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Professor: Free-trade agreement hampered by lack of transparency

Wed, 05/07/2014

LAWRENCE — The Trans-Pacific Partnership has the potential to be the most economically and politically significant free trade agreement in the Asia-Pacific region, but it is being hindered by a nontransparent drafting process and perceptions of favoring American corporate interests over poverty alleviation, according to a new article by a University of Kansas international trade law expert.

Raj Bhala, associate dean for International and Comparative Law and Rice Distinguished Professor at the School of Law, has authored “Trans-Pacific Partnership or Trampling Poor Partners? A Tentative Critical Review.” The article was published in the Manchester Journal of International Economic Law the same week President Barack Obama toured Asia discussing the agreement and other issues. The piece, listed in three different top-10, most-downloaded Social Science Research Resources Network categories, outlines problems that have stalled adoption of the agreement among the United States and 11 other nations that account for 40 percent of global gross domestic product.

“I didn’t start out seeking to criticize this agreement. I needed to be familiar with it to write the new edition of my next textbook and stay current in the classroom when teaching my students,” Bhala said. “As I learned more I became more skeptical and had more concerns. It became clear we are thinking too much about the wealthy elite, that our trade policy is ever-more corporatized, and we are also hearing these concerns from some of our closest friends and allies abroad.”

The Trans-Pacific Partnership, commonly known as TPP, was conceived in 2006 among four nations and has since expanded to 12. It is part of a growing trend among the U.S. and many other members of the World Trade Organization to form free-trade agreements, especially given the failure of the Doha Round to yield a comprehensive, ambitious and balanced multilateral deal. The U.S. alone has free-trade agreements with 20 nations, Korea, Colombia and Panama being the most recent.

One of the primary problems with the TPP is the lack of transparency in its drafting, Bhala said. Draft texts of free-trade agreements are generally made available to journalists and the public. Just two of the 29 TPP chapters were made available to the public. Those sections, addressing environmental and intellectual property law, only became so when they were leaked to WikiLeaks. Bhala’s scholarship draws from journalistic coverage of the leaked sections and analyses of domestic and foreign legal, governmental and nongovernmental organizations directly familiar with TPP talks.

American involvement in TPP makes economic sense, but also is driven by a strategic shift in focus from the seemingly easily troubled Middle East to the dynamic, entrepreneurial Asia-Pacific region, Bhala said. That strategic shift also means, if TPP takes effect, solidifying economic and political alliances to help contain China, even though the administration prefers not to make that admission. It is reminiscent of agreements the U.S. had with Western European nations to contain the Soviet Union during the Cold War. Even if China ultimately joins TPP, the U.S. and its allies already will have written rules on key issues of importance to China, such as duty-free, quota-free treatment for almost all traded goods, services sector liberalization, the behavior of state-owned enterprises and rules of origin for textiles and apparel merchandise. TPP then will be a “take it or leave it” proposition for China.

“Bluntly put, TPP and the pivot toward Asia is certainly justified by economic and demographic realities and projections. But the biggest reason is containing China,” Bhala said. “And setting rules of a big regional trade club before China joins, if it ever does, thus constraining it to play by those rules.”

However, in writing TPP rules, the U.S. and its trading partners have had profound disagreements. The perception is that American demands are simply too harsh, lack empathy and overtly favor American corporate interests over the most pressing matter in the Asia-Pacific region: poverty alleviation for those earning less than a dollar a day, and economic security for the fragile new middle class earning between $2 and $20 a day.

Two examples are opening Japanese agricultural markets to more imports from the U.S. and the sourcing of fabric for Vietnamese textiles, that country’s biggest industry. There are also disagreements on making Japanese markets more open to American cars and significant disputes on intellectual property. In the case of the latter, patents for pharmaceuticals, such as HIV/AIDS medications, are especially contentious. While American interests push for longer patent protection for medications, data exclusivity and so-called “evergreening,” Southeast Asian countries and NGOs argue that doing so only protects bloated corporations and stifles innovation while locals continue to die.

Those arguments are just a few of the problems holding up successful conclusion of TPP. Despite the differences among negotiating parties and political backlog in Washington, D.C., that has hampered American trade influence, Bhala believes there is still a good chance the parties will resolve their differences and finalize the free-trade agreement. That could be a boon not only to the nations involved in the agreement, but also to students in KU Law’s international trade courses. KU Law grads are practicing in 18 countries, including several Asian nations involved in TPP. The agreement could present many more opportunities for them, Bhala said.

“Essentially, this free-trade agreement is born of failure at the WTO level and the strategic shift to Asia,” Bhala said. “It’s bogged down by political gridlock in D.C., and a potpourri of disagreements on ancient issues such as farming and 21st century issues such as intellectual property, and the U.S. cannot bully its way to get a deal. I’m optimistic the U.S. will appreciate that sometimes helping our trading partners in the short term helps American in the long term.”



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Wanna Skype? Chancellor gets creative to surprise Truman winner From KU News Service: http://bit.ly/1awodaa Ashlie Koehn, a University of Kansas junior from Burns studying in Kyrgyzstan, interrupted helping her host family prepare dinner to make a Skype call on Monday evening. To her surprise, Chancellor Bernadette Gray-Little was on the other end of the call letting Koehn know she had been named a 2015 Harry S. Truman Scholar. Koehn is the 18th KU student to be named a Truman Scholar and the only 2015 recipient from the state of Kansas. Earlier this month, she was also named a 2015 Udall Scholar. And in spite of a distance of more than 10,800 kilometers and 11 time zones, Koehn’s thrill from hearing the news from the chancellor came through loud and clear. “Ashlie’s experience at KU epitomizes a quality undergraduate experience. She challenged herself in her coursework, exposed herself to different research opportunities, studied abroad in Germany, Switzerland and Kyrgyzstan, and participated in both student government and community service projects,” Gray-Little said. “This is quite a year for Ashlie. Her hard work is a wonderful reflection on her and also a great reflection on the university, and we all congratulate her.” Each new Truman Scholar receives up to $30,000 for graduate study. Scholars also receive priority admission and supplemental financial aid at some premier graduate institutions, leadership training, career and graduate school counseling, and special internship opportunities within the federal government. Koehn, a member of KU’s nationally recognized University Honors Program, is majoring in environmental studies, economics and international studies. Her goal after earning her KU degree is to pursue a master’s degree in economics at either the London School of Economics or the University of Reading, with a focus on the economics of climate change. In 2014, she received KU’s Newman Civic Engagement Award for her work establishing the Coalition against Slavery and Trafficking. Her involvement with the issue was sparked by Hannah Britton, associate professor of political science and women, gender, and sexuality studies, who hosted national conference on contemporary slavery at KU three years ago. “Ashlie and I met several times to think about what KU students could contribute to the issue of slavery and human trafficking, and the result was her founding of KU CAST,” Britton said. “After a year as president, Ashlie successfully handed the organization over to the next student leader. She demonstrated her strong leadership qualities by setting a unique goal and then pursuing it with her sense of passion, engagement and dedication. No matter the country or context, her leadership strength is evident in her coursework, her public service and her work experiences.” The University Honors Program works with a campus committee to select KU’s nominees for the Truman Scholarship and supports them during the application process. Anne Wallen, assistant director of national fellowships and scholarships, noted it was an amazing ruse to pull off the surprise. Originally, the call was set up to be between Wallen and Koehn. “I was totally not prepared to be greeted by Chancellor Gray-Little, but it was an amazing surprise for sure,” Koehn said. “As a first-generation student, it took time to learn the collegiate system, but my parents taught me to be resourceful and independent from a young age and KU and the Kansas Air National Guard have provided me with the opportunities to drive me into the future, both at graduate school and in my career. I plan to use the Truman Scholarship to pursue a career as an environmental economist helping to shape future trade agreements and leverage action on important international environmental issues, particularly concerning climate change.” Koehn also had a surprise of her own for the chancellor — the meal she was helping to prepare was not exactly typical Kansas dinner fare. On the menu with her host family in Kyrgyzstan on Monday was a traditional Kyrgyz meal called Beshbarmak, or “five fingers,” because you eat it with your hands. The dish is made of horse and sheep and was being prepared as a birthday celebration for Koehn’s host mom. Chancellor Gray-Little, as she signed off from Skype, made sure to encourage Koehn to enjoy her Beshbarmak. Koehn is the daughter of Rodney and Carolyn Koehn of Burns. She graduated from Fredric Remington High School in Moundridge. She is an active member of the Kansas Air National Guard and currently on leave while studying abroad in Bishkek, Kyrgyzstan. She is a member of the KU Global Scholars Program and a past member of the Student Senate. In addition to being named a 2015 Truman and Udall scholar, she was named a 2014 Boren Scholar and Gilman Scholar and in 2013 was named the Kansas Air National Guard Airman of the Year.


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