TPP's Business Asymmetries: Megaregulation and the Conditions of Competition Between MNCs and SMEs

Abstract

Mega-regional trade agreements represent an innovation in the governance of international commerce. Led by the major economies, they promulgate an economic framework that is tailored to the interests of the majors. Sorting out the differential impacts of the mega-regionals at the nation state level has been a major focus of the debate. National interest is, however, only one lens through which the differential effects of this governance model need to be analyzed. Modern trade theory recognizes the heterogeneity of firms in trade. Working through the implications of New New Trade Theory (NNTT) implies there is a need for a New New Trade Policy (NNTP) that takes into account, inter alia, the implications of trade agreements for small and medium-sized enterprises (SMEs) and indeed for the dynamic renewal of economies through the impact of these agreements on the conditions of competition between small and large firms, as well as conditions of competition between national economies. Do the mega-regionals respond appropriately? This paper examines this question by reviewing the likely impacts of the Trans-Pacific Partnership on the conditions of competition between the large multinational corporations (MNCs) and SMEs, with a particular focus on the effectiveness of the measures introduced by the TPP to address the asymmetrical impact of the agreement on MNCs and SMEs.