13 OCTOBER 2010: Inside US Trade reports that USTR, following the recommendations of a business coalition draft document, may be putting forward the US's own central co-ordinating body on regulation forward as a model to other TPP partners.
Currently, the US Office of Information and Regulatory Affairs (OIRA) takes a primary role in the US rule-making process - a federal agency wanting an issue a rule or regulation must comply with its requirements, including that a cost-benefit analysis of the rule is undertaken, and that the value in not regulating is also considered.
The US business coalition say the adoption of an OIRA-style body by other TPP partners would help regulate the decisions and reforms made across their government agencies and departments, ensuring they abided by the requirements of a TPP treaty.
However, civil society groups are wary of the effects of establishing such bodies. Sean Flynn of American University's Washington College of Law has warned that the US's current regulation oversight model was 'decades' in the making, and that the effect of imposing such an advanced model on developing countries in the talks, such as Vietnam, would be potentially destabilising.
A further concern is that there are currently no undertakings on whether the cost-benefit analyses envisaged would extend beyond trade costs (ie: to health, safety, labour and environmental concerns). Additionally, some groups have warned that strict regulatory coherence provisions would limit the ability of TPP members to regulate in the national interest - noting that Australia and New Zealand, both parties to TPP, have taken an aggressive stance on regulatory coherence in the multilateral Doha talks. As noted last week, New Zealand will be preparing a document on regulation for the fourth round of talks in Auckland, in December.
In comparison, the US approach to regulatory coherence at Doha has been less strict - it has opposed the 'necessity test' (requiring that regulations passed be 'no more burdensome than necessary') proposal that the two Australasian partners have previously supported.
OCTOBER 4 2010: Inside US Trade reports that a coalition of US business groups supporting the TPP negotiations have urged the USTR to include a separate TPP chapter to deal with regulatory coherence, in light of the reported emphasis negotiators have put on the topic in talks to date.
The coalition, headed by the US Chamber of Commerce, previously submitted a paper on regulatory coherence to negotiators in May. They have now issued another document of general recommendations, including that agreeements be made on a sector-by-sector basis. Sources say this may reflect the fact talks on coherence are at an early stage.
Other recommendations are:
* that negotiators identify in separate chapters a list of both best practices and unacceptable regulatory conditions;
* that the US request that other parties in the talks deliver a list of 'regulatory coherence deliverables and achievements' to set a sense of their initial progress;
* that any regulatory coherence chapter contain provisions on meaningful stakeholder consultation.
The coalition has also released a draft document of 14 'principles' ahead of the third round of TPP talks in Brunei. Its recommendations include:
* the conclusion of talks by late 2011;
* a set date for elimination of all tariffs and non-tariff barriers;
* that the TPP build on existing IP protections in previous US FTAs.
Sources say that as of early October, the US had not yet placed any concrete requests on regulatory coherence at the feet of the other negotiating partners, but may submit a concept paper on regulatory coherence during the third round of talks in Brunei, asking that parties outline what (if any) regulatory bodies and coordinating systems they currently have or use. Another source suggested that the US will aim to base its approach on its current position at the Doha talks.
It is understood that Singapore has already submitted a paper on regulatory coherence, while New Zealand, which is chairing TPP talks on regulatory coherence, plans to submit its own concept paper on the issue when it hosts the next round of talks in December.
21 SEPTEMBER 2010: The Sydney Morning Herald reports that a survey of a number of businesses by the Australian Chamber of Commerce and Industry has found that a number of them no longer see the benefit in the federal government negotiating free trade agreements.
The survey suggested that many businesses feel they have gained little in the way of market access and measurable benefits from the agreements ratified to date. Furthermore, they believe they are gaining more from direct trade measures (ie: grant schemes for exporters) than from the intricacies of multiple trade deals.
The Chamber's survey comes as part of a submission to to the Australian Productivity Commission, who were asked by the government last November to inquire into the benefits of bilateral and regional trade deals. In July, the Commission released a draft report of their findings suggesting future national income flowing from such deals was likely to be 'modest'.
The response from the Chamber comes as the newly appointed Trade Minister, Dr Craig Emerson, travels to Washington DC to meet with his US counterparts and attend the Global Services Summit. Trade Ministers from New Zealand and Malaysia will also be in attendance. Dr. Emerson has announced that he hopes to promote both global services trade reform and new support for the Doha Round during his visit.
19 JULY 2010: A draft research report by the Australian government's independent Productivity Commission has suggested that the national income flowing from future bilateral and regional trade agreements 'is likely to be modest'.
The report, released online last Friday, suggests that the Commission has received little evidence from Australian business to show that preferential agreements of this sort have provided substantial commercial benefits, and that current processes for assessing and prioritising such agreements "lack transparency and tend to oversell the likely benefits". Among its recommendations, it suggests Australia continue to pursue progress in the Doha Round, while carrying out full and public assessments of proposed agreements after negotiations have concluded, and that a cautious approach be taken to provisions on IP, investor-state dispute settlement, labour standards and cultural matters.
The government is expected to receive the Commission's final report in November 2010. The draft, meanwhile, can be read here.
8 JUNE 2010: As TPP members discussed the progression of their negotiations on the sidelines of the APEC conference in Japan, ministers in the overall region have resolved to press on with the stalled Doha talks, and push for their continued momentum at the G20 later this month.
The talks, held in Hokkaido, represented APEC's first ministerial meeting of the year ahead of the annual summit in Yokohama this November. 2010 marked the deadline year for the developed APEC nations to achieve the fair and open trade goal the organisation set in Indonesia in 1994 (the 'Bogor Goals') - developing nations still have until 2020.
The ministers also agreed to promote cooperation on international standards, make the smooth flow of goods and services easier, and strengthen IP rights.
Together, the APEC ministers resolved to "bring the Doha Development Agenda to a successful conclusion as soon as possible". The talks have remained effectively static since 2001 due to disputes between developed and developing nations and an unwillingness for the former, in many cases, to relinquish long-held protections and subsidies.
The ministers also agreed to attempt to craft an outline for November of possible ways to form a regional free-trade area - although it has been noted that this may face the hurdle of both existing agreements (ASEAN) and possible ones (TPP). A Reuters article on the meeting follows below.
10 JUNE 2010: Though the escalating Gulf of Mexico oil crisis has seen Barack Obama cancel his engagement in Indonesia and cast doubt upon a subsequent visit to Australia, TPP and 'spaghetti bowl' sceptic Bernard K. Gordon wrote at length about both destinations at the start of the month on East Asia Forum. He focuses on US and Indonesian trade relations, but also notes that recent incidents in North Korea will be shifting the Obama Administration's focus above the Equator of late.
On the TPP, Gordon is more strident (the full article may be read here):
"...Other US trade venues, the WTO Doha Round, the Korea FTA, and possible FTAs with ASEAN members, are not being forgotten and will be pursued if opportunities arise. But the TPP effort –representing Australia, Brunei, Chile, New Zealand, Peru, Singapore, the US and Vietnam – now tops Washington’s trade agenda. Singapore and Australia have long been important American trade partners, but as a group the TPP is no heavyweight. Its merchandise trade with the United States last year was US$110 billion, while total American exports and imports combined represented US$2.6 trillion. The TPP, in other words, accounted for just 4.2 per cent of America’s trade, and no partner is even in the top 10 of US export markets. Why then is Washington so energetically promoting the concept?
5 MAY 2010 - The US Trade Representative have taken right of reply in the Wall Street Journal following Bernard K. Gordon's article for the same publication late in April. They accuse Gordon of mischaracterising the Obama administration's attitude to the multilateral Doha round, and affirm that a completed TPP would be 'a key and promising element of a new trade strategy for North America'. Their letter follows below.
23 APRIL 2010: Routledge College emeritus Professor of Political Studies Bernard K. Gordon has come out against the Trans-Pacific Partnership in the Wall Street Journal. He argues that none of the 'weightiest' Asian trade actors (China, Japan, South Korea, or Indonesia) are involved in the agreement, and that regional economic integration across the Asia-Pacific is an unrealisable goal (raising labour standards in Brunei and Vietnam, opening up financial sectors in Australia and Chile, overcoming Congressional resistance to NZ agri).
Gordon argues that the US's focus must lie with the ongoing Doha Round negotiations, a sentiment he expressed in his book America's Trade Follies, as well as this 2003 article for Foreign Affairs.
27 APRIL 2010: The Canadian Minister of Trade, Peter Van Loan, has indicated that Canada intends to focus more strongly on bilateral and plurilateral trade agreements rather than concentrating solely on the progress of multilateral WTO talks. These may include the completion of talks with the European Union, as well as an FTA with Colombia. Van Loan indicated that Canada is watching the TPP talks 'with interest', but its success in joining negotiations is likely to rely substantially on its removing protections for its dairy and poultry sectors. Inside US Trade have received confirmation Van Loan has met with USTR Ron Kirk, but did not indicated whether this included discussion of Canada's future with the TPP.
* Seeks middle ground between pro/anti free trade factions
* USTR predicts between 18 to 24 months of negs for TPP
* Common sets of rules may be written for some trade issues
Taken from Inside U.S. Trade
Daily News - Wednesday, February 24, 2010
President Barack Obama told the Business Roundtable today (Feb. 24) that he wants to pursue a more strategic and aggressive effort to open new markets for US exports and that he seeks a middle ground between those that reflexively support or oppose every trade deal, according to his prepared remarks.
Obama said that he wants to pursue trade agreements that align the interests of workers and businesses, following the example of other US trading partners such as "China or Germany or Brazil."
He said in pursuit of this goal, the US is launching the Trans-Pacific Partnership (TPP) Agreement that will strengthen trade relations with Asia, the fastest growing market in the world. He said this is why his administration is pushing for a strong Doha round that creates "real access" to key global markets, and why it wants to deal with outstanding issues on the pending free trade agreements that the Bush administration negotiated with Panama, South Korea and Colombia.
Obama did not offer any time line for proceeding on any of those trade agreements, but the first session of the TPP negotiations is scheduled for mid-March. US Trade Representative Ron Kirk has said it will take between 18 to 24 months to complete the negotiations (Inside US Trade, Feb. 19)
USTR seems to be leaning toward keeping in place the market access provisions in the existing FTAs, which the US has with the majority of the TPP participants, but write a common set of rules on other issues, such as intellectual property protection, according to a Senate aide.
Obama said that those who reflexively support every trade agreement must realize that trading partners need to live up to their obligations under trade deals and that they must be enforced. He said that those who reflexively oppose every trade agreement must realize that if the United States sits on the sidelines while other nations sign trade deal will lose the chance of creating jobs in the United States.
Obama put his comments on trade in the context of helping the United States compete in the world, which he also said must include more exports of goods and services which support jobs in the United States. He said this is why he has set the goal of doubling exports over the next five years through the National Export Initiative, which he said would support two million jobs in the US.