1 May 2011: The Office of the US Trade Representative (USTR) has declared an intention to have all its proposals on IP protections by the commencement of the next round of TPP talks in Vietnam on June 20, spurring renewed lobbying by pharmaceutical companies to secure advantages for the industry in any US bid.
Inside US Trade reports that reports that US pharma companies are seeking a final US proposal that replicates the same 'high-standard' of the Korea-US Free Trade Agreement (KORUS) with additional protections for more recent pharmaceutical developments such as growing use of biologics (medicinal products created from biological and organic processes, rather than chemical ones).
Additionally, they are resisting any move by the US to base a proposal on the May 10, 2007 agreement. That agreement varied the original IP conditions in the Colombia, Panama and Peru US trade agreements in order to gain bipartisan support for all three to pass through Congress. The changes were designed to help ensure access to affordable medicines in developing countries. A leaked lobbying document from the Pharmaceutical Researchers and Manufacturers of America (PhRMA) indicates the May 10 agreement 'openly discriminates against the innovative pharmaceutical industry and would hinder (the) ability to compete fairly by lowering IP standards in export markets).
Lobbyists have also been outspoken about the current state of play in prospective TPP export markets, including New Zealand, which has a central state-run drug-purchasing agency (Pharmac). Pharmac is described as having a single-minded focus on 'driving down costs' that 'comes at the expense of the respect for intellectual property, transparency to the public and patient access tro better health outcomes' in the same document.
While no full details on what the US's June proposal will look like are presently available, senior USTR officials have indicated they would be open to moving away from the May 10 proposals. However, leading public health and advocacy groups are expected to use the May 10 agreement as the basis for their desired TPP proposal.
16 FEBRUARY 2011: The fifth round of TPP talks began in Santiago this week, with US pushes for more aggressive IP reform in the text expected to be a major source of debate and commentator discussion.
New Zealand, along with one another country, is understood to have submitted a draft text on IP, described as 'relatively progressive' compared to the IP provisions contained in most modern US FTAs.
As covered previously on TPPDigest, NZ negotiatiors have expressed concerns at the US's more aggressive demands on IP in the talks, which were understood to expand on IP provisions in the US-Australia FTA and make up for ground conceded in the current version of the Anti-Counterfeiting Trade Agreement (ACTA). The US reportedly submitted its own draft text to negotiators at the same time as NZ.
As with the Auckland talks last December, public statements on the progress of the talks are expected to limited to brief press conferences with stakeholders and the media.
However, delegates will be presented with signed open letters and petitions from civil society groups in Australia, Malaysia, Chile, NZ and the US asking that negotiations be made public and transparent. Negotiators will also be presented with a paper authored by Professor Jane Kelsey and Third World Network's Sanya Reid Smith, linking the agreement to continued international financial instability and offering a mock draft text.
Professor Kelsey says the current negotiations fail to recognise that the 2008 global financial crisis was the product of excessive liberalisation and deregulation, and that rather than rethinking an unsuccessful model, the TPPA negotiations appear to be bolting the door closed on the options for governments to re-regulate the financial sector and impose controls on speculative capital flows in ways that meet the needs of their people”.
The mock text is intended to approximate the actual text, still under negotiations conducted in secret. It is based on existing FTAs between the US and Singapore, Australia, Chile and Peru.
The authors recommend that financial services, financial investment and movement of currency are all excluded from the TPPA. Failing this, the agreement must provide allowances for national governments to continue to regulate the financial sector and financial transactions so as to prevent another crisis in the future.
19 JANUARY 2010: Inside US Trade reports that the US will hold off tabling a full and formal chapter on IP rights at the next round of TPP talks in Chile because of a need to carry out intra-agency and congressional consultation on areas of potential controversy.
An official reportedly indicated 'very wide' differences of opinion among US stakeholders, and is urging private-sector ones to handle suggestions on how to best handle hotter topics.
It is understood that one such contentious area is that of 'secondary liability' on Internet firms for violations of copyright by individuals. The US was intending to include this in the Anti-Counterfeiting Trade Agreement (ACTA), but the final language of that text as of August last year made the imposition of secondary liability on Internet firms optional. Secondary liability is strongly advocated by US movie and recording industry producers.
Further complicating the issue is the May 10 2007 agreement between the then-Bush administration and House Democrats on IPR, which relaxed stringent provisions on data exclusivity, patent linkage, and patent term extension. US industry groups oppose the retention of these relaxed provisions in the TPP context.
Overall, US private-sector groups say IP has been one of the slowest progressing areas of discussion in TPP talks to date. As previously reported, NZ has already drafted a paper opposing US approaches on IP and suggesting that the protections in TPP be limited to those already established under the multilateral WTO TRIPS agreement.
However, other sources are indicating Australia may end up being an ally of the US in the push for stronger IP protections. Additionally, sources have speculated that NZ's stance on IP is a negotiating tactic which they may relent on should they get the agricultural and dairy access in the US market they desire.
Professor Jane Kelsey has criticised the bid by USTR negotiatiors to make secondary liability a part of TPP intellectual property provisions. She released the press release below the break, warning that the move could 'reignite the hugely successful international campaign against secondary liability that followed the leak of the (local) ACTA text', on January 17.
23 JANUARY 2011: The southern New Zealand city of Christchurch will be visited by a number of high-level US officials at the United States New Zealand Partnership Forum next month.
The Press reports that Bush Administration USTR Susan Schwab will co-chair the forum, joined by former Senator and Govenor of Indiana Evan Bayh.
Executive Director of the NZ-US Council Stephen Jacobi has indicated the forum will 'assess how to move forward together on issues such as political security, trade and investment, education, science, and other global issues like climate change'.
The full press release appears below.
10 JANUARY 2011: Shortly before Christmas, seven House Democrats, including six members of the House Ways and Means Committee, wrote an open letter to Barack Obama calling for significant reform to trade investment provisions in the TPP's final text.
Inside US Trade reports that their letter asks that that US exclude an investor-state disputes mechanism from the agreement, or at least attach conditions to the use of such a mechanism by investors.
Those conditions may include:
an 'exhaustion requirement' (firms need to have exhausted local administrative and judicial remedies before pursuing their claim);
an 'authentic investment' requirement (firms who have actively created jobs or made a material contribution to the economy in question may seek protection);
narrower definitions of both 'investment' and 'investor'.
In pushing for an end or a relaxation of investor-dispute mechanisms in US FTAs, the lawmakers point out that neither the US-Australia FTA or the original (pre-NAFTA) US-Canada FTA included them. Additionally, they point to the extraordinary rights such mechanisms grant foreign investors over domestic firms, the risk that existing domestic courts are bypassed and undermined, and the ability of governments to pass health and safety legislation in the public interest.
The letter was signed by Reps Linda Sanchez (D-CA), Lloyd Doggett (D-TX), John Lewis (D-GA), Bill Pascrell (D-NJ), Pete Stark (D-CA), Danny K. Davis (D-IL) and Henry Waxman (D-CA).
20 DECEMBER 2010: The New Zealand media published a series of cables at the weekend indicating covert pressure on pharmaceutical reform by US lobbies, as well as serious doubts by NZ's own trade negotiators about the possible advantages of any US-NZ free trade agreement.
Writing in the Sunday Star-Times, Nicky Hager reports that chief trade negotiator Mark Sinclair privately told a visiting US State Dept official that New Zealand had little to gain from a free-trade agreement. This differs significantly from the accounts of the potential FTA benefits given by Prime Minister John Key and Trade Minister Tim Groser.
According to the cable, detailing a February 2010 meeting, Sinclair told US Deputy Assistant Frankie Reed there was a public perception a US free-trade agreement would be an 'El Dorado' for NZ's commercial sector, but that 'the reality is different' and that NZ must 'manage expectations' about the benefits of such an agreement.
Neither Sinclair nor the NZ government has deigned to comment on the content of the cable, which also warned that negotiations would prove 'gut-wrenching' for New Zealand and criticised member states for 'hanging on to 'little fantasies' about what is acheivable'.
For the US's part, a December 2004 cable reports that the American drug industry has been 'trying in vain to persuade the New Zealand government to change its restrictive pricing policies on pharmaceuticals' and that their new tactic is to reach out directly to NZ consumers to foster demands for 'cutting-edge drugs not covered by government subsidy'. More surprisingly, that cable goes on to say that pharmaceutical companies saw direct opposition in the then-Labour government's Cabinet, particularly in former Primer Minister Helen Clark. It goes on to note that "the industry may be paying a price for its unsuccessful effort in 1990 to unseat Clark, who at the time was health minister".
The full-text cables on Mark Sinclair's meeting with Frankie Reed can be read here and here. An earlier cable in which Groser expresses strong desire for the US to come to the table on TPP is here, warns about 'anti-US' factions of the opposition Labour Party, and indicates his government will handle the public aspect of negotiations in a 'mature' way can be found here.
Professor Jane Kelsey has argued that the leaks indicate comprehensively that the government sees 'no tangible benefits' from a NZ-US free trade deal, and that the government should concede as such to the public. Her press release following these reports can be read below the break.
The TPP Digest is on the lookout for further Cablegate leaks relating to TPP, with all and any actual or prospective members, and will publish them as they become available.
DECEMBER 5 2010:
The December 3 edition of Inside US Trade reports that a draft paper which has now been finalized and submitted to the Office of the US Trade Representative by a coalition of US businesses is urging US negotiators to actively shape IP regimes in other TPP countries in order to protect US geographical indicators (GI’s). Apart from protecting certain GI’s already existing in the US, the coalition wants the policy to make certain products produced in ‘significant quantities’ outside a proposed protected region (for example, ‘feta’ cheese) ineligible for GI protection. This is intended to help current US manufacturers and producers and save them the loss or cost of relabelling and rebranding.
As well, the paper requests that US negotiators replicate the IP provisions of the as-yet unsigned US-Korea trade agreement as a baseline to a text, especially in the area of patents and copyrights. It also asks for punitive protections extending beyond those in the current version of the Anti-Counterfeiting Trade Agreement (ACTA), such as a requirement that TPP states outlaw filming in theatres.
The paper, written by the Pharmaceutical Research and Manufacturers of America (PhRMA), the US Chamber of Commerce, and the Motion Picture Association of America (MPAA), also suggests that the TPP go beyond the US-Korea FTA in terms of software patents. These are traditionally a contentious area of IP rights, with critics arguing that patenting software effectively grants property rights over formulas and algorithims (ie: knowledge itself, rather than new physical inventions or processes).
The paper also contains implicit criticism of New Zealand’s public pharmaceutical purchaser, Pharmac. At one point, it urges drafters to deal with regulatory barriers which ‘have the effect of delaying or restricting access to innovative medicines to patients’. NZ is also cited as a TPP country that has yet to fully implement requirements of the World Intellectual Property Organisation (WIPO)’s Copyright Treaty and Performances and Phonograms Treaty.
25 NOVEMBER 2010:
Dow Jones and other trade and finance sources report that TPP negotiators are looking to begin assembling a negotiating text during the fourth round of talks in Auckland. On a public hearing on Malaysia’s entry into talks following the third round, Assistant USTR Barbara Weisel has encouraged business and other groups to ‘move quickly’ to provide input due the fast pace of negotiations.
24 NOVEMBER 2010:
Over the course of the APEC Leaders’ Conference in Yokohama, TPP side-developments have continued apace, in part due the the Japanese government’s continued interest in the partnership.
The NZ Herald’s coverage of PM John Key’s APEC statements noted that he has drawn a hard line on agriculture, reported as saying that New Zealand ‘will not want
Japan at the table’ if it attempts to exclude agriculture from any trade deal.
He added that Japan would need to enter TPP ‘only on (New Zealand’s) terms’.
To other TPP partners, he urged that they hold firm on existing criteria and conditions rather than relaxing any entry barriers and allowing compromises for Japan to join talks, while reiterating NZ’s desire to negotiate a ‘high-quality, comprehensive’ agreement.
Leading up to the talks, Japan’s nationwide polls showed nearly half of respondents supported Japan joining the TPP. However, Japanese agricultural and forestry workers have demonstrated en masse against the prospect of talks and Japanese PM Naoto Kan’s own ruling Democratic Party have urged him to temporarily abandon the free-trade drive. Ultimately, Japan indicated at the end of APEC that it would not make a decision on joining TPP until June 2011. This may be too late for Japan to join as a negotiating partner however; it may be required to accede to a complete agreement if one is completed.
Meanwhile, at a sideline summit of TPP members, Vietnamese President Nguyen Minh Triet confirmed that his country would henceforth participate as a full member of the talks. Previously, it had held ‘observer status’, and had been required to decide before the Auckland round of talks whether it would shift to full membership.
Kan’s appearance at that summit was considered contentious enough in Japan that American officials banned television cameras from attending the meeting. The Herald’s John Armstrong reported that this had annoyed some other delegations to the summit.
A NZ Herald article on Key’s results from APEC (which also included a signal to begin non-TPP negotiations with Russia) and a CNEO piece on Japanese opposition to TPP talks appear below.
5 DECEMBER 2010:
A leaked negotiating document
from New Zealand’s TPP talks has revealed a fundamental conflict between US and NZ positions on intellectual property in a possible agreement.
At the weekend, Public Citizen released the confidential paper, combined with analysis. It rebuffs the US’s ‘high-standard’ IP rights provisions as included in their recent bilateral trade agreements, particularly as they apply to medicine, entertainment and software patents.
The tenor of the New Zealand paper absolutely goes against that of a briefing paper to USTR negotiators previously covered by Inside US Trade and this site, in which US pharmaceutical companies singled out Pharmac as a non-tariff trade barrier which would pose a problem in negotiations.
The NZ paper goes on to recognize the effect of recent domestic debates on IP, including the 2009 controversy around proposed and abandoned changes to the Copyright Act and the recently concluded Anti-Counterfeiting Trade Agreement (ACTA). As it says, such debates ‘are taking on a significant political dimension in many of our societies. Many IP users as well as some innovators have become mobilised to oppose the further strengthening of IP rights’.
Although the proposed Copyright Act changes were first initiated by the previous Labour government, the grassroots movement against them was one of the first direct public challenges to John Key’s government post-2008. The government has also continued to face scrutiny from Maori iwi about how its IP laws are used for their traditional indigenous art, design, and knowledge. The Key government was also criticized for the secrecy under which Wellington-based ACTA negotiations were conducted, a point also acknowledged in the paper.
Public Citizen’s press release on the leak can be found here or by reading more below. An executive summary can be read here. Third World Network has also analysed the paper, and Jane Kelsey and TWN's Sanya Read Smith will each be speaking about the leak and other TPP issues at a media briefing at the Welcome Room, Sky City Hotel, at 3pm on Monday 6 December (all media welcome).
5 DECEMBER 2010:
The NZ Herald’s Fran O’Sullivan reports
that AFL-CIO President Richard Trumka wrote to NZ Trade Minister Tim Groser a fortnight ahead of this week’s talks, warning that a change to New Zealand’s employment laws recently passed under urgency may have prematurely jeopardized US union support of NZ inclusion in the TPP.
In late October, New Zealand’s parliament passed the Employment Relations (Film Production Work) Amendment Bill, the effect of which was to make film industry workers by default independent contractors, rather than employees. Previously, New Zealand’s Employment Relations Act required courts to interpret the ‘real nature’ of the work undertaken to determine whether a worker was in fact an employee or contractor. The extra-contractual nature of this interpretation exercise is also taken by employment courts in Australia, the US, the UK, and Canada.
The Bill excluded all workers who undertake ‘film production work’ from the definition of employee. It was passed as a reassurance to MGM Studios, who were threatening to move filming of Peter Jackson’s The Hobbit to the Czech Republic following a dispute between actors’ unions and the studio which MGM claimed would make continued production in New Zealand untenable.
Trumka’s November 15 letter to Groser said that the “misclassification” contained in the Bill represented a “serious problem” which deprived workers of the right to organize and bargain collectively.
He want to say that the Bill “would violate the labour provisions of any future trade agreement between our two countries that we could support."
The Herald goes on to report that NZ Industrial Relations Minister Kate Wilkinson will respond to Trumka’s letter, re-affirming her government’s view that the law change reflects the realities of the film industry without preventing film production workers from being employed as employees where all parties in a contract agree.
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: An outline of a draft of the APEC Leaders' Declaration, for November's Yokohama conference, indicates that the forum will refer to a US-backed multilateral trans-Pacific free trade agreement as a 'pathway' to creating a region-wide free trade area.
The draft, obtained by Kyodo News, allegedly cites an expanded TPP agreement as a method of acheiving a Free Trade Area of the South Pacific. The draft also recommends that APEC 'incubate' that long-term goal.
Japanese proponents of free-trade and the TPP Agreement are understood to be hopeful that Japan's chairing of APEC this year, combined with the significance of committing to an developing network of agreements at the APEC leaders' meeting, would mean that the country assumed an decisive and leading position in continued talks. However, as TPPDigest has reported, the question of joining the TPP has proved divisive throughout Japanese political culture over the past month.
5 NOVEMBER 2010: NZ IT news site Computerworld has quoted NZ intellectual property lawyer Rick Shera as warning that that US and prospective Japanese participation in the TPP could signal a renewed attempt by by both countries to secure more stringent IT protection provisions they have not been able to secure in the latest version of the ACTA (Anti-Counterfeiting Trade Agreement) text.
Shera believes that as the European Union presented a major obstacle to 'maximalist' IP protection in ACTA talks, the US may be using the TPP negotiations as an opportunity to circumvent opposition and set a tougher regime up among Asian nations.
The full article follows below.
5 NOVEMBER 2010: Secretary of State Hillary Clinton has spent the week in New Zealand, meeting with Prime Minister John Key and other senior officials. A large portion of news and attention has been devoted to the Wellington Declaration, a largely symbolic bilateral engagement documents on defence and regional issues - however the TPP has also been discussed. Key indicated to reporters that both a bilateral or multilateral deal could be discussed, but that "the fastest route through seems to be through the multilateral route and trans-Pacific partnership".
In a press conference held to coincide with the declaration, Clinton was asked about progress and timeframes for the TPP. Her response, together with Key's, falls below the break.
UPDATE: NZ trade experts have praised Clinton's brief public comments on the TPP during her visit - Radio NZ ran a feature on these on Friday morning.
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.
12 OCTOBER 2010: Both the Wall Street Journal and Bloomberg have reported on Malaysia's inclusion in the third round of talks, bringing the ranks of partners to nine.
The WSJ notes both the likely long duration of talks, as well as the uncertainty as to whether a final agreement would even be assured passage in congress without any form of fast-track authority for members. On the other commentators note the strategic value of the US's increasing engagement in the area (particularly as against China), and that Malaysia's inclusion as the US's 16th-largest trading partner gives the TPP some much needed momentum.
Speaking to Bloomberg, Australian trade academic John Ravenhill was more pessimistic about the relative insignificance of many of the partners so far, but noted that the inclusion of Japan and South Korea could make it the broadest-ranging US FTA since NAFTA. For Malaysia's part, it notes that the announcement and deal may attract foreign investment to the South-East Asian nation again, after it had been flagging in recent years.
Both articles follow below.
11 OCTOBER 2010: The third round of TPP agreement negotiations have ended in Brunei Darrulsalam. The talks ran from the 4th until the 9th, with parties giving a particular focus to the preparation of a consolidated text, as well as proposals for co-operation. Over 300 negotiators from TPP member countries participated, with 24 separate negotiating groups splitting aside across the week to discuss industrial goods, agriculture, textiles, standards, services, investment protections, IP, government procurement, competition, labour, and environmental standards.
During the talks Malaysia was made a member of the negotiations by the consensus of the eight existing members. Chief negotiators issued a joint statement to the press, saying they were 'pleased with the progress this week'. US Trade Representative Ron Kirk has notified Speaker of the US House of Representatives Nancy Pelosi, as well as Senate President Daniel K. Inouye, of Malaysia's inclusion. He hailed the state's plans for extensive economic reform, following issues which stymied the original plans for a US-Malaysia FTA a few years ago.
8 OCTOBER 2010: Democratic Congressman David Wu has written an open letter to Barack Obama, calling for all US trade agreements under negotiations, particularly the TPP, to promote and uphold human rights.
Wu's letter observes that talks such as the TPP should be used as an opportunity to advance democracy and the rule of law in other member countries, and points to the so-called 'democracy clauses' in other trade agreements around the world (including the integration agreements for the EU and MERCOSUR), that the US could follow as an example.
In the TPP context, he points in particular to the presence of Brunei, Singapore and Vietnam in talks - all three of whom have been cited in the past for arbitrary limits on freedom of speech, the press, religious freedom, and assembly.
The full text of Congressman Wu's letter can be read here.
1 OCTOBER 2010: Assistant US Trade Representative Barbara Weisel has welcomed the Philippines interest on joining the TPP, but has warned that doing so will involve 'significant legal reforms', including a strong IP rights system and the near-total opening up of the services sector.
BusinessWorld reports Weisel recognised that TPP commitments may even require the Philippines to undertake constitutional reforms (the constitution presently bars foreign ownership in a number of service sectors), and that the administration of Benigno Aquino III will have to generate 'domestic consensus' to permit such changes to get through.
The Philippine National Economic and Development Authority (NEDA), which would be negotiating any service sector liberalisation, has said full participation in TPP talks will take time because of the present legislative restrictions, and that no negotiation can occur ahead of making these reforms.
Weisel noted financial, telecommunications and computer services as areas of key interest for the US in the Philippines. The original BusinessWorld article 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: 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.
21 SEPTEMBER 2010: The Sydney Morning Herald reports that a survey of a number of businesses by the Australian Chamber of Commerce and Industry has found that a number of them no longer see the benefit in the federal government negotiating free trade agreements.
The survey suggested that many businesses feel they have gained little in the way of market access and measurable benefits from the agreements ratified to date. Furthermore, they believe they are gaining more from direct trade measures (ie: grant schemes for exporters) than from the intricacies of multiple trade deals.
The Chamber's survey comes as part of a submission to to the Australian Productivity Commission, who were asked by the government last November to inquire into the benefits of bilateral and regional trade deals. In July, the Commission released a draft report of their findings suggesting future national income flowing from such deals was likely to be 'modest'.
The response from the Chamber comes as the newly appointed Trade Minister, Dr Craig Emerson, travels to Washington DC to meet with his US counterparts and attend the Global Services Summit. Trade Ministers from New Zealand and Malaysia will also be in attendance. Dr. Emerson has announced that he hopes to promote both global services trade reform and new support for the Doha Round during his visit.
20 SEPTEMBER 2010: The US senior official to APEC, Kurt Tong, has told BusinessWorld that the Philippines would be best advised to concentrate on taking steps to become a viable partner in the TPP.
Speaking on the sidelines of a lecture at the Asian Institute of Management, Tong told reporters that a bilateral trade pact between the US and the Philippines was not an option at this time, and that a US-ASEAN FTA was also not being considered - he also noted that a number of ASEAN nations are currently participating in the TPP negotiations or have expressed interest in doing so (Malaysia, Japan).
Tong suggested the Philippines, which currently forms the US's second largest export market after China and Hong Kong, may want to take a look at the standard the TPP is likely to reach and 'benchmark' against it.
10 SEPTEMBER 2010: Following the TPP intersessionary talks in Peru, where the US indicated its preference for leaving existing FTAs in place while negotiating afresh with new trading partners, the NZ Minister of Trade, Tim Groser, has expressed concern about New Zealand's ability to gain the most advantageous deal out of the talks.
Australia's original FTA with the US was considered less than ideal, due to the exclusion of areas such as dairy and sugar. Groser told Radio New Zealand that he believed that under the preferred US arrangement, it would be harder for NZ to negotiate an agreement with the US that improved on the Australia-US FTA.
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.”
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.
7 AUGUST 2010: US Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell has indicated in Wellington that the US commitment is present to ink a deal on the TPP. He also dropped hints that there was strong support for Korea to be bought into the TPP.
Dr. Campbell was in NZ en route to the Pacific Island Forum meeting in Vanuatu, which NZ Prime Minister John Key was also attending.
He held tripartite talks with NZ and Australia during his Wellington visit, the first such official exchange in decades. NZPA reports that he indicated the NZ-US relationship was set to "move up to the next level", despite the clear challenges he acknowledged would arise in the talks.
30 JULY 2010: Following the unveiling of widespread labour law reforms by John Key's National government, the NZ Council of Trade Unions has announced it will no longer co-operate on trade issues, while AFL-CIO head Richard Trumka has cancelled an impending visit to NZ in response to the changes in employment conditions.
A fortnight ago, Key announced a raft of changes, including a universal expansion of 90-day 'fire at will' probation periods for new employees, requiring permission for union representatives to visit workplaces, allowing workers to trade in a fourth week of annual leave for cash, and requiring workers to provide proof of illness on request if they take a sick day.
The CTU president, Helen Kelly, said that while her body has been "prepared to work with government and business to promote the best possible outcome for New Zealand" in the past, the government's new path of "undermining workers" means that unions cannot support the government any longer on trade matters.
Trumka was set to make an official visit to NZ early next year as part of National's campaign to build strategic allies ahead of further TPP negotiations, but he made the decision to 'indefinitely postpone' the trip following the reaction of the NZ union movement to the changes. Kelly has expressed concern that he would have been 'paraded' by Key's government in an attempt to give NZ a more union-friendly appearance.
NZ Trade Minister Tim Groser has already criticised the union stance as short-sighted. While the leader of the opposition Labour Party, Phil Goff, blamed National for Trumka's cancellation, he also re-affirmed his party's support for the TPP.
29 JULY 2010: Speaking in Putrajaya, Malaysia, USTR Deputy Ambassador Demetrios Marantis has indicated that TPP negotiations are expected to have a 'better sense' of direction in 2011 than they have to date, especially with the US hosting the 2011 APEC meeting.
In response to questions about a clear timeline for a TPP framework, Marantis went on to say there was a need for 'substance to drive the timing' of negotiations, and that there would be more difficult regional issues to sort through as progress was made.
To date these regional trade issues have included acheiving regulatory coherence and streamlining regional supply chains, as well as how to integrate existing FTAs between negotiating parties into a new TPP framework.
Marantis also reiterated the countries' mutual committment to turn Malaysia into one of the US's top ten trading partners, saying that it was for Malaysia to decide whether the TPP was the route they wanted to take for this. He also lauded the TPP for having the potential to build on APEC's non-binding and aspirational commitments with more enforceable rules and requirements. The Bernama piece on Marantis's visit and address follows below.
20 JULY 2010: Inside US Trade reports that Malaysia is conducting final intense deliberations on whether to become a party in TPP negotiations, and that a decision could be made early next week as to its position, when Trade Minister Mustapa Mohamed meets with USTR representatives.
Malaysia has previously publically signalled interest in joining the talks, with PM Najib Tun Razak especially keen on becoming involved. However, sources estimate that it will not be in a position to join the talks until sometime next year.
Officials will be examining the TPP's relationship with Malaysia's five-year plan to modernise its economy, in particularly the 'New Economic Model' proposed by the nation's National Economic Advisory Council last year. The model was intended to resolve some of the areas of dispute which caused negotiations on the US-Malaysia FTA to grind to a halt in 2007, including caps on foreign direct investment and affirmative action employment quotas for native Malays.
09 JULY 2010: US senators have stated on a visit to Vietnam that the country must allow free and independent labour unions if it was to liberalise trade in a US agreement. Senator Tom Harkin told reporters that guarantees of freedom of organisation would be "an essential part" of any future US trade liberalisation agreement. Harkin is chair of the Senate Committee on Labor.
Vietnam currently bans all labour unions that are independent of the ruling Communist Party. Human Rights Watch reports that as recently as May, individuals who had violated this law were being arrested and detained.
An AFP article on Harkin's visit follows below the break.
5 JULY 2010:
The Otago Daily Times
reports that US Dairy Export Council president David Suber has warned that allowing the members of NZ dairy cooperative Fonterra to trade shares amongst themselves could jeopardise the inclusion of dairy in the TPP agreement. Writing to Agriculture Minister John Carter, Suber warned that the share-trading would serve to reinforce what is perceived as Fonterra's market dominance. The proposal, which 89.95% of Fonterra's members voted in favour of on July 1, revokes the requirement for the co-operative to redeem company shares - allowing them to be traded among 11,000 shareholder members instead.
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.
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 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.
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.
22 JUNE 2010: Reuters have suggested that US exporters will be looking toward Vietnam, a observing member only at both last week's meeting and the Melbourne talks in March, as their biggest coup in successful TPP talks. However, they have also noted lasting unease around the state's current environmental and labour record, as well as that of Brunei's.
USTR Ambassador Demetrios Marantis spoke at Hanoi's Foreign Trade University on June 9 - there, he praised Vietnam's 'determination and acheivement' in building trade and investment ties with America and the global economy, and promised to deal with Vietnam 'frankly and cooperatively' in future trade issues. On the matter of the TPP:
"The eyes of the Asia-Pacific are on you. Some are wondering if Vietnam can do what it takes to be part of the Trans-Pacific Partnership and others are wondering if you should do it. My response to the both these questions is absolutely ‘yes’. Vietnam can; the United States knows from watching and working with you in the past that Vietnam has the strong capacity to meet the international commitments it undertakes. And Vietnam should do what it takes to be part of the TPP, because your participation will enhance your own competitiveness and further your integration into the global economy.
"TPP partners are taking a new approach to trade negotiations – a 21st century attitude that reflects how companies from Hanoi to Houston will do business in the future. We want to ensure that small businesses benefit from this agreement, that it promotes development and regional integration and address key issues such as worker rights and environmental protection and conservation. These are priorities not only of the Obama trade agenda but of every forward-looking nation.
"The United States hopes that TPP will eventually grow to include countries across the Asia Pacific region. But to achieve something so ambitious, it is important to start with a group of like-minded countries. And we are exceedingly pleased that Vietnam is among them. As part of the TPP from the beginning, Vietnam will have the chance to shape the rules of what will become the most significant trade agreement in the Asia-Pacific. From our rich, recent history, there is every reason to believe that, through the TPP, Vietnam and the United States will continue to achieve together things that seemed impossible not long ago."
Reuters also noted that US business group stakeholders were seeking pledges both for a conclusion of talks by the time of the Hawaii APEC conference in November 2011, and for all parties not to impose any new barriers to trade while negotiations continue (ie: the "Buy American" provision of last year's stimulus bill).
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 Appeal reports 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.
7 JUNE 2010 - The Wall Street Journal has written on the 'relatively modest regional deal' (in their words) that is the TPP. The pieces focuses on the gaps between the Obama administration, civil society groups, and business interests around the agreement, and quotes the National Association of Manufacturers' fears that inclusion of '21st century' labour and environmental standards could end up being too tough.
The article also quotes the sponsor of the TRADE Act bill, Michael Michaud, as reporting that House supporters of the Act's aims have met with the USTR and are working towards a 'positive trade agenda'.
4 JUNE 2010: Following a call by the USTR for submissions for a proposed TPP environmental review, Defenders of Wildlife, Earthjustice, the Environmental Investigation Agency, Friends Of The Earth US, and The Sierra Club have written a nine-page submission urging for negotiators to ensure that all imports of wood, wildlife or products thereof meet the standards and laws of their country of origin. The groups have argued that a strongly-worded agreement could curb illegal regional trade in these products. In doing so, they hope that the TPP will take its cues from the 2008 US Lacey Act, which currently governs US prohibitions on illegally sourced fish, wildlife, and plant products.
The submitting groups are particularly worried about observing member Vietnam and prospective member Malaysia's reputations for illegal logging, as well as Chile and Peru's issues with illegal trade in fish. Inside US Trade reports that the environmental review will continue throughout negotiations, with a final report to be produced at their conclusion.
The groups additionally seek a scale-back of the ability for private entities to challenge government decisions in investor-state disputes, saying that these run against the ability of governments to regulate in the public interest. Their full letter can be read here.
4 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.
5 APRIL 2010 - Alejandra Alayza, coordinator of the Pervian Network for Globalisation with Equity (RedGE) has written a piece on diariolaprimeraperu in which there is a little speculation on what exactly a TPP agreement between the US and Peru could offer in the way of new deals and bargaining - and if so, how onerous those new requirements may be. The original piece is in Spanish, but an English translation follows below the break.
26 MARCH 2010 - La Republica and IPS report that a former Peruvian Deputy Minister of Labour, Julio Gamero, has warned that the large number of trade agreeements Peru has signed in the past year, as well as the impending negotiations in the TPP, may be having a negative impact on labour rights.
Gamero warned IPS that over the past three years, the number of collective bargaining agreements, health and safety inspections, and unionised members of the workforce has fallen dramatically. He is critical of the government's response, saying that it was not until a US delegation on labour issues visited Lima that a liaison office between government and unions was created. Coordinator for the Peruvian Network for Globalisation with Equity (RedGE), Alejandra Alayza, says it is essential to guarantee labour rights in any further agreements so that workers may share in the benefits.
The IPS article, which follows below, also looks at the effect of tariff-lowering on peasant farmers, as well as the TPA with the United States's impact on indigenous forestry rights and intellectual property.
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.
21 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.
20 MAY 2010 - The NZ-US Council has announced that its fourth Partnership Forum will be held from 20-22 February in Christchurch next year. Executive Director Stephen Jacobi made the announcement yesterday at the organisation's AGM. He says over a hundred NZ and US 'thought leaders and influencers' will gather to discuss the relationship between the two countries under 'Chatham House Rules' (allowing delegates to speak and have their views considered without those views being identified as those of their organisation). Mr Jacobi indicated the Forum would be 'crucial' as it would come at a time when NZ sought to conclude TPP negotations. The Council's statement follows below.
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.
5 MAY 2010 - The US Trade Representative have taken right of reply in the Wall Street Journal following Bernard K. Gordon's article for the same publication late in April. They accuse Gordon of mischaracterising the Obama administration's attitude to the multilateral Doha round, and affirm that a completed TPP would be 'a key and promising element of a new trade strategy for North America'. Their letter follows below.
8 May 2010: The United States has stated that it would welcome Malaysia to the ongoing TPP negotiations, following talks between US Trade Representative Ron Kirk and his Malaysian counterpart. Malaysia has recently been considering a series of economic 'modernisation' and liberalisation initiatives to make the country a more appealing free trade partner and to avoid some of the issues which stalled bilateral negotiations between the US and Malaysia.
Kirk also acknowledged that there was some resistance from US politicians to getting any new free trade deal through the hurdle of a vote in Congress, while urging that the underlying 'cynicism' creeping into domestic US discourse around free trade be addressed. The article follows below.
23 APRIL 2010: Routledge College emeritus Professor of Political Studies Bernard K. Gordon has come out against the Trans-Pacific Partnership in the Wall Street Journal. He argues that none of the 'weightiest' Asian trade actors (China, Japan, South Korea, or Indonesia) are involved in the agreement, and that regional economic integration across the Asia-Pacific is an unrealisable goal (raising labour standards in Brunei and Vietnam, opening up financial sectors in Australia and Chile, overcoming Congressional resistance to NZ agri).
Gordon argues that the US's focus must lie with the ongoing Doha Round negotiations, a sentiment he expressed in his book America's Trade Follies, as well as this 2003 article for Foreign Affairs.
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.
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.
27 APRIL 2010: The Canadian Minister of Trade, Peter Van Loan, has indicated that Canada intends to focus more strongly on bilateral and plurilateral trade agreements rather than concentrating solely on the progress of multilateral WTO talks. These may include the completion of talks with the European Union, as well as an FTA with Colombia. Van Loan indicated that Canada is watching the TPP talks 'with interest', but its success in joining negotiations is likely to rely substantially on its removing protections for its dairy and poultry sectors. Inside US Trade have received confirmation Van Loan has met with USTR Ron Kirk, but did not indicated whether this included discussion of Canada's future with the TPP.
24 APRIL 2010: New Zealand's National government have indicated they will not scrap Pharmac, the Pharmaceutical Management Agency of New Zealand, under any free-trade deal. Pharmac is the New Zealand government agency that decides on behalf of the nation's District Health Boards which medicines are to be subsidised. The NZ Herald has identified it as one of two likely stumbling blocks (the other being dairy) in the completion of a free-trade agreement between NZ and the US.
Trade Minister Tim Groser has described Pharmac as "an outstandingly successful public institution" which he had seen no need to make concessions on when he negotiated with US on the Trade Ministry's behalf ten years ago, while Health Minister Tony Ryall has called predictions by NZ pharmaceutical lobby group the Researched Medicines Association that Pharmac will face pressure for reform under any TPP "hypothetical and speculative". The USTR 'hit list' on New Zealand's trade barriers for 2010 notes US industry concerns about Pharmac's 'lack of transparency and predictability' and an 'onerous' approval process for their products.
16 APRIL 2010: The Washington Trade Daily reports that the USTR has met with leaders of Congress's congressional caucus on dairy farming to attempt to allay their fears about the sector being liberalised as part of any completed TPP agreement, and opened up to competition by New Zealand.Caucus co-chair Peter Welch (D-Vermont) has advocated NZ dairy trade's exclusion from the TPP, backed by a number of US dairy organisations. The WTD continues:
"Mr. Kirk told reporters he understands those concerns, but he is not ready to take anything off the table this early in the negotiations. The first round of TPP talks took place last month. There is plenty of time to look for creative solutions that would benefit the US dairy industry, he said. Actually this is a good time to ask what the US government can do to help US milk produces export so they can be just as competitive as New Zealand.'"
Kirk also asked the caucus and US producers to bear in mind the substantial market access the TPP could open up over multiple markets,especially should it expand to become a full Asia-Pacific multilateral agreement.
16 APRIL 2010: Washington Trade Daily reports that Malaysia is taking a 'close look' at joining the TPP negotiations. Prime Minister Najib Tun Razak spoke at a forum sponsored by the Center for Strategic and International Studies, noting the 'unfortunate' lack of progress in Malaysia's bilateral negotiations with the US and touting his recently announced 'New Economic Model' of trade and investment liberalisation. The Assistant US Trade Representative for Southeast Asia and the Pacific, Barbara Weisel, noted that Malaysia will need to convince prospective TPP partners that it will have room to move on sectors such as services and government procurement, both of which caused impasses in the US-Malaysia bilateral negotiations. The article follows below the break.
13 APRIL 2010 - NZ Prime Minister John Key has had a session with US Vice-President Joe Biden on his visit to Washington, DC, in which the two politicians discussed free trade and the TPP negotiations. Key reportedly emphasised the value of a completed TPP agreement to both states, emphasising that agricultural importing and exporting would not be a one-way street for either NZ or the US. Key's visit came after over 30 US Senators signed an open letter on behalf of their constituencies, asking that dairy be excluded from any FTA with New Zealand. A NZ Herald article has more on Key and Biden's discussion.
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...
The Office of the United States Trade Representative has just released its annual 'hit list' for 2010 on subsisting trade barriers in its trading partner countries. All seven of its current negotiating partners in the TPP are reviewed, with all having particular areas where the US argues further reform, liberalisation, or transparency is needed. These include pharmecutical goods, audiovisual and media services, tariff barriers, investment rules, e-commerce, and legal services. All 2010 USTR profiles can be found on the respective country page on this site, and below.
USTR report on NZ's Foreign Trade Barriers, 2010
USTR report on Australian Trade Barriers, 2010
USTR report on Chilean Trade Barriers, 2010
USTR report on Brunei's Trade Barriers, 2010
USTR report on Singapore's Trade Barriers, 2010
USTR report on Peru's Trade Barriers, 2010
USTR report on Vietnam's Trade Barriers, 2010
26 MARCH 2010 -
John Ballingall, the deputy chief executive of the New Zealand Institute For Economic Research
, has responded to the NZ Herald
opinion piece by Bernard Hickey
on the disadvantages of a free trade agreement with the United States. He argues that the agreement is between multiple countries rather than one between the United States and New Zealand alone, and that while dairy will be a matter of tough negotiation, it cannot be absolutely blocked in any final agreement. The full, annotated version of Ballingall's article is available online here
23 MARCH 2010: New Zealand Prime Minister John Key has downplayed the concerns of both the US Dairy Producers Federation and a group of thirty senators regarding the negotiation of a US-NZ FTA as part of the TPP, saying he believes that the stance is a hard curtain-raising position that will later be softened. He has also said that New Zealand will not be part of any deal that excludes agriculture.
New Zealand economic commentator and editor of interest.co.nz Bernard Hickey has written in the New Zealand Herald arguing against a NZ-US FTA. Central to his article's concerns are the possibility of an agreement where dairy is excluded, the opening-up of the NZ Pharmac system to competition, and the possibility of more stringent IP laws (New Zealand recently considered controversial reforms that would have bought it closer to the existing US framework).
Hickey's editorial comes as US and NZ dairy groups continue to dispute the effect of a FTA allowing NZ dairy farmers access into the US market. A Stuff article about the US National Milk Producers Federation's allegations against Fonterra is below the break.
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 15, 2010: Barack Obama is due to meet with his Australian counterpart, Kevin Rudd, on March 26. The whirlwind stop in Canberra is likely to cover the by-then complete negotiation rounds in Melbourne for the TPP agreement. While Obama is quick to hail the 'model alliance' between the US and Australia, serious doubts are rising in Rudd's capital about the lack of consultation and analysis going ahead into the negotiations, as an excellently-argued Canberra Times op-ed by Professor Thomas Faunce expresses today...
CITIZENS AGAINST FOREIGN CONTROL OF AOTEAROA, CHRISTCHURCH, MARCH 15 2010:
Talks started in Melbourne today for the US, Australia, Peru and Vietnam to join an expanded Trans-Pacific Strategic Economic Partnership (TPP, currently comprising NZ, Chile, Brunei, and Singapore, known as the P4 Agreement), with November 2011, when the US hosts APEC, as the target to seal the deal. This will be used as the backdoor means to secure a US/NZ Free Trade Agreement. Already the Americans have said that they see this as more than a mere free trade deal but as a vehicle for broader Asia/Pacific economic integration, which has enormous political implications. Alarm bells should be loudly sounding.
12 February 2010: The American Enterprise Institute's Claude Barfield recently wrote on the future of trade relations between the US and the South Pacific. In his most recent opinion piece (originally appearing on East Asia Forum), he advocates a broad US role in the construction of a "new Asian economic architecture". Like many free traders in Australia and New Zealand, they're now arguing that TPP will be the best mechanism for President Barack Obama to develop this.
"We made the case for the Obama administration to move with dispatch in asserting U.S. leadership in the construction of a new Asian economic architecture that would be broad and inclusive. And we argued that the Trans-Pacific Strategic Economic Partnership (TPP) agreement was an ideal vehicle through which to achieve this goal."
Read the full article here.
Officials from Australia, Brunei, Chile, New Zealand, Peru, United States, Vietnam have begun talks toward the TPP in Melbourne, a move pro free-trade commentators are marking as a push for the APEC group of nations toward the long-term goal of an Asia-Pacific free trade zone. The talks are estimated to cover 470 million people, with a combined GDP of USD$16 trillion. New Zealand is sending a delegation of 15 to the talks. More below the break...(Radio New Zealand's report can be accessed here
As agricultural and farming blogs
have been quick to seize on
, the US dairy industry has come out in force on the eve of TPP negotiations. And those concerns have quickly been heard and met by a bipartisan group of 30 senators, many of whom come from the US's own dairy heartland. On March 11, they delivered a letter to US Trade Representative Ron Kirk urging that the industry is protected from New Zealand (or, more specifically, dairy co-op giant Fonterra) in any agreement between the nations. The letter itself continues below the break...
MARCH 11, 2010 (Wall Street Journal) - US dairy farmers are pleading for protection from their counterparts in New Zealand as President Barack Obama's trade negotiators begin talks on a regional agreement in Australia next week.
New Zealand accounts for nearly a quarter of global dairy exports, according to Rabobank International, a large agricultural lender. U.S. dairy farmers are concerned that increased trade with the region could result in New Zealand flooding the U.S. with cheap dairy products such as cheese and milk powder that could depress prices for U.S. producers. Logistics and cost make it unlikely New Zealand would ship fluid milk to the U.S.
WASHINGTON DC, MARCH 10 2010 – Today, Representative Mike Michaud (D-ME), Chairman of the House Trade Working Group (HTWG), joined with Representative Louise M. Slaughter (D-NY) and other HTWG members in a bipartisan meeting with United States Trade Representative Ron Kirk regarding continuation of U.S participation in talks for a Trans-Pacific Partnership Free Trade Agreement with Australia, Brunei Darussalam, Chile, New Zealand, Singapore, and Vietnam.
MARCH 5, 2010: In an interview with Inside U.S. Trade, Deputy U.S. Trade Representative Demetrios Marantis this week said the U.S. is examining how it could build on work already completed under the auspices of the Asia Pacific Economic Forum (APEC) in the context of negotiations to establish a Trans-Pacific Partnership (TPP) agreement.
"There is a lot of stuff we do in APEC that I think can very well inform some of the regional aspects of the TPP agreement," Marantis said in a March 4 interview. "So I think looking at APEC, and looking at the initiatives APEC has pursued ... and seeing what would work in the context of a binding, regional trade agreement, I think APEC will offer some instructive lessons."
KUALA LUMPUR, March 8 2010 -- Malaysia stands to gain from joining the Trans Pacific Partnership (TPP) quickly as it will be well placed to negotiate better deals to boost trade volume and increase market access into the American market, outgoing U.S. Ambassador to Malaysia James Keith said on Monday.
Expecting Malaysia to come on board soon, Keith said the TPP, comprising eight countries, would be a high quality platform to increase market access and boost trade flows for all member countries.
WASHINGTON, MARCH 3 2010 - President Barack Obama's plan to negotiate an Asia Pacific free trade pact could have a devastating impact on the dairy, sugar and textile sectors in the United States, US industry groups warned on Tuesday.
Negotiators from the United States, New Zealand, Australia, Peru, Vietnam, Chile, Singapore and Brunei will meet in Melbourne, Australia on March 15 for the first round of talks on the proposed Trans-Pacific Partnership (TPP) pact.
Inside US Trade, March 2 2010
Australian Ambassador Kim Beazley today (March 2) signaled that
negotiations to create the Trans-Pacific Partnership (TPP) agreement
should put all issues on the table and not automatically keep in place
exemptions from market access commitments contained in current free
trade agreements the U.S. has with some of the countries now
participating in the TPP negotiations.