Trans-Pacific Partnership: Where are we now?

As negotiators meet today in Canberra to continue nutting out the details of the Trans-Pacific Partnership (TPP) renewed attention is focused on the agreement.  Just a few days ago the controversial Intellectual Property (IP) chapter was leaked, confirming warnings that the chapter was excessively punitive with serious implications for freedom of speech and public health.

As the negotiators meet to discuss IP, they will also be aware of the increasing pressure to conclude the deal, now dragging into its seventh year of negotiations.  While the technical work nears conclusion (the majority of chapters have been closed), a US/Japan market access deal remains elusive.  Until market access discussions progress we are unlikely to see conclusions of the most controversial rules issues, including IP. 

What is the TPP?

The Trans-Pacific Partnership (TPP) is a regional trade agreement which very much reflects the 21st century’s trade policy focus on non-tariff barriers, aiming to achieve regulatory coherence in contentious areas such as Intellectual Property (IP) State Owned Enterprises (SOEs), Labour, Environment and Rules of Origin. From its humble beginnings in 2006 as the Trans-Pacific Strategic Economic Partnership Agreement (P4) between Brunei, Chile, NZ and Singapore, the TPP has now become the world’s largest trade agreement, with 12 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, NZ, Peru, Singapore, US and Vietnam) currently involved in negotiations. If completed the deal will cover almost 40% of GDP.  The agreement provides new market access through free trade with Canada, Mexico and Peru, and “will co-exist with existing free trade agreements” in the other countries – although exactly how that will work is unclear.

There has also been widespread concern as to the secrecy of the negotiation procedures, as voiced by various organisations in fields such as intellectual property and public health. While DFAT has held “more than 700 public consultations on the TPP negotiations” and is “open to receiving submissions on the TPP at anytime”,  the text is secret (even the latest leak is months old).  This leaves stakeholders concerned about access to knowledge and culture to advocate as best they can for a balanced chapter that is flexible and adaptable enough to cope with future innovation policy.  Meanwhile no formal stakeholder program has been held with the negotiating rounds since the August 2013 Brunei round, and the recent negotiation rounds have been held with short (or no) public notification.

Where are we now

Negotiation efforts are in full force with many member States hoping to have all fundamental elements of the agreement concluded by the end of the year. Australian trade minister Andrew Robb has released an optimistic statement that “After more than four years of intense negotiations the conclusion of the world’s largest regional trade agreement is within reach”.

However until market access talks between US and Japan regarding agriculture and automobile trade are resolved it seems unlikely we will see substantial progress. The US has expressed concern over Japan’s lack of flexibility in negotiations during the home stretch, but they themselves are showing little flexibility regarding automobile tariffs.  And until they secure Trade Promotion Authority (‘fast track’) many countries have indicated that there is no chance of the deal being sealed.

Japanese Prime Minister Shinzo stated in a conference call on September 23rd that Tokyo was presenting its flexibilities and that he was prepared to “have an improvement of market access in a daring way”.  The tough stance taken by Japan at the negotiating table is likely a reflection of Abe’s fear of provoking political consequences against his Liberal Democratic Party, coming up to local and regional elections scheduled early next year. Major concessions relating to sensitive agriculture products could provoke such political consequences. In his address to the Council on Foreign Relations, Abe spoke about the “enormous task” of overcoming “resistance from the people” within his country. He declared his efforts in trying to be flexible despite lack of public support from Japan regarding international trade as demonstrated in polls taken by Pew Research.

However, Minister Robb remains unfazed by the fact that Japan and US failed to bridge their bilateral trade agreement gaps. He said that 90% of the agreement had been negotiated, and that “we’re at the hard end”, with this last part of the negotiations being the “hardest”.  Signaling the optimistic commitment, the negotiators are meeting this week in Canberra, with a ministerial level meeting in Sydney next weekend and reports of another possible negotiator meeting following.  Robb believes that as more significant conclusions are reached, especially between the US and Japan, “momentum will be huge” and the agreement “could be realized in November or December”.

Originally with the aim of tariff-free trading throughout the block, it now seems clear tariffs are being negotiated on a bilateral basis.  Civil society and business groups remain concerned about what might be offered up in exchange for market access, especially for countries like Australia that already have relatively low tariffs.  As has been emphasized by the Productivity Commission and others, the IP chapters can have a huge effect on Australia’s economy and national well-being.  We continue to urge the government not to agree to any measures that would adversely impact on free expression and cultural wellbeing.