12 OCTOBER 2010: Both the Wall Street Journal and Bloomberg have reported on Malaysia's inclusion in the third round of talks, bringing the ranks of partners to nine.
The WSJ notes both the likely long duration of talks, as well as the uncertainty as to whether a final agreement would even be assured passage in congress without any form of fast-track authority for members. On the other commentators note the strategic value of the US's increasing engagement in the area (particularly as against China), and that Malaysia's inclusion as the US's 16th-largest trading partner gives the TPP some much needed momentum.
Speaking to Bloomberg, Australian trade academic John Ravenhill was more pessimistic about the relative insignificance of many of the partners so far, but noted that the inclusion of Japan and South Korea could make it the broadest-ranging US FTA since NAFTA. For Malaysia's part, it notes that the announcement and deal may attract foreign investment to the South-East Asian nation again, after it had been flagging in recent years.
Both articles follow below.
11 OCTOBER 2010: The third round of TPP agreement negotiations have ended in Brunei Darrulsalam. The talks ran from the 4th until the 9th, with parties giving a particular focus to the preparation of a consolidated text, as well as proposals for co-operation. Over 300 negotiators from TPP member countries participated, with 24 separate negotiating groups splitting aside across the week to discuss industrial goods, agriculture, textiles, standards, services, investment protections, IP, government procurement, competition, labour, and environmental standards.
During the talks Malaysia was made a member of the negotiations by the consensus of the eight existing members. Chief negotiators issued a joint statement to the press, saying they were 'pleased with the progress this week'. US Trade Representative Ron Kirk has notified Speaker of the US House of Representatives Nancy Pelosi, as well as Senate President Daniel K. Inouye, of Malaysia's inclusion. He hailed the state's plans for extensive economic reform, following issues which stymied the original plans for a US-Malaysia FTA a few years ago.
OCTOBER 6 2010: In a letter dated October 5, 2010, USTR Ron Kirk has informed the Speaker of the US House of Representatives, Nancy Pelosi, that Malaysia will be included in ongoing negotiations on the TPP agreement.
Speaking ahead of the third round of TPP talks in Brunei, Kirk said that Malaysia's inclusion "will contribute meaningfully to these goals and to the development of the high standard , 21st-century trade agreement (the US) is seeking."
Kirk continues by observing that US goods and services exports to Malaysia totalled $10 billion in 2009, which the TPP will likely enhance. He also says he has Malaysia's assurances that since it embarked on a process of extensive domestic economic reform, it is now prepared to conclude a high-standard agreement, including previous contentious issues from the US and Malaysia's fruitless bilateral negotiations.
The Malaysian Ministry of International Trade and Industry reported that the decision came unanimously among the existing parties, estimating that it would increase the total percentage of Malaysian global trade accorded preferential treatment to 71.2%. Bernama reports that Malaysia will be hoping to benefit from reduced and eliminated export duties on footwear, textile and apparel products, as well as cocoa, petroleum products, and timepieces.
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.
2 AUGUST 2010: Malaysian International Trade and Industry Minister Seri Mustapa Mohamed has affirmed that Malaysia is keen and willing to join TPP negotiations, but must wait on the assent of the current membership before proceeding.
He indicated that the Malaysian Cabinet gave the mandate to pursue joining the agreement a fortnight ago, and that Malaysia will be willing to review previously sensitive areas such as procurement and services.
29 JULY 2010: Speaking in Putrajaya, Malaysia, USTR Deputy Ambassador Demetrios Marantis has indicated that TPP negotiations are expected to have a 'better sense' of direction in 2011 than they have to date, especially with the US hosting the 2011 APEC meeting.
In response to questions about a clear timeline for a TPP framework, Marantis went on to say there was a need for 'substance to drive the timing' of negotiations, and that there would be more difficult regional issues to sort through as progress was made.
To date these regional trade issues have included acheiving regulatory coherence and streamlining regional supply chains, as well as how to integrate existing FTAs between negotiating parties into a new TPP framework.
Marantis also reiterated the countries' mutual committment to turn Malaysia into one of the US's top ten trading partners, saying that it was for Malaysia to decide whether the TPP was the route they wanted to take for this. He also lauded the TPP for having the potential to build on APEC's non-binding and aspirational commitments with more enforceable rules and requirements. The Bernama piece on Marantis's visit and address follows below.
20 JULY 2010: Inside US Trade reports that Malaysia is conducting final intense deliberations on whether to become a party in TPP negotiations, and that a decision could be made early next week as to its position, when Trade Minister Mustapa Mohamed meets with USTR representatives.
Malaysia has previously publically signalled interest in joining the talks, with PM Najib Tun Razak especially keen on becoming involved. However, sources estimate that it will not be in a position to join the talks until sometime next year.
Officials will be examining the TPP's relationship with Malaysia's five-year plan to modernise its economy, in particularly the 'New Economic Model' proposed by the nation's National Economic Advisory Council last year. The model was intended to resolve some of the areas of dispute which caused negotiations on the US-Malaysia FTA to grind to a halt in 2007, including caps on foreign direct investment and affirmative action employment quotas for native Malays.
4 JUNE 2010: Following a call by the USTR for submissions for a proposed TPP environmental review, Defenders of Wildlife, Earthjustice, the Environmental Investigation Agency, Friends Of The Earth US, and The Sierra Club have written a nine-page submission urging for negotiators to ensure that all imports of wood, wildlife or products thereof meet the standards and laws of their country of origin. The groups have argued that a strongly-worded agreement could curb illegal regional trade in these products. In doing so, they hope that the TPP will take its cues from the 2008 US Lacey Act, which currently governs US prohibitions on illegally sourced fish, wildlife, and plant products.
The submitting groups are particularly worried about observing member Vietnam and prospective member Malaysia's reputations for illegal logging, as well as Chile and Peru's issues with illegal trade in fish. Inside US Trade reports that the environmental review will continue throughout negotiations, with a final report to be produced at their conclusion.
The groups additionally seek a scale-back of the ability for private entities to challenge government decisions in investor-state disputes, saying that these run against the ability of governments to regulate in the public interest. Their full letter can be read here.
8 May 2010: The United States has stated that it would welcome Malaysia to the ongoing TPP negotiations, following talks between US Trade Representative Ron Kirk and his Malaysian counterpart. Malaysia has recently been considering a series of economic 'modernisation' and liberalisation initiatives to make the country a more appealing free trade partner and to avoid some of the issues which stalled bilateral negotiations between the US and Malaysia.
Kirk also acknowledged that there was some resistance from US politicians to getting any new free trade deal through the hurdle of a vote in Congress, while urging that the underlying 'cynicism' creeping into domestic US discourse around free trade be addressed. The article follows below.
3 MAY 2010: Malaysian National News Agency Bernama reports that the government, via its Finance Ministry, is considering changing its government procurement laws to allow foreign companies to participate in contracts. Currently in several key contracts the government does not allow the participation of foreign suppliers, as Malaysia is policy bound to support local entrepreneurs. International Trade and Industry Minister Datuk Seri Mustapa Mohamed says relaxing procurement laws is one of three criteria Malaysia must meet to join the trade pact, along with the introduction of a clear competition policy and reform of labour laws.
16 APRIL 2010: Washington Trade Daily reports that Malaysia is taking a 'close look' at joining the TPP negotiations. Prime Minister Najib Tun Razak spoke at a forum sponsored by the Center for Strategic and International Studies, noting the 'unfortunate' lack of progress in Malaysia's bilateral negotiations with the US and touting his recently announced 'New Economic Model' of trade and investment liberalisation. The Assistant US Trade Representative for Southeast Asia and the Pacific, Barbara Weisel, noted that Malaysia will need to convince prospective TPP partners that it will have room to move on sectors such as services and government procurement, both of which caused impasses in the US-Malaysia bilateral negotiations. The article follows below the break.
APRIL 2 2010: The possibility of a broad regional trade agreement in the Pacific is reportedly leading Australia, New Zealand and Singapore to consider reopening the market access arrangements in their own existing bilateral trade agreements. While sources are suggesting this is being done with an intention of creating a single, unified market access schedule to eliminate a 'spaghetti bowl' effect ahead of a TPP Agreement, a USTR official has already expressed doubts about reopening these agreements at a sensitive time. An Inside US Trade story follows below the break...
KUALA LUMPUR, March 8 2010 -- Malaysia stands to gain from joining the Trans Pacific Partnership (TPP) quickly as it will be well placed to negotiate better deals to boost trade volume and increase market access into the American market, outgoing U.S. Ambassador to Malaysia James Keith said on Monday.
Expecting Malaysia to come on board soon, Keith said the TPP, comprising eight countries, would be a high quality platform to increase market access and boost trade flows for all member countries.