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An essay I wrote for my 300-level (NZ = final undergraduate level) geopolitics paper.  The essay question was: Critically discuss what the Trans-Pacific Partnership can tell us about recent transformations in the international state system.  I received A+ for this essay.  Discussion or critique appreciated.  Please don’t steal my work (Turnitin will get you anyway).

 

The TPP evidences the substantial change in the international state system that has occurred in recent decades.  As a transnational agreement, it reflects a growing inclusion of global governance, rather than simply state sovereignty, as the means through which domestic policy is implemented.  Global governance is defined as a system of international coordination, based on multilateralism, and in which state sovereignty is not considered as important as integration (Heywood 2011).   In the pre-war and inter-war eras, and to a lesser degree under the Bretton Woods system, state sovereignty was considered practically absolute.  An examination of this legacy provides context, enabling the TPP to be understood as an important embodiment of modern global governance.  Though it is accepted that global governance diminishes the sovereignty of nation-states in the traditional sense, governments still utilise softer powers during negotiations in order to achieve their ends.

In order to understand the transformation in the international state system that the TPP demonstrates, the historical status quo must be considered.  It is most helpful to focus on economic relations, as this area is the one in which conflict might produce the most immediate and potentially serious consequences (Heywood).  Prior to WWI, and perhaps causing it (Heywood 2011), an imperial arrangement dominated the globe.  Within imperial systems, wealth is distributed very unevenly, concentrated at the centre (Baylis et. al. 2011)  A major causative factor of WWI was conflicting imperial interests.  The Depression of the 1930s then helped to feed political instability and extremism, culminating in WWII; protectionism was hereafter viewed unfavourably.  In 1944, at the UN Monetary and Financial Conference, it was decided that economic liberalism was the path to integration and the prevention of further crises.  Three organs were constructed, known collectively as the Bretton Woods System: the International Monetary Fund, the World Bank, and the General Agreement on Tariffs and Trade.  The IMF oversaw the stabilisation of exchange rates by pegging them to the U.S. dollar, and the U.S. dollar to gold.  The World Bank provided reconstruction loans to war-affected parts of Europe.  GATT aimed to reduce tariffs on a global scale.  All of these organs together provided regulation of global trade and finance, with a view to integrating and liberalising (Baylis et. al.).  This is an early example of the kind of multilateralism exhibited in today’s system of global governance; an international agreement aimed at avoiding conflict, for which member states are required to surrender some sovereignty.  However, as will be discussed further on, the states involved in designing the system also had national interest in mind, and were merely pursuing their policy objectives through means other than the exercise of sovereignty . 

The Bretton Woods system remained functional until 1971, when President Nixon announced his New Economic Policy (U.S. Dept. of State 2013); after the system’s collapse, multilateral agreements continued to be popular.  The American dollar had become overvalued primarily because of military spending, and President Nixon unpegged the dollar from the value of gold.  Exchange rates were floating from this point on, so the organs of the Bretton Woods System could not fulfil their original purposes.  However, multilateralism was on the rise, and the organs adapted.  The IMF became somewhat of a watchdog for financial transparency; the World Bank turned its focus to developing nations in need of loans, and the GATT became the World Trade Organisation in 1995.   Along with these central multilateral bodies, regional trade and security agreements began to spring up frequently after the end of the Cold War.  Rosecrance (1991), from a realist perspective, argues that this was primarily due to the collapse of bipolarity.  By 2010, 462 regional trade agreements were known to the WTO (Heywood 2011).  This was the same year in which the TPP was entered into by New Zealand, Brunei, Chile and Singapore. 

The TPP demonstrates, in several ways, this gradual shift from an inter-war era of protectionism and strict exercise of state sovereignty.  Although the TPP negotiations themselves are not publicly released, and thus an analysis of individual parties’ conditions can only be performed to the extent that leaked documents reveal anything, the programme and locations of meetings, et cetera, are available.  The first noteworthy point is the lack of a supranational authority involved in the TPP negotiations.  The states involved in negotiating the TPP are surrendering some national sovereignty in order to make concessions; whereas in bygone eras, nations did not consider integration a primary goal, and as such exercised total sovereignty over domestic policy.  However, even though some sovereignty is being conceded, there is no larger power that coordinates these nations. While the WTO will require that the agreement is recorded, it does not have any binding power over states, so to speak (Heywood).  The WTO cannot be considered supranational for this reason.  The agreement exhibits multilateralism, as it is based on negotiations and agreement rather than authority.  Similar to earlier examples of multilateralism, such as NAFTA, the negotiations themselves are even moved around to different localities to create more of a sense of fairness and inclusion. 

The second notable way in which the TPP demonstrates global governance is the considerable involvement of transnational corporations, and, less influentially, other NGOs.  There are more than 600 TNCs involved in the negotiating rounds of the TPP (Citizens Trade Campaign 2014).  This reflects a “hollowing out” of the state in an upwards direction.  TNCs are involved in the agreement at the expense of members’ state sovereignty, because they are powerful enough to negotiate their preferred outcomes.  As Herod (2009) explains, TNCs are able to virtually dictate the financial environment of many states, because governments desire their investment.  They may demand tax breaks or amendments to labour legislation.  Thus, there is no denying the significance of TNCs as global actors which are, in some cases, more powerful than entire countries.  Multilateralism involves input from many more parties than just the traditional nation states; it includes TNCs and other NGOs.  Despite the restriction of TPP negotiations, the attendees of these rounds is sometimes public knowledge, and NGOs on a local level have been shown to have been included.  On April 20, 2012, First Union General Secretary Robert Reid stated in an interview for TVNZ’s Breakfast show that his organisation had had a presence at the most recent round of negotiations in Auckland, in an advisory capacity.  The Hon. Murray McCully also stated in the House on December 6th, 2010:

“MFAT has called for submissions from NZ interests in relation to TPP…the discussions underway in Auckland at the moment are open in the sense that there are over 100 national and international interest groups…”(inthehouseNZ 2010)

This demonstrates that along with an upwards “hollowing out” of the state, global governance operates on more regional and local levels.  This is an inherent trait of the system; unlike the earlier state-centric approach of government, governance is very versatile, and a single negotiation can involve multi-level input, from local to global. 

It is true that literature concerning the TPP is highly speculative, considering the confidentiality of the agreement.  A commonly cited protest to the TPP (It’s Our Future.co.nz 2012, New Zealand Herald 2013) is that it compromises state sovereignty.  While, as aforementioned, global governance as exemplified by the TPP is considerably less state-centric than earlier approaches to international relations, it is not necessarily true that sovereignty itself is under threat.  Baylis et. al. argue that this is irrefutably the case.  These authors cite the considerable involvement of TNCs in global governance as an insurmountable barrier to state sovereignty.  Uncontrollable cross-border financial flows, triangulation and problems of extraterritoriality of TNCs and their subsidiaries are given by way of explanation.  In the traditional sense of the term ‘Westphalian sovereignty’, that is, absolute sovereignty, these issues do pose a problem in terms of necessity for the state to consult with and consider other parties.  However, Herod and Heywood both take the opposite stance.  States, it is argued, may still maintain sovereignty through the strategic employment of such ‘soft power’ methods as negotiation, example and the establishment of trust. 

Insofar as sovereignty can be understood as the ultimate ability to implement policy, states are still able to do this within a system of global governance.  Two examples are relevant here: firstly, the U.S.’ motives in the original establishment of the Bretton Woods System; and secondly, that same nation’s intent regarding China and the TPP.  The U.S. was pursuing its maxim of economic integration in 1944 with the aim of expanding its hegemony.  John Maynard Keynes, of the U.K. delegation, had originally suggested that one of the supposed organs should have the power to hold large lender states accountable for ‘loan-sharking’, should smaller economies default on unreasonable debts.  The U.S. was able to completely negotiate this provision out of the agreement.  While Baylis et. al. make the point that states are unequal, and smaller ones have no hope of defending their sovereignty, it has been seen in the leaked Intellectual Property Rights provision of the TPP (Wikileaks 2013) that New Zealand disagrees with America over something in that section; and the Hon. Murray McCully stated in the House on December 6th, 2010 (inthehouseNZ), that the government is not prepared to negotiate on the status of Pharmac.  It is therefore clear that, despite being a small state, the NZ government believes it has reasonable bargaining clout in the negotiations.  In another example of soft power exercise, it is argued by Kelsey (2013) that the U.S. intends to either isolate China from its Asia-Pacific trading partners by joining the TPP, or to force China to join and agree to American provisions.  Either way, both of these nations will be required to make some policy concessions, but will not be so isolated that they will be forced to accept unfavourable outcomes.  With a lack of bipolarity and a variety of regional trade communities, both the U.S. and China will have other, albeit perhaps less lucrative, opportunities.  As such, both are free to pursue policy objectives in the negotiations, but will fall short of being able to blackmail one another.

The TPP is a convenient vehicle through which to understand the recent changes to the international state system, as these are most easily conveyed from an economic perspective.  The pre- and inter- war eras, from imperial beginnings, emphasised the significance of the nation-state and the sovereignty thereof. The implementation of the Bretton Woods System was the point of change after which multilateralism began to replace this state-centric approach.  Despite the collapse of Bretton Woods in the 1970s, global governance – as opposed to government – gradually became more salient, particularly after the end of the Cold War; and this system is prevalent today, employed on both macro and micro levels, from the global marketplace to local councils.  Advisory groups, business interests and states all cooperate to achieve the most mutually beneficial end possible.  The TPP evidences the involvement and power of TNCS; the inclusion of small NGOs; and the ability of states to employ ‘soft power’ methods to achieve policy goals.  It is this ability that circumvents the proposal that states are losing sovereignty under the global governance model.

 

 

 

 

 

 

 

 

                                                           BIBLIOGRAPHY

 

 

Baylis, J., Smith, S., & Owens, P. (2011). The globalisation of world politics. Oxford, England: Oxford     University Press.

 

Citizens Trade Campaign. (2014). The Trans-Pacific Partnership Free Trade Agreement: NAFTA for the Pacific Rim?. Retrieved from http://www.citizenstrade.org/ctc/trade-policies/tpp-potential-trade-policy-problems/

 

Goodwin, M. (2009). Governance. in R. Kitchin and N. Thrift (Eds.), International Encyclopedia of Human Geography (pp. 593-599). Oxford: Elsevier.

 

Herod, A. (2009). Governing Globalization: Geographies of Globalization. Malden, MA, Oxford and West Sussex UK: Wiley-Blackwell.

 

Heywood, A. (2011). Global politics. Hampshire, England: Palgrave Macmillan.

 

inthehouseNZ. (2010, December 6). Question 1: Russel Norman to the Minister of Trade [Video file].  Retrieved from https://www.youtube.com/watch?v=LICeK6xizro

 

Jane Kelsey: TPPA end game can only come from dirty compromises. (2013, Nov. 29). New Zealand Herald. Retrieved from http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11164328

 

Kelsey, J. (2013). US-China relations and the geopolitics of the Trans Pacific Partnership Agreement (TPPA). Third World Resurgence, No. 275. Retrieved from http://www.globalresearch.ca/us-china-relations-and-the-geopolitics-of-the-trans-pacific-partnership-agreement-tppa/5357504

 

Rosecrance, R. (1991). Regionalism and the post-Cold War era. International Journal XLVI. Retrieved from http://www.jstor.org/discover/10.2307/40202895?uid=3738776&uid=2&uid=4&sid=21104253025633

 

U.S. Dept. of State. (2013). Nixon and the end of the Bretton Woods System, 1971-1973. Retrieved from http://history.state.gov/milestones/1969-1976/nixon-shock

 

Wikileaks. (2013). Secret Trans-Pacific Partnership Agreement (TPP) – IP Chapter.  Retrieved from     https://wikileaks.org/tpp/

 

 

 

Grade: A+

This is an excellent essay. It shows a clear understanding of the international state system and the concepts we use in the course to understand its transformation and you integrate this successfully with a good sense of the TPP. The essay is well constructed and well written and you show the ability to make use of examples in appropriately nuanced ways. I’m glad to hear you are considering postgrad study! Great work.

RP

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