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Some Pacific trade partners aim for deal in coming months

By: | at 06:22 PM | International Trade  

Some Pacific trading partners are aiming for a deal on a regional free trade zone as early as the next few months, sources close to the negotiations said, although others caution a pact is still a long way off and see the U.S. elections as a wild card.

Trade ministers from the 12 Trans-Pacific Partnership (TPP) countries said after May meetings in Singapore the talks gained momentum and they would step up efforts over coming weeks.

A central element of U.S. President Barack Obama’s strategic shift towards Asia, the TPP would cut trade barriers and harmonize rules in a complex deal covering two-fifths of the world economy and a third of global trade.

Some officials close to the talks told Reuters they worried about a closing window of opportunity to finalize talks with U.S. mid-term elections in November.

A Mexican official, who was not authorized to speak publicly, said some were pushing to get an agreement in September at the latest.

“If we don’t make it during the summer it will be difficult for the United States to persuade voters in the middle of the mid-term election campaign, so the aim of the members, particularly Japan, the United States and Mexico, is to seek an agreement towards the end of the (northern) summer,” he said.

Still, others took a more pessimistic view. A diplomatic source from another TPP country, who is familiar with the negotiations but declined to be identified, said he did not expect ministers to meet again in July, or even August.

“Until the (U.S. mid-term) election is over, there won’t be real enthusiasm for striking a deal,” he said, adding it would need “huge political investment” in Washington to get an agreement this year.

“It is going to take considerable time to reach the final stage of negotiations. There is a lot of filibustering of issues by other countries because they are afraid if all issues are resolved, excluding those they are interested in, they will be crushed.”

Obama’s democrats have links to labor and environmental groups who worry the TPP may cost the United States jobs and harm the environment. Some democrats facing tight election races may be unwilling to support a deal that could lose them votes.

The White House hoped to complete TPP last year but talks stalled over Japanese tariffs on agricultural imports. Tokyo wants to protect rice, wheat, dairy, sugar and beef and pork products, while Washington seeks to shield U.S. carmakers from increased Japanese competition.

Countries hope to wrap up talks this year. Japanese Economics Minister Akira Amari has said talks are in their final phase. U.S. Trade Representative Michael Froman has said the substance will drive the timetable.

Those attending the Singapore talks said they noted a change in attitude from Japan after an earlier summit between Obama and Japanese Prime Minister Shinzo Abe.

“Japan is starting to sit down and talk with members like Mexico ... Peru and Chile, whereas before they had been a bit evasive,” the Mexican official said.

Australian Trade Minister Andrew Robb said countries made real progress on what each would offer on market access. “My sense is that we are months, not years, away,” he said in written response to questions.

A New Zealand industry source briefed on the talks said it was unlikely that officials would reach anything other than a “cosmetic” agreement this year, with details to be worked out next year.

New Zealand has its own elections in September and the government will effectively be in hiatus from late June.

An individual familiar with the U.S. position said talks were not in the final phase yet and outstanding issues included the environment text, numerous intellectual property questions, rules on labor and the operation of state-owned enterprises. (Reuters)