TPP Ministers: Shape of Trade Deal "Crystallising" Following Sydney Meet

30 October 2014

Ministers from the Trans-Pacific Partnership (TPP) countries concluded a three-day meeting in Sydney, Australia on Monday, citing “significant progress” in their negotiations on both market access and on trade and investment rules.

“We consider that the shape of an ambitious, comprehensive, high standard and balanced deal is crystallising,” ministers said in a joint statement issued following their meeting. 

The announcement that the shape of a potential deal is advancing comes ahead of a series of meetings where leaders from the 12-nation group are set to cross paths, which trade observers say could prove pivotal if a deal is indeed to be concluded this year.

Ministers have now pledged to continue focusing their efforts on consulting “widely at home and work intensely with each other to resolve outstanding issues in order to provide significant economic and strategic benefits for each of us.”

The 25-27 October gathering was preceded by a 19-24 October meeting of chief negotiators, and ministers confirmed that these chief negotiators would be staying in Australia for at least a few days longer to continue advancing the work.

The ministerial meeting, which officials said was meant to “lay the groundwork for the conclusion” of the TPP talks, was hosted by Australian Trade Minister Andrew Robb and chaired by US Trade Representative Michael Froman.

Along with meeting in plenary to discuss issues affecting the whole group – with officials afterward touting progress in difficult areas such as intellectual property, environmental protection, and state-owned enterprises – ministers also held various bilateral discussions during the Sydney meeting, which they said focused primarily on goods, services, and investment market access.

The 12 countries currently involved in the TPP negotiations are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam.

Finish line approaching?

In his opening remarks to ministers on Saturday, Robb affirmed that, in his view, “we are working now to try and conclude this agreement by the end of this year.”

Some sort of TPP outcome by year’s end has been a stated goal of US President Barack Obama, who suggested in June that he would like there to be “something that we have consulted in Congress about, that the public can take a look at,” in time for his November trip to Asia in order to close the deal. (See Bridges Weekly, 26 June 2014)

An ambitious agreement, US officials have repeatedly affirmed, could help build the support in Congress for passing a separate piece of domestic legislation, known as Trade Promotion Authority (TPA) or fast-track, that is essential for ratifying trade deals in Washington without subjecting them to additional amendments by US legislators.

Despite the recent ramp-up in TPP negotiating momentum, however, Robb acknowledged in a radio interview ahead of the ministerial that the greatest risk for the talks “is for this thing to be stalled.”

“Every company’s got its sensitivities, as we do – and the biggest risk is that those things prevent this agreement being concluded,” he said during the ABC AM interview.

Speaking to reporters after the meeting, Robb affirmed that this latest ministerial demonstrated “a real sense that we are within reach of the finish line,” adding that the focus of the group seems to have increased by “several notches.”

“We are seeing a great preparedness to make some of the difficult decisions, a willingness to compromise, to get to final decisions,” he added. “We are seeing places people are prepared to move providing the rest of the package ends up as they hope. But I would say, in conclusion, that as always [in] these types of agreements, nothing is decided until everything is decided.”

US-Japan market access

The question looming over the negotiations these past several months has been whether the US and Japan will be able to reach a bilateral deal on agricultural and automobile market access.

Despite repeated meetings between Washington and Tokyo officials, the two sides remain apart, ministers confirmed on Monday, though Froman stressed to reporters that there has been “substantial progress over the past several weeks.”

The protracted negotiations between the two largest economies in the 12-country talks have been widely blamed for slowing down the overall pace of negotiations, with other members reportedly hesitant to put too much on the table until it is clear whether a US-Japan deal is reached – and if so, what it would entail.

Officials from some other TPP members tried to dispel that notion last week, noting that the bilateral talks are necessary if the broader group-wide negotiations are to succeed.

“We would be extremely concerned with both the Japanese and the US delegations if they were not meeting privately because power is very important to integrate into a negotiating process,” New Zealand Trade Minister Tim Groser told reporters on Monday. “It is absolutely essential that they explore what I’d call the outer parameters of a deal, provided that the largest parties [are] in a continuous process of discussion with countries like mine and they are.”

The New Zealand trade official did qualify, however, that a “sweetheart deal that just is made in Tokyo and Washington” – without the participation of other players – would cause “immense disruption” to the 12-country negotiations overall.

Leaders’ meetings forthcoming

Ministers told reporters on Monday that chief negotiators will stay on in Australia for a few more days to continue these discussions, in line with the instructions given by their trade chiefs. A subsequent meeting of ministers will occur “in the coming weeks,” they added, without setting a specific date at that time.

Despite not publicly announcing dates for either a ministers’ or leaders’ meeting, the fact that at least two major gatherings of regional leaders are scheduled for the next month – along with Obama’s call for a November result of some kind – have fuelled speculation that a TPP-specific leaders’ event may be forthcoming.

For instance, leaders from TPP countries will be present during the Asia-Pacific Economic Cooperation (APEC) Leaders’ Meeting in Beijing, China in early November, given that all TPP members are part of the 21-nation APEC group.

However, the fact that Beijing is hosting this year’s APEC event has sparked questions as to whether TPP leaders will indeed meet separately in the Chinese capital, given that China is not currently part of the 12-country negotiations.

While China is not in the TPP, it is involved in a separate regional integration initiative, known as the Regional Comprehensive Economic Partnership, which was launched in November 2012. (See Bridges Weekly, 21 November 2012) Along with China, those negotiations include all ten members of the Association of Southeast Asian Nations, India, South Korea, and some TPP countries such as Japan, New Zealand and Australia.

Trade officials involved in the latter talks have suggested that the deal could be another pathway toward reaching a Free Trade Area of the Asia-Pacific – though whether it would be complementary to, or in competition with, the TPP has sparked significant debate.

Another key meeting is the upcoming summit of G-20 leaders in Brisbane, Australia on 15-16 November. Some TPP members – the US, Australia, Canada, Japan, and Mexico – are part of the G-20 configuration. New Zealand and Singapore, while not G-20 members, are listed as “guest countries” for this year’s meeting.

In his remarks to fellow ministers this past weekend, US Trade Representative Michael Froman highlighted the upcoming meetings as another incentive for ramping up the talks.

“We now have in front of us an excellent opportunity to resolve the outstanding issues where possible, to narrow our differences, and to tee up these issues for our leaders as they see each other in the coming weeks in various places around Asia,” Froman said.

“It’s an effort that will further the integration of this very important region, the Asia-Pacific region, and very importantly it will be an agreement that will help set the rules of the road for this region, and it will be a very important economic and strategy opportunity,” the US trade chief said.

ICTSD reporting.

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