Socio-economy / Umno & Barisan Nasional

Stiglitz : The US is committed to a lack of transparency

Just read what the Nobel laureate, Professor Joseph Stiglitz has to say about the TPPA:

Though nothing has come of the World Trade Organization’s Doha Development Round of global trade negotiations since they were launched almost a dozen years ago, another round of talks is in the works. But this time the negotiations will not be held on a global, multilateral basis; rather, two huge regional agreements – one transpacific, and the other transatlantic – are to be negotiated. Are the coming talks likely to be more successful?

The Doha Round was torpedoed by the United States’ refusal to eliminate agricultural subsidies – a sine qua non for any true development round, given that 70% of those in the developing world depend on agriculture directly or indirectly. The US position was truly breathtaking, given that the WTO had already judged that America’s cotton subsidies – paid to fewer than 25,000 rich farmers – were illegal. America’s response was to bribe Brazil, which had brought the complaint, not to pursue the matter further, leaving in the lurch millions of poor cotton farmers in Sub-Saharan Africa and India, who suffer from depressed prices because of America’s largesse to its wealthy farmers.

Given this recent history, it now seems clear that the negotiations to create a free-trade area between the US and Europe, and another between the US and much of the Pacific (except for China), are not about establishing a true free-trade system. Instead, the goal is a managed trade regime – managed, that is, to serve the special interests that have long dominated trade policy in the West.

There are a few basic principles that those entering the discussions will, one hopes, take to heart. First, any trade agreement has to be symmetrical. If, as part of the “Trans-Pacific Partnership” (TPP), the US demands that Japan eliminate its rice subsidies, the US should, in turn, offer to eliminate its production (and water) subsidies, not just on rice (which is relatively unimportant in the US) but on other agricultural commodities as well.

Second, no trade agreement should put commercial interests ahead of broader national interests, especially when non-trade-related issues like financial regulation and intellectual property are at stake. America’s trade agreement with Chile, for example, impedes Chile’s use of capital controls – even though the International Monetary Fund now recognizes that capital controls can be an important instrument of macro-prudential policy.

Other trade agreements have insisted on financial liberalization and deregulation as well, even though the 2008 crisis should have taught us that the absence of good regulation can jeopardize economic prosperity. America’s pharmaceutical industry, which wields considerable clout with the office of the US Trade Representative (USTR), has succeeded in foisting on other countries an unbalanced intellectual-property regime, which, designed to fight generic drugs, puts profit ahead of saving lives. Even the US Supreme Court has now said that the US Patent Office went too far in granting patents on genes.

Finally, there must be a commitment to transparency. But those engaging in these trade negotiations should be forewarned: the US is committed to a lack of transparency. The USTR’s office has been reluctant to reveal its negotiating position even to members of the US Congress; on the basis of what has been leaked, one can understand why. The USTR’s office is backtracking on principles – for example, access to generic medicines – that Congress had inserted into earlier trade agreements, like that with Peru.

In the case of the TPP, there is a further concern. Asia has developed an efficient supply chain, with goods flowing easily from one country to another in the process of producing finished goods. But the TPP could interfere with that if China remains outside of it.

With formal tariffs already so low, negotiators will focus largely on non-tariff barriers – such as regulatory barriers. But the USTR’s office, representing corporate interests, will almost surely push for the lowest common standard, leveling downward rather than upward. For example, many countries have tax and regulatory provisions that discourage large automobiles – not because they are trying to discriminate against US goods, but because they worry about pollution and energy efficiency.

The more general point, alluded to earlier, is that trade agreements typically put commercial interests ahead of other values – the right to a healthy life and protection of the environment, to name just two. France, for example, wants a “cultural exception” in trade agreements that would allow it to continue to support its films – from which the whole world benefits. This and other broader values should be non-negotiable.

Indeed, the irony is that the social benefits of such subsidies are enormous, while the costs are negligible. Does anyone really believe that a French art film represents a serious threat to a Hollywood summer blockbuster? Yet Hollywood’s greed knows no limit, and America’s trade negotiators take no prisoners. And that’s precisely why such items should be taken off the table before negotiations begin. Otherwise, arms will be twisted, and there is a real risk that an agreement will sacrifice basic values to commercial interests.

If negotiators created a genuine free-trade regime that put the public interest first, with the views of ordinary citizens given at least as much weight as those of corporate lobbyists, I might be optimistic that what would emerge would strengthen the economy and improve social well-being. The reality, however, is that we have a managed trade regime that puts corporate interests first, and a process of negotiations that is undemocratic and non-transparent.

The likelihood that what emerges from the coming talks will serve ordinary Americans’ interests is low; the outlook for ordinary citizens in other countries is even bleaker.

18 thoughts on “Stiglitz : The US is committed to a lack of transparency

  1. What big bullies do – US illegally paying subsidies to even rich farmers, bribing Brazil not to pursue the matter further, leaving millions of poor cotton farmers in Sub-Saharan Africa and India suffering from depressed prices. Damn.

    Don’t know what next they’d do, maybe protectionism on their corn oil, soya bean oil etc to the detriment of our palm oil? Shouting free trade nonsense?

    We must shout at them each time bullies do their bullying. Good that the professor does and we should chorus such people each time.

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    • I’m not so concerned about non-transparency of American trade as much as their larger economic interests. I remember arguing at length with people on why they wanted to bomb Iraq. One fellow insisting that the Americans were after the Iraqi oil.

      One thing for certain was there ware no Weapons of Mass Destruction. Iraq was bombed to smithereens. Bloody hell.

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  2. One sometimes wonder how much Barack Obama weighs in on such acts and decisions of the US. I like to think that the fler is quite liberal, though he succumbed to the Israel Lobby which 2 professors have described as having “unmatched power” as far as international politics are concerned. But this is trade. And agriculture, specifically.

    In Malaysia Najib has been accused of not reigning in the acts of the so-called Level Four boys. Including on the appointment of blokes with fake MBA as Chief of Tabung Haji and a fake PhD of Indian origin as CEO of FGVH. Both organizations are responsible for vast amounts of money of direct and indirect interest to the Malays, especially the kampung and FELDA Malays. Many also accuse him of doing the appointments himself, without even any advice or prodding by the Level Four etc.

    It’s an unfair world we live in these days. In supposedly enlightened USA and terribly disheartening Malaysia. We need the big stick from somewhere to whack those concerned. Anyone knows where to find the effective whacking tool?

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    • “.. unfair world we live in …terribly disheartening Malaysia” – Egypt had confusing news about Mohamed El Baradei, former IAEA boss announced as Prime Minister then the TV station denied it, Malaysia has Google News page showing the Star as reporting “Nazri and Zahid differ on repeal of Sedition Act .. one for repealing it and the other calling for it to be retained” but the page could not be found – “Error 404” which suggests it may be hacked/ removed.

      But the US beats us all – supposed to be the champion of democracy, transparency, free trade advocacy etc and now behaving like DAP, Pakatan Rakyat Anwar Al Juburi – cakap tak serupa bikin.

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  3. Yes, the US is committed to a lack of transparency. Definitely in the defence field. Especially now that China has become the second largest economy in the world and is sabre rattling a little bit in the China Seas. Even Japan has started to increase their defence budget.

    And the Japanese must now have a broader interpretation of their war-renouncing Constitution that disallows even participation in international peace keeping operations other than in non-combat functions. Certainly sending Japanese fighter jets to islands where the Chinese show their presence is defence, not offence. Knocking down a Chinese frigate that may be provocative there may also be defence. And the US surely would not be transparent in the various detection, radar-jamming and other military activities they may be engaging in the area.

    US wants to maintain world supremacy. Including in trade. Now even Russian President Vladmir Putin has referred to US as “our partners” – he said so when commenting on the American whistle blower Snowden stranded at Moscow airport with his passport cancelled by the US government. Non transparency on trade matters is also a part of the overall US pursuit of world supremacy. You can’t negotiate and get the best deals to maintain your world supremacy if you start revealing all what you do or don’t so. Especially your negotiating positions. It’s called strategy. Sometimes it’s also called do as I say, not as I do.

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  4. Truth of the matter is, BN is like a headless chicken running around not knowing what to do. While the snakes from outside the country and snakes from within are sniping and trying to get a piece of the action.

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    • Care to elaborate, Mister? What “truth of the matter” you talk, man?

      You are not making wild allegations without substantiation like the usual Oppo hippos, are you?

      You don’t have arguments, do you? If have, say out lorr.

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  5. Trade agreements should be symmetrical, should not put commercial interests ahead of broader national interests, etc, said the Nobel laureate Professor. And the US is not committed to transparency in trade agreement negotiations. Wonder what the World Trade Organization is doing. But then, the US is also playing a key role in there, isn’t it?

    It’s always an uphill battle trying to set things right where the “Policeman of the World” is involved. The League of Nations had noted there was no “supra-national authority” to control the behaviour of rogue nations, and its successor, the United Nations have created the “Big Five” Permanent Members of the Security Council to effectively supervise the “ruling of the world”, so to speak. But have we got there yet?

    The Chinese Ambassador to US last night said on CNN that China, one of the Big Five, is not a Super Power, considers itself “a developing nation”. But the fact that Russian President Vladimir Putin referred to US as “our partners” suggests that they, too, are concerned about any potentially unwelcome posture China might take when its steel mills and shipyards have produced enough aircraft carriers to carry hundreds of jet fighters laden with sophisticated missiles guided by satellites orbiting the skies that they surely have launched in addition to their manned rockets. Would China continue to be a responsible member of the Big Five when they have achieved a Super Power status?

    China can’t play much of a role in WTO now as their manufacturing and trading activities have not reached the level of sophistication as the US. But one thing is clear: countries will always try to “put commercial interests ahead of broader national interests”, however the degree of success may be. And we small fries like Malaysia shudder at the thought of the Big Five clashing on the world stage, on trade, whatever, that might lead to military brinkmanship and a nuclear holocaust. We’ll pray. This fasting month. And always.

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    • Are they not using trade agreements to achieve a political purpose? The following news heading suggests that it’s the opposite of ““putting commercial interests ahead of broader national interests” and I support it when it’s countering China’s influence:

      “The Trans-Pacific Partnership Trade Agreement Would Harm Our Environment
      Huffington Post – ‎4 hours ago‎

      Proponents say that the Trans Pacific Partnership (TPP) trade agreement would be a platform for economic integration and government deregulation for nations surrounding the Pacific Rim and facilitate free trade to counter China’s financial influence in Asia and the Pacific. The negotiating parties include Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States. Japan also announced its intention to join the agreement last spring..”

      Here is an excerpt from the article:

      “Quietly, the Obama administration is systematically putting into place a two-ocean globalist plan that will dwarf all prior trade agreements, including NAFTA, with the goal of establishing the global sovereignty envisioned by New World Order enthusiasts. The two agreements are the Trans-Pacific Partnership, or TPP, and the Transatlantic Trade and Investment Partnership, or TIPP.”

      Interestingly, Malaysia appears to want to join the “New World Order”. Liberalization, eh?

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  6. I have in recent years agreed a lot with what Tun Dr Mahathir says. But not sure if I would agree with his views on the Trans Pacific Partnership (TPP) agreement. He said it would jeopardise Malaysia’s trade with China and not good long term.

    He had as PM railed against the US led APEC and now said the new TPP was a thinly disguised trade block to neutralise China’s rise in the region.

    “We will be tied up to them and whatever policy they decide, our trade with China will be affected,” he said. But then, any trade agreement produces that. He has not given the arguments when saying, “.. our trade with the US will not be increased, despite the claims that trade within the TPP will amount to billions and trillions of dollars.” But I agree that China is a major export market for Malaysia.

    TDM said the US is worried about China. Again, I agree that “there is a political reason behind the TPP” but not sure if it is “to our cost,” In fact, with the Chinese muscle flexing in the China and South China Seas against Japan, Philippines – and Malaysia is claiming one disputed island – I’m not sure if being “in the Chinese block” will be in our national interest in the long term.

    We note his observation that the US has all the advantages of technology and capital and they move in and out as they please .. whenever they find the situation is bad, they move out (but would China not do the same?). He also said under the TPP, government procurement and capital controls will suffer, risking another financial collapse as in 1997. But I’m glad that he said, “I am not rejecting TPP completely, I am saying this is to be studied carefully,”

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  7. The Malaysian Reserve claims that a source from the Ministry of International Trade and Industry (MITI) said China has shown interest to join the TPP, and that an announcement is expected soon.

    The MITI source said the US has been sending out specific invitations to nations to join the TPP talks and one of them is China.

    But a source from an unnamed international NGO who is said to be familiar with the TPP negotiations said that it is highly unlikely, saying, if the invitation is confirmed, it’ll be “a very serious matter” as the entry of China will probably change the entire configuration of the treaty.

    It is said that Malaysia’s halal requirements is a source of concern as it could be seen as a trade barrier or its procedures may not be agreeable to other TPP members. But it is claimed that halal has been excluded from the discussion table.

    I see huge hurdles in the way of reaching an agreement in the negotiations. One comment made by a relevant party is that “there were too many incongruent elements that raised more fear than hope with the secretive trade deal.”

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  8. I will confess. Now I am biased. Having a dislike of anything Chinese. After the Chinese Tsunami.

    So, I find it difficult even to accept Tun Dr Mahathir’s strong advice against Malaysia joining the TPP. Which is said aimed at containing the influence of China. He gave quite strong advice in the media to day. I have suspicions about the Mainland Chinese as well. I’m inclined to favour Malaysia being in the US grouping.

    But, honestly, it’s too complicated for me to understand Tun’s points about capital controls, currency pegging, etc. Maybe it’ll become clearer in due course. But then, even if one understands all those, would Najib listen to the rakyat’s objections? Even the Sedition Act he wants to repeal despite Home Minister Zahid and Minister Shahidan speaking for its retention. Already many people have been asking that he be replaced at the UMNO party elections in November.

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    • The Philippines have thrown their lot with the US. Not just trade – TPP etc – even militarily, it seems..They are busy rushing to complete re-building Subic into a naval base and Clarke (both are north of Manila) into an air base for US ships and fighter aircraft that used to be based there during the Vietnam War.

      Sure this decision has been due to the Chinese action around the island that the Philippines have been claiming for a long time – just rocks, but a lot of oil said to be around there. The Chinese started to “lurk around” as they rose to become the second largest economy in the world, recently started building aircraft carriers, rockets sending men into outer space, etc.

      It’s difficult to trust the Chinese. They have assisted the Malayan Communist Party trying to overthrow our Government, the North Koreans trying to overrun the Korean Peninsula, and the North Vietnamese overrunning south Vietnam. Trying to turn these countries into communists under their influence, though communism is out of fashion now.

      But the Americans have proven to have defended democracy – they played a huge role in whacking the Germans and the Japanese in World War II, in Korea and in Vietnam, too. I prefer Malaysia go with the Americans, rather than the Chinese.

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      • We are small fries. True, we need to speak like independent sovereign nations with our own identity, wanting to manage our own destiny. But realistically, no man is an island, and no island is not visited by others, including crooks and corporate marauders.

        The Americans even do unhealthy economic, trade and business practices in their own country but they have huge resources to counter them, including anti-monopoly laws.

        We Malaysia needs to take sides. China has a turbulent history, 5,000 years of civilization much of it claiming to be superior to all others, those outside “the Middle Kingdom” they said were “barbarians”, yet they were ruled by foreigners – Mongols and Manchus – for several hundred years until the 20th Century, and were regarded as a pariah state only until 10-20 years ago. The psychology of a people like those I cannot trust.

        Especially when we have the seditious, subversive and anti-national elements in the DAP etc spreading hatred towards the majority race, causing the Chinese Tsunami and demanding the Sedition Act be abolished, I won’t feel safe with Malaysia under the influence of mainland China. So, I, too, support Malaysia joining the TPP.

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        • I’m also concerned about “going with the Americans”. Look at what they have done to Egypt as recently as several days ago. They supported the Military which ousted Morsi from the Presidency. The country going into turmoil endlessly. 2 years after the Arab Spring, 1 year after Morsi was elected President.

          Imagine, they are supposed to be the guardian of democracy the world over, the so-called Policemen of the World and all, now supporting what people have branded the action by the Military as a coup d’ etat. And US supports that.

          Last time they bombed Iraq, said to be goaded by Israel. Then Obama kept at arm’s length from Israel, but because of the Israeli Lobby and the votes, he went to the land of the Zionists, donned the Jewish skull cap, joined the Jews praying at the Wailing Wall at the Temple Mount behind the Al Aqsa Mosque in Jerusalem. (The original Jewish Temple was burnt by the forces of Roman Emperor Titus in AD 90 – or was it Hadrian, later – and Islamic forces built the Al Aqsa Mosque from which Prophet Muhammad ascended to Heaven).

          Time and leaders always change, don’t they? But would the Chinese and their kind of history change? Not when judged from the DAP Chinese and the Chinese tsunami. We have to keep on bashing the unscrupulous, the unprincipled, the seditious and the subversives, don’t we? And the one abolishing ISA, EO and now the Sedition Act.

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      • A friend argued that China might not want to harm Malaysia. Because the Malaysian government is friendly towards China. Because there are 23% Chinese in this country.

        But he agreed that China has staked its claim on the Spratly island chain in the South China Seas by constructing a structure above the stone that juts out of the sea just for their Navy men to take turns staying there guarding it. The same island chain that Malaysia has built an air strip and a tourist resort on the bigger island called Pulau Layang Layang.

        So, can we trust the Chinese? Do we not benefit in terms of protection if Malaysia joins a trade pact said to be intended to contain the influence of China?

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    • The DAP Chinese not disloyal? The Tsunami Chinese followed the DAP because angry with BN, not because disloyal? I don’t think so.

      Reason? Why should I give reason? The DAP Red Beans always accuse never give reason. We must be allowed to do that sometimes.

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