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.
24 JULY 2010: The Wall Street Journalreports 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.
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.
21 JUNE 2010: Inside US Trade reports that US negotiators are resisting demands from other TPP parties to further open its own borders to allow the temporary entry of highly skilled workers. Assistant USTR Barbara Weisel relayed Congress's desire that it does not want USTR to negotiate market access on immigration in the TPP context during a June 15 briefing to stakeholders at the San Francisco talks. This would appear to be an accurate reflection of bipartisan pressure in the US government against further immigration-liberalising provisions in US FTAs.
However, it has also been made clear that the current favourable visa concessions to highly skilled workers from Singapore and Chile are unlikely to be scaled back from their bilateral trade agreement forms in the TPP, as both parties are likely to object to such a reduction.
Weisel also acknowledged the original P4 text at this meeting, as negotiated between NZ, Australia, Singapore and Brunei. Chapter 13 of that agreement required that parties "exchange information on measures that affect the temporary entry of business persons", and required the parties to review the rules and conditions applicable to movement of natural persons "with a view to achieving a comprehensive chapter on temporary entry".
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.
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.
18 JUNE 2010: The TPP is being characterised as 'the first major test' of the Obama Administration's trade agenda, according to the chairman of the US House Trade Working Group, Mike Michaud. As negotiations occur in San Francisco this week, he is once again arguing for negotiations to be conducted in the spirit of the TRADE Act, with a focus on job creation and economic opportunities for American workers and businesses. For their part, the USTR say the TPP will secure hundreds of thousands of jobs in each export-driven state.
Sources are reporting that the inclusion of new members is also a topic that will be discussed at the new round. It is being suggested that new members will be granted entrance to the talks at the consensus of all current parties, though they will be required to accept the 'high-standard' terms the other parties will have already negotiated. Canada and Malaysia are reportedly willing to meet these terms.
One likely source of dispute among the stakeholders this week has been investment, in particular investor protections against adverse government decisions. Public Citizen and other NGO watchdogs are urging a departure from previous US bilateral investment models, while business lobbyists are insisting that these investment measures in fact need to be stronger. Sources report that the US is proposing provisions similar to those contained in the recent US-Korea agreement.
Business groups, who sent a letter to Ron Kirk urging completion of talks by the APEC Leaders' Meeting in 2011, say they are pleased at the progress of targets and believe it will match their desired target, should it continue at its current speed.
15 JUNE 2010 - The first day of the TPP negotiations has wrapped up in San Francisco, with the USTR once again dedicating a portion of its site to daily updates. It reports that a briefing was provided to major stakeholders that registered to attend the talks, including industry groups, environmental NGOs, unions, and fair trade campaigners. Topics of discussion have included the US approach to investment issues, how the agreement will relate to its predecessors, and the process for future accessions.
A plenary was then held setting out the goals for the week: determining a framework for market access negotiations and the relationship between the TPP agreement and pre-existing FTAs, and defining a path forward on so-called “horizontal” issues including small business priorities, regulatory coherence, competitiveness, supply chains, development, and regional integration.
In the afternoon, smaller working groups split up to discuss the following:
*Technical Barriers to Trade
*Legal and Institutional
Meanwhile, as the week began, nearly 100 US companies and business groups wrote a joint letter to Ron Kirk, claiming that 'time is of the essence' and that negotiators should aim to complete talks by the end of 2011. An AFP article follows below.
15 JUNE 2010: San Francisco community newspaper the San Francisco Appealreports that representatives of labour, environmental, andl civil society groups will demonstrate alongside a mix of other activists outside the second round of TPP negotiations, which began on Monday at the South of Market area of San Francisco's CBD. Local area politicians will appear alongside the California Fair Trade Coalition and the San Francisco Labor Council at the rally. The demonstration has been described as an attempt to channel the talks toward job retention, environmental protection, and human rights.
A noon concert by The Pretenders' Chrissie Hynde, in association with PETA, aimed to highlight the Australian wool industry's failure to stop mulesing of lambs, while a number of public health groups have also been campaigning ahead of this week's meeting to retain US controls on tobacco in any negotiation.
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.
2 MAY 2010: NZ negotiators confirm that the second round of TPP talks will take place in San Franscisco in the second week of June 2010. Several groups have come away from the first round of talks in March assigned to look at certain clusters of topics, with a view to preparing papers on those topics for the June negotiations. Horizontal issues covered to date include those arising from the TPP's regional approach (cutting through the 'spaghetti bowl' of differing regulations in the existing bilateral FTAs) , development issues relating to Vietnam and other developing nations that an agreement may expand to later, and how to create a 'living' agreement that can accomodate new parties and new issues.
Other points of note:
- Vietnam currently holds 'associate member' status in the talks, and has three rounds of meetings to decide whether it stays as a full member or withdraws.
- Columbia, Canada, and Malaysia have all expressed interest in potentially joining the talks at a later date.
- The reciprocal status accorded to goods and services between Australia and New Zealand under ANZCERTA will not be extended to other parties, as the relationship is seen as unique and contains 'no-go' areas for the US.