TPP Negotiations Update

The nine members of the Trans Pacific Partnership negotiation met on 19 May in the sidelines of the APEC Trade Ministers’ Meeting, held at Big Sky, Montana.

The meeting expressed comfort with the “steady and solid” progress made in the negotiation but noted that it was “highly complex”. They expressed their goal of “reaching broad outlines of agreement by November”. The November date refers to the APEC Leaders Meeting due to be held in Hawaii.

They also agreed that negotiators should “intensify their consultations on issues of particular sensitivity and to make achieving an ambitious outcome in these negotiations a top priority”.

This language is interesting at a number of levels. The reference to complexity highlights how difficult this negotiation actually is. And the call for an intensification of consultations on sensitive issues, confirms that these have not yet been tackled, yet this is where most of the difficulties lie. It is therefore little wonder that the end of year target “reaching broad outlines of agreement” is short of the ambition that was on the table when TPP leaders met in Japan last November.

In summary, this statement is saying that good progress has been made on the more straightforward issues, but not much has been achieved on the tough issues. Much more work needs to be done so don’t expect a final outcome by the end of the year.

The “sensitive issues” include most of New Zealand’s demands on agricultural market access and on issues such as New Zealand’s pharmaceutical import regime and IP law as it pertains to pharmaceuticals. For Australia, the sugar issue is probably the biggest demand of the US. This was excluded from the original Australia US FTA. For Vietnam, the textiles, clothing and footwear issue will loom large.

The Big Sky statement also notes that “many APEC economies continue to express interest in joining the negotiations”. We imagine that the issue of expansion will raise its head in Hawaii. Japan was perhaps closest to joining but all work on this has been stopped as Japan deals with the post-earthquake Tsunami world. Canada, Thailand, Korea and Mexico have all been talked about a possible new entrants and China is following negotiations with increasing interest.

Ministers continue to refer to the TPP as setting a “high standard”. This is good news for New Zealand as anything excluding key agriculture sectors, or not fully liberalizing these, could not be possibly be described as “high standard”.

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