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b-421297-Lima_Peru30 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.

 

 

lima5 JULY 2010: Inside US Trade has reported that TPP negotiators will meet in Peru in August to attempt to sort out the architecture of market access schedules. The market access structure will apply to goods, textiles, and agriculture. However, all parties have now agreed to have one set of rules on services, investment, sanitary and phytosanitary rules, technical barriers to trade, government procurement, and IP rules.

Officials have also clarified that previous FTAs within the TPP membership will co-exist alongside any new TPP arrangement. This means that if the TPP were to contain higher standard or more demanding requirements, this would be implemented while existing obligations would be maintained. There will be specific negotiations where an existing FTA and a TPP come into direct conflict.

Ahead of the third round of formal negotiations in October, at which parties are hoping to table draft chapters of the TPP text itself, a source has suggested that some topics, including government procurement and rules of origin, may have specific elements tailored to assist small-to-medium sized enterprises. Making the agreement of more value to these enterprises was one of the main focuses of the San Francisco meeting last month.

 

spagbowl2 JULY 2010: Much of what was discussed and debated at the second round of TPP talks in San Francisco has been teased out and presented to the public after the fact. Public Citizen's Eyes on Trade blog highlights the ongoing uncertainty as to how negotiating parties will deal with their existing 'spaghetti bowl' arrangement of bilateral agreements, and suggests that this means no final agreement can be reached by late 2011.

The US position at the San Francisco talks was that the TPP negotiations should not 'open up' existing market access schedules. This would likely mean that the special status of some sensitive products in the previous FTAs (for example, sugar's exclusion from the US-Australia FTA) would be preserved. This may limit the further market access the US can get within Australia, Peru, and Chile.

Sources say the US is keen to negotiate bilaterally with countries it doesn't yet have agreements with - this would involve separate talks with Brunei, New Zealand and Singapore. This would create a number of different market access schedules within the TPP, with differing tariffs and deadlines. It is understood that Australia, NZ and Singapore would prefer plurilateral agreements on market access across the board, and that existing market access schedules be opened. The rationale is that this would be simpler, and set a high standard for the agreement on the whole and future acceding parties. As mentioned earlier on the TPP Digest, the primary and secondary sectors of the US agricultural industry are split on keeping existing market access schedules closed. Producers fear the effects of opening up the domestic market to further agricultural imports from Peru, Australia, Singapore and Chile. Processors, meanwhile, believe they could gain advantages in new markets from reform of market access rules, and have accused producers of 'protectionism'.

Inside US Trade reports that negotiators are planning another informal meeting on the matter of market access schedules before Brunei in October.

Inside US Trade is also reporting that existing regulatory difficulties across member markets may also prove to be a hurdle. USTR Ron Kirk has cited regulatory coherence as one of the aims that would make the TPP a '21st century' agreement, but business spokespeople have admitted that addressing present differences will be 'very hard'. An alternative that some have proposed is to establish a framework of principles that can be used for future regulatory coherence, rather than trying to harmonise all sectors ahead of a final agreement. The US Business Coalition for TPP has prepared a confidential paper on regulatory coherence which urges TPP countries to go further and farther than previous trade agreements to ensure that, where possible, binding commitments are sought and made. Another source suggested New Zealand and Australia are likely to be at the front of such a push.

 

pen24 JULY 2010: The Wall Street Journal reports a US trade official as saying that enough may have been done in the TPP talks last week for parties to start drafting a core text for the pact by October, at the third round of negotiations in Brunei. However, the official also reported that the task of structuring market-opening timelines for manufactured goods and agriculture will still require further discussions. It is understood that the US is keen to preserve existing market access plans in its existing trade deals with Australia, Chile, and Singapore, rather than developing a complicated new schedule.

The official also said that the pace of talks would mean that partners interested in becoming part of the initial bloc, such as Canada and Malaysia, would have to come to the table by early next year. As was suggested during the talks, this also presumably means that those new countries would need to agree to what was already in place amongst the original eight member states.

The WSJ also relayed that there was 'consensus' about additional measures to spur job creation and preserve the environment in the eventual agreement, although more substantive details were not offered.

 

cover-letter-template4 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.

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cattle14 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.

 

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australasia_1APRIL 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...

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