13 FEBRUARY 2011: Four-day talks between Australia and Japan on bilateral trade suggest that popular Japanese oppositon to agricultural reforms will continue to stand in the way of Tokyo negotiating in the TPP.
The talks, which just ended and were the first on trade between the two countries since April last year, have been described by Australian negotiators as 'useful discussions', but it does not appear any breakthrough was reached over Japan's continued subsidies to its wheat and rice farmers.
A full piece on the talks from AFP follows below.
11 NOVEMBER 2010: Japanese media report that a crowd of over 3000 citizens protested on Wednesday against Japan's plan to initiate discussions to join the TPP at the APEC Leaders' Conference in Yokohama.
A mixture of farmers, fishermen, and agricultural officials began their rally in an open-air hall before marching through the streets of central Tokyo, chanting and bearing placards. Speakers warned that if Japan joined the TPP, its domestic agriculture, fisheries, and forestry would be wiped out.
Meanwhile, Prime Minister Naoto Kan's sole coalition partner. the People's New Party, has indicated it will not approve any TPP negotiations, while the main centre-right opposition party, the Liberal Democratic Party, has also made indications his party will not support taking part in the TPP. A Japan Today article on the rally has more information.
25 OCTOBER 2010: Inside US Trade reports that Canada has been told by the US and other TPP parties that it is still not ready to enter negotiations.
It is understood the message was conveyed to Canada at a sideline meeting to the Brunei round at the start of October - the rationale being that a 'range of issues' existing partners had asked Canada to address have yet to be satisfactorially resolved. Chief among these are Canada's retention of a supply management system for its dairy and poultry sectors, which has led New Zealand to criticise its bid, and a perception by the US that Canada better needs to address intellectual property rights.
Canada has not stated which specific concessions it would make in its dairy sector or elsewhere, were it to gain membership.
In Brunei, Vietnam was also urged to decide ahead of the fourth round of talks in New Zealand whether or not to join as a full negotiating partner - to date, its status has been that of an 'associate member', which has saved it some of the responsibilities and commitments of full negotiating partners. Officials have not been specific as to what would occur if Vietnam could not give an undertaking as to full membership before the December round.
The US source IUT spoke to was also non-specific as to any role for Japan in the near future in TPP talks . They were clear that no informal discussion between Japan and the US has occurred to date, and indeed suggested that Japan may be perceived much as Canada - a potential party with too many domestic hurdles at present to be seen as a viable partner by members with strong agricultural sectors. It was also suggested that as the talks become more robust, US negotiators are keen to set a cap on the current nine negotiating members, requiring other states to accede in the future.
5 NOVEMBER 2010: The ruling Japanese DPJ party may be en route for a collision course with its Prime Minister, Naoto Kan as to Japan's role in TPP negotiations, according to Nikkei.
The government will seek to win Cabinet approval next Tuesday for its basic policy on economic partnership agreements, including its position on TPP - however, some 70 lawmakers have clearly indicated their opposition, gathering at the Japanese Diet to urge a cautious approach to the pact. Representatives from rural and agricultural areas believe the tariff-abolishing requirements of a finalised TPP agreement will result in an influx of cheap agricultural products which would destroy Japan's domestic market.
The full Nikkei article follows below.
18 OCTOBER 2010: The Asahi Shimbun reports that Japanese Prime Minister Naoto Kan's aggressive push for his country to investigate joining the TPP at some point in the near future has placed his administration on a 'collision course' with farmers.
Kan's Democratic Party of Japan have announced the initiative as falling rice prices have affected farmers' livelihoods, with the possibility of trade liberalisation doing away with their traditional protections alarming them further. The government has pushed for a more assertive courting of free trade deals, warning that Japan risks being left behind as an economic force if it does not form more comprehensive economic partnerships.
But even within the DPJ, sentiment has been divided, with at least one Upper House member warning the TPP would destroy both the rural economy and community. Compounding this is a perception that the government's existing programme to compensate Japanese farmers for reduced market prices is ineffective, and that it could not cover the further burden of the abolition of tariffs on agricultural imports.
The full Asahi story follows below.
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.
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.
27 SEPTEMBER 2010: Japan's new Trade Minister, Akihiro Ohata, has announced that he is looking at making overtures toward the TPP. Japan has previously been vague as to whether it would join the framework.
However, Ohata admitted to a news conference that it would 'difficult' for Japan to participate unless it overcame 'its agricultural issues'.
Ohata's remarks come ahead of an annual meeting of APEC leaders in Japan in November, at which the TPP is likely to be discussed by both current and prospective parties.
Japan's reluctance to open up its agricultural market has made it previously reluctant to enter either P4 or TPP talks, but on this occasion Agriculture, Forestries and Farming Minister Michihiko Kano has also backed Ohata's announcement. He has suggested environmental tax revenue may be used to support farmers disadvantaged by the lowering of agricultural tariffs.
However, Kyodo News International reports a Foreign Ministry official as saying that Japan will first have to carry out studies over the next two months to determine whether it shall join talks for 2011, but also reported a Japanese trade academic as expressing scepticism that Japan would make any decision before the APEC meeting.
Kyodo News's full article follows below.
27 SEPTEMBER 2010: Philippines President Benigno S. Aquino III has confirmed that his country is going to seek the support of the United States in a bid to join the Trans-Pacific Partnership.
Speaking to the Council of Foreign Relations in NYC last week, President Aquino said that the Philippines is now 'positioning' itself to be a good prospect for the pact - this follows the US's recommendation that the Asian nation 'benchmark' itself against the likely standards of the final TPP agreement.
The confirming statement, which appears in full below, from Aquino's office, also indicates that the TPP is aiming to eliminate 90 percent of all tariffs among member countries, and reduce all trade tariffs to zero by 2015.
15 SEPTEMBER 2010: Following its recent general election, Australia's Labor government has reshuffled its Cabinet, replacing Simon Crean as Minister of Trade with Dr. Craig Emerson. Dr. Emerson, who previously worked as an economic adviser to the United Nations, and served as the Minister for Competition and Consumer Affairs in Kevin Rudd's government, has previously strongly criticised the Howard-era system of bilateral trade-agreements, especially the Australia-US FTA, as "a paperwork nightmare for exporting and importing businesses". He has also advocated continued multilateral negotiations through the WTO system, saying that "trade policy should revert to the principle of non-discrimination that formed the cornerstone of the world trading system before the rise of preferential deals".
Speaking to Sydney's 2GB radio station on September 14, Dr. Emerson indicated that Labor policy would not re-erect any of the tariff barriers removed on imports since Bob Hawke's 1980s government, and indicated continued strong support for foreign investment into Australia:
“We live in a global economy, and we do need foreign investment…we want Australia to remain an attractive place for foreign investment. We still get a lot of benefit out of big projects and enterprises that are partly or even wholly foreign-owned in this country… Of course there are some areas, Ross, in the economy, where people are more sensitive about foreign investment, that’s natural, but I think as a general presumption, we should be in favour of foreign investment, not against it.”
27 JUNE 2010:
IBM are reporting that the USTR are pushing for the liberalisation of computer-related services within the TPP agreement. At a June 16 press conference, vice-president of government programmes Chris Padilla said IBM and other computing companies are seeking a TPP equivalent to the WTO's plurilateral Information Technology Agreement (ITA) which liberalised computer and telecommunications hardware. This agreement (or agreements) would ensure access to advanced information and communications technologies, services, software, and electronic commerce, while also ensuring that parties eliminate any remaining customs duties on these technologies.
14 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.
1 MAY 2010: The USTR has firmly opposed the notion of excluding the dairy sector in its entireity from any completed TPP negotiation. Inside US Trade reports there have been potential tradeoffs discussed, including US dairy concessions in the talks in exchange for the raising of barriers on imports of milk protein concentrates (which New Zealand is a major exporter of). USTR has made it clear, however that it does not presently back legislation imposing such tariffs. Additionally, the proposed tariffs on MPC's would violate US committments at the WTO, meaning the US may have to negotiate with WTO members not part of the TPP who believe the barriers might affect them.
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...