[Ip-health] FT: US and Japan differences stall Pacific Rim trade deal

Thiru Balasubramaniam thiru at keionline.org
Tue Dec 10 23:00:06 PST 2013


December 10, 2013 1:49 pm
US and Japan differences stall Pacific Rim trade deal

By Shawn Donnan in Singapore

But negotiations between the US and Japan during four days of ministerial
meetings in Singapore that concluded on Tuesday failed to find a solution
on how to treat agricultural and other products.

Michael Froman, the US trade representative, told reporters after the
meetings ended, that not enough progress had been made by Japan. Tokyo’s
offers, he said, had not yet lived up to the “high ambition” of the TPP,
pointing to a 2011 declaration in Honolulu in which US President Barack
Obama and other leaders called for the wholesale elimination of tariffs.

“We are hopeful that Japan is able to come to the table prepared to achieve
the kind of outcome that is expected as part of
Mr Froman said. “Resolving the US-Japan market access questions will be
critical to the success of TPP.

Yasutoshi Nishimura, the Japanese vice-minister for trade leading the
delegation in Singapore, told reporters: “Japan will continue to do our
best to reach this high-level agreement.”

But earlier on Tuesday he told Japanese reporters that Tokyo could not
“give one millimetre” and called for the US to show greater “flexibility”.

Mr Nishimura replaced Akira Amari, the minister in charge of the TPP
negotiations, at the last minute after Mr Amari was diagnosed with tongue
cancer. Some analysts have said that because of his more junior status Mr
Nishimura was unlikely to have the same authority to cut a deal.

Mr Abe on Tuesday pledged “drastic reforms” for the agriculture sector to
make it more globally competitive and double annual exports to $1tn, the
Kyodo news agency reported.

How Japan and the US resolve their negotiations over market access is
crucial. While the 12 ministers involved in this week’s negotiations in
Singapore reported “substantial progress” in a closing statement on
Tuesday, that may matter little if the US and Japan cannot find agreement.

For many of the countries involved, the question is what they are willing
to compromise on intellectual property, investment and other rules in
return for access to the US and Japanese markets.The TPP hinges on a
balance between what its participants hope will be ambitious “21st-century”
rules on things such as intellectual property rights and more traditional
issues of market access.

Mr Froman said ministers had found potential solutions to the “vast
majority” of the contentious rules issues in the agreement and handed them
to negotiators to do more technical work.

Those areas where “landing zones” had been found, he said, included:
intellectual property rights (where the US has been insisting on tough
rules for copyright and patents); the treatment of state-owned enterprises;
rules of origin; and investment.

The last is important as that is where the US has been pushing for the
establishment of an investor-state dispute settlement mechanism that would
allow companies to legally challenge countries who violate TPP rules
outside their own courts.

Australia has until recently opposed the creation of such a tribunal. It is
now facing a case before one in Hong Kong that was brought by the tobacco
industry over its plain packaging laws.

But Australia’s trade minister, Andrew Robb, told reporters on Tuesday that
Canberra was now willing to back the idea if it won “substantial” market
access in return.

Many observers believe the US will have to give Australian sugar cane
farmers and other agricultural producers greater access to the American
market in return for its backing on a number of contentious areas.

The failure to seal a deal in Singapore means the ministers will miss a
year-end target set for them by their leaders in October. But in a closing
statement they said they would meet again next month.

Deborah Elms, a TPP expert at Singapore’s S. Rajaratnam School of
International Studies, said she now expected a deal to be closed by March,
ahead of an April visit to Asia by Mr Obama.

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