1 Given the vast and growing literature on international law, it is remarkable how few systematic attempts have been made to uncover the fundamental nature of such law as a social phenomenon. This poverty of theory has not gone unnoticed the vanishing point of jurisprudence. As Koskenniemi points out, though ‘discussion on “theory” about international law has become a marginalized occupation’, ‘this has not always been so’.1
There are huge differences in living standards around the world. Even the poorest citizens of the Indonesia have incomes and access to health care, education, public services, and economic and social opportunities. But, Indonesian GDP yet somewhat maximized if we compare it with the exploration of nature that has been done the last few decades. Therefore we will see some of the issues objectively and widely from International Political Economy.
International Political Economy (IPE) is the rapidly developing social science field of study that attempts to understand international and global problems using an eclectic interdisciplinary array of analytical tools and theoretical perspectives. IPE is a field that thrives on the process that Joseph Schumpeter called "creative destruction." IPE can be analyzed in terms of three factors: interest, institutions, and information. The international economy might affect foreign national economic policymaking through two related channels, the first runs directly from the global economy to the preferences of national socioeconomic and political actors. Similarly, the state of international capital markets can have a big impact on the preferred policies of groups in potential borrowing countries going to the prospects of access to thriving global financial markets can lead firms and sectors to champion national trade, monetary, or exchange rate policies they might not otherwise support, all these involve a common causal can change in the international economic environment affects the policy preferences and behavior of domestic groups, and thus has impact on national policymaking and foreign economic policies. One variant of analysis of the impact of the international economy on domestic institution is about the
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2 effects of globalization on the prospects for the social-democratic welfare state and similar social
policies.2
Political economy, considered as a branch of the science of a statesman or legislator, proposes two distinct objects: first, to provide a plentiful revenue or subsistence for the people, or more properly to enable them to provide such a revenue or subsistence for themselves and secondly, to supply the state or commonwealth with a revenue sufficient for the public services. It proposes to
enrich both the people and the sovereign.3
Politics and Economics approach international trade from completely different point of view using completely different analytical frameworks. The problem is that states think in terms of geography and population, which are the relatively stable factors that define its domain while markets are defined by exchange and the extent of the forward and backward linkages that derives there from.
In the domestic analysis, we identify three analytical steps.4 First, Economic Interest, this
framework and its emphasis on the demand side coming from self-interested socioeconomic actors has roots in three perspective:
1. The Stigler-Peltzman
2. The analysis rent-seeking or directly unproductive behavior
3. Marxist.
Analysis of domestic interest can be structured along two dimension: specifying the content of groups whose interest are at stake and specifying the organization of these interest. An important starting point for domestic IPE is to ascertain the interest, or policy preferences, of groups both broad and narrow.
Second, Political Institutions, the interest, preference intensity, and organization of socio economic actors is only a starting point for the analysis of domestic constraints on foreign economic policy. This is especially true of the organization of the political system as it responds
2
International Political Economy by Frieden and Martin page 120-122 3
An Inquiry into the Nature and Causes of The Wealth of Nations by Adam Smith 428 4
3 to political pressures. Institutions perform two general functions, aggregation and delegation. Third, they investigate how these interest are mediated through political institution.
The Transatlantic Trade and Investment Partnerships (TTIP) is a series of trade negotiations being carried out mostly in secret between EU and US. As a bilateral trade agreement, TTIP is about reducing the regulatory barriers to trade for big business, things like food safety law, environmental legislation, banking regulations and the sovereign powers of individual nations.
Next the other Trade Agreement is Trans Pacific Partnership, is a free trade agreement between US, Japan, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore
and Vietnam. Although the TTP covers a wide range of issues, this site focuses on the TTP’s
Intellectual Property (IP) chapter.
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II
LITERATURE REVIEW
1. Mercantilism
Mercantilism was the guiding doctrine behind the attempts of regimes and peoples of the early modern Atlantic World to organize their economic existence. The aim of mercantilism was to structure the financial foundation of the nation-state. Mercantilism had its faithful few and its querulous many. Nevertheless, all of early modern Europe recognized and conformed, in various degrees, to the doctrines of mercantilism. Mercantilism attracted a following because it seemed to work. Mercantilist thinkers argued that a strong central government was so important that the Crown had to have the power to turn every element of the state to achieving that purpose, including the economy. Mercantilism argued just that the organizers of production and those who did the work could attain satisfaction only within the protective embrace of a strong nation-state. Mercantilism's infatuation with expanding overseas trade was reinforced by an important corollary. The promotion of one's own merchants diminished the power of foreign merchants. The increase of
country maintains its national economic interests because it is an important element in national security. Mercantilism do not believe in free trade. Mercantilism see the international economy as an arena of conflict between opposing national interests,
rather than the area of mutually beneficial cooperation. Mercantilism's infatuation
5
The Cambridge Economic History of the United States Edited by Stanley L. Engerman, Robert E. G allman Cambridge University Press 337
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5 a country is a loss for the other countries.
Thomas Mun, writing in the mid-1620s: "Only so much will remain and abide with us as is gained and incorporated into the estate of the Kingdom by the over-balance of the trade." For the mercantilist, getting full benefit out of colonies involved the development, implementation, and enforcement of policies designed to attain three interrelated objectives.
Because it is a Zero Sum, so the orientation is to the country should exporting, and if when a country importing means the country will lose. In this case mercantilism very protection of international trade, and national interest are highly preferred, so as the economy aims to increase the power of the state and therefore must take precedence
over economic policy.8 Politics becomes a factor that most preferred in view or
analyze the context of international political economy.
Extractive political institution, Politic surrounds institutions for the simple reason that while inclusive institution may be good for the economic prosperity of a nation, some people or groups will be much better off by setting up institutions that are extractive. When there is conflict over institutions, what happens depends on which
people or group wins out in the game of politics – who can get more support, obtain
additional resources, and form more effective alliances. In short, who wins depends on the distribution of political power in society. The political institutions of a society
7
The Cambridge Economic History of the United States Edited by Stanley L. Engerman, Robert E. Gallman Cambridge University Press 339
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6 are key determinant of the outcome of political game. They determine how the government is chosen and which part of the government has the right to do what. Political institutions determine who has power in society and to what ends that power
can be used.9
2. Liberalism
The whole of the advantages and disadvantages of the different employments of labor and stock must, in the same neighborhood, be either perfectly equal or continually tending to equality. The five following are the principal circumstances which are made up for a small pecuniary gain in some employments, and
counterbalance a great one in others:10
a. The agreeableness or disagreeableness of the employments themselves;
b. The easiness and cheapness, or the difficulty and expense of learning them;
c. The constancy or inconstancy of employment in them;
d. The small or great trust which must be reposed in those who exercise them;
e. The probability or improbability of success in them.
Adam Smith argued the extension of improvement and cultivation tends to raise it directly. The landlord’s share of the produce necessarily increases with increase of
the produce. 11
The great commerce of every civilized society is that carried on between the inhabitants of the town and those of the country. It consist in the exchange of rude for manufactured produce, either immediately, or by the intervention of money, or of
some sort paper which represent money.12 The increase and riches of commercial and
9
Why Nations Fail Daron Acemoglu And James Robinson page 80 10
An Inquiry into the Nature and Causes of The Wealth of Nations by Adam Smith 83 11
Ibid page 198
12
7 manufacturing towns contributed to the improvements and cultivation of the
countries to which they belonged in three different ways:13
a. Affording a great and ready market for the rude produce of the country;
b. The wealth acquired by the inhabitants of cities was frequently employed in
purchasing such lands as were to be sold, of which a great part would frequently be uncultivated;
c. Commerce and manufactures gradually introduced order and good government,
and with them, the liberty and security of individuals, among the inhabitans of the country, who had before lived almost in a continual satate of war with their neighbours and of servile dependency upon their superiors.
The country using by Extractive Economic Institution usually firmly than Extractive
Political Institution, Extractive Economic Institution because underlined
entrepreneurial initiative, creativity, or adequate education to prepare them for skill
work.14
3. Marxism or Structuralism
Marxist materialism sees the world as a totality, and as dynamic. For there to be historical motion from within a totality, that totality must contain contradictions. In the words of two radical scientists, systems destroy the conditions that brought them about in the first place and create the possibilities of new transformations that did not
previously exist.15
As stated at the opening of this paper, Hart, as for the textbook writers, international
law is law – despite its lack of centrally organized sanctions or ‘secondary’ rules that
specify procedure for adjudication. Inasmuch as international law is ‘the vanishing
point of jurisprudence’, inasmuch as its nature as law remains opaque while its role
13
Ibid 317 14
Why Nations Fail Daron Acemoglu And James Robinson page 74 15
8 as a regulatory mechanism is retained, this historical contingency is inevitable. International society regulates itself in various ways, it is claimed, and in the modern
age we happen to call that regulation ‘law’.16
Marxist and structuralism have a point of view based on class worker. The wealth of those societies in which the capitalist mode of production prevails, presents itself as “an immense accumulation of commodities,” its unit being a single commodity.17 At
first sight a commodity presented itself to us as a complex of two things – use value
and exchange value.18 They manifest themselves therefore as commodities, or have
the form of commodities, only in so far as they have two forms, a physical or natural form, and a value form.
At the level of individuals, as Marx suggests, the ascending and descending arguments are mediated by the state. However, this is not the case internationally, where the units are states them-selves: in this instance, the relationship is still one of
sovereignty and dependence, but it is no longer contained by an overarching power.19
Marxist make highlighted several points contained in the theory of Liberalism, the most important point is inequality on worker class. In his book on Das Capital Volume I, he argued in his Chapter 10, The Working day. Marxist started from The Limits of the working day.
The supposition that labor-power is bought and sold at its value. Its value, like that of all other commodities, is determined by the working-time necessary to its production. If the production of the average daily means of subsistence of the laborer takes up 6 hours, he must work, on the average, 6 hours every day, to produce his daily labor-power, or to reproduce the value received as the result of its sale. The necessary part
of his working day amounts to 6 hours, and is, therefore, caeteris paribus (other
Daskapital by Samuel Moore and Edward Aveling, edited by Frederick Engels page 27 18Ibid
page 30 19
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itself is not yet given. therefore, an antinomy, right against right, both equally
bearing the seal of the law of exchanges. Between equal rights force decides. Hence is it that in the history of capitalist production, the determination of what is a working day, presents itself as the result of a struggle, a struggle between collective capital, i.e., the class of capitalists, and collective labor, i.e., the working-class. 20
Similarities, mercantilist was to be conflict with Zero Sum and similarities with the liberals is the non-state actors. The main actor and analysis from this perspective are classes in society. The main economic goal is to achieve the interests of the class itself.
20
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III
FREE TRADE AGREEMENT:
TRANS-PACIFIC PARTNERSHIP (TTP)
1. Abstract
The United States and 11 other countries of the Asia-Pacific region—Australia,
Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and
Vietnam—are negotiating the text of the FTA. With over 20 chapters under
negotiation, the TTP partners envision the agreement to be “comprehensive and high
-standard,” in that they seek to eliminate tariffs and nontariff barriers to trade in goods, services, and agriculture, and to establish or expand rules on a wide range of issues including intellectual property rights, foreign direct investment, and other
trade-related issues. They also strive to create a “21st-century agreement” that
11 issues for Congress that the TTP presents. The report will be revised and updated as
events warrant.21
2. Issue
a. The Evolution of the TTP
The Trans-Pacific Strategic Economic Partnership, as it was originally known, was conceived in 2003 by Singapore, New Zealand, and Chile as a path to trade liberalization in the Asia-Pacific region. Brunei joined negotiations in 2005, and the Trans-Pacific Strategic Economic Partnership (P-4) agreement was concluded in 2006. In March 2008, the United States joined the negotiations to conclude the still outstanding investment and financial services provisions. President Bush notified Congress of his intention to negotiate with the existing P-4 members on September 22, 2008, and with other countries, Australia, Peru, and Vietnam, on December 30, 2008. At the 2011 APEC Leaders meeting in Honolulu, the leaders of the (then) nine TTP countries
agreed to the broad outlines of an agreement. They categorized the TTP as “a
comprehensive, next-generation regional agreement that liberalizes trade and investment and addresses new and traditional trade issues and 21st-century challenges.” TTP trade ministers also highlighted the following five key areas
of the agreement.22
Comprehensive Market Access: Removal of both tariff and nontariff barriers is
comprehensive and ambitious in all areas.
Regional Agreement: Fully regional agreement that facilitates trade and the
development of production and supply chains among TTP members.
Cross – Cutting Trade Issues: Holistic, agreement-wide approach to specific areas:
medium-12
New Trade Challenges: Addresses emerging trade issues such as those caused by
new technology (e.g., cloud-computing).
Living Agreement: Agreement will “evolve in response to developments in trade,
technology or other emerging issues” and expand “to include other economies from across the Asia-Pacific region
i. The TTP and the Rebalance in the Asia-Pacific Region
23
The TTP has potential implications beyond U.S. economic interests in the
Asia-Pacific. The region is increasingly seen as being of vital strategic importance to
the United States. Throughout the post-World War II period, the region has
served as an anchor of U.S. strategic relationships, first in the containment of
communism and more recently as a counterweight to the rise of China. This
trend has recently been accentuated by the Obama Administration’s “pivot to Asia,” along with the perception that the center of gravity of U.S. foreign,
23
13
economic, and military policy is shifting to the Asia-Pacific region. The TTP is
viewed as an important element in the U.S. “rebalancing” toward Asia.24
ii. The TTP and the WTO
encompass countries with numerous existing FTAs. The proposed TTP
agreement could add another layer of complexity or it could simplify the
existing trade rules in the region by unifying them under one agreement.25
iii. The TTP and Other Asia-Pacific Trade Agreements
The Regional Comprehensive Economic Partnership (RCEP), for example,
would join ASEAN and its six FTA partners—Australia, China, India, Japan,
Market access for goods, services, and agriculture often forms the crux of FTA negotiations. However, nontariff barriers such as technical barriers to trade and sanitary and phytosanitary standards, while considered rules, also have an
14
categories for each of the partner countries. The TTP will include tariff
phase-out schedules that cover more than 11,000 commodity categories for each of the
partner countries.
ii. Market Access Agriculture
Negotiating the terms of agricultural trade liberalization within the context of
what trade negotiators have billed as a high-standard trade agreement for the
21st century continues to be central to efforts to fashion an overall TTP
agreement. In negotiating expanded market access, the TTP countries have
engaged in a process where offers are exchanged with each other and then
responded to with requests to improve the offer. To date, USTR has engaged in
a separate offer/request process with each of the five countries that the United
States does not yet have a bilateral FTA—Brunei, Japan, Malaysia, New
Zealand, and Vietnam. Whether this process has been undertaken with Canada
is unclear. A major issue for U.S. agricultural interests is that Canada maintains
support regimes for several significant commodity groups, including dairy,
poultry and eggs. These regimes support domestic prices and discourage
imports, with the result that access to these product markets has not been fully
liberalized under the Canada-U.S. FTA. With respect to other countries with
which the United States has an FTA, the U.S. position is that it will not engage
in talks to reopen any existing market access provision.28
28
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IV
ANALYSIS OF TRANS-PACIFIC PARTNERSHIP (TTP).
All economic institutions are created by society. Politics is the process by which a society chooses the rules that will govern it.
Many countries that failed, they are more concerned and in favor of political freedom than the freedom to think and develop the economy. Because I think freedom of thought and develop economy for make individual increase the ability and quality.
Government as state authorities in this case, has a role as a support to encourage its citizens to survive in the free market. Not through the creation of regulations that make losses investors are also citizens.
State as a ”Welfare State“ will protect the welfare of the people. Also we know the duty of the
state as a “Night Watchman”, (Nachtwakerstaat), in the narrow sense, the state will protect the
people from the free market. If we look broadly the country as a night watchman main task is to ensure and protect the economic position of the ruling class the fate of those who are not ruling class ignored by government tools in one.
With the advent of TTP agenda, Indonesia as a country that is directly adjacent to the Pacific region, Indonesia should play an active role, not only as a follower in such cooperation, but it can contribute as a country that has an interest in the Pacific region.
