Autos and dairy seem to have been settled. Now only IP for biopharmaceuticals seems to remain. The U.S. has made a compromise proposal, moving from twelve years to eight, more than half-way to the Australian position of five years. U.S. congressional leaders have reminded negotiators that the TPP must be approved by U.S. Congress, along with eleven other legislatures. TPA passed the U.S. House of Representatives with a 218 – 208 vote. Talks have been extended until Oct 4. Canada, Mexico, NZ Trade Ministers said they’ll stay until TPP is concluded. Japan’s Trade Minister said” … there were two conditions for us to accept that proposal: First, this would be the last chance, in other words there had to be certainty of getting a deal on pharmaceuticals; second, because of the schedule, Japan could not accept any further extension.”
On the period of market exclusivity for biopharmaceuticals, perhaps the largest sticking point in the talks, the United States made a new proposal that would essentially set the period at eight years.
The proposal is a compromise aimed at Australia, NZ and some developing nations, which have been pressing for five years or less. NZ Prime Minister John Key said, “We could live with some extension, but not, we don’t think a dramatic one.”
Stakeholders at the meeting say the U.S. Congress might not pass the deal if it doesn’t offer eight-year exclusivity rights to makers of biologics medicines, which is already down significantly from the U.S.’s current protection of 12 years. The Austalian government, meanwhile, faces political pressure at home to avoid granting anything beyond five.
Autos and auto parts: U.S., Canada, Mexico, Japan reach agreement
Japan, the United States, Mexico and Canada on Thu, Oct 1 overcame a major sticking point by agreeing to set a 45% TPP requirement for automobiles.
Fearing that vehicles and auto parts made by Japanese manufacturers in non-TPP countries such as Thailand will flood the U.S. and other markets, Canada and Mexico had been demanding a TPP content rate of 60% or higher, close to the 62.5% rule-of-origin under NAFTA.
Japan was seeking a level of around 40%.
The four countries agreed to adopt a Japan-proposed rule to regard vehicles that use non-TPP parts as made in the zone if the key parts are made within a TPP member country.
Dairy: U.S., Canada, New Zealand, Japan
New Zealand, a global dairy powerhouse with 17% of world dairy trade, has been pushing for improved access for its exports as part of the TPP.
But the US is unwilling to allow in more imports unless its farmers in turn secure better access for exports in Canada and Japan.
Canada’s dairy sector is 90% closed to foreign competition and the government is under political pressure to avoid any additional products on Canadian grocery shelves.
Canada’s Trade Minister Ed Fast said, “Canada is prepared to negotiate, to stay here until we have a deal. We believe we are on track to do so.” Many Canadian industries are thrilled at the prospect of a deal. The head of Canada’s pro-free-market agriculture group said he expects a nine-per-cent increase in canola exports alone, with big gains for other industries including pork, beef and barley.
“We’re extremely optimistic for our sector,” said Brian Innes of the Canadian Agri-Food Trade Alliance, and vice-president of the Canola Council.
The head of the NZ Dairy Assn said, “We won’t get everything we want, but in the end we’ve got to be reasonable.” and NZ Prime Minister Key said, “The New Zealand economy’s not all dairy… while we don’t get everything we want in dairy we don’t give everything that would be required, so like with every negotiation it is literally that, a negotiation. There’s give and take from both sides.”
“There’s going to be quite a lot of sectors that come out and say this is the best thing since sliced bread.” He was also quick to leverage off Former Labour Prime Minister Helen Clark’s high-profile backing of the TPP this week,when she said New Zealand cannot afford to be left out.
“I think in the end people generally will fall in behind the view that Helen Clark said which is, they may not understand every intricacy or what it means for quota or tariff changes but they do intuitively know that the United States and Japan are massive markets and they certainly know through the track record of New Zealand that we do well being in free trade.”
TPP offers a trade architecture for the next 10, 20, 30 years
But it would be a historic mistake if these talks collapsed, said one Canadian business group at the conference. The TPP is about more than tariffs and quotas, said Cam Vidler of the Canadian Chamber of Commerce. He said it’s a rare opportunity for the international community to modernize its trade rules, so that they cover new technologies and the new Asian economic powerhouse.
“Each country needs to be careful to get a deal they can live with,” he said.
“But we don’t want to nickel-and-dime this thing either. You’ve got to look at the big picture. We’ve got to look at what this means for our economies and our business communities and our citizens and our workers 10, 20, 30 years from now.
“If we want to live in a world where global markets, managed under the rule of law in a predictable way, where countries can compete on a level playing field, we need to do something about it. And this is the best, if not the only, chance we can see in front of us to do that.”
TPP must be approved by legislatures in 12 TPP countries, including U.S.
U.S. Senate Finance Committee Chairman Orrin Hatch (R-Utah), co-author of the Trade Promotion Authority legislation, said in a recent speech in the Senate, “My hope is that, as they move through the latest round of talks in Atlanta this week, they consider what it will take to get a deal through Congress. If you look at the bipartisan coalition that supported our TPA bill, you should get a pretty good sense of the balance it will take to get enough support here in the Senate and over in the House.” .
The TPP must be approved by both the U.S. House of Representatives and U.S. Senate, and “implementing legislation” must be passed that would bring U.S. laws into compliance with the TPP agreement, for example, reducing the IP protection from 12 years to eight years, if that compromise is agreed on in Atlanta.
Republicans and Democrats who supported TPA have threatened to remove their support if U.S. officials defy congressional guidance in the Bipartisan Trade Promotion Authority.
Congressional trade leaders, sent a letter demanding that the Obama administration immediately ramp up talks with lawmakers as negotiations on a massive Asia-Pacific agreement reach a critical stage.
House Ways and Means Committee Chairman Paul Ryan (R-Wis.), Ranking Member Sandy Levin (D-Mich.), Senate Finance Committee Chairman Orrin Hatch (R-Utah) and the panel’s top Democrat, Ron Wyden (D-Ore.), said “we expect you to intensify these consultations and coordination immediately” on the Trans-Pacific Partnership (TPP).
“If you are unable to obtain an agreement that is consistent with the standards we have set out , we would support continuing negotiations so that TPP meets the benchmark that Congress can support.”
House Agriculture Chairman Mike Conaway, R-Texas, and 15 other members of his committee said in a letter to U.S. Trade Representative Michael Froman on Thursday that they were “deeply concerned over the lack of meaningful market access in key markets for America’s rice farmers, and we are also deeply concerned by the lack of movement and transparency with respect to meaningful new, balanced market access for our nation’s dairy farmers.” The letter also warned against “undermining U.S. sugar policy.”
The United States proposed this week to bar tobacco companies from using special trade tribunals to sue or threaten countries that passed antismoking laws, hoping to remove one roadblock to what would be the largest regional trade agreement in history.
In recent days, groups of lawmakers have banded together to express their concerns about the direction of the TPP talks, including 17 members of the House Agriculture Committee.
The lawmakers, all of whom supported TPA, sent a letter to USTR Froman on Thu, Oct 1 outlining how they must see improved market access for rice and dairy among other agricultural products to support the final TPP deal. And they said warned that a proposed exception for tobacco would establish “a dangerous new precedent” in global trade and risk passage of the agreement.
The U.S. president already faces a tough task in retaining the limited support he got from House and Senate Democrats during the Trade Promotion Authority (TPA) debate while convincing Republicans proponents to stay onboard.
Read more …
U.S. proposes compromise on bio-drugs in TPP talks, The Japan News, Oct 4, 2015
Stalled over drug patents, TPP negotiators may work all night, L.A. Times, Oct 3, 2015
TPP: 11th hour snags could mean delay, The Canadian Press, Oct 3, 2015
Four way auto deal advances TPP talks, Japan Times, Oct 2, 2015
Pacific Rim nations close in on a landmark TPP trade deal, Straits Times, Oct 3,2015
TPP talks heading into Saturday, The Hill, Oct 2, 2015
TPP will be concluded this year; then to get TPP through Congress, White House, Sep 16, 2015
What’s still wrong with TPP, Rep. Sander Levin, Politico, Sep 28, 2015