Trans-Pacific Partnership talks in Dallas

May 18, 2012
by WLJ

An important meeting on trade began in Dallas last week but attracted almost no attention from the press or anybody else. The chief negotiators for the nine Trans- Pacific Partnership (TPP) countries convened the session, the 12th of the series in their work to develop a free trade area in the Pacific. The talks are important for several reasons, including the fact that they involve the U.S., Australia, New Zealand, Chile, Peru, Brunei, Singapore, Vietnam and Malaysia. Japan, Canada and Mexico say they are thinking about joining, but that hasn’t happened yet.

Another reason is that their purpose is a much broader trade deal than the typical free trade agreement that often focuses on tariffs and little else. TPP will include many, many other aspects important to trade, including labor and environmental standards, as well as internal supports. For example, sector-specific groups met last week on services, customs, so-called horizontal issues, intellectual property rights, telecommunications, technical barriers to trade, labor, trade remedies, investment, and legal issues, according to a statement from the Office of the U.S. Trade Representative (USTR).

In addition, stakeholder groups on site in Dallas held a round table on small- and medium-sized enterprises, and shared their views on how TPP should treat intellectual property rights. In addition, the Dallas-Fort Worth World Affairs Council held a session on access to medicine—an extremely delicate issue that includes agreements to make patent linkage, patent term extensions, and full-term data exclusivity voluntary rather than mandatory. Data exclusivity provisions refer to the period in which a generic manufacturer may not use the clinical test data developed by an innovative drug manufacturer.

Intellectual property rights are a major issue among these negotiators and in a letter, more than 30 business associations called for strong and comprehensive “IP” rights in TPP. “More, not less, rigorous IP rules are needed to thwart the explosion in IP infringement, including pirated, counterfeit and unlawful copycat products through all sectors of the economy and trade secret theft,” the letter said.

Because the TPP talks are so broad, they are generating efforts to boost protections as well as tear down barriers and a number of major groups in Congress have expressed strong concerns over USTR’s positions.

For example, Rep. Mike Michaud, D-ME, and 15 other House members wrote US- TR Ron Kirk last week seeking maintenance of existing tariffs on import-sensitive footwear which they say are necessary for U.S. manufacturers to compete with Vietnam, “the second largest footwear exporter to the United States,” the letter said, noting that only 1 percent of the footwear sold in the U.S. was manufactured domestically.

At this time, the administration is talking about wrapping up a deal on TPP by the end of the year, a target almost no one believes is possible. In fact, the main cast of participants is not yet set, since it is far from certain whether Japan, Canada and Mexico will formally ask to participate, and the conditions they will be expected to meet if they do.

In addition, there has been significant grumbling among negotiators that the U.S. has focused very heavily on the broader side issues but the group has not yet identified specific goals for the main event, which they see in terms of proposals for direct market access and a common regulatory framework.

In part, these concerns reflect skepticism regarding the administration’s ability to balance the interests of some of its main supporters with broader trade objectives. It says it wants to negotiate a 21st Century agreement with its Pacific trading partners and, in the process, end most government interventions in their economies— while supporting stronger labor and environmental and other protections. And, the administration says it wants to boost U.S. sales overseas sharply, and to actively enforce negotiated trade rules.

And, it wants to do all this without running afoul of the several roadblock issues that have tied up the World Trade Organization’s Doha Round. In addition, it faces the tricky problem of actually fighting for presidential fast-track authority to negotiate trade agreements, even in the face of opposition from many who otherwise support the administration.

Perhaps the White House can do all these things, and if so, it will deserve credit for that. However, many U.S. trade advocates are still smarting from the Buy American provisions in the stimulus laws and the pullback from Doha leadership.

To this fairly large group, administration trade policy efforts have been sometimes indifferent and less than consistent in the past, and they will be watching closely to see how they hold together this time around.

It may well take real progress on an ambitious TPP to change that view, DTN’s Washington Insider believes. — WLJ