No Final Deal in TPP Trade Talks

BY ERIC JOHNSTON – AUG 1, 2015

OSAKA – Efforts to conclude the framework for the Trans-Pacific Partnership Agreement ended in failure Saturday, with negotiators unable to bridge differences over issues ranging from pharmaceutical patents to expanded imports of agricultural, and particularly dairy, products.

The latest round of talks in Hawaii between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam had been called a make or break moment for the controversial pact due to concerns over the U.S. political calendar.

Without even the broad outlines agreed to, and despite discussions among members to meet again later this month, TPP proponents are growing worried a final deal will not reach the U.S.

Congress for deliberations before next year, and risk being delayed until after the 2016 presidential election, placing its ultimate passage in further doubt.

Following the meeting in Hawaii, the TPP ministers issued a statement saying they were close to a deal, but that more work was needed.

“We have made significant progress and will continue to work on resolving a limited number of remaining issues. Ministers and negotiators leave Hawaii committed to build on the momentum of this meeting by staying in close contact as negotiators continue in their intensive engagement to find common ground. We are more confident than ever that TPP is within reach,” the statement said.

Economic and fiscal policy minister Akira Amari told reporters afterward that negotiators could not bridge differences over a demand by New Zealand to greatly increase imports of dairy products or set a period on the length of a patent period for pharmaceutical data, which will affect the price and availability of cheaper generic drugs in the region.

But he said a final agreement was near.

“One more ministerial meeting and I think we can reach an agreement on everything,” he said, adding that there was a consensus, but no formal agreement yet, to meet toward the end of the month.

For Japan, the key issue is tariff reductions in the five so-called sacred agricultural sectors of rice, wheat, beef and pork, dairy products and sugar.

Tokyo is negotiating an abolition of tariffs on eggs and chicken meat, and a reduction of the imported beef tariff from the current 38.5 percent to 9 percent over a 15-year period.

The U.S. is pushing Japan to increase the amount of imported rice by more than three times the current level under a TPP agreement, but Japan has agreed to only a minimal increase.

On the other hand, the U.S. and Japan are still wrangling over Japanese auto parts exports to the U.S., a politically sensitive topic for Washington.

While Amari and other TPP ministers remain upbeat, the political climate in both Japan and the U.S. for the TPP is growing more uncertain.

In Tokyo, Prime Minister Shinzo Abe’s poll numbers are falling over his handling of the security bills debate and the controversy over the 2020 Tokyo Olympics’ National Stadium.

In addition to the opposition parties, Abe’s political rivals within the Liberal Democratic Party, many of whom have deep reservations about the TPP, are starting to grumble about his leadership.

Abe faces re-election as LDP president on Sept. 30.

And while no challengers have yet emerged, the party is worried about heading into next summer’s Upper House election with a prime minister who has low approval ratings.

For the U.S., 2016 means the November presidential election.

Amari said that the American political calendar was such that it would be extremely difficult for the TPP to get approved by the U.S. if negotiations weren’t wrapped up at the next ministerial meeting, while those elsewhere who are opposed to TPP agree the time for a deal is almost up.

“This ministerial meeting was viewed as a do-or-die moment … (it’s failure) in part reflects how controversial the TPP is in many of the involved nations,” Lori Wallach, director of Public Citizen’s Global Trade Watch, said in a statement.