Polity by Rob Salmond

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Polity: Why did the TPP fail?

32 Responses

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  • David Hood,

    Aren't those placements somewhat subjective? For example, based on the negotiation leaks shouldn't Australia be closer to the U.S. than New Zealand is.

    Dunedin • Since May 2007 • 1443 posts Report Reply

  • Rob Salmond, in reply to David Hood,

    @David: Yep, the placements aren't precise. That's common in this kind of structural modelling. As I mention in-text, the exact placement matters less than the broad pattern - a diverse range of national-level viewpoints, each backed with a veto threat, over what shape TPP should take.

    Wellington • Since Jun 2015 • 102 posts Report Reply

  • Tom Semmens,

    The TPP failed because the majority of voters realised all the “benefits” of free trade go to someone other than them.

    Sevilla, Espana • Since Nov 2006 • 2212 posts Report Reply

  • Fen Tex,

    I don't think that all makes much sense in light of the realisation

    American hypocrisy on trade matters is nothing new

    .

    But for that hypocrisy and the greater importance issues like the TPP have for horse trading and influence peddling in the U.S Congress the TPP would be supported - it is after all in the greater interest of the U.S.

    If the theory it couldn't satisfy anyone so might be vetoed by anyone were true then (apart from begging the question if it couldn't satisfy anyone why wasn't it vetoed by everyone) it wouldn't have needed the U.S Congressional and Presidential Elections popularist pressures to have it vetoed and it would never have reached a general agreement for that to become it's final hurdle.

    This reads like post hoc reasoning, even if it does give me warm fuzzies for basically agreeing with my personal objections to the TPP. It never seemed to convince many in the past.

    I think the merits and problems with the TPP have sweet f'all to do with it's failure. It seems to me it's a hostage to bigger political currents .

    Christchurch • Since Oct 2014 • 18 posts Report Reply

  • Rob Salmond, in reply to Tom Semmens,

    @Tom: I don't really agree, because I think the TPP had less to do with "free trade" than many people claimed..

    I'm persuaded by people like Larry Summer and Paul Krugman that the TPP isn;t really a classic "free trade" deal at all. It main impetus was about erecting IP-investment based barriers to trade and governmental action, rather than the classic free trade mission of reducing tariff and similar barriers. (Yes, it reduced tariffs as well, but the more fundamental changes were elsewhere.)

    It's nicely discussed in a New Yorker article here:

    http://www.newyorker.com/news/john-cassidy/r-i-p-free-trade-treaties

    Wellington • Since Jun 2015 • 102 posts Report Reply

  • Rob Salmond, in reply to Fen Tex,

    @Fen Tex:I'm sorry if I wasn't clear. The idea I'm advancing is NOT: "it couldn’t satisfy anyone so might be vetoed by anyone." In fact, this theory suggests there really WAS room for every veto player to be made overall better off, but only if the trade negotiators themselves were willing to swallow some pride and make do with a smaller deal.

    Also, I don't agree when you say: "the merits and problems with the TPP have sweet f’all to do with it’s failure." Had the TPP looked different, and given the US more of what it wanted, I'm convinced it wouldn't have become a political football in the Presidential race. Trump / Clinton would have found something else to kick around instead.

    Wellington • Since Jun 2015 • 102 posts Report Reply

  • Kumara Republic,

    From 2013, still rings true. Big Farming in America remains a rentier racket, and it's a key reason why the TPPA can't be called a free trade agreement.

    http://www.stuff.co.nz/business/farming/agribusiness/8879488/A-fistful-of-dollars-for-US-farmers

    What I find most bizarre is that US farmers, who have this image of being freedom lovers with a loathing for pinko-socialist bureaucrats in Washington, accept handouts from the state. It seems so . . . un-American! Aren't they embarrassed?

    When the Business Roundtable was in its prime it used to bring out zealous American academics that were so right wing they made Ayn Rand look like a raving Marxist. They lectured New Zealand on the benefits of the free market and getting government out of our lives.

    I used to like interviewing them as I would always ask them what they thought of the billions of dollars of government handouts doled out to US farmers. They would smile nervously and say of course they didn't agree with them but it was all politics and nothing much could be done about it. What hypocrites! I always felt they would have been more useful staying home and preaching to their own politicians and farmers.

    The southernmost capital … • Since Nov 2006 • 5416 posts Report Reply

  • Bill Eaton, in reply to Rob Salmond,

    TPP now has so little to do with free trade that the vector should be almost vertical. This diversion was mostly the work of US and Japan and NZ would have done better to keep them out in the first place. Free trade with SIngapore and some others would have been worth something to NZ but that advantage was squandered in pursuit of the delusion that great trade powers would play nice. I see NZ is offering its trade negotiation "expertise" to the UK for Brexit. The Brits should pass on that.

    Auckland • Since Sep 2014 • 15 posts Report Reply

  • Fen Tex,

    Had the TPP looked different, and given the US more of what it wanted, I'm convinced it wouldn't have become a political football in the Presidential race.

    I have always agreed with the argument you quoted above that the TPP was all about investing others in U.S interests by use of IP and other regulations and not about expanding trade in goods (why I've always maintained it was never in NZ's interest).

    Which makes the idea that it could have looked different a non-starter, it was what it was and looked like itself. So it was, by it's nature, always going to be a potential football in an argument over nativitism (personally I'm not convinced a stake is in it's heart, the hypocrisy we all know people are capable of leaves plenty of room for it to be re-invigorated after elections).

    How could it have differed so that it wouldn't be a handy football? More openness in trade in goods? But that's the very target it has painted on it.

    Stronger benefits for U.S investment and IP regulation? That's the stuff being ignored for the political point scoring. If it can turn heads and change opinions it's already there to do it (and as I write I fear may yet).

    The TPP isn't being dissed on it's own merits but it's symbolism now that there's a present strong voice of nativist protectionism out and about. That's either going to fade as economies strengthen or persist if they keep limping.

    I'd like to think the current trend is the first, but I've a foreboding deep in my heart (probably from my Presbyterian upbringing) there's yet a shoe to drop from the Great Recession.

    Christchurch • Since Oct 2014 • 18 posts Report Reply

  • Ian Dalziel, in reply to Bill Eaton,

    a mere fettered anger...*

    Free trade with SIngapore and some others would have been worth something to NZ but that advantage was squandered in pursuit of the delusion that great trade powers would play nice.

    Yes, it would have been interesting to see how the small Trade Agreement the Labour Government originally started -

    The TPP began as an expansion of the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP or P4) signed by Brunei, Chile, New Zealand, and Singapore in 2005.* *

    - would have panned out if left to just those four - before the big cuckoos got in the nest and laid their eggs for everyone else to hatch and feed...
    Heck, it would probably already have been in place and showing benefits by now...

    So now the other exercise is 'How much did this damp squib of failed diplomacy' cost us?
    How many wasted millions were spent pushing a doomed rock repeatedly up hill in this Sisyphean*** orgy of hubris?

    *anagram of Free Trade Agreement

    * *source

    *** source

    Christchurch • Since Dec 2006 • 7887 posts Report Reply

  • Bart Janssen, in reply to David Hood,

    Aren't those placements somewhat subjective?

    Ya think!

    On a graph with no scale!

    These kinds of graphs really really piss me off because they are so common in management bullcrap.

    Essentially this is just someone's guess. It may or may not be an educated guess but it still a guess. Because most folks don't take guesses seriously they put the guess on a fake graph to make it look like data. When challenged they resort to "it's just a representation, don't take it literally".

    The OP should be ashamed of trying such a cheap tactic on this audience.

    I have no problem with him guessing. I even am happy that it might be an educated guess.

    But abusing graphical representation of data to try and fool folks into taking his guess as anything more significant is unacceptable bullcrap.

    Auckland • Since Nov 2006 • 4450 posts Report Reply

  • Rob Stowell,

    What happens to all the legislative change we have in the pipeline so TPP can swing into effect? 70 years of bloody copyright - what a joke.
    Knowing this lot, we will pass it all anyway, just to be ahead of the game - so later on we have nothing left to bargain with ...

    Whakaraupo • Since Nov 2006 • 2090 posts Report Reply

  • Rob Salmond, in reply to Bart Janssen,

    @Bart: I don;t think I ever tried to pass these off precise, empirical data, and you'll find the words "guess" and so on sprinkled through the post. The point here is to illustrate the structure of the bargaining problem using the chart. It's pretty common among social scientists, and I think can help provide insight about what's going on.

    But, hey, I get that my cup of tea isn't always everybody else's cup of tea.

    Wellington • Since Jun 2015 • 102 posts Report Reply

  • Rob Salmond, in reply to Rob Stowell,

    Knowing this lot, we will pass it all anyway, just to be ahead of the game – so later on we have nothing left to bargain with

    Yep, NZ did a very good line in "pre-emptive, unilateral trade liberalisation" in the 1980s and 1990s, cheered on by MFAT. They were later shocked - shocked! - when they found out other countries didn't follow suit.

    Head-desk.

    Wellington • Since Jun 2015 • 102 posts Report Reply

  • Brent Jackson,

    Looking at your chart, it appears obvious that USA should never have been a part of it. Removing the USA dots gives heaps of overlap for the remaining dots.

    However, it is probably just indicative of how simplisticly arbitrary this sort of chart is. There are hundreds of clauses in the agreement that each of the different nations would put greater or lesser emphasis on, and reducing that sort of complexity down to a two-dimensional, scale-less chart, is highly unlikely to reveal anything meaningful.

    Auckland • Since Nov 2006 • 614 posts Report Reply

  • Rich of Observationz,

    Brunei, Chile, New Zealand, and Singapore

    One out and out dictatorship, one disguised dictatorship, a newish democracy and us.

    It's obviously harder to do free trade agreements with countries where the people have some input in choosing their governments.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • izogi,

    That all means the TPP is functionally dead.

    Pardon my cynicism, but I'm sure the TPP has been declared dead by its opponents, and then somehow re-risen, multiple times over the past several years. I'm not going to underestimate the potential for the world of US politics to somehow find a way, and I'll believe this zombie agreement is actually dead when I see it hanged, disembowelled, beheaded, quartered and incinerated beyond recognition.

    Wellington • Since Jan 2007 • 1139 posts Report Reply

  • Matthew Hooton, in reply to Ian Dalziel,

    it would probably already have been in place and showing benefits by now

    It is already in place and showing benefits.

    Auckland • Since Aug 2007 • 194 posts Report Reply

  • Tinakori,

    "They were later shocked - shocked! - when they found out other countries didn't follow suit.

    "Head-desk."

    Ah, exhumed from the graveyard of economic thought, the economic zombie fallacy that there has to be reciprocity for the benefits to be realised. And I bet MFAT did not think that reciprocity was required for trade liberalisation to be effective.

    Wellington • Since Jul 2013 • 118 posts Report Reply

  • LanceWiggs,

    Attachment

    It's interesting what happens if we remove the USA from the picture. The US was a late entrant after all, as was Japan.
    What if no USA?

    NZ • Since Nov 2010 • 5 posts Report Reply

  • Rob Stowell, in reply to Tinakori,

    the economic zombie fallacy that there has to be reciprocity for the benefits to be realised.

    Hey ho. Maybe you can explain the benefits to NZ of one-sided ISDs and 70-year copyright.

    Whakaraupo • Since Nov 2006 • 2090 posts Report Reply

  • Rob Salmond, in reply to Tinakori,

    Ah, exhumed from the graveyard of economic thought, the economic zombie fallacy that there has to be reciprocity for the benefits to be realised. And I bet MFAT did not think that reciprocity was required for trade liberalisation to be effective.

    You're right that MFAT felt there was some benefit to NZ lowering its borders unilaterally.

    But it also felt there was more benefit to NZ if other countries lowered their borders, too (because exports). And MFAT explicitly marketed the NZ experience as proof of the virtue of unilateral liberalisation, and were shocked when other countries didn't buy it.

    Wellington • Since Jun 2015 • 102 posts Report Reply

  • william blake,

    https://www.mfat.govt.nz/en/media-and-resources/news/tim-groser-becomes-ambassador-to-us/

    This looks like a poisoned chalice now; coudnta happened to a nicer guy.

    Since Mar 2010 • 378 posts Report Reply

  • Andre,

    The biggest losers in all of this are the Chinese. Maybe they'll still try to retrospectively change our FTA with them based on the fact our government ratified the TPP at our end? Nothing would surprise me when it comes to our bulk steel supplier / real estate purchaser.

    New Zealand • Since May 2009 • 350 posts Report Reply

  • Sacha, in reply to Tinakori,

    there has to be reciprocity for the benefits to be realised

    turning up naked to a game of strip poker conserves energy, I guess ..

    Ak • Since May 2008 • 19683 posts Report Reply

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