TPP Trade Talks at Pivotal Stage as Hawaii Meet Closes (Updated)

30 July 2015

Editor’s Update, 9 August 2015:

The ministerial-level meeting of the 12 countries negotiating a Trans-Pacific Partnership (TPP) trade agreement ended without a deal on 31 July, though officials pointed to “significant progress” in the talks.

“Ministers and negotiators leave Hawaii committed to build on the momentum of this meeting by staying in close contact as negotiators continue their intensive engagement to find common ground,” officials said upon concluding the meeting, while not announcing a date or venue for their next gathering.

The 28-31 July ministerial meeting, held in the US state of Hawaii, had been pegged by many trade observers and officials as a potential turning point in the negotiations, one whose success could have major impacts on the global trade landscape, and whose failure could possibly lead to a years-long drift in the talks.

Australian Trade Minister Andrew Robb, in an interview with ABC Radio, said that ministers had reached decisions on “over 90 percent” of the issues involved in the wide-ranging trade pact, which if completed would include around 30 chapters and cover economies making up 40 percent of global GDP.

The talks in Hawaii had stumbled over issues such as market access for dairy and automobiles, among others, along with intellectual property issues such as the length of data exclusivity for drugs derived from a biological background.

“Unfortunately we made a lot of progress on 21st Century issues but 19th and 20th Century issues like sugar and dairy, we are still fighting those old wars,” the Australian trade official said in a separate interview with Sky News on 3 August.

With major trading partners such as the US and Canada both facing general elections between now and late 2016, the timeframe for finalising and ratifying the TPP talks before political dynamics become too heated is growing increasingly tight, officials say.

Some officials, such as Japan’s economic and fiscal policy minister Akira Amari, have suggested in recent days that another ministerial could be called soon, but likely not before the end of August. Others have said that a deal is still possible this year, without citing a date for the next ministerial.

“We are hoping very much that over the course of the next couple of months, before the end of the year, TPP can be completed,” US Secretary of State John Kerry told reporters in Hanoi on 7 September after meeting with Vietnamese Foreign Minister Pham Binh Minh, adding that he was “confident” the remaining issues were few and could be resolved.

A full update on the status of the TPP talks will be released when Bridges resumes publishing in early September. The original story from this edition, published on 30 July before the conclusion of the ministerial, is posted in its entirety below with its original headline.

ICTSD reporting; “Kerry confident of concluding TPP trade pact this year,” REUTERS, 7 August 2015; “Japan unlikely to wrap up TPP deal by year-end,” THE JAPAN TIMES, 9 August 2015.


 

30 July 2015: TPP Trade Talks at Pivotal Stage as Hawaii Meet Nears Conclusion

Trade ministers from 12 Pacific Rim countries are gathered in the US state of Hawaii this week, in an effort to bring the negotiations for the Trans-Pacific Partnership (TPP) Agreement to their much-awaited conclusion.

The meeting is currently scheduled to conclude tomorrow, with the hopes of reaching at least a broad outcome, even if some of the final details need ironing out later on. If completed, the planned trade agreement would cover 40 percent of global GDP, and proponents say it would break new ground with disciplines in areas such as competition and e-commerce, along with including enforceable environmental and labour protections, to name a few.

The 12-country group currently includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, the US, and Vietnam. While no new members are expected before the conclusion of the negotiations, officials have said that other countries could potentially sign on after a deal is reached.

Building momentum

In the few short weeks since a new version of Trade Promotion Authority (TPA) was approved in the US, the push has been on to resolve as many of the remaining differences as possible ahead of a potentially final ministerial meeting, particularly given the upcoming election cycles in TPP member economies that could complicate the talks if they continue much longer.

Trade Promotion Authority, which sets the US’ principal negotiating objectives in trade agreements as well as the terms for their consideration in Congress, was considered essential by many of the US’ TPP partners before any final offers could be put on the table, given the concern that without it the trade deal could be amended by American lawmakers. (See Bridges Weekly, 2 July 2015)

Chief negotiators have already held several days of meetings in Maui ahead of the ministers’ meet, in an effort to lay the groundwork for these final days.

Those talks came after various bilateral meetings between TPP officials, including some at the leaders’ level, throughout the past month. (See Bridges Weekly, 9 July 2015)

National leaders such as Japanese Prime Minister Shinzo Abe have publicly reiterated in recent weeks that the deal is in the finishing stages, while cautioning that some of the most difficult decisions are now in front of the 12-country group.

“This will be a final stage meeting toward achieving the resolution of the TPP negotiations. The finish line is now within reach,” said Abe during a 27 July meeting with his main ministers. “However, the end of the negotiations will be the hardest part.”

Other officials, such as Australian Trade Minister Andrew Robb, have said that reaching a deal in Maui is key, citing the shifting political dynamics in some member countries, such as the US and Canada.

“If we don’t do it this week, it’s going to be very difficult I think to conclude it within a couple of years. But we are very close and I do feel we’re into the last few issues,” he said on Monday in an interview with ABC Radio, according to a transcript of his remarks.

Range of issues on the table

With the pressure piling on, key questions remain over how – and whether – high-profile disagreements on areas such as agricultural market access, intellectual property, investor-state dispute settlement, and state-owned enterprises might be resolved.

For example, in the area of intellectual property, the length of data exclusivity for biologics has been one of the major sticking point for some member economies. Biologics are those drugs that come from a biological background rather than a chemical one.

Whether the US and Japan – the two largest economies in the talks – will be able to confirm a long-awaited deal on agricultural and automobile trade is another key question, though some recent reports have indicated that the two heavyweights may be near a deal.

Robb confirmed on Monday that sugar and dairy also remain among the tough areas in terms of agricultural market access, noting that the sensitivity of these issues varies depending on the country involved. While securing better access to the US sugar market is key for Australia, dairy has been particularly difficult for Canada, which will hold a general election this October and is being asked by TPP partners to lower existing protections.

Canada uses a supply management system for dairy and poultry, tightly regulating their price and production via the use of “marketing boards.” New Zealand, a major dairy exporter has been among those pushingstrongly forCanada to make significant concessions in this area.

However, industry groups and certain lawmakers in other TPP member countries, such as the US, have been making their own demands on dairy market access gains.

“A final Pacific Rim trade agreement must deliver significant access for US dairy exports, as well as ultimately achieve positive results for US dairy producers by ensuring that any additional New Zealand access to US dairy markets is not higher that the market opening we expect to see from Canada and Japan,” said Jim Mulhern, the President and CEO of the US-based National Milk Producers Federation.

ICTSD reporting; “Issues Mount as Negotiators Gather to Wrap Up Trans-Pacific Trade Pact,” THE NEW YORK TIMES, 27 July 2015; “Negotiators inch toward historic trade deal,” FINANCIAL TIMES, 26 July 2015; “Rice, milk and cars stand in way of historic trade pact,” POLITICO, 27 July 2015; “Dairy trade impasse holding up Pacific trade deal: NZ envoy,” REUTERS, 29 July 2015.

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