rules of origin

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.


us_flag20 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.


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Food-Chemical-Product-Testing-Service29 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.

ustr5721 MAY 2010 - Last week was deemed 'World Trade Week' in the United States by the Obama Administration, and saw US Trade Representative Ron Kirk has been work to encourage buy-in for support of the TPP from both the US Chamber of Commerce and members of the public.

On 18 May, Kirk spoke to the US Chamber of Commerce's 'Next Steps on World Trade' conference
, with a focus on his administration's 'high-standard, 21st century, Asia-Pacfic regional trade agreement'. He again confirmed that San Francisco would be the site of negotiations on the week of June 14. With regards to market access arrangements, he said that any agreement would need to be 'forward looking' while also possessing 'enough flexibility to accomodate sensitivities'.

Kirk also indicated that the second round of negotiations would focus on 'value-added' benefits of a regional agreement, such as greater regulatory cooperation on issues such as food safety.

On 21 May, the USTR held an "online chat" session in which it answered submitted questions about various aspects of the TPP. The chat indicated that the USTR is focused on obtaining an investor-state dispute mechanism for the TPP, that it intends to 'consult closely with stakeholders' over the possible changes to rules of origin in the US textile industry that the TPP would require, and that the US will seek 'high-standard' IP enforcement rights. A transcript of the chat follows 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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