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.
2 SEPTEMBER 2010: Inside US Trade reports the the Office of the US Trade Representative is currently pursuing multiple approaches to achieve 'regulatory coherence' among TPP parties. This is being done to relieve barriers to exports. USTR is currently asking private-sector stakeholders to identify priority areas where regulatory barriers need to be examined and potentially removed.
Assistant US Trade Representative has also indicated that the US is keen to look at establishing new TPP-wide regulatory systems for emerging industries, as well as increasing transparency in current regulatory requirements among TPP countries - this may be done through the construction of a database that provides all information on these requirements in one place for those who may want to trade within the TPP.
It is reported that other USTR officials suggested that the Obama administration is looking to expand the provisions on labour and environmental protections before what was inclued in past US agreements. This may include cooperative efforts on job creation and skills enhancement, and the promotion and regulatory reform of 'green' technology. Particular areas of interest cited by US Trade Reps have reportedly been illegal logging, wildlife trafficking, and marine conservation.
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 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.
22 JUNE 2010: US Representatives Linda Sanchez (California-D) and George Miller (California-D) have written an op-ed in the Huffington Post, framing the TPP talks as an 'excellent opportunity' for Barack Obama to deliver on his trade campaign committments and break away from the NAFTA models of the 1990s onwards. They call for the TPP to build on the initial improvements to the Peru Free Trade Agreement (negotiated for by House Democrats in 2007) by redressing currently 'excessive' foreign investor privileges, more stringent safety and inspection standards for food and manufactured goods, and promote US-based green manufacturing.
It also examines the records of Brunei and Vietnam and calls for the final text to include a democracy clause of some sort, cautioning that their inclusion may otherwise promote sweatshop labour in Asia while damaging industry in the US.
20 JUNE 2010: The second round of TPP talks reached an end at the weekend, with the USTR reporting "significant, positive" progress over the week.
Thursday's session reportedly involved discussion in the lead negotiator's group of how best to address the needs of small and medium-sized enterprises, transparency, and the issue of stable supply chains across the Asia-Pacific region. Other groups split to discuss capacity building, cross-border services, customs cooperation, e-commerce, financial services, government procurement, intellectual property rights, investment, labor, santiary/phytosanitary measures, and textiles.
The afternoon saw stakeholder presentations from the Center for Public Analysis on Trade and Health (CPATH) and the California Public Health Association-North (CPHAN). CPATH's presentation to the TPP negotiators is available online here. Another TPP presentation on energy services, made by the International Forum on Globalization's executive director, Victor Menotti, is available here.
Friday's session involved final negotiating group meetings on business mobility, capacity building, financial services, government procurement, intellectual property rights, sanitary/phytosanitary measures, textiles and 'trade remedies'. USTR reports it will hold a briefing in Washington DC this week to update the press on last week's round.
The USTR TPP blog also fielded a few questions last week, including one about the incorporation of Colombia into the TPP. Their indication was that "current TPP members have decided to focus initial expansion of the group on APEC member economies" (of which Colombia is presently not one). USTR instead reiterated its intention to resolve concerns regarding the US-Colombia FTA.
Reuters report that the eight member parties now hope to begin working out a draft text at the third round of talks in Brunei in October, and that US multinationals, including Wal-Mart, are lobbying keenly for a relaxation of existing rules of origin laws.
17 JUNE 2010: Australian unions, health and environment groups have joined forces to warn of the potential consequences for the Australian Pharmaceutical Benefits Scheme (PBS) and for the regulation of tobacco advertising if the TPP goes through. AFTINET say that submissions from US pharmaceutical companies to the USTR are seeking changes that could raise the whole sale price of medicines, and that the introduction of an investor-dispute mechanism to a settled agreement would mean tobacco companies could challenge moves that retrict access to or visibility of their products. Their full press release follows below the break. A launch was held at noon on Wednesday for an accompanying pamphet outside the NSW Parliament House, featuring speeches from investor-state dispute academic Dr Kyla Tienharra, as well as Greenpeace and the Australian Manufacturing Workers Union.
17 JUNE 2010 - The Christchurch Press in New Zealand has run an op-ed by Council of Trade Unions policy director Bill Rosenberg, which highlights what he sees as the potentially risky areas of the TPP negotiations. He argues that for any final negotiated agreement to be truly '21st century', it must tightly regulate financial services and control the international flow of currency, especially subsequent to the credit crunch. Additionally, he argues that negotiations need to respect the independence of NZ's Pharmac agency as well as its current overseas investment rules. The full article follows below the break.
8 JUNE 2010: Trade ministers of each TPP member state met at the sidelines of the APEC conference in Sapporo at the weekend to lay down preliminaries for the second round of negotiations for the pact, set to commence Monday 14 June in San Francisco. The ministers resolved to direct their negotiators to be as 'open and creative' as possible in the areas of regulatory coherence, transparency, development competitiveness, and small-to-medium sized enterprises. It was also urged that stakeholder input from continue to be considered (though whether this was to come from business groups or civil society was not expressly clear). The USTR's report follows below.
29 MAY 2010 - Inside US Trade reports that a coalition of US businesses are drafting a series of around five position papers to submit to the USTR ahead of the start of the second round of US negotiations, set to begin on June 14 in San Francisco. The topics covered are expected to include regulatory coherence, the status of SMEs, and competition-related matters.
The coalition will reportedly offer a list of general ideas on how to advance these areas, including:
- committing TPP members to explicitly identifying acceptable standards, testing and product certification;
- committing TPP members to sign on to a number of other Mutual Recognition Agreements (ie: the APEC MRA for conformity in telecommunications equipment assessment);
- encouraging TPP members to join international regulatory forums (ie: the Asian Harmonisation Working Party for medical devices);
- importing regulatory 'best practice' for a range of international fora, including the OECD-APEC regulatory checklist;
- exploring the formation of the TPP Regulatory Council to oversee work in this area.
22 MAY 2010: American academic and blogger Simon Lester was among those who posed questions in USTR's online chat on Friday 21 May. He has parsed their answer to his question about the inclusion of a investor-state dispute mechanism in the TPP agreement on the International Economic Law and Policy Blog:
"Things that suggest inclusion:
-- it was a "priority" in prior FTAs
-- it provides "critical protection" for U.S. investors abroad
Things that suggest it won't be included:
-- its inclusion in prior FTAs was related to trade negotiating objectives from 2002, which have since been modified, and apparently have not yet been determined for the TPP
-- they are still looking for input, which suggests that the status quo (inclusion of investor-state) is not set in stone
-- there is no mention of the impact of investor-state on domestic regulations, which many people view as a negative aspect of investor-state (or does not mentioning this point suggest they want to downplay it in order to justify the inclusion of investor-state?)"
MARCH 15, 2010: Trade unions from across the Pacfic have called for a fairer trade agreement network today, fearing the possible outcomes of an 'everything on the table' agreement. New Zealand's Council of Trade Unions has been keeping counsel with its counterparts in the US and Australia. The joint declaration of the combined TPP unions (Australia, NZ, Singapore, USA) can be read here. The individual unions, including CTU have issued their own statements.
MARCH 14, 2010 - With TPP Negotiations set to commence in Melbourne on March 15, over 30 community and union groups have combined to make an appeal to the Australian government and Trade Minister. They ask that any completed agreement safeguard the Pharmaceutical Benefits Scheme, Australian local content in media, regulation of GE food, regulation of foreign investment and industry policies that support local employment. The joint statement follows below the break.