Global Glance: Oct 26, 2015

A quick look at intriguing international stories

By John Bostwick, Managing Editor, Radius

Welcome back to Global Glance. This week we look at:

• How to make sense of the Trans-Pacific Partnership, or TPP
• Africa’s precarious middle class
• A Texas honky-tonk in Tokyo

Making Sense of the Trans-Pacific Partnership, or TPP

The Trans-Pacific Partnership (TPP) is a complex trade deal involving 12 countries that’s been in the works for 10 years. The countries involved — Australia, Canada, Japan, Malaysia, Mexico, Peru, the US, Vietnam, Chile, Brunei, Singapore and New Zealand — completed negotiations earlier this month. Notably absent in the partnership is China. As a Wall Street Journal article last week explained, the TPP reflects “the expansive American model of free trade — rather than China’s narrower variant.” Basically, the partnership looks to cut tariffs and encourage trade among the countries involved, perhaps eventually leading to something like the European Union. Lawmakers in each country will now have to agree to the details of the deal in order for it to be ratified.

While the TPP is heavily supported by US President Obama, it is just as heavily criticized by many other leading US figures, including labor leaders and political candidates as diverse as Bernie Sanders and Donald Trump. Detractors argue that TPP negotiations have been opaque and secretive, and that the partnership will ultimately hurt workers, among other criticisms. Last week’s Journal article nicely captures how politically charged and complex the proposed partnership is. The deal has widespread support in most of the countries involved, including support from Canada’s newly elected Liberal party, but “the one country where passage looks precarious is the US.” The article further notes the irony of US reluctance, given that the TPP is on the surface a reflection of American economic ideals.

Unfortunately, that Journal article doesn’t provide much background on the deal, which is, while obviously hugely important, not the most scintillating of topics. As Philip Bump of The Washington Post wrote earlier this year, “I find the discussion of the trade deal being considered in Washington to be hopelessly dull.” Bump gamely tries to inject life into the subject, and he’s good on the subject of Trade Promotion Authority (TPA), or “fast-track authority”, which “gives the [US] president the ability to negotiate a deal that will receive only an up-or-down vote in Congress.”

For a more detailed and current look at the TPP, check out The New York Times’ “The Trans-Pacific Partnership Trade Accord Explained.” In the wake of the recent US-EU Safe Harbor ruling, it’s interesting to note that the TPP, according to the Times, contains an agreement “not to block cross-border transfers of data over the Internet, and not require that servers be located in the country in order to conduct business in that country.”

And for an excellent, concise overview of the deal, read BBC.com’s “TPP: What Is It and Why Does It Matter?” That summary reminds us that the TPP is distinct from the Transatlantic Trade and Investment Partnership, or TTIP, which “is a deal to cut tariffs and regulatory barriers to trade between the US and member states of the EU.”

Is Africa’s Middle Class Really Growing?

Back in June, we noted that Nestlé was in the news for significant worker cutbacks in nearly two dozen African countries. Representatives of the Switzerland-based food giant said the company had incorrectly projected the growth of Africa’s middle class. An excellent article in The Economist last week picks up on this topic, which is widely discussed by those interested in global markets. The sobering piece doesn’t dispute the fact that Africa’s middle class is emerging, due to factors like the rise of democracy and tighter legal controls. However, the article notes that Africa’s middle class is “thin” and “remains small across most parts of the continent.” And, as is in other parts of the world, “inequality has increased alongside growth in most parts of Africa.” The article also observes that “Africa has failed to develop industries that generate lots of employment and pay good wages.”

The problem in Africa seems to be a vicious circle. Multinationals like Nestlé have been attracted to the possibility of catering to a huge market of upwardly mobile people in Africa, so they set up operations there. When the market projections don’t pan out, then those companies reduce the number of jobs on the continent and/or slow plans for expansion, further weakening the region’s already precarious middle class. The Economist article indicates that the current situation in Africa is cause for serious worry, as “even mild economic shocks may be enough to push households back below the threshold of poverty.”

For more information, check out the article “How Big Really is Africa’s Middle Class?” published last month in African Business. It contains much good information on how various recent studies have defined what it means to be middle class in Africa, and how different definitions can shape perceptions. One influential 2011 paper, for example, led to the widespread notion that one in three Africans is middle class. However, that same paper defined the majority of “middle class” individuals as having a consumption level of just $2 to $4 a day. Still, one author of the paper who is quoted in the article cautions against dismissing the power of Africa’s middle class: “That Nestlé and [drinks multinational] Diageo are not doing as well as projected does not necessarily reflect the fortunes of the African middle class. It could well be their own poor business strategy.”

A Texas Honky-Tonk in Tokyo

Last Monday, National Public Radio ran a brief, intriguing story about a bar in Tokyo called Little Texas, run not by “Tex-pats” in Japan, but by local man Takeshi Yoshino and his wife. Yoshino used to run a noodle shop, but his love of country music spurred him to open Little Texas ten years ago. A stickler for authenticity, he “makes annual trips to the Lone Star State to bring back actual fixtures, photos, license plates and neon lights for the bar.” The article links to a truly touching YouTube clip of the tavern owners receiving honorary Texas citizenship — granted in 2011 by then-governor Rick Perry — with Yoshino’s wife holding her hand over her heart and choking back tears.

A photo essay of the Tokyo honky-tonk ran last year in RocketNews24, and includes a video clip of a Japanese bluegrass group performing. One photo shows a paper placemat with the following valediction: “Y’all come back now here [sic]!” which, now that I think about it, strikes me as a totally understandable misreading of “[you] hear?” Anyway, the placemat is proof of just how difficult it is to catch the nuances of another culture and language, no matter how strong a devotee you are.

Until looking into the subject of Little Texas, I’d never heard of RocketNews24. According to its "About" page, the website began in 2008 as a Japanese-language news blog. The English-language version started in 2010. RocketNews24 now covers stories not only about Japan, but about China, Taiwan, Korea and even North Korea. And it has 10 million unique users a month, y’all.