Canadian economics & political science professor Richard Stubbs, of McMaster University in Hamilton, Ontario, has posed the prospect of TPP (Trans-Pacific Partnership) failure and its replacement by the more flexible RCEP (Regional Comprehensive Economic Partnership).
In an article in The Conversation & MacroBusiness in Australia on Wednesday, Flawed TPP trade deal a bridge too far, Professor Stubbs described the battle of the capitalisms – the market-led versus state-guided approach to economic growth.
Most of the public debate about the Trans-Pacific Partnership has been about secrecy – participants, including big business, know the detail of what’s being discussed, but the public in all 12 countries involved are deliberately being kept from frank accounts and about the prospect of rules favouring US big business being imposed on the partners.
On one of the difficulties those trying to patch together an agreement have met, Professor Stubbs wrote: “The form of capitalism found in East Asia also relies heavily on production networks. Yet free trade agreements associated with Western countries tend to assume that manufactured goods are produced in one country. Cumulative rules of origin which would take into consideration a country’s participation in production networks are generally problematic for the US or are included in such a way as to privilege the TPP members – such as the US. The infamous ‘yarn forward’ rule, which will require Vietnam to source yarn from the US rather than its current supplier, China, is but one of the problems faced by East Asian economies.”
Professor Stubbs said the regional comprehensive economic partnership among Asian countries “is less intrusive, less ambitious & more flexible”.