Still lots of work to do, but TPP is 98% done

National Foreign Trade Council Chairman Alan Wolff listed the following as final issues: dairy, sugar and rice market access; intellectual property protections for biological medicines; rules of origin for automobiles; public health exemptions for tobacco; investor-state disputes; labor; exemptions for state-owned enterprises; Internet service provider liability; and a currency side agreement. In other words, a lot of work.

“I see this as the ‘transcontinental railway.’ We’ve come 98 percent of the way. Well, if you think of the transcontinental railway, if we’re 2 percent apart, we’ve got about 60 miles, and there’s some swamps and ravines, but in fact no one is going to abandon the railroad. This is going to happen.”

Alan WolffThe irony of “free trade agreements” is that they do not deliver truly free trade for everything among the parties. The agreements do make progress — within the bounds of what is considered politically feasible at the time. And there is always the hope that the progress could be really substantial.

As world leaders strive to complete a Pacific Rim trade deal, negotiations over tariffs on trucks, sugar and dairy remain sticking points.

As officials last week approached what they hoped would be the final week of negotiations of a Pacific Rim trade deal involving nearly 40% of the world’s economy, one of the most contentious issues between the U.S. and Japan turned out to be the handling of the 25% U.S. tariff on pick-ups and SUVs. Since the weighted average American tariff on industrial products is 1.5% on industrial products, one might think that there was some scientific or policy reason that exists for high protection on these very popular vehicles.

Actually, that high tariff stems from a spat that took place 50 years ago.

Why free trade agreements don’t really deliver free trade, Fortune, Aug 13, 2015

 

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