasting Indonesian programs at quite low cost. Even if we didn’t want to negotiate FM licences in some Indonesian cities a strong AM transmitter on Christmas Island could reach all over West and Central Java and Jakarta in the day time and even further at night. We really aren’t trying. (In Broome, WA a few years ago, I was able to pick up Indonesian AM stations loud and clear at night.) Visas are another issue that may not be helped by a trade agreement. We can fly to Indonesia without a visa. Indonesians have to pay a big, non-refundable fee and jump through hoops to get a visa for Australia, which is often refused. At least, if nothing else, we could make the fee refundable.
The arse has fallen out of the crystal balls market?
‘Even spruikers can’t find benefits…’ That’s because there aren’t any! Except for those in the top 1%.
All that will happen is that MORE workers from these ‘TPP’ countries will be allowed into Oz so that wages will stay low. We are rapidly heading for the $2/hour scenario for all.
And that is before we even have to deal with the ISDS atrocity…!!