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
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