Framework for Trans-Pacific Pact Announced; New Countries Express Interest

16 November 2011

Leaders of the nine countries negotiating the Trans-Pacific Partnership (TPP) Agreement announced a broad outline for the proposed accord at this weekend's gathering of Asia-Pacific leaders. Canada, Japan, and Mexico also stated their interest in joining the negotiations at the meet, held in the US state of Hawaii.

The framework, announced on 12 November at the annual Asia-Pacific Economic Cooperation (APEC) Leaders' Meeting, aims to "enhance trade and investment among the TPP partner countries, promote innovation, economic growth and development, and support the creation and retention of jobs," according to the proposed pact's current members.

Current TPP members include Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the US, and Vietnam.

In describing the pact, TPP leaders acknowledged that some issues still remain unresolved. Nonetheless, they expressed confidence that this "will be a model for ambition for other free trade agreements in the future."

The pact, which members bill as a "21st century" agreement, will slash tariffs and other barriers to goods and services trade and investment; the goods covered will represent some 11,000 tariff lines. Negotiators also plan to incorporate in the pact issues involving regulatory coherence; competitiveness and business facilitation; small- and medium-sized enterprises; and economic development and governance, according to the framework.

Trade negotiators will next meet to discuss the pact in early December, at which point future negotiating rounds will be scheduled.

Canada, Japan, Mexico interested in signing on

The APEC summit also saw three non-negotiating parties - Canada, Japan, and Mexico - express interest in joining the trade talks. While the announcement was generally well-received, the potential influx of new members did prompt concern from some parties that negotiations could become even more difficult to conclude.

New Zealand Trade Minister Tim Groser, speaking to Reuters, cautioned that too many additions at this stage could render current expectations somewhat unrealistic.

"I don't think anyone can seriously imagine that we can complete this negotiation with economies as important as these three by the end of 2012," he said.

Canada, disappointed after Washington again delayed approval of the Keystone XL Canada-to-Texas oil pipeline project in the US, has lately expressed an interest in selling more of its energy products to Asian markets.

"This does underscore the necessity of Canada making sure that we are able to access Asia markets for our energy products," Prime Minister Stephen Harper said on the sidelines of the APEC leaders' meeting.

Meanwhile, Japan's announcement sparked some questions with regards to the country's agricultural support practices.

New Zealand‘s Groser stressed that the TPP talks "must include rice"; the impact of the trade pact on the Japanese rice industry has traditionally been one of the major stumbling blocks preventing Tokyo from committing to the TPP.

Critics in Japan fear that farmers may struggle against losing the current 778 percent import tariff on the commodity (see Bridges Weekly, 2 November 2011).

Groser's comment came in response to news that Japan was objecting to a White House press release on Tokyo's decision to start consultations with TPP members. In the press release, the White House had claimed that Japanese Prime Minister Yoshihiko Noda was allowing all goods on the negotiating table for possible liberalisation - an assertion that Tokyo insisted was an overstatement.

The TPP, which was launched in 2006 as an agreement between Brunei, Chile, New Zealand, and Singapore, is now currently at nine members. The pact has been billed as a possible framework for a larger pact that could eventually cover all 21 APEC economies.

Questions raised about access to medicines, SPS

Interest groups, industries, and NGOs have repeatedly questioned the benefits from this agreement, citing concerns over a range of issues, including access to medicines and animal and plant health measures.

In an October statement, the Citizens Trade Campaign - a Washington-based coalition of advocacy organisations - cautioned that the trade agreement may cede too much power to large pharmaceutical firms, undermining access to medicines.

Likewise, the Australian Fair Trade and Investment Network recently told reporters that some US-backed provisions in the pact might increase corporate power and thus hold prices of medicines too high.

Concerns surrounding genetically modified (GM) food and organisms have also emerged lately, particularly from New Zealand civil society groups. Last week, the Wellington-based Sustainability Council of New Zealand published an op-ed claiming that the US might aim to block mandatory labelling for GM products.

Tony Zohrab, lead negotiator for sanitary and phytosanitary (SPS) issues for New Zealand's Ministry of Agriculture and Forestry, recently assured critics that blocking pests and diseases from abroad remains a New Zealand negotiating priority.

"We also have a keen interest in the biosecurity and food safety standards applied by governments overseas because of the high proportion of our export trade that comes from the agriculture, horticulture, forestry, and fisheries sector," he said.

ICTSD reporting; "Pacific free-trade deal has hidden dangers: NGO," AUSTRALIA NETWORK NEWS, 14 November, 2011; "Leaders back free-trade pact but unions warn on tariff cuts," THE AUSTRALIAN, 14 November 2011; "Japan set to join trade discussions," FINANCIAL TIMES, 11 November 2011; "Stephanie Howard and Simon Terry: Let's insist on labels for GM foods," THE NEW ZEALAND HERALD, 10 November 2011; "Canada Eyes Asia After US Delays Keystone Project," REUTERS, 14 November, 2011; "WTO fatigue fuels Asia-Pacific trade deal: NZ minister," REUTERS, 14 November 2011; "New Zealand: Japan Must Include Rice in TPP talks," WALL STREET JOURNAL, 14 November 2011.

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