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Will China’s Gambit to Undermine the Trans-Pacific Partnership Succeed?

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While eyes in the US have remained focused on the budget cliffhanger in Washington, in Bali, two sets of meetings were taking place. The first was the latest set of Trans-Pacific Partnership negotiations. The US, led by John Kerry (Obama was supposed to make an appearance but the budget drama kept him away) met with representatives of the 12 nations it is pressing to agree to this deliberately mis-branded “trade deal”. The reason the label is misleading is that trade is already substantially liberalized; the real point of the TPP and its cousin, the pending EU-US trade agreement, is to weaken the power of nations to regulate, which will allow multinationals to lead a race to the bottom on product and environmental safety. As we wrote earlier this year:

By way of background, the Administration is taking the unusual step of trying to negotiate two major trade deals in the same timeframe. Apparently Obama wants to make sure his corporate masters get as many goodies as possible before he leaves office. The Trans-Pacific Partnership and the US-European Union “Free Trade” Agreement are both inaccurately depicted as being helpful to ordinary Americans by virtue of liberalizing trade. Instead, the have perilous little to do with trade. They are both intended to make the world more lucrative for major corporations by weakening regulations and by strengthening intellectual property laws. The TPP has an additional wrinkle of being an “everybody but China” deal, intended to strengthen ties among nations who will then be presumed allies of America in its efforts to contain China…

Baker describes in scathing terms why these types of deals are bad policy:

…these deals are about securing regulatory gains for major corporate interests. In some cases, such as increased patent and copyright protection, these deals are 180 degrees at odds with free trade. They are about increasing protectionist barriers..

These deals will also lead to more upward redistribution of income. The more money that people in the developing world pay to Pfizer for drugs and Microsoft for software, the less money they will pay for the products that we export, as opposed to “intellectual property rights”….

This is yet another case where the government is working for a tiny elite against the interests of the bulk of the population.

If that isn’t bad enough, there’s another side of these planned pacts that is often simply ignored. These “trade” deals are Trojan horses to erode or eliminate national regulations. Baker anticipates that these deals will include sections that would limit government regulation (including at the state and local level) on fracking and could revive much of the internet surveillance that reared its ugly head in the failed SOPA [notice this was written in the innocent pre-Snowden era].

And this sort of erosion of the right to regulate will most assuredly extend to financial services. Dodd Frank? The Brown-Vitter bill that some see as a great new hope for tougher financial regulation? They are already unworkable under existing trade agreements.

Back to the current post. The second meeting in Bali this week was for Asia-Pacific Economic Cooperation (APEC). And the two intersected in intriguing ways. Remember, the terms of the TPP are shrouded in secrecy that is utterly inconsistent with the notion of democratic rule. Draft chapters have not been released. In the US, the US Trade Representative has given briefings on the general terms of the pact’s chapters, but as anyone who has worked on contracts or legislation, reading the detailed terms is critical to understanding an agreement, and those are being kept firmly secret. Consider this stunner from the Japan Times in August (emphasis ours)

In a related development Friday, government officials briefed LDP lawmakers on the current status of the negotiations.

The Diet members were told that Japan has joined in time for negotiations on market access and other fields the country is keen to discuss.

They were also informed that the talks involve a strict nondisclosure agreement prohibiting members from releasing information for four years after the conclusion of a deal.

Not only has the US been pushing remarkably hard on the secrecy front, it’s being remarkably aggressive on timing. It got a commitment from the prospective signatories in Bali for the pact to be finalized by year end, when a State Department briefing immediately afterward met with skeptical questions (if you have time, you really should read the session in full. The obstinacy and disingenuousness of the State Department mouthpiece is way too obvious). For instance:

QUESTION: The penultimate (inaudible). Okay. Sorry.

I know that the statement says that you guys all believe you’re on track to finish by the end of the year, but that is completely in contradiction to what the Malaysian minister said publicly and on television several times and in his press conference. So what I’m trying to understand is: Were certain assurances given to people like Malaysia and to – over Bumiputera and to Japan over agriculture? To certain parties were assurances given that something is going to be possible so that they can get on track at the end of the year? Or is there a possibility that there could be some deal at the end of the year that’s a platform, and that other countries within the 12 could join once their issues are resolved?

SENIOR ADMINISTRATION OFFICIAL: Well, I haven’t seen the specific comments of the Malaysian prime minister.

QUESTION: No, not prime minister, the trade minister –

SENIOR ADMINISTRATION OFFICIAL: Oh, the trade minister –

QUESTION: Yeah, I can send them to you.

SENIOR ADMINISTRATION OFFICIAL: — that you’re referring to, there was a –

QUESTION: They said it’s not possible.

SENIOR ADMINISTRATION OFFICIAL: Well, there was a very good discussion among leaders both about where we are in the negotiations, the progress that’s been made, and the remaining issues that need to be addressed. And it is clear that there are a number of complex issues that need to be addressed.

Forbes is also skeptical that the deal can get done so quickly:

Given the vastly different economic systems, structures, and development stages of the 12 TPP negotiating countries the sweeping scope and “21st century” (read: U.S. model) approach of TPP would be expected to require highly disruptive changes in many of the countries. And so it is proving. During the past months, U.S. negotiators have been jostling with counterparts from Malaysia and Vietnam over intellectual property protection and government procurement. For Vietnam where, as in China, state-owned enterprises are dominant, TPP “level playing field” rules are unacceptable. TPP’s terms of reference for extended drug patent protection—clearly an advanced country interest—is problematic for poorer, developing countries. Likewise for TPP’s proposed standards for environmental and labor protection.

In fairness, the Forbes article points out that one set of issues that was seen as a major stumbling block for Japan, that of five types of agricultural products it wanted held out of the deal, may not be such a problem after all because the Japanese Prime Minister Abe, who talked up the deal this week, looks to be able to play the sellout of domestic farmers so as to disadvantage an LDP rival.

However, the US has been ruffling the potential signatories. For instance:

The last full TPP negotiating session in Brunei witnessed USTR Froman violating protocol and good manners by muscling into the chairmanship (which by rights was the host country’s) so as to command everyone to dash to the Obama administration’s yearend finish line. That action, and virtually everything else done with the TPP by the USTR (and Obama himself), evidence an arrogant and bullying style that we see all too often in the Obama administration.

And the State Department Q&A also indicated that Indonesia, which was also hosting the APEC leaders’ meeting, had the US trying to upstage that session.

Now bruised official egos are likely not enough in and of themselves to derail a trade deal. But the Asian nations are also playing a careful balancing act between the current hegemon, the US, and its presumed successor, at least in the region, if not globally, China. Now remember, the whole point of the TPP is that it is an “everybody but China” deal. So what did China do at the APEC summit when Obama was detained in Washington? Step up its efforts to undermine the TPP. From Agence France-Presse:

The United States stepped up efforts to reinforce its economic might in the Asia-Pacific at a regional leaders’ summit in Indonesia on Tuesday, amid warnings from an increasingly bold China….

But China and even some developing nations included in the TPP have expressed concern that it will set down trade rules primarily benefiting the richest countries and most powerful firms.

“China will commit itself to building a trans-Pacific regional cooperation framework that benefits all parties,” Chinese President Xi Jinping said in a speech following Kerry at the Apec business forum….

“The Trans-Pacific Partnership, featuring confidential talks and the highest free trade standard beyond mere lower tariffs, is widely considered a new step for the US to dominate the economy in the Asia-Pacific region,” the China Daily newspaper said in a front-page report on Xi’s speech.

Indonesia also signalled its irritation at the huge focus on TPP at the Apec summit, shunting the planned meeting on Tuesday afternoon of the 12 nations involved to a hotel outside the official venue…

Meanwhile, China and Indonesia are involved in plans for a rival free trade pact involving 16 countries around the region and being spearheaded by the Association of Southeast Asian Nations.

Negotiations for that pact are expected to be discussed at an East Asia Summit in Brunei this week.

It’s not clear that China’s efforts to throw sand in the TPP gears will work. But the year end timetable looks like a bizarre Administration fantasy (why push for an empty commitment to a deadline that clearly can’t be met?). And the parallel ASEAN trade talks could give countries that wanted to drag their feet on the TPP an excuse to do so (note that one country being reluctant is likely to be insufficient to derail the deal, but two or three could change the equation. Reporters in the State Department briefing were making comparisons to the failed Doha round).

A final factor that could work against the TPP is a continuation of a destabilizing budget battle. As we’ll discuss in our accompanying post today, there was progress of sorts Wednesday, in at least the two sides have agreed to talk. But they aren’t even at the stage of discussing terms, beyond a vague idea of putting the debt ceiling on hold while the two parties work out a bigger budget deal, with deficit cutting measures included. The problem is given the failure to reach a Grand Bargain Great Betrayal last year, I don’t see why there is any reason to believe a six week delay will pave the way for a deal coming together, given the increased hostility between the two camps and the hard core Republican right insisting on throwing Obamacare into the talks. The longer Washington is in disarray, the weaker its position in pushing for a trade deal. As we’ve said before, that may be the one silver lining of the damaging Federal shutdown.

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30 comments

  1. s spade

    If we have to count on China for disrupting this TPP ultimate corporate giveaway, the country is in even more trouble than anyone suspects.

    The Congress Critters ought to know that if this thing pushes through the corporations won’t need them any more, which means goodbye to a large chunk of campaign money. Whoops!

    1. richard travis

      Americans need to quit relying on anybody and everybody and turn off the TV and revolt. Relying on some other entity to do what we should have been doing all along is why we are in this situation(oppressive totalitarianism) now. Have you tortured a US Senator recently?

  2. Banger

    This whole deal is very odd. First of all, if this trad agreement indeed is solely about enriching large American corporations then why would the bureaucracies of the countries involved be interested in this sort of agreement that takes away their sovereignty?

    The TPP is the next stage of globalism meant to destroy the nation state which may or may not be a good thing and further moves us into the desired outcome: a globalized Empire dominated and enforced by U.S. military power as the “wrapper” to a sort of corporate feudalism in local areas that will bypass national sovereignty.

    What is interesting is how blatant this power grab is by the corporate sector and the fact that no attempt has been made, outside of bribery, to bring either intellectual opinion nor public opinion on board. As I look around, I see little support and much opposition to the agreement. How do they expect this agreement to pass Congress–that is no longer a done deal after the Syria fiasco and now the crazy budget impasse.

    1. Yves Smith Post author

      They may feel trapped by the race to the bottom. If Vietnam refuses to sign on, for instance, why wouldn’t a big bad multinational prefer to do business in a neighboring signator country, like Malaysia or Thailand? I think they all fear they can’t afford to stay out unless enough bolt to tank the deal. Or at least they have to participate in the talks to see if they might go through. They keep their options open if they are at the negotiating table.

      1. Chris Rogers

        Yves,

        Pepe Escobar over at Counterpunch had a good angle on TPP from a Chinese perspective – seems not all are happy at the US Asia tilt, particularly the Chinese, add this paper up with Craig Robert’s take on the military aspect of the US-tilt to Asia and from a geo-politics perspective, its does not look rosy for US neoconservative economic desires.

        Here’s the link to Escobar’s article – well worth the read:
        http://www.counterpunch.org/2013/10/09/shoot-out-at-the-free-trade-corral/

      2. JohnnyGL

        Yves,

        You’ve got to figure the shadows of 1998 loom over this whole thing. Especially, for the countries that you mentioned (Indonesia, Malaysia, Thailand). It seems the US side has to be woefully detached to think SE Asia is going to trust US led policy as the best course of action so soon again after that disastrous round of ‘shock and awe’ treatment. Indonesia and Thailand both got the ‘Greece’ treatment before the term was even invented. Malaysia did better than most in the region by bolting shut the exits for rapid capital flows. Those lessons are unlikely to be forgotten soon.

    2. Adriannzinha

      Regarding nation states and these trade deals…

      One could quite well make a significant case that nation states are glorified vassals of the corporate machine with particular loyalty to bankers, oil/energy conglomerates, with the military serving as enforcers. These aren’t trade deals so much as ways to bypass sovereignty of nation states and more directly, the populace.

      It is noble to imagine the US congress opposing the TPP. Still I only need recall how monstrosities like the patriot act, obamacare, and others were passed with many seemingly not even bothering to read the bills. Not to mention other gems that were hyped and sold to the public like NAFTA in the name of free trade and progress.

      So I’m inclined to hope that TPP doesn’t get passed because of disagreement among the Asian countries or outright opposition by the Chinese. The latter have certainly attempted to win over support from many a nation in Africa, Latin America, and in Asia of course by making investments. Still I suspect TPP will get pushed through, forcibly at the tip of a dagger in the form of saber rattling from American armed neighbors (Japan notably, Phillipines, and others), First strike missles masqueraded as missile defense systems, and a couple of economic carrots perhaps.

      The alleged ‘pivot to asia’ is nothing but a long-term american strategy to encircle, contain, and potentially engage in direct conflict with China. There are white papers out by think tanks that are quite candid in outlining this policy. Washington’s global economic prowess while still prominent isn’t what it once was and that leaves military intimidation and force as the primary cards left to play.

      It has been quite an evolution of rule from kings, church power, absolute monarchies, parliamentary democracies and nation states, to the servile corporate state.

      1. Banger

        Great points. I don’t think the TPP will pass. All aspects of the government have lost credibility–the Administration, the Congress, the national security state, the Judiciary. We are, at a real transition point regardless of whether the current crisis is resolved or not–even if it is it will just come back again and again.

        Other countries see that the U.S. is faltering though it will take time for them to adjust, the U.S. still has the power of intimidation on its side through its covert operatives and NSA spying that I believe keep the leadership of many countries in line.

      2. from Mexico

        In Mexico the neocons/neoliberals don’t run quite as roughshod over the media and the academe as they do in the US. So unlike in the US, a dissident voice periodically filters through.

        The Universidad Autónoma Metropolitana in Mexico City established, for instance, the Center for Transition Sciences (CTS) which once a year sponsors a conference in which non-neocon/neoliberal viewpoints are presented. Last year the Chinese had the floor, and this year Russia.

        The title of last year’s conference was The Geo-economic and Political-military Situation of China, which in part dealt with “the vulnerabilities of the asian dragon in the face of US hegemony in the following areas: food, hydrocarbons, financial and bank control, and aircraft carriers.” ( http://www.jornada.unam.mx/2012/05/30/opinion/022o1pol )

        This year Sivkov Konstantin Valentinovich, second in command to the now-famous Leonid Ivashov, spoke at the conference. Konstantin highlighted “the tectonic changes in global geopolitics associated with the transference of the economic center of gravity to the Asia/Pacific region.”

        Konstantin also spoke of politics inside Russia, and how the US defeats in Iraq and Afghanistan had greatly strengthened Putin’s hand inside Russia, with the pro-neoliberal forces inside Russia in full retreat. ( http://www.jornada.unam.mx/2013/10/09/opinion/022o1pol ) The manner in which the US’s Iraq and Afghanistan disasters (that is, disasters for the neocon/neoliberals — they were like gifts out of the blue for non-neocon/neoliberals) impact the internal politics of Russia is something that is seldom discussed in the US.

        Nonetheless, banking/finance is only one of the fronts on which the US squares off against China and Russia. Other importnat fronts are military, food and hydrocarbons.

        There’s a great film, produced by a French company but available in various languages, including English, that gives an overview of hydrocarbons and geopolitics:

        China vs USA – ‘The Battle for Oil’ Part 1of 2
        http://www.youtube.com/watch?v=Bc2_oS9zDeo

        China vs USA – ‘The Battle for Oil’. Part 2 of 2
        http://www.youtube.com/watch?v=T6w4FhwIumQ

        What comes through loud and clear is that when China sits down at the negotiating table in, for instance, Africa, to do an oil deal, it brings its check book. The US, on the other hand, brings its drones (its clenched fist) and its “We are God’s earthly regents” schtick.

        1. John Jones

          Mexico

          I watched that documentry. What do you think is the end result gonna be?

          How long is oiland gas gonna last?

          1. from Mexico

            Oh I don’t know. Don’t get me to lying.

            Konstantin said that “the tectonic changes in global geopolitics associated with the transference of the center of economic gravity to the Asia/Pacific region,” together with the financial crisis of the West, “implies the inevitability of a serious reorganization of the geoplitical panorama, together with the threat of military conflicts of grand scale.”

            But Konstantin to me comes across like a Russian Dick Cheney.

            A more optimistic take is that of Andreas von Bülow:

            Most of our industrialized nations rely on the free market forces to gain access to energy and other resources. There is no need to occupy these resources and watch the access by a military apparatus with a price tag of 430 billion dollars a year. This is the dream of the military industrial complex and the Bush-Administration as they brush aside the most stringent emergencies of the poorest quarter of the American people.

            http://www.voltairenet.org/article133896.html

            Von Bülow is touting classical or liberal economic theory, but the world has never worked that way. Never. A wonderful example of this was, in the video, when China tried to buy Unocal. So all the talk of free trade and free markets is just that, empty talk.

            You might also enjoy this video:

            A High-Risk Barrel
            http://www.youtube.com/watch?v=IF5A2I-P8L8

  3. Trent

    “So the idea that the Fed was created as some sort of conspiracy” Yet the way you describe the TPP makes it sound like a conspiracy….. so do they exist among large institutions, or are they just the figment of our paranoid minds yves? I would say from a study of history, hell just Rome, that they exist and then some wherever the possibility of power or power itself is found.

    1. Banger

      Well put. Where there is power and the stakes are high conspiracies sprout like weeds. The stunning fact is that the American people, due to the cult of American Exceptionalism promoted by every political sector from far left to far right, don’t see it no matter how obvious it is.

  4. skippy

    Amends for the Dbl comment, cut – pasted from links section, more relevant here thingy.

    The Abbott Coalition looks set to sign off on the highly secretive Trans-Pacific Partnership later this month, but what will it mean for ordinary Australians? Dr Matthew Mitchell reports.

    osted by admin in Business, Economics, International, Law on 5 October, 2013 10:13 am / 60 comments
    Tweet

    The Abbott Coalition looks set to sign off on the highly secretive Trans-Pacific Partnership later this month, but what will it mean for ordinary Australians? Dr Matthew Mitchell reports.
    Initial nations involved in the TPP; it may include more.

    Initial nations involved in the TPP; it may include more later.

    WHAT SORT of “Trade Agreement” manages to both criminalise internet use and force coal seam fracking onto communities?

    The answer to this is the Trans-Pacific Partnership (TPP), a pact that has the ominous potential to achieve both these corporate objectives — and many more.

    Of course, we cannot know the exact effects of the TPP, as the negotiations over the past few years have been held in secret. However, two leaked chapters – out of the 26 or more under negotiation – have caused more than their fair share of concern.

    One of these chapters threatens to undermine both our existing domestic and international legal systems, throwing away the protections and rights achieved over hundreds of years.

    How? Through tribunals linked to a system of International Investor-State Dispute Settlements (ISDS). The one in the TPP led to an open letter signed by prominent Australian judges, lawyers, politicians and academics insisting that the government should not sign an agreement that includes ISDS. The letter states:

    …the increasing use of this mechanism to skirt domestic court systems and the structural problems inherent in the arbitral regime are corrosive of the rule of law and fairness.’

    But ISDS is most definitely included in the proposed TPP put forward by United States negotiators

    osted by admin in Business, Economics, International, Law on 5 October, 2013 10:13 am / 60 comments
    Tweet

    The Abbott Coalition looks set to sign off on the highly secretive Trans-Pacific Partnership later this month, but what will it mean for ordinary Australians? Dr Matthew Mitchell reports.
    Initial nations involved in the TPP; it may include more.

    Initial nations involved in the TPP; it may include more later.

    WHAT SORT of “Trade Agreement” manages to both criminalise internet use and force coal seam fracking onto communities?

    The answer to this is the Trans-Pacific Partnership (TPP), a pact that has the ominous potential to achieve both these corporate objectives — and many more.

    Of course, we cannot know the exact effects of the TPP, as the negotiations over the past few years have been held in secret. However, two leaked chapters – out of the 26 or more under negotiation – have caused more than their fair share of concern.

    One of these chapters threatens to undermine both our existing domestic and international legal systems, throwing away the protections and rights achieved over hundreds of years.

    How? Through tribunals linked to a system of International Investor-State Dispute Settlements (ISDS). The one in the TPP led to an open letter signed by prominent Australian judges, lawyers, politicians and academics insisting that the government should not sign an agreement that includes ISDS. The letter states:

    ‘…the increasing use of this mechanism to skirt domestic court systems and the structural problems inherent in the arbitral regime are corrosive of the rule of law and fairness.’

    But ISDS is most definitely included in the proposed TPP put forward by United States negotiators.

    The Gillard government made it clear that Australia would not sign another trade agreement that included international dispute settlement by tribunals. This followed Australians being burnt by an agreement that has allowed Phillip-Morris to take Australia to an international tribunal over its plain packaging laws, even though our own High Court already decided against Phillip-Morris.

    Other countries are experiencing equally serious consequences.

    The North American Free Trade Agreement (NAFTA) is being used by gas and oil company Lone Pine Resources to sue Canada over Quebec’s moratorium on fracking. A trade agreement was also used to sue Ecuador for USD $1.77 billion.

    The Coalition’s trade policy document indicates that Abbott’s government will sign the TPP with acceptance of ISDSs because the Coalition is

    ‘…open to utilising investor-state dispute settlement (ISDS) clauses as part of Australia’s negotiating position.’

    Not only that, but it says it will

    ‘…fast track the conclusion of free trade agreements.’

    Tom J. Donohue, CEO and President of the U.S. Chamber of Commerce, told CNBC that the TPP deal will be completed in a month.

    Added to the threat of ISDSs are many other concerns, including those raised by the leaked chapters – snip

    http://www.independentaustralia.net/2013/business/abbott-set-to-sign-secretive-tpp-agreement-this-month/

    skippy…. comment section is lively imo see:

    ekill67
    5 October, 2013 at 12:32 pm

    So there it is.This is the reason Murdoch was so heavily in favour of the Coalition for the last Federal Election. Didn’t take long did it? I certainly don’t recall hearing about this pre election…

    Bighead1883
    5 October, 2013 at 1:02 pm

    And the lying thieving Corporation American loving Lieberals would have us even have this happen under a TPP.-Thanks to the shutdown, food safety inspectors at the US Food and Drug Administration, which monitors 80% of the US’s food supply, are on furlough until the budget gets passed, as Food Safety News reports.Also there is no truth in labelling in the US or even a requirement to ment GMO`s or CARCINOGENIC additives,on and on.The TPP will destroy Australia.

    RON
    5 October, 2013 at 2:26 pm

    I wonder if the ABC has the guts to report this? It would seem that the death of communism in Eastern and Central Europe, and the former Soviet republics has meant what Galbraith junior predicted back in the early 1990′s, namely, the growth of unfettered capitalism. These bastards, who gave us bullshit for decades about being the champions of free democracies, will soon become the champions of their puppet authoritarian governments – much like the Soviets championed the puppet regimes of communist Poland, Hungary, Romania, Czechoslovakia et al. Abbott has become one such puppet in the world’s first Murdocracy. Happy days folks. At least there were many of us here who tried to warn the Australian public, but the old media drowned out our voices. We saw this coming.

    Read more at http://www.nakedcapitalism.com/2013/10/links-101013.html#uTYkiFQf88OIstO4.99

  5. Richard Lyon

    This all has the feel like the push toward the transnational empire. It is certainly something that deserves extensive public discussion. Yet, the secrecy surrounding it makes that difficult at best. The blanket of the security state is very effective at smothering dissent.

  6. susan the other

    As Paul Craig Roberts says, This has nothing to do with free trade. We have never been respectful of the Pacific Rim countries. Their relationship with us has always been a reluctant truce. We haven’t heard about the Indonesian countries on this deal. Indonesia has always been abused by “free trade” – think East Timor and the capitalist mining interests. The claim to other countries’ natural resources will surely be an important part of the TPP. Where does Chile stand? Peru? New Zealand? Myanmar? I read that China just opened up a big casino on the border of Myanmar and Laos – that one is not being discussed anywhere. Where does Colombia stand? Ecuador has publicly questioned the value of the TPP and as this post mentions Thailand, Vietnam, Malaysia. And Australia just signed a deal to sell its minerals to China in yuan, right? I really don’t see how the TPP “contains” China at all. And Japan is a total sellout. Maybe because so much of its agricultural production is now contaminated. Here’s a question: If they can force these TPP conditions on sovereign countries, can they actually force people to buy, eat and consume their products? What do they do about the accumulating refusal to create any true demand?

  7. anon y'mouse

    if the rumours about this thing are true, and that corps will be able to sue and win damages against any country that makes laws protecting their own citizens due to lost profits, then this exemplifies the neofuedalism that is so much discussed around here.

    the nation-state as a unit will be a hollowed out shell, while its population’s buying power is captured permanently for these big corps. they, through their officials, have no say about this and have to pay either to purchase things that are harming them and their local economies, or the difference in damages.

    people are sidetracked by the term “feudal” into thinking this has to be a locational. global trade and communication lines have made this possible. location is intended to be Everywhere. “buy our product, or starve”.

    the landgranted knights of old would be salivating pools at something like this, which could not have happen in their wildest dreams. they were tied to a place, and had to struggle to keep money flowing to them. these people figured out the money-ownership angle and just have to find a way to institute this as an hereditary right. not only that, the knights had to put up with a buncha peasants that they had to motivate to work harder to instigate some of those money flows, and couldn’t kick out (until the end stage).

    this is the end-state, or climax ecosystem, of that mentality. there is little to be gained, except in oil or water, through conquest anymore now that the world is mapped and country’s boundaries have been set. destabilize some, and hollow out others so that only their husk remains, and threaten the rest with guns. I don’t see how something like this breaks down unless world wide resistance would have a chance due to defection of the military, and they know who pays their bills and don’t identify with the common man.*

    ((I know this. the members of my family who have been in military, and others that I’ve met while in college, don’t really see the rest of us as “one of them” anymore. they speak in inscrutable shorthand, and make it clear that we will never understand them. they have a different value system now–one they view as “better” than the rest of us.))

    1. Lambert Strether

      But feudalism that isn’t locational is like Hamlet without the prince. The social relations and in particular the relations of production aren’t comparable. That’s why (and I haven’t read Hoexter’s essay yet) I resist the term.

      1. anon y'mouse

        “the social relations are not comparable”

        could you expand on this one for me? why are they not? is not bidness a form of war? supremacy in bidness/finance takes the place of numbers raised under banner for war. are not ivy leagues, or the even more exclusive prep schools for them, to give imprimatur to younger generation (Knights garter)?

        is it not the anglo-western powers holding dukedoms, while elites of other countries conspire both with (to plunder bananas, water rights) and against for something like a baronetcy?

        1. Lambert Strether

          I’m not an expert in feudalism. But we don’t see peasants tied to the land today; we don’t see people being knighted by kings; we don’t see wage labor dominating the workplace in feudalim; we don’t see the owners of capital determining what is to be produced in feudalism. We see usury in both systems, of course…

          1. anon y'mouse

            you don’t need the land, but what it produces. you don’t need the peasants, you need their labor. you also need markets. group a produces products for group b, and vice versa in a neverending circlejerk of profit.

            if you have enough money, you can command the land and labor to do what you want. if you really have enough money, you can ensure that the peasants get only enough to keep alive and keep buying your crap that you handily imported from group B across the water. some of them even LIKE what they’re doing, and find it valuable in itself (identify with). heck, you’re so rich you can pay scientists to make discoveries for you which you can then use to sell the rubes more Ipods or whatever. you never know, one of them might invent bionic replacement body parts for you one day.

            I don’t see a lot of difference here with the knights of old, except that both they and the peasants were tied to the land and had more mutual expectations of one another. money controls both land and labor, so there’s no need for you to fulfill the expectations of peasants. only to find your comfortable profit level and order-of-magnitude money advantage, and keep that rolling along while other people work for you. and, if all the ‘knights’ do the same thing, it doesn’t really matter if peasant a works in factory b or whatever. eventually, consolidation and economies of scale make sure that only you and your 3 buddies are in charge of the entire market in any one thing.

            the peasants have to buy from you, or your 3 buddies. perhaps there’s a bit of fun seeing how you can outdo one another for their attention, but there’s more fun in forcing them through law or planned obsolescence that they can only use it for so long and then have to buy another one (virtual, downloaded stuff is the ultimate. they must keep paying or they don’t have any access at all, or the access simply expires. what did you sell? pixels on servers. smoke, air).

            peasants MUST survive and eat, and they need a car, and a cellphone, and a laptop, and an xyz to do so and be taken seriously by the others in their particular band or herd. and you make rents, and more laws about what the peasants have to buy, from whom, and all to keep them flowing in.

            add all the financial stuff about securitized mortgages and bankrupt pension plans, and you’ve just made money selling more smoke and air. if something is missing from historical feudalism, I don’t know what it is.

  8. Yonatan

    The TPP strikes me as expansion of the TBTF from finance to all major (US?) corporations. It essentially seems to state the corporations have a right to profit. I can see them regarding any failure to have a profit in any market as being source of a claim against the relevant government for loss of rightly owed profits. Given that claims are ‘judge’ by a special tribunal rather than a normal court of law, this means that, no matter what happens, corporations must, and will, have their profit.

  9. wendy davis

    Does anyone have any informations as to whether or not China was ever invited into the TPP agreement?

    On my last post on the subject, I dug up two stories that saud they had been, and that China was considering it. Both were English versions of Chinese websites.

    Thus, Pepe Escobar’s assertion that they never were potential signatories was baffling to me. He did a great job of explaining all the deals that are in the works, I might add.

    1. Yves Smith Post author

      China’s not part of the TPP. The whole point of the TPP is to isolate China. And I’ve never seen anything that indicates China was ever invited.

      Are you sure you aren’t confusing the trade deal with the ASEAN (16 nation) negotiations underway? China is most assuredly part of that.

      1. purple

        Yes, isolate the 2nd largest economy in the world, that is economically and culturally integrated in ASEAN in a way that the U.S. isn’t. In its own backyard.

        I mean really, this just demonstrates how utterly clueless Washington is.

      2. wendy davis

        I’m sure, although I don’t know how much of the ‘diplomacy’ is cat-and-mouse. This is from February 2013, and I haven’t found citation of Clinton’s invitation:

        “Whether the U.S. is trying to “hedge” against China’s equally ambiguous rise, or genuinely contain it, or whether the TPP is an attempt to put economics front and center of U.S. – Asia relations (rather than strategic issues) are questions that must be left for the future. For now, both the U.S., through former Secretary of State Clinton, and Singapore, through Prime Minister Lee, have openly invited China to join.”

        http://thediplomat.com/pacific-money/2013/02/08/the-trans-pacific-partnership-will-it-happen/

        And from June 2o13:

        ‘After Japan joins talks, China considering TPP”:

        http://www.japantimes.co.jp/news/2013/06/01/business/after-japan-joins-talks-china-considering-tpp/

        Just a quick Google, and as I said, it’s not clear how much is feints in either direction.

        But thank you, Yves, for keeping on this travesty. Lori Wallach was on Democracy Now again recently to call it for what it really is.

        My sense is that you and Escobar are correct, though.

  10. different clue

    Every DLC Clintonite Shitocrat in office supports the TPP.
    Do enough Rs also support it to pass it?

    If it takes an accidental coalition of China abroad and the Tea Party here to destroy the TPP, I hope that coalition emerges and wins.

  11. purple

    An Asian trade agreement without China has no chance of succeeding. THE PRC blows the U.S. away when it comes to investment in ASEAN countries. Plus, Chinese businessmen basically hold sway in the economic realm regardless throughout Asia sans Japan and S. Korea.

    And it’s not just China – all these Asian countries have protected industries that have no interest in TPP.

    The U.S. is bullying using its military muscle and technological dominance in a few key industries. But overall it won’t and can’t work.

  12. Fiver

    Norman Pollock has an overly wordy, but properly troubling piece up on CounterP in which he argues, I believe quite correctly, that this is not about trade, but rather straight-forward US Imperialism, tied directly to the military’s so-called “pivot” to the Pacific, involving immense expenditures including a rapid re-arming of Japan – so it can take the pounding from any Chinese response rather than the US homeland.

    The intent is to create an encircling bloc of US legal pawns not just for criminal looting purposes, but also to bring the ‘forward areas’ of US striking power to as many of China’s neighbours as possible.

    They are laying the groudwork for offensive war in case of an economic show-down over oil or Africa or other critical Chinese interests and in such haste as to beg the question:

    Just how bad do US planners see things getting just ahead that they would take such provocative, openly aggressive, reckless actions in tandem? What on earth are they afraid of? Do top US officials see no hope for the US economy except as a global extraction machine which can have only 1 owner/operator? Apparently so.

    I sometimes wonder if the US big boys have ever given any thought at all as to what they will do with the world, once they’ve got it all? I fear all meaning would drain from their strategic little heads.

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