Dec 152016
 

These are some reflections on RCEP round in Jakarta for those who weren’t there.

Japan has become the US in drag, asserting its commitment to implementing the TPPA no matter what and pushing TPPA positions (and sometimes worse) even in areas it initially opposed in those negotiations, such as SOEs and intellectual property. Presumably this is to impress Trump in the hope the TPPA can be resurrected or a bilateral US Japan deal can rise from its ashes, with Japan surrendering once again to the American superpower.

Australia and New Zealand continue their mantra that RCEP must be a ‘high quality’ agreement and continue to demand massive commitments from developing countries. They got a lot of pushback this week. Problem is they have nothing to offer in return.  Tariffs into Australia and NZ will be zero by 2020 under the ASEAN NZ FTA. India is hardly fussed with potential access to their markets in return for massive concessions. Both countries have agreements with China and South Korea.  But they have no TPPA. Trying to sell a muted RCEP as a credible substitute would be a further blow to their ideological aspirations, reinforcing the impression they are fighting for a lost cause while leaving their commercial lobbies skeptical and unsatisfied.

China as always plays a subtle game. While this is branded as an ASEAN-led agreement, there can be no deal without China’s buy in. That rules out anything significant in some  areas, such as SOEs and aspects of e-commerce that involves offshoring of data. But it has active interests in investment and goods exports to India especially. That means careful trade-offs and nuanced rules, which are not what New Zealand, Australia, Japan and Korea say is a bottom line.

India’s position is an enigma. It wants to come in from the cold and join these clubs, but not at any price. Concessions have already been made on goods. Their more progressive model investment treaty will inevitably be diluted in a plurilateral deal with countries that have signed up to the unbalanced and increasingly discredited pro-investor model, as per the TPPA. But you don’t get the sense this is ‘do or die’ for India if they are pushed too far.

As for ASEAN – who really knows. They are supposedly speaking as a bloc, but apparently not always. There is such diversity among them, from affluent Singapore to three LDCs. Those who were part of TPPA may be breathing a sigh of relief, but nevertheless be more comfortable with the liberalising positions put forward by other TPPA countries. Clearly, the combination of ASEAN, India and China will affect the pace of the negotiations and the ‘ambitions’ of any outcome.

Business is pushing, with an East Asian lobby group having several days of access to negotiators to press their demands. Civil society, by contrast, got 90 minutes to give 4 minute speeches to negotiators expressing their concerns. At the end the Australian chief suggested civil society also highlight the positives. He insisted the TPPA was not yet dead, and denied that parts of TPPA were being shifted across to RCEP, which he said was a total different deal. The latter may be true, but that doesn’t mean they aren’t trying.

By contrast the Indian representative welcomed critical insights and sought views on future engagement. That is bound to become an issue. This was the 19th round and only the third opportunity for even this level of engagement. Decisions about stakeholder access are left to the host country – in this case the Indonesians were extremely generous with facilities and making negotiators available. But there is no guarantee that will continue in the rounds scheduled for the whole of next year. Doubtless business will continue to enjoy the negotiators’ ear.

This deal is not going to happen in a hurry. There is time to build pressure, including from the legislatures who are being shut out from another deal that will usurp their role in governing their nations, alongside the workers, women, indigenous nations, local businesses and communities who will be governed by yet another regime of corporate rule(s). In later February the RCEP show moves to Kobe in Japan. Trump will have become President and Prime Minister Abe will doubtless try to impress with his commitment to implement the TPPA, even if the US does not. How that flows through to his hosting of RCEP, where Trump’s nemesis China is one of the main players, will be fascinating to watch and may add to the complexities that mean RCEP may follow TPPA and never see the light at the end of its tunnel.

 

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