Sunday, August 7, 2016

Trans-Pacific Partnership Part 1: Preamble


The Trans-Pacific Partnership is a proposed agreement between 12 countries along the Pacific rim: The United States, Japan, Canada, Mexico, Chile, Vietnam, Australia, Peru, New Zealand, Malaysia, Brunei, and Singapore.

The preamble of the TPP lays outs the goals of the deal between those countries, which is mostly reflected by the pro-TPP statements on the front page of the United States Trade Representative's TPP website. The preamble doesn't really get into the details of the deal, so there isn't a lot to unpack.

The one thing that caught my eye was this paragraph:
...AFFIRM that state-owned enterprises can play a legitimate role in the diverse economies of the Parties, while recognising that the provision of unfair advantages to state-owned enterprises undermines fair and open trade and investment, and resolve to establish rules for state-owned enterprises that promote a level playing field with privately owned businesses, transparency and sound business practices;
This is an interesting passage to me, since it recognizes the existence of state-owned enterprises among the parties involved in the agreement, labelling them unfair, and saying this deal will mitigate that unfairness somehow.

The most obvious reason for this passage is that Vietnam is one of the members of this agreement, and that country is still Communist in many ways. Therefore, they have several state-run enterprises, including their oil industry, mobile phone services, and their massive textiles industry. Much of Vietnam's economy is effectively capitalist these days, but state-owned enterprises still make up a significant portion of the country's productivity.

That said, all countries have at least a few state-operated enterprises. The United States, for instance, has state-run banking services as well as a state-run postal service (United States Postal Service) which competes with other, private parcel services. I also wonder if and how the deal will impact state-subsidized ventures, such as the United States' massive agricultural subsidies.

We'll have to wait until Chapter 17 to see how the deal addresses this. That's a long way to go from here.

(This series will continue with Chapter 1 of the TPP.)

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