Do Vietnamese rights allegations set TPP back by years?

A set of disturbing claims about Vietnamese rights violations by US unions and activists, together with the US Department of Labor blacklisting Vietnam for its use of child labour in garment making, holds the potential, in our view, to delay implementation of the Trans-Pacific Partnership (TPP) past the end of this decade – if it ever gets off the ground

Before readers snort and accuse me of exaggeration, let’s remember that the last Free Trade Agreement (FTA) the US Congress ratified (with Colombia) took almost six years to go from draft agreement between negotiators to implementation. Over five years of that was spent stuck in Congress – which has still to ratify the FTA with Panama.

The allegations being made by the US Department of Labour (DoL) about the use of child labour in Vietnam are serious – but probably not as serious as its finding (which no-one has contested) that there is no serious monitoring of the use of child labour in Vietnam. Vietnam’s consequent blacklisting is probably commercially immaterial (China’s blacklisted too, and it hasn’t hurt its apparel sales to the US) – but China’s not seeking an FTA with the US. In its review of Vietnam’s response to initial abuse allegations, the DoL observes that the Vietnamese seem not to have understood the claims being made – and every single protectionist Congressman will point out that that hardly instils confidence in Vietnam’s likelihood to observe whatever rights guarantees are in the TPP.

In our view, these things are like a pendulum. For the years from 2000, there was a wave towards free trade in much of the Western political community – and the US Congress granted TPA to get deals through quickly. But since then, we’ve had a recession followed by (in the US) a jobless recovery, and elsewhere in the West just more joblessness, leaving a widespread sense throughout the developed world that free trade just shipped jobs somewhere else. On top of that, the South Asian garment factory tragedies have made many conclude that there is no way goods can be made offshore without increasing the total amount of human misery – and a politician who wants to be re-elected has to deal with this change.

The activists publishing the reports we’ve mentioned want the US to call off TPP negotiations, and we think that’s unrealistic. But it’s not unrealistic for activists to win the battle to bring debate about the TPP onto the floor of Congress – which inevitably means onto the floor of the Canadian and Australian Parliaments and probably the Japanese Diet. While the US-Australia FTA was being negotiated, it took the Australians longer to agree to ratify than it took the Americans: scepticism about the benefits of free trade isn’t just an American peculiarity.

With observers now expecting no final agreement from the negotiators before 2014, it’s looking increasingly likely the Partnership will come into practice no earlier than 2020. If then