[A2k] Bridges Weekly: TPP Countries Gear Up for High Stakes Ministerial Meeting

Thiru Balasubramaniam thiru at keionline.org
Thu Jul 9 04:24:24 PDT 2015




TPP Countries Gear Up for High Stakes Ministerial Meeting

9 July 2015

The Trans-Pacific Partnership (TPP) countries are gearing up for a
highly-awaited ministerial meeting at the end of July, in a gathering that
many officials predict could bring the talks to a close.

The gathering, now scheduled for 28-31 July in the US state of Hawaii, will
be preceded by a meeting of chief negotiators from 24-27 July.

“Since they last met in May, trade ministers from the twelve TPP countries
have been working continuously. As a result, we have made considerable
progress in closing gaps on remaining issues, and we continue to work
intensively to address specific issues bilaterally,” the Office of the US
Trade Representative (USTR) said in announcing the meeting.

“The upcoming ministerial provides an important opportunity to build on
this progress as we work to conclude the negotiation,” the statement said.

The ministerial announcement comes less than two weeks after US President
Barack Obama signed Trade Promotion Authority (TPA) into law, following a
bruising trade debate among American lawmakers over the merits of the TPP
and other trade deals.

The TPA legislation, which outlines Washington’s negotiating priorities in
trade deals and sets the terms for their ratification in Congress, among
other provisions, was widely considered an essential step for any TPP deal
to come to fruition, with US trading partners unwilling to put their final
offers on the table beforehand. (See Bridges Weekly, 2 July 2015)

Bilaterals underway

With the date and venue for the high-level meet now set, the next few weeks
are set to see a flurry of activity among TPP member countries – a group
that includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico,
New Zealand, Peru, Singapore, the US, and Vietnam – as they work to
finalise the trade talks.

Various bilateral meetings among officials from TPP member countries are
already underway, with more scheduled in the coming weeks, in an apparent
effort to bridge some of the remaining gaps before the ministerial event.

Officials from the US and Japan, for example, were set to meet from 7 July
for bilateral talks on market access and automotive trade, according to a
press schedule from the Office of the US Trade Representative.

USTR Michael Froman also met on Monday with Vietnam’s General Secretary
Nguyen Phu Trong, who was then scheduled to meet with Obama on Tuesday at
the White House, with TPP one of the subjects on that event’s agenda.

Afterward, Trong referred to those talks with the US President as
“constructive and candid,” with the two leaders discussing both their
differences and possible next steps.

The TPP talks were also reportedly raised during a 5 July meeting in
Vancouver between US Vice President Joe Biden and Canadian Prime Minister
Stephen Harper, with a White House “readout” of the meeting indicating that
the two officials “reaffirmed the shared commitment to deepening robust
trade relations and the early conclusion of negotiations for the
Trans-Pacific Partnership,” without going into specifics.

Remaining issues

The planned trade agreement is set to cover a wide-ranging set of areas,
such as textiles and apparel, sanitary and phytosanitary standards (SPS),
rules of origin, goods market access, services, labour, environment,
investment, and intellectual property, to name a few.

How much of the 12-country deal has yet to be finalised remains uncertain,
with some officials suggesting that at least six chapters of the
approximately 30 under negotiation are still not finished. Areas still
requiring political decisions reportedly include intellectual property,
state-owned enterprises, and rules on investment, according to Jiji Press,
citing unnamed Japanese government officials.

“Around 10 percent of issues are still to be agreed, but I hope we can seal
an agreement in a final round of negotiations at the end of the month,”
Mexican Economy Secretary Ildefonso Guajardo told the Wall Street Journal
in an interview.

For his part, Australian Trade Minister Andrew Robb said in late June that
TPP countries “are really one set of negotiations amongst all of the
ministers away from a conclusion,” though the Australian official also
noted that there is the possibility that two rounds may be required.


Among the more controversial areas that remain include issues such as
investor-state dispute settlement, or ISDS, which has drawn significant
public scrutiny in recent months, both in the TPP context as well as in
discussions relating to the US’ planned trade deal with the EU, known as
the Transatlantic Trade and Investment Partnership (TTIP).

“The fact of the matter is that the so-called investor-state dispute
settlement which is being discussed as part of the [TPP] agreement is
something that Australia has entered into with 28 other countries for 30
years now,” said Robb during a radio interview last week, in response to
questions over the trade deal’s investment rules.

“We’ve only ever had one case taken against us, which is the tobacco case,”
he added, in an apparent reference to the lawsuit filed by Philip Morris
under the Australia-Hong Kong bilateral investment treaty (BIT) over
Canberra’s plain packaging rules for tobacco products.

Furthermore, he said, the modifications that have since been made to ISDS
under TPP are geared toward ensuring governments’ right to legislate in
certain areas.

Agriculture, intellectual property

Agricultural market access also remains a sticking point for some of the
group’s members. While the efforts to clinch a US-Japan bilateral deal on
the subject have been underway for several months, with reports indicating
that the two are still working to reach mutually acceptable terms on rice,
tensions are still running high over what terms Canada is willing to
provide on dairy and poultry.

Canada’s supply management system for such farm goods tightly regulates
their price and production, via the use of “marketing boards.” Officials
from countries such as New Zealand have said that they are hoping to see
Canada make a “meaningful” offer. The US is also among those reportedly
asking more from Ottawa.

Some reports have suggested that, should this disagreement persist, Canada
may even consider withdrawing from the trade talks. However, Prime Minister
Harper said last month that being a TPP member is “essential” for Ottawa,
while pledging to take steps to protect the supply management system.

Regarding intellectual property, a document that purported to be the draft
chapter on the subject was leaked last month to Politico, which said that
the US has been arguing for stricter protections with regards to
pharmaceuticals, putting it at odds with many TPP partners.

These include, for example, mandatory “patent linkage” – in other words,
preventing TPP members from approving generic drugs should there be patent
issues not yet finalised with the original – as well as terms regarding
what can be included in a patent, terms regarding their extension, and more.

The main area of disagreement regarding pharmaceuticals, Australia’s trade
minister said in late June, relates to the issue of biologics, which are
those drugs that come from a biological background rather than a chemical

These drugs cost an average of 22 times more than non-biologic drugs,
according to the Brookings Institution. Meanwhile, some have argued that
making it easier to develop “biosimilars,” which are “follow-ons” to an
original biologic, could significantly slash the costs of producing such

Politico’s report of the draft intellectual property chapter says that the
US has been advocating for patent linkage to also extend to biologics,
along with other requests such as long periods for data exclusivity, among
other provisions. The chapter is dated May of this year, and its
authenticity has not been confirmed, the news agency said.

ICTSD reporting; “Mexican Official Sees Deal on Pacific Trade Zone in Late
July,” THE WALL STREET JOURNAL, 6 July 2015; “TPP ministers to gather in
Hawaii July 28-29,” KYODO, 6 July 2015; “6 chapters of TPP pact still
unresolved,” THE JAPAN NEWS, 5 July 2015; “Pacific trade ministers to
gather in Hawaii from July 28,” KYODO, 7 July 2015; “Trans-Pacific
Partnership building momentum for deal this summer,” THE GLOBE AND MAIL, 6
July 2015; “Leaked: What’s in Obama’s trade deal,” POLITICO, June 2015;
“Canada Pledges Support for ‘Powerhouse’ Pacific trade Pact,” BLOOMBERG, 7
July 2015.

This article is published under

Volume 19 - Number 25

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