Poor man’s pivot
The government’s decision to join an Asia-Pacific free trade area is not likely to provide much shelter from economic headwinds, argues Paul Demarty
As Reddit users continue to wreak chaos on stock and commodities markets, it seems Her Majesty’s government is taking a gamble of its own.
On February 1, international trade secretary Liz Truss announced that the UK had formally applied to join the Comprehensive and Progressive Trans-Pacific Partnership. This is the first major diplomatic gambit the country has made since formally exiting the European Union, and it is not difficult to see why. Membership of the CPTPP would provide readier access to a series of trading partners, from major economic powers like Japan, through middleweights like Australia and Singapore, to relative minnows like Vietnam.
If the name of this thing sounds slightly familiar, it is because this is the successor to the Trans-Pacific Partnership - a laboriously negotiated trade agreement that, along with various powers in the Asia-Pacific region, was to include the United States. It was exactly the sort of lash-up that Donald Trump denounced in nativist terms on the 2016 campaign trail, and he wasted no time in withdrawing the US from it.
The CPTPP is what resulted when those ‘partners’ left in the lurch by Uncle Sam decided to go on with it anyway. It has some of the more obnoxious demands of the US sanded off, but the text is otherwise substantially identical, and so still controversial. Several of the initial signatories have yet to ratify it - for example, Chile, where a very substantial protest movement mobilised against it in 2019. All that said, it remains the third largest free-trade zone in the world.
While Truss is full of sunny optimism about the whole thing, there are reasons for scepticism as to how much this is a ‘game changer’. The UK already enjoyed free-trade arrangements with most CPTPP members through EU membership and those existing relationships have been ‘rolled over’. Exactly how much value lies in the rest of the zone for swashbuckling Global Britain is unknown. Some estimates suggest that, all things being equal, British gross domestic product will actually decline slightly as a result of a related trade deal with New Zealand.
Opposition politicians have been critical of how quickly this has been pushed through - although brazen contempt for transparency is typical of the whole history of the TPP and its Atlantic cousin, the Transatlantic Trade and Investment Partnership (TTIP). (The latter would have united the EU and the North American countries in an even bigger bloc, but proved too politically toxic for the Europeans and, of course, Donald Trump had no interest in reviving it.) Emily Thornberry, shadow secretary for international trade, declared:
Like any other trade agreement, the advantages of joining the CPTPP will have to be assessed once we see the terms on offer … More generally, people will rightly ask why we have been through five years of debate in Britain over leaving a trade bloc with our closest neighbours, only to rush into joining another one on the other side of the world without any meaningful public consultation at all.
The physical distance is not an inconsiderable matter of concern. Though British governments have long confused the health of the City with actual prosperity, not even the smartest ‘quants’ at Goldman Sachs have managed to invent an edible bond derivative, or one that can be fitted usefully into a car. Trade in many things is irreducibly physical. However important the Japanese economy may be, it is no substitute for Germany as an industrial powerhouse trading partner, and the supply-chain ‘teething’ problems we have enjoyed since the start of the new era are not likely to be ameliorated significantly. The bottom line is clear: only about nine percent of British trade is with CPTPP countries - roughly equivalent to Germany alone. (Britain counts as a Pacific power merely on account of its continued ‘ownership’ of the Pitcairn Islands - population: 50!).
Thornberry also complained: “... at present, Liz Truss cannot even guarantee whether we would have the right to veto China’s proposed accession if we join the bloc first.” It is, truth be told, rather difficult to assess the likelihood of this problem being posed for real. It was certainly unimaginable when the Obama administration was designing TPP in the first place; the point of the thing was plainly to exclude China, and support an American pivot towards alliance-building elsewhere in the Asia-Pacific theatre. (Trump’s canning of the deal was, therefore, not a little ironic.) Of course, now that the US has abandoned attempts to give strategic leadership to the TPP and CPTPP, the primary obstacle to Chinese membership has disappeared (though chilly relations with Japan and Vietnam remain problematic), and the state leadership has cautiously welcomed the idea.
That probably got a lot less likely, however, when Trump was defeated in November. Hua Guofeng, the immediate successor to Mao Tse-Tung, was reluctant to step out of the Great Helmsman’s shadow, and his slogan, ‘Whatever Chairman Mao said we will say, and whatever Chairman Mao did we will do’, was mockingly called ‘the two whatevers’. There is something of that relationship between Joe Biden and the Obama presidency, a fondness for the old hits. Time has moved on, but the main significant change there is merely the further ascendancy of China hawks in the US foreign policy elite.
Biden remains coy about the CPTPP, but could well push the US to join; and those controversial US-demanded clauses remain in the text of the treaty, merely ‘suspended’ for the time being. The other signatories, in other words, made sure to leave the door open. It seems far more likely that the US will re-engage than that China will successfully take the thing over, though the latter scenario would be more interesting for the observer, given Britain’s Atlanticist commitments and simultaneous dire need to compensate for the great self-inflicted wound of Brexit.
The question of the left’s attitude to all this is, on one level, straightforward. Like TTIP (and, for that matter, like the EU), the terms of the CPTPP are geared firmly towards insulating the smooth proceedings of large-scale capitalist interests from the democratic (or otherwise) political processes of its member-states, allowing corporations to sue national governments on various grounds and Viking/Laval style support for social dumping and the levelling-down of conditions. It is not surprise that a Thatcherite creep like Truss is so very excited about it.
On that basis, were (let us say) a trade union AGM to discuss a motion opposing Britain’s membership of the CPTPP, it would - unless the motion was truly awful - be sensible to support it, or at least to abstain.
There are, of course, ways to make such motions awful, the most common of which is to maintain the illusion that the alternative to such deals is ‘national sovereignty’. The very grounds for scepticism we have mentioned - that so much of our trade is still with our former European ‘partners’ - ought to highlight that. The economy just is global, and will remain so even at the limit of the present tendency towards the emergence of rival power blocs (it would then be more global, rather than a system of autarkic states). Moreover, Britain’s role as the capstone of the system of tax havens leads the UK further away than many countries from such an autarky, even if it were desirable.
In truth, Britain is in something of a ‘wouldn’t start from here if I were you’ situation. The scramble to join a trading bloc of dubious benefit is merely a reflex response to Brexit, and indeed something of an admission that hard Brexit was always a fantasy. Joining the CPTPP is a kind of deflected form of ‘Brexit in name only’; and, if some trading arrangement with the US is concluded, that will likely be on still poorer terms.
The left, alas, is also in ‘wouldn’t start from here’ territory. The philistine obsession with choosing sides in the bourgeoisie’s confected controversies - even, and perhaps especially, one that backfires as spectacularly as David Cameron’s Brexit referendum did - left comrades either sulking about how we were, after all, having a Tory Brexit instead of the fantasy Brexit of the dreams, or else letting fears of ‘creeping fascism’ panic them into spear-carrier duty in the service of Tony Blair, George Soros and co. What was needed was an independent critique of the whole sorry affair - from the anti-democratic nature of the referendum to the deeply reactionary politics of both sides. Of course, there was nothing of the sort.
As the sands of global diplomacy shift, the working class badly needs its own foreign policy - which is to say, we need to get beyond merely saying ‘yes’ or ‘no’ to dishes served to us by our enemies. Otherwise, the result - in Britain at least - of the slow-motion car crash that Brexit still is will be merely more chauvinism, more Dolchstosslegende politics, and further small contributions to global barbarism.