Australian government inquiries question impact models for TPP

CANBERRA — Economic modeling on the impact of TPP-11, known as the Trans-Pacific Partnership trade agreement — minus the United States — has been called into question by two Australian government inquiries.

On Aug. 22 the Joint Standing Committee on Treaties released their TPP-11 inquiry report followed by the Senate Standing Committees on Foreign Affairs, Defence and Trade Committee report released on Sept. 18.

Both highlighted a lack of clarity and multiple interpretations of economic modeling that gave an uneven look at the impacts — including to lower- and middle-income countries. They also identified challenges in understanding impacts on women, health, and the environment.

It was a dramatic shift from earlier inquiries into TPP according to Giovanni Di Lieto, lecturer in international business at Monash University. And one that can impact how future trade agreements are analyzed for effectiveness.

“If you compare these latest reports on the TPP-11 from the earlier ones at the start of negotiations, just a few years ago, you can see there is a change of tact in tone and content,” Di Lieto said. “There is something clearly changing — and it is not just [United States President Donald] Trump. Trade relations are changing.”

What did the reports find on the issues of modeling TPP and trade impacts generally?

While the reports did not recommend throwing out the trade agreement, they did raise questions on transparency, fairness, and communicated impacts. The recommendations were almost mirror images in both reports — one being that the government considers undertaking independent modeling and analysis of the agreement.

A range of modeling was carried out to study what benefits TPP-11 brings and to whom. But the inquiries found that these are often left open to interpretation, resulting in contradictory evidence provided to the inquiries. The modeling, which takes a series of assumptions about an economy based on previous evidence to predict future outcomes, has limited results and misses crucial issues such as health impacts, environmental impacts, and gender.

ActionAid Australia was a key source of evidence for both inquiries in identifying challenges in gender-based modeling, including ActionAid’s submission that argues that some women in lower-income countries have found that free trade agreements “exacerbated gender inequalities.”

To assess impacts on health, health impact assessments would need to be part of free trade agreements analysis. It would also support calls from the World Health Organisation to use health impact assessments to better integrate health into policy decisions. Environmental impact assessments were similarly recommended.

Further recommendations from the Senate Standing Committees on Foreign Affairs Defence and Trade want a health, gender, and environmental impact assessment expanding to all of Australia’s existing trade agreements, to ensure countries and communities are not negatively impacted.

Di Lieto explained that the nature of trade agreement modeling means that identified impacts will continue to be a grey area.

“Free trade agreements are worth billions of dollars, but it is never really clear who they will benefit,” he said. “Right now if you want to look at gender gaps, minority engagement, or other development challenges, we simply don’t have the tools to answer these questions. But it is good we are asking these questions. By asking questions there will be a push to answer them.”

Putting gender equality on the trade agenda

ActionAid Australia was pleased that gender was getting the focus it deserved in the trade setting.

“We’ve now seen two reports into recent trade deals — PACER plus and the TPP — recommend that gender impacts are taken into account,” Lucy Manne, head of policy and campaigns for ActionAid Australia, explained to Devex.

The recommendations, Manne believes, help highlight that trade deals often negatively impact women in low-income countries, who are the most affected.

“This means not implementing the TPP until a full gender impact assessment is completed, and adopting policies that require gender impact assessments prior to signing any future trade deals,” Manne said.

For Manne, economic modeling needs to disaggregate results by gender to identify the differential impacts on men and women — and it should also be sector-specific.

“Where economic modeling falls short is its reliance on quantitative data, which may show aggregate gains or losses but provide little insight into the everyday impacts on men and women, in particular, any impacts on women's unpaid care work, which are typically excluded from economic models,” Manne said.

But despite the acknowledgment, ActionAid Australia’s analysis suggests that TPP will undermine women’s rights and gender equality in signatory countries — and are calling for the Australian Senate to block the deal they call discriminatory.

Will TPP be scrapped?

The findings of the reports are critical of TPP but Di Lieto believes there is one thing that will push the agreement through, with the change of additional parties coming on board once it is ratified: Geopolitics.

“They are doing it because there is a geopolitical push behind it,” he said. “It makes a lot of sense to be in the TPPP-11 in geopolitical terms because of security. But the business case for it is not compelling. There is not enough evidence for me to say whether it should be rejected or enforced.”