Alternative analyses of contemporary trade and political agreements that identify power relations are needed to ensure critical perspectives are voiced within international relations theory. Too often, while trade negotiations take place little attention is paid to the nature of divisions of labor and the intentions of actors involved. The Trans-Pacific Partnership Agreement (TPP) currently under negotiation maintains 12 diverse economies spread across the Asia-Pacific. The TPP has the potential to set new international precedents that will impact multiple sectors across the globe and the next negotiation round will take place in Brunei from 22 to 26 August. With the failure of the Doha Development Round to break major ground to lower trade barriers, nation-states see the TPP as a mechanism to set new rules for international trade that will impact the world economy. The rules negotiated for intellectual property alone will impact access to medicines, distribution of music, and freedom of expression among other areas. It is important, then, to understand the roles of each economy within the TPP negotiations and the world-system. In identifying the power relations among economies, a world-system analysis will help shed light on the TPP negotiation process and contrasts with traditional rational actor theory.
In an earlier post I discussed different perspectives on the TPP and a few trade areas being negotiated that have become controversial. With Japan’s entrance into the TPP, and member economies and governments calling for negotiations to wrap up this year, a few issues continue to provoke controversy. Namely, the intellectual property provisions and tariffs for traditionally protected industries.
To better understand their perspectives on trade issues and role within the world economy, the TPP negotiating economies can be separated into regions and examined according to their structural relationship. Capitalism, according to world-system theory, is organized around an inter-regional and transnational division of labor. Together, nations within the world economy work within a specialized division of labor with core, semi-periphery and periphery zones. Nations within the core (US, Canada, Japan) control, and are the primary owners of, the means of production; they produce higher technology goods. The periphery (Brunei, Chile, Malaysia, Mexico, Peru, Vietnam) on the other hand, produce goods using less skilled labor and own a scant amount of the means of production. Acting as a buffer zone between the two, the semi-periphery (Australia, New Zealand, Singapore) maintain a mixture of both industries. While demanding ever-higher prices for their own finished products, the core seeks the lowest prices from the periphery for their raw materials and goods.
All three core countries and several semi-periphery countries negotiating the TPP are concerned about particular industries, yet their place within the world-system enables them to maintain primacy. While verbally concerned about the ability of domestic primary industries (particularly sugar, beef, and rice) to thrive when faced with competition, the core countries’ advanced farming equipment and corporate agriculture models have given them significant advantage over periphery countries. Additionally, the US and Japan are concerned about each other’s high technology manufacturing sector, namely vehicles. Imported vehicles make up only a small portion of the Japanese market, while the US imports about 40% of its vehicles; US Trade Representative Michael Froman recently commented that “Japan’s success came at the expense of others,” including the US automotive sector.
Core states have historically led the transition of the capitalist world economy in a way that has skewed development and increased political and economic disparities. The strong state machinery in industrialized economies in the West has dictated international trade laws and norms, for example WTO provisions and the move toward bilateral and multilateral ‘free trade’ agreements. Wherever it could penetrate, the geographic expansion of the capitalist world economy transformed political systems and labor conditions.
The transformation of capitalism is still occurring, with transitions of industry and labor. In the 18th century, core economies transitioned from agricultural to industrial production as their focus. In contemporary capitalism, core countries are more interested in managing intellectual property and the internet economy than industrial production. Mexico and other periphery countries also seek to benefit from the internet technology sector, but current penetration rates for the internet are low within their countries. Managing the lucrative internet economy and extending holds on intellectual property have become key features of the TPP negotiations. With their incorporation into the world economy, labor relations in the periphery and semi-periphery countries transitioned over time and according to Wallerstein “were established to produce goods for a capitalist world economy and not merely for internal consumption.” Through unequal trade relations, the core has continued to expropriate capital surplus created by the periphery.
Even within core countries, there are disagreements about intellectual property which has become the new economic battleground. Through the TPP, the US seeks to compel other economies to adopt its stringent intellectual property regulations. One example is the trademark system, where experts say it will negatively impact domestic culture and the economy: “The Japanese trademark system, like many other international systems, is unlike the US system and is strictly registration based. In order to allow for harmonization across the TPP countries, it would be best if the US conformed to the other countries and adopted the registration based approach.” The US’s imposition of its own IP regulations on the rest of the TPP countries is akin to the US asking countries to drop the metric system (which works effectively) in favor of feet, gallons and pounds. Such a “strict application [of IP laws] would prove unduly burdensome and impractical for enforcement purposes.”
While there has been some stakeholder engagement, the terms of negotiation for each round of the TPP and agreements (or lack thereof) reached have been shrouded in secrecy. Both conservative and liberal groups from seemingly every negotiating country requested details are made public before, not after, their countries sign onto such a comprehensive and potentially economy-altering agreement. In the US, bipartisan coalitions of Congressmen have sent letters to the Office of the US Trade Representative to encourage transparency in TPP negotiations; in particular, the latest letter sent in August 2013 led by Congressman Jared Polis (D-CO) calls for Michael Froman to “publicly release ‘detailed information’ about the intellectual property provisions, which are of particular importance to the public, currently being negotiated in the TPP.” In providing only piecemeal information to the public and members of government, negotiators from core countries are able to guide conversations about the TPP and block those which may impede profits.
In addition to the importance of the roles of each economy within the TPP negotiations, one should also examine the motivations of the primary leaders. Leaders of the core states in particular are counting on the TPP to be part of their legacy. With Japan as the latest entrant to negotiations, Prime Minister Shinzo Abe expects the TPP to pull Japan out of its relative economic decline and to rally the populace behind his new economic policies. Japanese industry elites however have criticized the TPP and fear cheap imports. US President Barack Obama has also embraced the TPP as a crowning achievement of his second-term focus on international trade and refocus on the Asia-Pacific. While neither President Obama nor Prime Minister Abe are leaving office in the next few months, they have both ignored public criticisms of the TPP and are instead forging a path that will set international trade standards and norms that will benefit specific lucrative sectors. In contrast, the Malaysian government has handled sharp domestic criticism by removing a timeline for signing the TPP. As a periphery economy, Malaysia is concerned about the intellectual property provisions in the TPP and their effect on the ability of low income Malaysians to access medicines.
Secrecy of the negotiations aside, the Trans-Pacific Partnership will be a game-changing trade agreement due to the wide scope of sectors involved and the strength and enthusiasm of the core countries involved. A recent quote by international law expert Gary Horlick at a CSIS event sums up the issues well: “Countries’ negotiators always say, ‘I’m not going to change my laws.’ That’s why you have negotiations.” For the TPP, “If the US government wants to take advantage of something, we’re in a position to get a really good outcome.” A world-system outlook while not optimistic can help to identify the structural relationship of actors involved and provide a more holistic view of trade agreements. In this case the TPP maintains a range of periphery, semi-periphery and core economies as participants in negotiations; if the public could see negotiation transcripts or outcomes from each meeting the structural relationships would become only more transparent.