Bridges Weekly Trade News DigestVolume 17Number 28 • 5th September 2013

TPP Talks “Intensify” in Brunei as Year-End Deadline Looms


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Negotiators meeting in Brunei last week “intensified” their work in the hopes of completing the Trans-Pacific Partnership (TPP) Agreement by year’s end, officials said on Friday. However, the talks remain “difficult,” some say, despite the hope that the talks could be near their final stage.

Notably, the Brunei talks began with a meeting of TPP ministers in order to provide political momentum to the negotiations and narrow gaps on sensitive issues - particularly given the limited time remaining before the end of the year. This TPP “ministerial” included discussions of possible “landing zones” for the more contentious areas, along with the sequencing of some topics as the negotiations reach their end stages.

The ministerial included both joint and bilateral meetings, according to a statement released following the event. Negotiators then met through 30 August, building their discussions off their ministers’ guidance.

The Brunei talks reportedly saw progress in the areas of competition, environment, financial services, investment, intellectual property, market access, and rules of origin. However, groups dealing with other topics - such as those involving technical barriers to trade, e-commerce, and legal issues - did not meet during the nine-day talks, though they are expected to hold discussions in the weeks ahead.

Current members of the TPP include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam.

Self-imposed 2013 deadline remains in focus

TPP countries - a 12-strong group that only just added Japan to its ranks this summer - had previously floated the idea of completing an agreement in time for next month’s Asia-Pacific Economic Cooperation (APEC) leaders’ meeting in Bali. Officials from TPP members have traditionally met on the sidelines of major APEC gatherings in order to review progress in the negotiations.

The October plan now appears to have been shelved, with TPP ministers referring to the APEC meeting instead as an important “milestone” in the process. However, ministers have pledged to “maintain our active engagement” ahead of the Bali event.

Officials have publicly said in recent weeks that they still hope to conclude the negotiations by the end of 2013. Mike Moore, New Zealand’s Ambassador to the US, has said that this is a “doable” goal, a sentiment that US Trade Representative Michael Froman has similarly expressed.

Some stakeholders, however, have questioned whether holding to a year-end goal is still possible, or even advisable. Trying to resolve all of the remaining issues in that timeframe could lead to a less ambitious outcome, US Chamber of Commerce President and CEO Thomas Donohue recently warned.

“We must not short circuit our ambitious goals for the sake of expediency,” he said.

Even some TPP negotiators have reportedly expressed scepticism over the 2013 timeline, with a Malaysian official telling AFP that this goal may not be “realistic.” This latest round, for instance, was itself a “difficult” one, the official said. Major disagreements still remain in several areas, such as on state-owned enterprises (SOEs), intellectual property, and rules-of-origin, among others.

The dates of the next negotiating round have not been announced; however, TPP negotiators are expected to meet in mid-September in Washington, Japanese officials have said. Intersessional discussions will also be held in the coming month.

Japan involvement

Trade observers were also watching this Brunei round closely to see how Japan’s participation could affect the process. Tokyo became a formal member of the TPP group in July, just two days before the end of the last round, which was held in Malaysia.

In Brunei, Japan held bilateral tariff negotiations with nearly all of its TPP partners, with the exception of Chile and Peru. Japan has already tabled tariff elimination proposals with six of those countries, Tokyo’s chief negotiator Koji Tsuruoka told reporters. Exchanges of proposals with Australia and the US are expected later this month.

Agricultural market access is expected to be a major sticking point between Japan and its fellow TPP members, with Tokyo hoping to maintain its famously high tariffs on rice, as well as on beef, pork, dairy, wheat, and sugar.

The US and Japan have also begun to hold bilateral talks in parallel to the formal TPP process, in line with the deal announced earlier this year between the two sides that effectively paved the way for the Asian economy to join the regional negotiations. (See Bridges Weekly, 18 April 2013)

“We are looking to Japan to work with us in a constructive manner to address the barriers that have impeded our access in key areas,” Froman told the Japan National Press Club ahead of the Brunei round, noting that some bilateral meetings have already taken place.

“Barriers to access to Japan’s automotive and insurance markets and non-tariff measures in other sectoral and cross-cutting areas hold back growth and innovation,” the US official argued. “[These barriers] hurt workers, business, and consumers in both our countries.”

ICTSD reporting; “TPP talks on tariffs advance as Brunei round ends,” KYODO NEWS INTERNATIONAL, 30 August 2013; “Pacific trade deal negotiators finish ‘difficult’ round,” AGENCE FRANCE PRESSE, 30 August 2013; “U.S. Trade Representative Addresses Trade Conflicts With Japan Ahead of TPP Brunei Talks,” WALL STREET JOURNAL, 19 August 2013; “Brunei TPP round ends in ‘success’,” THE JAPAN TIMES, 30 August 2013.

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