[A2k] CORRECTION (Bridges Weekly): TPP Talks See Progress in New York as Officials Suggest Deal Within Months

Thiru Balasubramaniam thiru at keionline.org
Thu Feb 5 06:44:48 PST 2015


http://www.ictsd.org/bridges-news/bridges/news/tpp-talks-see-progress-in-new-york-as-officials-suggest-deal-within-months

TRANS-PACIFIC PARTNERSHIP (TPP)
<http://www.ictsd.org/search?f[0]=field_tag%3A458>
BRIDGES <http://www.ictsd.org/bridges-news/Bridges>
,
VOLUME 19 - NUMBER 4
<http://www.ictsd.org/bridges-news/bridges/issue-archive/tpp-talks-see-progress-in-new-york-as-officials-suggest-deal>
TPP Talks See Progress in New York as Officials Suggest Deal Within Months
5 February 2015

Efforts to wrap up the 12-country Trans-Pacific Partnership (TPP) talks
have reportedly gained momentum in recent weeks, with officials suggesting
that a deal may be possible within months. Chief negotiators meeting in New
York last week aimed to bridge some of the gaps across several chapters,
amid reports that a breakthrough on US-Japan agriculture and automobile
talks could be imminent.

Officials did not release a formal statement or summary following the New
York informal round, but reports had indicated that advances were being
made in a number of areas, leaving mainly the trickiest issues still on the
table.

With the finish line now seemingly in sight, US officials have been racing
to lay the groundwork for the future ratification of an agreement, if one
is indeed completed.

Washington has particularly come into focus, given that the Obama
Administration’s term will end in January 2017 and with a new Republican
Congress now in place, whose leaders have supported the Asia-Pacific trade
deal as a priority.

The 12 countries involved in the TPP talks, which together account for 40
percent of global GDP, are Australia, Brunei, Canada, Chile, Japan,
Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam.

*Froman: final deal “coming into focus”*

The US’ top trade official testified to Congress last week that the TPP
negotiations could be wrapped up quickly, while urging American lawmakers
to grant renewed “fast track” trade powers – also known as Trade Promotion
Authority (TPA) – in order to ensure that a final deal can be ratified in
Congress intact.

“The contours of a final [TPP] agreement are coming into focus,” said US
Trade Representative Michael Froman in testifying at the Senate Finance
Committee last week, in comments reported by the Financial Times. “We think
everyone is focused on getting this done… in a small number of months.”

Speaking at back-to-back hearings of both the Senate Finance and House Ways
and Means committees on the US President’s 2015 trade agenda, the trade
chief called 2015 a “critical year for trade,” in light of both the TPP and
separate efforts to advance negotiations on an EU-US trade deal.

The testimony – particularly Froman’s calls for TPA – come within days of
US President Barack Obama’s annual State of the Union address, where the
American leader similarly urged lawmakers to work with him on trade to
avoid giving China the chance to “write the rules of the world’s
fastest-growing region.” (See Bridges Weekly, 22 January 2015
<http://www.ictsd.org/bridges-news/bridges/news/obama-makes-call-for-fast-track-trade-powers-in-annual-address>
)

Mexican economy minister Ildefonso Guajardo has also said that a TPP deal
in the near future was “feasible,” telling news agency Reuters last month
that an agreement could be reached by mid-March. Several reports have
indicated that March could be a potential date for another TPP ministerial
meeting, though the date and venue have yet to be formally confirmed.

*Agriculture, autos breakthrough imminent?*

Reports have also emerged in recent weeks of potential advances in the
difficult bilateral negotiations between the US and Japan on agricultural
market access. Success in those talks, as well as another bilateral track
on automobiles which also saw meetings
<https://ustr.gov/about-us/policy-offices/press-office/schedule/2015/january/press-week-ahead-january-26-30>
last
week, is said to be key in moving the TPP talks forward as a whole.

Japan’s Nikkei newspaper recently suggested that the two sides had made a
significant advance on both rice imports and car safety standards, with
Tokyo reportedly offering to increase its tariff-rate quota for US rice by
“tens of thousands” of tonnes, while maintaining tariffs on the good.

Washington, for its part, has reportedly backed down from its own request
that Tokyo ease safety standards for imported cars, the Japanese newspaper
said.

The US’ National Pork Producers Council (NPTCC), which conducts outreach
for 43 state associations of pork producers, has also recently suggested
that Tokyo and Washington have also managed to bridge some of their gaps on
pork trade.

“Significant progress has been made with respect to Japan’s market access
offer on pork thanks to the hard work of US trade officials and the strong
support of the US Congress,” said NPPC President Howard Hill in a 26
January statement
<http://www.nppc.org/2015/01/u-s-pork-producers-all-in-on-tpa/>, without
elaborating on what this progress entails.

Reports in Kyodo News, a Japanese news agency, have indicated that Tokyo is
offering to reduce tariffs on US pork imports over a ten-year period,
citing unnamed sources.

Despite these reports, Japanese deputy chief negotiator told Reuters on
Tuesday in Washington that even though progress has been made in talks this
week with the US, there are still further issues that need to be “worked on
at an official level” before convening either a bilateral ministerial
meeting or an overall TPP ministerial.

Japanese Prime Minister Shinzo Abe’s win in a December snap election had
been seen by trade observers as providing a potential window for Tokyo to
agree to politically difficult reforms to agricultural trade protections,
particularly in so-called sacred products such as beef, dairy, pork, rice,
and sugar. (See Bridges Weekly, 18 December 2014
<http://www.ictsd.org/bridges-news/bridges/news/officials-express-optimism-as-trans-pacific-trade-talks-head-into-2015>
)

*“Fast track” timeline*

Given the ramp-up in the TPP process, a new TPA bill could be introduced in
Congress later this month, key legislators have said over the past
fortnight.

Senate Finance Committee Chairman Orrin Hatch, a Republican of the US state
of Utah, confirmed last week that he was working with his committee’s top
Democrat, Ron Wyden of Oregon, and House Ways and Means Committee Chairman
Paul Ryan to introduce a TPA bill in Congress. While not formally
committing to a timeline, Hatch did say that this was likely to occur this
month.

In a speech
<http://www.finance.senate.gov/newsroom/chairman/release/?id=105f85b0-a0c3-473e-ace0-97459e73abea>
at
the Washington-based American Enterprise Institute, Hatch indicated that
the fundamentals of the upcoming TPA proposal would be “substantially the
same” as the one introduced a year ago by Hatch and the former chairmen of
those two committees, though there would be some changes. (See Bridges
Weekly, 16 January 2014
<http://www.ictsd.org/bridges-news/bridges/news/us-congress-gears-up-for-fast-track-trade-fight>
)

TPA, along with ensuring that fully negotiated trade deals cannot later be
amended in Congress, would also set negotiating priorities for the US
executive branch to follow when negotiating international trade agreements.

Notably, the Senate Finance chief has said that a TPP deal without
significant openings in agricultural market access “will never receive
support in Congress,” referring specifically to Japan and Canada as
countries that need to make larger concessions.

Furthermore, several US lawmakers on both sides of the aisle have asked
that provisions relating to currency manipulation be included in a final
TPP deal, committing participants not to take action that would unfairly
distort exchange rates.

Hatch, for his part, has noted that the previously suggested TPA
legislation had included addressing currency manipulation as a principal
negotiating objective, and indicated that he would pursue this in the next
iteration of the bill.

“Our job creators and workers also need to have confidence that their hard
work is not being unfairly harmed by currency manipulation,” Hatch said,
adding that many legislators do not feel that the issue is being properly
addressed by the executive branch.

Top Democrats, such as Charles Schumer of New York, have also said that the
TPP would not receive their backing without action on currencies. US trade
officials, in turn, have indicated that currency issues traditionally fall
under the Treasury Department’s area of responsibility, as well as
international forums such as the G-20 and the International Monetary Fund
(IMF).

*Regional trade initiatives*

The push to finish the TPP comes as various other regional trade
liberalisation processes are also ramping up their own momentum. One of
these is the push amid the ten-country Association of Southeast Asian
Nations (ASEAN) to meet their target of establishing a common market by the
end of this year.

Other regional agreements are also said to be in the pipeline, including
the planned Regional Comprehensive Economic Partnership (RCEP), which along
with all 10 members of ASEAN also includes Australia, China, India, Japan,
Korea, and New Zealand. (See Bridges Weekly, 21 November 2012
<http://www.ictsd.org/bridges-news/bridges/news/asia-pacific-leaders-announce-major-regional-trade-talks>
)

Speaking at the World Economic Forum’s Annual Meeting in Davos, Switzerland
last month, Thai Deputy Prime Minister Pridiyathorn Devakula pledged that
ASEAN’s 2015 goal of an economic community will be met.

“Believe me, we will have a single market by the end of this year,” the
Thai official said, while acknowledging the scepticism some observers might
feel about the potential to meet such an ambitious target.

The ASEAN process, among others, has sparked questions over what the
implications will be of these overlapping regional initiatives,
particularly given that not all ASEAN members are involved in the TPP, and
vice versa.

Four of ASEAN’s members – Brunei, Malaysia, Singapore, and Vietnam – are
also involved individually in the TPP. ASEAN, which covers a population of
over 600 million people, also includes Cambodia, Indonesia, Laos, Myanmar,
Philippines, and Thailand.

Some other ASEAN members, such as the Philippines, have said they too would
be interested in signing onto the TPP deal. However, US Assistant Secretary
for the Bureau of East Asian and Pacific Affairs Daniel Russell affirmed
recently during a speech in Manila that any aspiring new entrants will need
to wait until after the agreement is done to apply for membership.

“The Trans-Pacific Partnership, or TPP, is a cornerstone of President
Obama’s rebalance to the Asia-Pacific region, and while we’re focused now
on concluding the agreement with our current partners, the TPP is being
drafted with an eye toward future expansion,” Russell said
<http://www.state.gov/p/eap/rls/rm/2015/01/236249.htm>, noting that
Washington hopes Manila will sign on in the near-term.

“To do that, we will need to work together on a host of issues, including
investment and trade liberalisation, which will benefit the country in the
short term and for years down the road,” he said.

ICTSD reporting; “Japan TPP negotiator: Not ready for Japan-U.S.
ministerial trade talks,” REUTERS, 4 February 2015; “Tokyo offers to cut
tariffs on US pork in TPP talks, sources say,” KYODO, 3 February 2015;
“Mexico says Pacific free trade deal ‘feasible’ in mid-March,” REUTERS, 22
January 2015; “US trade chief says Pacific deal is close,” FINANCIAL TIMES,
27 January 2015; “Japan offers compromise on rice in Asia-Pacific trade
talks: Nikkei,” 24 January 2015; “Asia trade talks heat up as fast-track
battle rages,” POLITICO, 30 January 2015; “Currency Fight Hinders Talks on
U.S.-Pacific Trade Deal,” WALL STREET JOURNAL, 25 January 2015.



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