Bridges Weekly Trade News Digest • Volume 14 • Number 22 • 16th June 2010

Second Round of Trans-Pacific Trade Talks Gets Underway

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Eight Pacific-Rim countries are engaged in free trade talks hosted by the United States in San Francisco this week. The negotiations, which are still in their early stages, aim to establish a free trade zone that would span Australia, Brunei, Chile, New Zealand, Peru, Singapore, the United States, and Vietnam.

The negotiators, who are working toward a Trans-Pacific Partnership (TPP) Agreement, held their first round of negotiations in Melbourne, Australia in March.

According to a statement from the Office of the US Trade Representative, this week’s talks aim to establish a framework for the market access negotiations, to clarify the relationship between the TPP agreement and existing bilateral trade deals, and to define “paths forward” on issues like small business priorities, regulatory coherence, competitiveness, supply chains, development, and regional integration.

Looking ahead, officials hope to finalise a full draft text before the third round of talks kicks off in October.

The negotiations appear to have picked up steam recently, as Canada, Colombia and Malaysia, among others, have all expressed interest in either joining or closely following the negotiations. There has even been talk of expanding the deal to eventually cover the entire Asia-Pacific region.

Ann Capling, a trade expert at the University of Melbourne, says the TPP talks have benefited from political difficulties in other negotiating arenas. “For a number of countries, their efforts to negotiate bilateral trade agreements have stalled” and they are looking for new opportunities, Capling explained in an interview with Radio Australia.

Democratic Senators John Kerry and Jim Webb are strong proponents of the proposed deal.

“The United States risks losing export share in an exploding market and ceding influence in the Asia-Pacific unless it is able to participate more vigorously in regional trade,” the senators said in a statement released on Tuesday. “TPP represents an excellent opportunity to change this dynamic and build a platform for region-wide economic integration.”

The United States has already secured free trade deals with the four largest economies in the TPP talks - Australia, Chile, Peru and Singapore - leading some critics to question the value of US participation in the negotiations.

Some detractors in the United States have cited political reasons to be sceptical of the talks.

“Vietnam and Brunei are simply not appropriate partners for a US trade pact, given the lack of democracy and observance of basic workers’ and other human rights in those countries; limitations on full democratic rights in Singapore are also problematic,” Public Citizen’s Global Trade Watch, a Washington-based NGO, said in a statement submitted to the Office of the USTR in January.

The negotiations over liberalisation of the TPP parties’ dairy sectors could also prove difficult, observers say. New Zealand is expected to try to get its dairy farmers greater access to the other countries’ markets - a move that the US and others are expected to fight.

Global Trade Watch, the American Farm Bureau and the National Milk Producers Federation are attending the San Francisco meeting as observers, along with 20 other US stakeholder groups.

ICTSD reporting.