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Chile to Enter the CPTPP

Chile to enter CPTPP
In October 2022, Chile’s Congress passed a vote allowing Chile to enter the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), previously known as the Trans-Pacific Partnership (TPP), an international trade agreement. Chile, a nation that relies heavily on international trade, is joining the CPATPP to boost its economy and the global economy.

What is the Trans-Pacific Partnership?

In 2005, the CPATPP began as a five-nation agreement. The nations were Brunei, Chile, New Zealand and Singapore. In 2008, President George W. Bush agreed to begin talks for the United States to join this trade agreement. President Obama continued the trade agreement, with a finalized agreement by 2016. Unfortunately, President Trump pulled the U.S. out of the agreement, crumbling the TPP and forcing all 12 countries involved to re-plot the deal. The TPP then turned into the CPTPP.

The remaining 11 countries in the TPP moved forward to create their international deal, with the recent vote for Chile to enter the new international trade deal.

Eleven, soon to be 12, countries have ratified the deal to enter the CPTPP, a free-trade agreement aiming to boost domestic and global economies. For its members, the CPTPP removes 95% of the tariffs used commonly for international trade. The CPTPP eliminates all tariffs on sheep’s meat, wool and cotton. There are partial tariff eliminations for industrial/manufactured products, plants (medicinal or otherwise), wine, dairy products and beef (specifically Japan’s beef products). The CPTPP is the first international agreement providing a free market for e-commerce and no policies forcing ownership of one nation over an e-commerce enterprise. It protects foreign investments and keeps all parties safe from potential discrimination, thus creating fair and free trade that benefits all involved.

The CPTPP accounts for 40% of the global economy and in the case of the global trade value, about 25%. The CPTPP can create lasting positive effects on the global economy because of its impact on raising global GDPs. It can increase productivity and national income worldwide, bringing money into local economies, increasing wages, creating jobs and effectively lowering poverty rates worldwide. The potential benefits of the CPTPP convinced Chile to enter the trade deal.

Chile’s Global Trade

Chile is trusted internationally for its strong trade presence, but like the rest of the global market, Chile experienced some economic downturns during the COVID-19 pandemic, though it appears to be recovering. With the U.S., Chile has an established free-trade agreement. Chile already limits tariffs on its exports, welcomes foreign investments, and its open market operations. An open market, such as Chile’s, has no barriers to trade, i.e., no tariffs. Its economy is in solid shape with only around a 4% poverty rate. As many can benefit from Chile’s lack of tariffs, it is logical for Chile to seek similar financial gain elsewhere.

Chile’s main exports are copper, which accounts for 48% of all Chile’s exports, but it also relies on its exported manufactured and industrialized goods for income (38% of exports and export income). Chile earned $50.7 billion from copper alone in 2021, an incredible increase from $33.17 billion in 2020. Chile’s international presence and trade are substantial factors in the government’s decision for Chile to enter the CPTPP. The Chilean government hopes to promote additional changes regarding certain “state-to-state” trade operations in the CPTPP but remains hopeful for future economic prosperity.

The Benefits of the CPTPP

The CPTPP still has room for advancement as more countries enter it. Despite its newness, there has already been significant progress relating to the world of e-commerce. The CPTPP inspired e-commerce trade regulations and other free-trade agreements between Chile and Argentina. China, an important trading partner for most of the world, has applied to receive recognition as a full member of the CPTPP. China’s presence could entice other nations to follow suit, given its placement on the world stage.

The CPTPP protects small and medium enterprises (SMEs), a fact that Canada heavily promotes. About 47%  of Chile’s businesses are SMEs. The presence of SMEs allows for local economic development and can attract foreign investments. As the world faces economic troubles and continued recovery from the COVID-19 pandemic, Canada reported stable and trusted trade and attributed this success to the CPTPP.

Many nations have already found the CPTPP beneficial in one way or another, be it regarding e-commerce trade, decreased tariffs or protection of SMEs. As a free market, Chile exemplifies the benefits and economic prosperity that the CPTPP can provide on a larger scale. Chile is an example of the kind of nation and partnership the trade deal seeks to create. When Chile enters the CPTPP, it can share its economic prosperity worldwide with strengthened trade partners.

– Clara Mulvihill
Photo: Wikimedia Commons

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Mexico and the Sugar Support Program

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When it comes to the Trans-Pacific Trade Partnership (TPP), the United States’ sugar subsidies may not leave a sweet taste.

Touted by the U.S. government as a deal intended to alleviate barriers to fair trade amongst 12 countries lining the pacific rim, the TPP has met considerable backlash in congress this summer.

Many in Washington on both sides of the aisle have alleged that the TPP is full of deals that favor US corporations in lieu of global interests—especially when it comes to the global sugar market.

As the Obama administration was drafting the TPP, which is said to focus on redoing trade barriers such as tariffs and strict market controls between Chile, Peru, Vietnam, Malaysia, Mexico, New Zealand and the US (among others), the sugar lobby was also tightening their hold in Washington.

The sugar support program currently protects the interest of growers in the United States by heavily inflating the costs of domestic sugar. The going world price for sugar is 10.94 cents; the price in the United States is more than double that, at 24.45 cents according to the August 2015 future commodities market.

Logically, this might seem as if it would actually help foreign sugar growers in places such as Mexico. If they are able to sell their cane at a lower price the US should present an readily available market.

Instead, there is a great deal of red tape that surrounds sugar importation into the United States: less and less foreign sugar is allowed to make it into the United States every year, which can spell catastrophe for the exports of developing countries

“Mexico struck a preliminary deal in October to send less sugar to the U.S.,” wrote the Wall Street Journal. “The U.S. is the world’s fourth-largest sugar consumer and relies on its imports, most of which come from Mexico.”

What does this mean for the future of economic development in places like Mexico? As it stands, Mexico produces more sugar than it consumes increasing the necessity of selling the surplus on the global market.

Under the existing agreement, 300,000-to 400,000 tons of sugar sit idly in Mexican storehouses, doing nothing to help spark the Mexican economy. Since the NAFTA regulations were imposed (reaffirming U.S. sugar support) the number of people living in “food poverty in Mexico has grown from 18 million” to 20 million, according to Foreign Policy in Focus.

TPP, in theory, should eliminate the NAFTA tariffs and regulations. In practice, however, the sugar lobby continues to write enormous subsidy-saving checks in Washington.

“We can’t compete with our hands tied,” said mill owner Juan Cortina, who is also the head of Mexico’s sugar chamber. “The United States offers its sector certain benefits and we should have the same. If not there is no level playing field.”

In light of the previous NAFTA agreements, the U.N. has warned that the TPP could “aggravate global poverty” as trade deals worth about $300 billion are negotiated behind closed doors.

Now, in 2015 the doors are open, and the ever-powerful United States sugar lobby is public for everyone to see.

– Emma Betuel

Sources: WSJ, Al Jazeera, Reuters, Herald Tribune, Spartanburg Herald Journal, San Diego News, Foreign Policy In Focus, Washington Post
Photo: MOMA

Internet Freedom, Intellectual Property and the TPP

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U.S. Congress could soon pass legislation to fast-track the embattled Trans-Pacific Trade Partnership (TPP), the Guardian reported Monday, a deal which has divided the Democratic party in the final months of Obama’s two-term presidency. One divisive factor of the controversial deal stems from language used in its chapter on Intellectual Property (IP), which some believe would curb internet freedom by restricting users’ access to copyrighted materials, while increasing penalties for doing so.

Internet freedom advocates argue that the changes made to intellectual property enforcement internationally will inhibit participating countries from enforcing their own, oftentimes shorter copyright terms, while additionally placing further controls upon the fair use exception to copyright law, which The Intercept explained allows individuals to “repurpose copyrighted material to make art or music.”

Negotiations of President Obama’s trademark, albeit controversial deal have been infamously secret, which is one reason prominent political figures from within the President’s own party have voiced their opposition.

On her website, Senator Elizabeth Warren (D-MA) hosts a petition to bring TPP brokerages out from behind closed doors where entities other than corporate lobbyists could access the deal that will affect international environmental policy, labor standards and regulations, as well as intellectual property standards and enforcement.

Pleas for transparency by Warren and her contemporaries were finally quelled by a May 14 Senate vote, which advanced a bill that would grant Obama, and future presidents, sole authority to negotiate the terms of the TPP, Bloomberg reported.

The TPP unites 12 countries with a combined 40 percent of the world’s economy, including some major economic players like Japan, South Korea and Canada, as well as developing countries such as Vietnam and Brunei.

The Electronic Frontier Foundation (EFF), a nonprofit which advocates for freedom of expression and innovation on the Internet, secured a draft of the TPP chapter on intellectual property containing language that would limit users’ “freedom of speech, right to privacy and due process, and hinder peoples’ abilities to innovate.”

Each participating nation will be forced to adopt the TPP’s standards for intellectual property online, which the EFF says goes beyond current U.S. law and lengthens the time an individual or corporation maintains ownership of copyrighted material.

It would also punish alleged copyright infringers by kicking them offline without due process through the termination of their ISP contract. Additional, harsher criminal sanctions, such as jail time without so much as a formal complaint from the copyright holder beforehand, are also a possibility under TPP parameters, the EFF reports.

The EFF also said TPP’s stance on trade secrets–forged as a “tactic to address cyber-espionage on the global stage,”–is nebulous on what exactly constitutes a trade secret, and also lacks any safeguards for journalists or whistleblowers who access information “without criminal or commercial intent.”

The inevitable result, EFF asserts, will be a chilling effect on free and uninhibited expression, which Harvard economist Amartya Sen argues is both the means and the end to development in underdeveloped countries.

Without transparency during the negotiation process, it is difficult to say exactly how restrictive TPP’s IP controls will be. But as of late last month, Sputnik International found that more than 2,354 websites and tech companies had called on users to contact their congresspersons in opposition to the TPP.

– Amanda Burke

Sources: The Guardian, EFF, First Look, Bloomberg, Sputnik News
Photo: Flickr

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Secret Trade Agreement to Exacerbate Poverty

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The Trans-Pacific Partnership (TPP) is a free trade agreement originally drafted in 2005 between Brunei, Chile, New Zealand and Singapore. It has since included vested interest from the United States, Australia, Canada, Japan, Malaysia, Mexico, Peru and Vietnam.

Much like previous trade agreements, the TPP’s main goal is to promote trade and investment among partner countries and eliminate tariffs on goods and services.

The TPP differs greatly from previous trade agreements as it includes a number of controversial clauses that could negatively impact millions of people around the globe. While trade agreements typically deal with lowering trade barriers, this agreement encompasses additional points of contention ranging from intellectual property rights (ex: extending copyright protections, making approval process harder for generic drug makers) to limiting public support for state-owned enterprises in order to foster competition.

The agreement has received extensive backlash from internet freedom activists, environmentalists, labor activists, advocacy groups and elected officials.

Although trade negotiations are typically conducted in private in order to protect the positions of the involved states, the TPP is disconcerting as it is significantly more comprehensive and encompasses many facets of society. Naturally, this has many concerned over its contents.

There have been a number of critiques that the multi-national trade agreement would exacerbate economic inequality on a global scale. Much like NAFTA and other “free” trade agreements, it has been argued that the TPP would place corporations ahead of the people, destroying job opportunities at home and increasing poverty for workers abroad. Further, the agreement will increase competition for low-skill, low-pay jobs that cannot be shipped off shore; the workers at home will be even more hard-pressed to find jobs, making them worse off than ever before.

U.S. foreign policy critic and professor at MIT, Noam Chomsky argues that the TPP is an “assault” on working people and intended to further corporate “domination.” “It’s designed to carry forward the neoliberal project to maximize profit and domination, and to set the working people in the world in competition with one-another so as to lower wages to increase insecurity,” Chomsky has said in an interview with HuffPost Live.

The TPP is likely to follow in the footsteps of NAFTA where U.S. corporations will contribute to the trade deficit by manufacturing in developing countries abroad, rather than reviving the economy at home. Negotiations for the TPP, also known as “NAFTA on steroids,” have been largely kept secret from the public and members of Congress. This has forced the public to rely on confidential documents released by WikiLeaks and Huffington Post. Despite these leaks, the public is largely kept in the dark.

Corporate interests are pushing for agreements – or, regulations – in order to standardize otherwise “inconsistent regulations.” Most of the current regulations “may not be perfect, but they are serving their purpose regardless: to protect workers, consumers, the economy and the environment,” says economist Joseph Stiglitz. The TPP would reform these already-placed regulations potentially producing dire consequences for the majority of impacted people in the United States and abroad. The proposed clauses could decrease regulations so that the corporate sector will further profit from lowering “non-tariff barriers.”

In 2012, the Obama administration has called for the renewal of the “fast track” authority so that negotiations for the TPP can be expedited and approved with minimal debate and no amendments. This secretive agreement has the potential to pull the working class in America and those in developing countries deeper into poverty.

– Rozali Telbis

Sources: Alternet, NY Times, Huffington Post, Common Dreams
Photo: BlairBlog