13 FEBRUARY 2011: Four-day talks between Australia and Japan on bilateral trade suggest that popular Japanese oppositon to agricultural reforms will continue to stand in the way of Tokyo negotiating in the TPP.
The talks, which just ended and were the first on trade between the two countries since April last year, have been described by Australian negotiators as 'useful discussions', but it does not appear any breakthrough was reached over Japan's continued subsidies to its wheat and rice farmers.
A full piece on the talks from AFP follows below.
24 NOVEMBER 2010:
Over the course of the APEC Leaders’ Conference in Yokohama, TPP side-developments have continued apace, in part due the the Japanese government’s continued interest in the partnership.
The NZ Herald’s coverage of PM John Key’s APEC statements noted that he has drawn a hard line on agriculture, reported as saying that New Zealand ‘will not want
Japan at the table’ if it attempts to exclude agriculture from any trade deal.
He added that Japan would need to enter TPP ‘only on (New Zealand’s) terms’.
To other TPP partners, he urged that they hold firm on existing criteria and conditions rather than relaxing any entry barriers and allowing compromises for Japan to join talks, while reiterating NZ’s desire to negotiate a ‘high-quality, comprehensive’ agreement.
Leading up to the talks, Japan’s nationwide polls showed nearly half of respondents supported Japan joining the TPP. However, Japanese agricultural and forestry workers have demonstrated en masse against the prospect of talks and Japanese PM Naoto Kan’s own ruling Democratic Party have urged him to temporarily abandon the free-trade drive. Ultimately, Japan indicated at the end of APEC that it would not make a decision on joining TPP until June 2011. This may be too late for Japan to join as a negotiating partner however; it may be required to accede to a complete agreement if one is completed.
Meanwhile, at a sideline summit of TPP members, Vietnamese President Nguyen Minh Triet confirmed that his country would henceforth participate as a full member of the talks. Previously, it had held ‘observer status’, and had been required to decide before the Auckland round of talks whether it would shift to full membership.
Kan’s appearance at that summit was considered contentious enough in Japan that American officials banned television cameras from attending the meeting. The Herald’s John Armstrong reported that this had annoyed some other delegations to the summit.
A NZ Herald article on Key’s results from APEC (which also included a signal to begin non-TPP negotiations with Russia) and a CNEO piece on Japanese opposition to TPP talks appear below.
11 NOVEMBER 2010: Japanese media report that a crowd of over 3000 citizens protested on Wednesday against Japan's plan to initiate discussions to join the TPP at the APEC Leaders' Conference in Yokohama.
A mixture of farmers, fishermen, and agricultural officials began their rally in an open-air hall before marching through the streets of central Tokyo, chanting and bearing placards. Speakers warned that if Japan joined the TPP, its domestic agriculture, fisheries, and forestry would be wiped out.
Meanwhile, Prime Minister Naoto Kan's sole coalition partner. the People's New Party, has indicated it will not approve any TPP negotiations, while the main centre-right opposition party, the Liberal Democratic Party, has also made indications his party will not support taking part in the TPP. A Japan Today article on the rally has more information.
8 NOVEMBER 2010: AP reports the meetings ahead of next weekend's APEC Leaders' Summit in Yokohama have commenced, just as the Japanese Cabinet has indicated a willingness to engage with TPP partners. As reported earlier, a leak of the APEC Leaders' Declaration indicated that APEC would call for 'concrete steps' toward a Free-Trade Area of the Asia-Pacific (FTAAP).
Further information on the draft has indicated it offers no time-frame or deadline for such an FTA. Other limitations may be that APEC itself is not a negotiating body, and its membership, ranging from the US to third world nations such as Papua New Guinea, is even more disparate than that of the TPP.
The Daily Yomiuri reports that the government followed the Cabinet meeting agreeing to enter into talks with TPP partners, but not being specific as to whether it actually intends to participate in the agreement. This lack of a clear stand is believed to be due to opposition to possible TPP reforms within the ruling Democratic Party of Japan itself. The Yomiuri article, reproduced below, is valuable in highlighting the tenuous domestic situation of Prime Minister Naoto Kan's government over the TPP question.
25 OCTOBER 2010: Inside US Trade reports that Canada has been told by the US and other TPP parties that it is still not ready to enter negotiations.
It is understood the message was conveyed to Canada at a sideline meeting to the Brunei round at the start of October - the rationale being that a 'range of issues' existing partners had asked Canada to address have yet to be satisfactorially resolved. Chief among these are Canada's retention of a supply management system for its dairy and poultry sectors, which has led New Zealand to criticise its bid, and a perception by the US that Canada better needs to address intellectual property rights.
Canada has not stated which specific concessions it would make in its dairy sector or elsewhere, were it to gain membership.
In Brunei, Vietnam was also urged to decide ahead of the fourth round of talks in New Zealand whether or not to join as a full negotiating partner - to date, its status has been that of an 'associate member', which has saved it some of the responsibilities and commitments of full negotiating partners. Officials have not been specific as to what would occur if Vietnam could not give an undertaking as to full membership before the December round.
The US source IUT spoke to was also non-specific as to any role for Japan in the near future in TPP talks . They were clear that no informal discussion between Japan and the US has occurred to date, and indeed suggested that Japan may be perceived much as Canada - a potential party with too many domestic hurdles at present to be seen as a viable partner by members with strong agricultural sectors. It was also suggested that as the talks become more robust, US negotiators are keen to set a cap on the current nine negotiating members, requiring other states to accede in the future.
5 NOVEMBER 2010: The ruling Japanese DPJ party may be en route for a collision course with its Prime Minister, Naoto Kan as to Japan's role in TPP negotiations, according to Nikkei.
The government will seek to win Cabinet approval next Tuesday for its basic policy on economic partnership agreements, including its position on TPP - however, some 70 lawmakers have clearly indicated their opposition, gathering at the Japanese Diet to urge a cautious approach to the pact. Representatives from rural and agricultural areas believe the tariff-abolishing requirements of a finalised TPP agreement will result in an influx of cheap agricultural products which would destroy Japan's domestic market.
The full Nikkei article follows below.
18 OCTOBER 2010: The Asahi Shimbun reports that Japanese Prime Minister Naoto Kan's aggressive push for his country to investigate joining the TPP at some point in the near future has placed his administration on a 'collision course' with farmers.
Kan's Democratic Party of Japan have announced the initiative as falling rice prices have affected farmers' livelihoods, with the possibility of trade liberalisation doing away with their traditional protections alarming them further. The government has pushed for a more assertive courting of free trade deals, warning that Japan risks being left behind as an economic force if it does not form more comprehensive economic partnerships.
But even within the DPJ, sentiment has been divided, with at least one Upper House member warning the TPP would destroy both the rural economy and community. Compounding this is a perception that the government's existing programme to compensate Japanese farmers for reduced market prices is ineffective, and that it could not cover the further burden of the abolition of tariffs on agricultural imports.
The full Asahi story follows below.
9 OCTOBER 2010: Asahi.com reports on Japan's continued consideration of becoming a party to the TPP. Prime Minister Naoto Kan now says he will consider participating in future negotiations, following on from indications from Trade Minister Akihiro Ohata that there would be overtures towards the existing parties.
Asahi''s editorial welcomes Kan's position, announced ahead of the APEC leaders' meeting in Yokohama next month, but is clear as to the potential obstacles. Any trade agreement involving NZ and the US is likely to require Japan to liberalise its market for agricultural products, which may damage the government's support. Additionally, the decision comes in a climate where privatisation is presently unpopular, following criticism of the decision to privatise Japan Post in 2007 and stymied attempts to reverse the process recently.
Countering this is fear that Japan is being left behind by regional rivals (China, South Korea) who have been negotiating and finalising trade agreements as Japan refuses to negotiate on traditionally protected areas. The full editorial follows below.
29 SEPTEMBER 2010: Reforms to New Zealand's Overseas Investment Act have been criticised as being 'vague' and 'weak' by political opponents and lobby groups for greater economic sovereignty.
Deputy Prime Minister Bill English unveiled changes to the Act on Monday 27th of September, aimed at introducing 'extra flexibility' to consider contentious issues such as large-scale farm sales. Ministers of parliament will be given a right of veto over transactions where NZ's economic interests are believed to be threatened. The detail on how these applications are to be considered are to be fleshed out before the end of the year.
Newly organised group Save The Farms said there was little clarity around the rules and that the veto option was simply politically expedient, while the Green Party expressed concern that the suggested reform would become overtly politicised. Independent business commentators have also criticised the change. The new rules will not take effect until December, but will affect a large Chinese firm's bid for a major chain of New Zealand dairy farms in what was intended to be the first step in securing an NZD$11.5 billion dairy business. It is presently not clear whether or how these changes would affect NZ's continued TPP negotiations.
27 SEPTEMBER 2010: Japan's new Trade Minister, Akihiro Ohata, has announced that he is looking at making overtures toward the TPP. Japan has previously been vague as to whether it would join the framework.
However, Ohata admitted to a news conference that it would 'difficult' for Japan to participate unless it overcame 'its agricultural issues'.
Ohata's remarks come ahead of an annual meeting of APEC leaders in Japan in November, at which the TPP is likely to be discussed by both current and prospective parties.
Japan's reluctance to open up its agricultural market has made it previously reluctant to enter either P4 or TPP talks, but on this occasion Agriculture, Forestries and Farming Minister Michihiko Kano has also backed Ohata's announcement. He has suggested environmental tax revenue may be used to support farmers disadvantaged by the lowering of agricultural tariffs.
However, Kyodo News International reports a Foreign Ministry official as saying that Japan will first have to carry out studies over the next two months to determine whether it shall join talks for 2011, but also reported a Japanese trade academic as expressing scepticism that Japan would make any decision before the APEC meeting.
Kyodo News's full article follows below.
10 SEPTEMBER 2010: Following the TPP intersessionary talks in Peru, where the US indicated its preference for leaving existing FTAs in place while negotiating afresh with new trading partners, the NZ Minister of Trade, Tim Groser, has expressed concern about New Zealand's ability to gain the most advantageous deal out of the talks.
Australia's original FTA with the US was considered less than ideal, due to the exclusion of areas such as dairy and sugar. Groser told Radio New Zealand that he believed that under the preferred US arrangement, it would be harder for NZ to negotiate an agreement with the US that improved on the Australia-US FTA.
30 AUGUST 2010: Inside US Trade reports that while TPP members discussed complex and concrete proposals on how to structure market access agreements in any final agreement, there were seversal unresolved points at the end of a two day 'intersessional' meeting in Peru.
Sources said negotiators could not agree on how past market access schedules in previous FTA's would relate to any new schedules, or how to structure the market access talks for the TPP itself - and that these are being treated as two interrelated issues.
It is understood that the US presently favours keeping pre-negotiated market access schedules unaltered, while Australia (whose existing market access arrangements with the US exclude key products such as sugar) is arguing in favour of 'opening up' the schedules for future concessions. However the USTR disputes this interpretation, responding that talkd have been more 'nuanced'.
Proposals discussed in terms of structuring market access have included the idea of negotiating a single market access schedule while leaving scope for bilateral outcomes alongside it. Both Malaysia and Canada were present at the intersessional for bilateral talks with TPP members, but did not formally participate in the market access talks. Canada is set to meet US trade representatives on the weekend of September 6 for more expansive talks. Both the US and NZ have expressed misgivings about Canada failing to offer sufficient dairy market access and its agricultural supply management system, should it join the talks.
Meanwhile, members of the TPP business coalition in the US are preparing revised papers for the office of the USTR ahead of the third round of talks in Brunei, with a focus on hotly-debated areas such as regulatory coherence.
17 JULY 2010: The NZ Herald has recently run a number of op-ed pieces, of varying rigor, about the matter of foreign investment in New Zealand following a Chinese-based company's bid to buy 16 large dairy farms presently in receivership. The matter has split commentators and lobby groups, with the normally pro-free trade Federated Farmers association saying the farms should only be sold to countries that allow New Zealanders to purchase their land in kind.
In the July 15th edition of the Herald, Council of Trade Unions economist Bill Rosenberg argues that a review of overseas investment legislation is overdue and that much stronger controls are needed, especially as the relevant sectors are deregulated by a succession of FTAs, including those presently under negotiation such as the TPP.
The full article runs below.
5 JULY 2010:
The Otago Daily Times
reports that US Dairy Export Council president David Suber has warned that allowing the members of NZ dairy cooperative Fonterra to trade shares amongst themselves could jeopardise the inclusion of dairy in the TPP agreement. Writing to Agriculture Minister John Carter, Suber warned that the share-trading would serve to reinforce what is perceived as Fonterra's market dominance. The proposal, which 89.95% of Fonterra's members voted in favour of on July 1, revokes the requirement for the co-operative to redeem company shares - allowing them to be traded among 11,000 shareholder members instead.
4 JUNE 2010: A group of over 25 American corporations and industry bodies has written to Islam Siddiqui, the USTR's chief agricultural negotiator, urging that a 'comprehensive' TPP go ahead.
The group, which includes multinationals such as Walmart, Nestle, Kraft, and Mars Incorporated alongside lobbies such the Emergency Committee For American Trade and the Grocery Manufacturers Association, urges that all avenues for increased market access be investigated and that all products and sectors be included in an agreement to enable this.
The letter goes on to recommend that import-sensitive sectors be given appropriate tariff phase-out timeframes where it can be shown that they need more time to adapt, but with an eventual aim of total tariff elimination. At any rate, the writers entreat that sensitive agricultural sectors be up for negotiation rather than wholly excluded from the upcoming rounds. They conclude arguing that the TPP should be envisaged as a 'WTO-plus' agreement.
The letter follows in its entireity below.
26 MARCH 2010 - La Republica and IPS report that a former Peruvian Deputy Minister of Labour, Julio Gamero, has warned that the large number of trade agreeements Peru has signed in the past year, as well as the impending negotiations in the TPP, may be having a negative impact on labour rights.
Gamero warned IPS that over the past three years, the number of collective bargaining agreements, health and safety inspections, and unionised members of the workforce has fallen dramatically. He is critical of the government's response, saying that it was not until a US delegation on labour issues visited Lima that a liaison office between government and unions was created. Coordinator for the Peruvian Network for Globalisation with Equity (RedGE), Alejandra Alayza, says it is essential to guarantee labour rights in any further agreements so that workers may share in the benefits.
The IPS article, which follows below, also looks at the effect of tariff-lowering on peasant farmers, as well as the TPA with the United States's impact on indigenous forestry rights and intellectual property.
14 MAY 2010 - The primary and secondary sectors of the US agricultural industry are at odds with each other as to the effect a completed TPP would have on existing FTAs with TPP negotiating partners, according to Inside US Trade. It reports that a letter dated May 11 to the Obama Administration from twenty groups representing agricultural producers has requested that market access schedules and accompanying rules of origin in the US's current Free Trade Agreements with countries now negotiatiing to be part of the TPP (including Australia and Chile) go unchanged.
"That letter argues that agricultural provisions in the existing FTAs were carefully negotiated in order to secure approval in Congress. One source also pointed out that agricultural producers are eager to avoid any political difficulties that could arise if the TPP talks are used to “revisit” the provisions in previous FTAs, which are controversial in the U.S. Congress.
Producer sources also pointed out that existing FTAs have already reduced, or are in the process of reducing, agricultural tariffs down to low levels. Therefore, revisiting FTA market access schedules is more likely to result in backsliding on agricultural commitments from FTA partners, or in FTA partners making new demands on the U.S., these sources argued...."
However, sources in the processing sector have said that the letter smacks of 'protectionism', and have cited arguments for existing market access schedules to be revisited. For example, it has been argued that lowering the tariffs which have remained under previous FTAs will offer processors easier access to certain inputs, as well offering new market access gains in return for processing industries. They have warned that any limitation as to reopening past FTAs or the agriculural sector will limit opportunities for trade-offs and mean that other countries shut off those same sectors, limiting the scope of any negotiated deal.
"...In March 2 testimony before the International Trade Commission (ITC), Devry Boughner, director of international business relations for Cargill Incorporated (a multinational producer and marketer of food and agricultural products), signaled that her company would not favor such limitations by arguing that the TPP agreement must be comprehensive, including all products and all sectors in all TPP economies.
“The agreement must be bold, building on past FTAs, but not limiting ourselves to what was done in the past,” she argued. “For the U.S. food and agriculture sector to gain critical market access to TPP economies, TPP must liberalize trade for even the most sensitive agricultural products.”"
The USTR has privately said it wants to determine an internal position for how the TPP will interact with existing trade deals for the second round of negotiations in June.
Notably, the May 11 letter comes from a combination of organisational lobbies, some of which have favoured increased trade liberalisation in the past. The organisation that reportedly led the efforts, the American Farm Bureau Association, called for progress on bilateral FTAs on 3 May. This may indicate concern by US producers that the arrangements for agricultural market access in a TPP would be tougher.
1 MAY 2010: The USTR has firmly opposed the notion of excluding the dairy sector in its entireity from any completed TPP negotiation. Inside US Trade reports there have been potential tradeoffs discussed, including US dairy concessions in the talks in exchange for the raising of barriers on imports of milk protein concentrates (which New Zealand is a major exporter of). USTR has made it clear, however that it does not presently back legislation imposing such tariffs. Additionally, the proposed tariffs on MPC's would violate US committments at the WTO, meaning the US may have to negotiate with WTO members not part of the TPP who believe the barriers might affect them.
16 APRIL 2010: The Washington Trade Daily reports that the USTR has met with leaders of Congress's congressional caucus on dairy farming to attempt to allay their fears about the sector being liberalised as part of any completed TPP agreement, and opened up to competition by New Zealand.Caucus co-chair Peter Welch (D-Vermont) has advocated NZ dairy trade's exclusion from the TPP, backed by a number of US dairy organisations. The WTD continues:
"Mr. Kirk told reporters he understands those concerns, but he is not ready to take anything off the table this early in the negotiations. The first round of TPP talks took place last month. There is plenty of time to look for creative solutions that would benefit the US dairy industry, he said. Actually this is a good time to ask what the US government can do to help US milk produces export so they can be just as competitive as New Zealand.'"
Kirk also asked the caucus and US producers to bear in mind the substantial market access the TPP could open up over multiple markets,especially should it expand to become a full Asia-Pacific multilateral agreement.
13 APRIL 2010 - NZ Prime Minister John Key has had a session with US Vice-President Joe Biden on his visit to Washington, DC, in which the two politicians discussed free trade and the TPP negotiations. Key reportedly emphasised the value of a completed TPP agreement to both states, emphasising that agricultural importing and exporting would not be a one-way street for either NZ or the US. Key's visit came after over 30 US Senators signed an open letter on behalf of their constituencies, asking that dairy be excluded from any FTA with New Zealand. A NZ Herald article has more on Key and Biden's discussion.
MARCH 30 2010 - The announcement that Natural Dairy (NZ) Holdings, a Cayman Islands registered, Hong Kong-based company - has proposed a buyout of up to $1.5 billion in NZ dairy assets, including the substantiial North Island dairy operations held by the receivers of Crafar's farms, has raised a response from the Productive Economy Council and the Campaign Against Foreign Control of Aotearoa cautioning against national asset sales of large portions of agricultural land. Given the current tension between the NZ dairy industry and its US counterpart, there may yet be further debate about Chinese businesses holding stakes in NZ dairy in any further TPP negotiations.
The March 30 edition of the Otago Daily Times looks at the phenomenon of foreign investors considering NZ farms and primary processing plants. It is likely that any future FTA with TPP parties will raise these same considerations for NZ. The article follows below the break.
23 MARCH 2010: New Zealand Prime Minister John Key has downplayed the concerns of both the US Dairy Producers Federation and a group of thirty senators regarding the negotiation of a US-NZ FTA as part of the TPP, saying he believes that the stance is a hard curtain-raising position that will later be softened. He has also said that New Zealand will not be part of any deal that excludes agriculture.
CITIZENS AGAINST FOREIGN CONTROL OF AOTEAROA, CHRISTCHURCH, MARCH 15 2010:
Talks started in Melbourne today for the US, Australia, Peru and Vietnam to join an expanded Trans-Pacific Strategic Economic Partnership (TPP, currently comprising NZ, Chile, Brunei, and Singapore, known as the P4 Agreement), with November 2011, when the US hosts APEC, as the target to seal the deal. This will be used as the backdoor means to secure a US/NZ Free Trade Agreement. Already the Americans have said that they see this as more than a mere free trade deal but as a vehicle for broader Asia/Pacific economic integration, which has enormous political implications. Alarm bells should be loudly sounding.
Officials from Australia, Brunei, Chile, New Zealand, Peru, United States, Vietnam have begun talks toward the TPP in Melbourne, a move pro free-trade commentators are marking as a push for the APEC group of nations toward the long-term goal of an Asia-Pacific free trade zone. The talks are estimated to cover 470 million people, with a combined GDP of USD$16 trillion. New Zealand is sending a delegation of 15 to the talks. More below the break...(Radio New Zealand's report can be accessed here
As agricultural and farming blogs
have been quick to seize on
, the US dairy industry has come out in force on the eve of TPP negotiations. And those concerns have quickly been heard and met by a bipartisan group of 30 senators, many of whom come from the US's own dairy heartland. On March 11, they delivered a letter to US Trade Representative Ron Kirk urging that the industry is protected from New Zealand (or, more specifically, dairy co-op giant Fonterra) in any agreement between the nations. The letter itself continues below the break...
MARCH 11, 2010 (Wall Street Journal) - US dairy farmers are pleading for protection from their counterparts in New Zealand as President Barack Obama's trade negotiators begin talks on a regional agreement in Australia next week.
New Zealand accounts for nearly a quarter of global dairy exports, according to Rabobank International, a large agricultural lender. U.S. dairy farmers are concerned that increased trade with the region could result in New Zealand flooding the U.S. with cheap dairy products such as cheese and milk powder that could depress prices for U.S. producers. Logistics and cost make it unlikely New Zealand would ship fluid milk to the U.S.
WASHINGTON, MARCH 3 2010 - President Barack Obama's plan to negotiate an Asia Pacific free trade pact could have a devastating impact on the dairy, sugar and textile sectors in the United States, US industry groups warned on Tuesday.
Negotiators from the United States, New Zealand, Australia, Peru, Vietnam, Chile, Singapore and Brunei will meet in Melbourne, Australia on March 15 for the first round of talks on the proposed Trans-Pacific Partnership (TPP) pact.
Inside US Trade, March 2 2010
Australian Ambassador Kim Beazley today (March 2) signaled that
negotiations to create the Trans-Pacific Partnership (TPP) agreement
should put all issues on the table and not automatically keep in place
exemptions from market access commitments contained in current free
trade agreements the U.S. has with some of the countries now
participating in the TPP negotiations.