Leaders meet for TPP talks in 2010. Image: Wikipedia.

International Affairs

Did Turnbull Just Torpedo The TPP?

By Richard Denniss

July 05, 2016

With a new Senate likely to be hostile to free trade deals, the road to signing the Trans-Pacific Partnership just got bumpy, writes Richard Denniss.

One thing that is certain after Saturday’s election, the Trans-Pacific Partnership (TPP) is dead, and along with it the Coalition’s economic agenda and narrative. The free trade agreements that Andrew Robb signed with China, Korea, and Japan were some of Tony Abbott’s proudest achievements, yet they are exactly the sort of deals that Pauline Hanson, Nick Xenophon, and Jacqui Lambie believe cost Australian manufacturing workers jobs.

And thanks to Malcolm Turnbull’s new Senate voting rules and double dissolution election, Hanson, Xenophon, and Lambie are now the block of votes that the Coalition will need to win over to pass their legislation when the ALP and Greens are opposed.

The National Party will feel the pain most acutely. Described by some as the big winners last night, the Nationals have always struggled in head to head policy debates with the likes of Hanson. While the Nationals have always been willing to sign trade deals that hurt manufacturing in exchange for helping beef or sugar producers, Hanson has been less sanguine about throwing blue collar workers under the bus in the interests of big agri-business.

Xenophon has already forced the Coalition to do a hasty U-turn on building submarines in Adelaide after Tony Abbott’s Defence Minister, David Johnson, said he wouldn’t trust the South Australian based ASC to “build a canoe”. Xenophon, who will soon have two senate colleagues on his team and at least one member in the lower house, is now on the hunt for an assistance package for the struggling Arrium Steel to ensure Whyalla isn’t wiped out.

Xenophon has shown that when the Coalition is faced with a choice between taxpayer funded industry assistance and their ‘principled’ support for ‘free markets’, there’s no contest (especially in an election year). The question for Jacqui Lambie, Pauline Hanson, and the rest of the parliament is how best to capitalise on the Liberal’s ‘pragmatism’. It’s hard to believe that only two years ago the Coalition were spinning their willingness to let the car industry move offshore as proof of their resolve. It might not have been what Malcolm Turnbull had in mind, but there has never been a more exciting time to propose ‘agile and innovative’ industry assistance.

The only way for new trade agreements like the TPP to be ratified is if the ALP and Coalition decide to show some bipartisan commitment to the neoliberal trade agenda. But after Shorten’s unexpected success on the weekend the odds of Labor pivoting to the right on economic management seem as low as they have been in a decade.

Democrats presidential candidate, Hillary Clinton. (IMAGE: iprimages, Flickr)

Significantly for the ALP’s likely thinking, even Hilary Clinton and Donald Trump have begun to distance themselves from the TPP. It seems that not only are there no atheists in foxholes, but there seems to be no free traders in election years.

Leaving aside the substantive problems with the TPP the seats that the Coalition just lost in Tasmania, Queensland and South Australia were all in regions trying to cope with the downside of rapid economic transition after the “age of entitlement had ended”. Put another way, millions of Australians are deeply concerned at the thought they are not only expected to cope with costs of structural change, but expected to do so without the safety net that previous Australians governments, including Menzies, helped to build during the 20th century.

Labor’s attack on the Liberal’s hostility to publicly provided healthcare worked not just because the cost of healthcare scares a lot of people who can’t afford to buy themselves out of trouble, but because Medicare works as a symbol of the safety net that low income earners facing rising unemployment care a lot about.

So while in theory the ALP could offer the Coalition a lifeline for the ratification of its trade deals, the reality is that such a display of bipartisan contempt for the public’s hostility to trickle-down trade policies would be of even greater benefit to the new cross benchers than Turnbull’s decision to both change the Senate voting rules and call a DD.

Saturday night did not just signal a swing away from the Coalition, but from the whole idea that trickle down tax and trade policies could deliver economic or political benefits. Inevitably, some in the Coalition have argued the exact opposite in claiming that modest efforts to rein in generous tax concessions for high income earners lay at the heart of the Liberals’ demise.

Such denial of the underlying cause of the unprecedented swing against them might help the more conservative MPs hold on to their party’s policy agenda, but it will do little to help them hold on to the votes required to implement any agenda.