TPP – An update from our Visiting Fellow, John Garnaut

So Andrew Robb has stared down the US Trade representative, Mike Froman, to leave the medical intellectual property regime broadly unchanged. “Froman and I got into an arm wrestle on this,” as a bleary-eyed trade minister told me from Atlanta. “We had 10 meetings in 2½ days.”

By exhausting Froman into submission, and protecting Australia’s five-year “biologic” data exclusivity regime, Robb has done both the US and the wider region a great favour.

He has forced the Obama Administration into battle with key Republican congressmen who are backed by the US pharmaceuticals industry, even though they delivered the Administration its fast-track negotiating powers.

This has given the Administration a chance of convincing the region that the TPP is a vehicle for free trade rather than its opposite.
It also gives Robb a chance of convincing Australians that the Trans Pacific Partnership will be good for them.

Still, this will not be easy, as Robb’s travails over the China FTA have shown.

The Abbott Government had struggled to sell the China agreement even though it offers clear, tangible and immediate benefits, including an immediate $200m annual boon to Australian wine exporters. It is by far the most impressive bilateral agreement that Australia has every signed.

ChAFTA should have been an easy sell but the Abbott Government made it look hard.

The benefits of the TPP, in contrast, are ambiguous, intangible and long-term.

How does Robb convince voters that facilitating “data” flows, improving transparency for state-owned enterprises, and allowing corporations to sue governments will contribute to prosperity? How do you illustrate those abstractions on the evening news?

Worse, how do you show that these relatively invasive behind-the-border requirements are not weapons in the hands of US corporations, attacking the independence of sovereign states?

The Obama Administration is trying to bypass these difficult questions by framing the TPP as a matter of geopolitical supremacy. “We can’t let countries like China write the rules of the global economy. We should write those rules, opening new markets to American products…”

But such short cuts aren’t available to Andrew Robb. He has to sell the TPP on economic merits alone. This is where his new tech-savvy and articulate prime minister, Malcolm Turnbull, will have to play an outsized supporting role.

And then trade strategists need to absorb the implications of Australia joining the world’s first “megaregional”, with the prospect of others to come.

With the World Trade Organisation on life support, and the Regional Comprehensive Economic Partnership (RCEP), under negotiation, where does Australia’s trade relationship with Europe fit in?

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