Bridges Weekly Trade News DigestVolume 16Number 17 • 2nd May 2012

Canada, Japan, Mexico Press for Entry into Trans-Pacific Trade Talks


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Six months after expressing interest in joining the proposed Trans-Pacific Partnership (TPP) Agreement, Canada, Japan, and Mexico have yet to join the nine-country talks, with a high-profile bilateral meeting in Washington between the US and Japanese heads of state on Monday ending without a formal announcement regarding Tokyo’s bid. Current TPP members are said to be still evaluating whether it is feasible to take on new members while also trying to clinch a deal by year’s end.

The TPP negotiations - launched in 2005 among four countries, and eventually expanding to a group of nine - are three-quarters of the way done, according to Dominic Goh, director-general of international economics at Singapore’s foreign affairs ministry, in comments reported by the Wall Street Journal. The administration of US President Barack Obama has made the accord one of the centrepieces of the White House trade agenda, with Obama hoping for a deal by the end of 2012.

The proposed pact currently includes Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the US, and Vietnam as members. Canada, Japan, and Mexico expressed interest in joining the talks in November 2011 at the annual Asia-Pacific Economic Cooperation (APEC) Leaders’ Meeting (see Bridges Weekly, 16 November 2011).

Since then, current TPP members have been evaluating whether it will be possible to bring Tokyo, Ottawa, and Mexico City into the trade talks while at the same time preserving the desired level of ambition for the pact, and without slowing down the negotiating process. Back in November, New Zealand Trade Minister Tim Groser acknowledged that such a task might prove difficult. “I don’t think anyone can seriously imagine that we can complete this negotiation with economies as important as these three by the end of 2012.”

All of the TPP negotiating parties are also members of the 21-country Asia-Pacific Economic Cooperation (APEC) group; the proposed trans-Pacific pact has been billed as a possible launching ground for a wider trade deal that could eventually include all APEC members.

However, as the three prospective new members work to shore up support among current TPP countries, complaints have emerged from some that the process is not moving quickly enough.

No deal announced after US President, Japanese Prime Minister meet

Japanese Prime Minister Yoshiko Noda met with Obama in Washington on Monday, a meeting that was widely acknowledged beforehand as unlikely to lead to an announcement regarding Japan’s TPP membership, despite earlier expectations to the contrary.

“We instructed our teams to continue our consultation regarding Japan’s interest in joining the Trans-Pacific Partnership, which would benefit both our economies and the region,” Obama said at a joint news conference with Noda following their meeting.

While the US has yet to make a final decision on Japan’s membership - with many members of Congress apprehensive over whether Tokyo will be willing to make sufficient market access concessions in various sectors - Noda has also struggled to build up support at home for the trade deal.

One of the main sticking points in consolidating both public and political support in Japan has involved agriculture, with critics fearing that farmers might struggle against losing import tariffs on some commodities, such as rice. Early last week, approximately 300 Japanese lawmakers adopted a resolution urging Noda not to declare during his Washington trip that Japan would participate in the nine country talks, saying that doing so would be a “wrong political judgment.”

“The Japanese have been engaging in this incredible debate back in Japan on what TPP means for them. And it doesn’t sound, at least from what I’m seeing and hearing, that they’ve made any decisions yet,” Deputy US Trade Representative Demetrios Marantis told reporters in Washington last Thursday.

Mexican officials express frustration

Meanwhile, Mexican officials have lately voiced their frustration over the delay in getting their bid to join the talks approved. “We are waiting for the [US] Trade Representative’s office to go to the next level,” Mexican Economy Secretary Bruno Ferrari said on the sidelines of a World Economic Forum in Latin America event in Puerto Vallarta late last month.

“For some reason this has been delayed. Until everyone is in agreement, and the US is missing, we cannot advance,” Ferrari continued.

“We are undertaking a detailed and thorough process to evaluate the readiness of Mexico, as well as Japan and Canada, to meet the high standards and objectives of the TPP,” Carol Guthrie, a USTR spokeswoman, told Bloomberg last week in an e-mail.

“While we have made progress, we and other current TPP members have additional work ahead, including further consultations on issues that have emerged through our analysis and from input from Congress and stakeholders.”

Canada: Bids should be dealt with separately

In recent remarks, Canadian Trade Minister Ed Fast has said that it is unclear whether the applications will be dealt with jointly or separately, advocating, for his part, for the latter.

“Each of our economies - Japan, Mexico, Canada - have unique circumstances, unique challenges, unique trade barriers that the current partners want to have addressed,” Fast told Reuters.

“We believe it is to our benefit that our application be considered on its own merits rather than as a group,” he continued.

While Canada has recently won the backing of TPP member Chile, Ottawa is still working to gain support of other members, including Australia, New Zealand, and the US, with differences in agriculture reportedly one of the key stumbling blocks in the discussions with Wellington and Canberra.

“We’ve been very encouraged by the support we’ve been receiving,” Fast said earlier this week, noting that the majority of TPP members support Canada’s bid.

The pact, which members bill as a “21st century” agreement, will slash tariffs and other barriers to goods and services trade and investment; the goods covered will represent some 11,000 tariff lines. Negotiators also plan to incorporate into the pact issues involving regulatory coherence; competitiveness and business facilitation; small- and medium-sized enterprises; and economic development and governance, according to an outline released in November.

The next round of negotiations is scheduled to take place in the US city of Dallas from 8 to 18 May.

ICTSD reporting; “Mexico Says U.S. Stalling on Addition to Pacific Trade Deal,” BLOOMBERG, 23 April 2012; “Mexico, Canada reiterate interest in Asia-Pacific trade deal,” THE HILL, 3 April 2012; “US trade officials call for swift completion of Asia-Pacific trade deal,” THE HILL, 24 April 2012; “Lawmaker resolution to Noda: Don’t commit to TPP during U.S. trip,” JAPAN TIMES, 25 April 2012; “Calderon presses for US answer on Pacific trade pact,” REUTERS, 24 April 2012; “U.S., Japan still mulling regional trade pact: Obama,” REUTERS, 30 April 2012; “US Trade Official: No Deal Expected on Trans-Pacific Pact During Noda Visit,” WALL STREET JOURNAL, 26 April 2012; “Trans-Pacific Partnership Trade Talks are 75% Done - Singapore Official,” WALL STREET JOURNAL, 26 April 2012; “Canada making progress in trans-Pacific bid: Fast,” WINNIPEG FREE PRESS, 20 April 2012.

One response to “Canada, Japan, Mexico Press for Entry into Trans-Pacific Trade Talks”

  1. Why is the TPP Such a Big Secret? | ASH > Action on Smoking & Health

    [...] Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Canada, Japan and Mexico are all expected to join talks, and many see more Pacific Rim countries including China and Russia eventually signing on. With [...]

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