(TPP) is a trade agreement currently being negotiated between Australia, Brunei Darussalam, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. It will account for roughly 40% of global gross domestic product and a third of world trade. The comprehensive plan covers, among other areas, government procurement, intellectual property, electronic commerce, labor protections, food safety, animal and plant health, competition policy and state- owned enterprises. Membership is by invitation only. T he Philippines is on the right track in seeking to accede to the TPP, according to officials from the US and New Zealand, two of the free trade agreements 12 current members. Inquirer.net reports that NZ Minister of Trade Tim Groser has cited the countrys good progress in preparing for the TPP and said the government has been completely rational by indicating to US President Barack Obama the Philippines interest in joining. Groser added, however, that the country would have to decide if it wants to make that crucial last step and participate in negotiations.
TPP members are working towards a multilateral agreement that will lower trade barriers between 12 countries in the Asia-Pacific region and effectively create the worlds largest trade agreement since the WTO.
Groser says the crucial step for now is for current members to complete negotiations so that the Philippines could better assess what it must do to meet the TPPs high standards. At the same time he acknowledged how bilateral trade between NZ and the Philippines had gone over 1B NZ$ last year, and expressed confidence the Philippines could become a major economy if future governments are able to sustain the countrys economic momentum.
US Commerce Secretary Penny Pritzer said the US welcomed the Philippines interest in the TPP. The trade deal, when completed, will PH on track to TPP, say NZ, US officials TRADE seeks to advance inclusive growth by improving the Philippines global standing in the international economy through higher levels of trade and foreign direct investment. It also works to ensure that national trade regimes conform to international standards. TPP Updates Volume 1 Issue 9 June 2014 Recent developments on the Trans-Pacific Partnership gathered from third party sources as indicated in the provided hyperlinks. TPP Briefs: NZ farmers advocacy group is eager to push TPP forward; Australian Trade Minister Andrew Robb says TPP members may reach agreement in early 2015; US dairy groups threaten to pull support for trade deal; Chilean senator calls on president to evaluate TPP benefits; US House Democrats call for better labor provisions. International news: 3 Singapore premier cites the need for TPP to have strong US bipartisan and public support. The TRADE Project 3F Herco Center, 114 Benavidez Street, Legazpi Village, Makati City 1229 Tel: (02) 843-0612; 843-4704 Fax: (02) 823-7835 2 (continued next page)
PH ON TRACK (from p. 1) 2 TPP Updates/June 2014
give greater regulatory coherence for all members and help forge better links for companies with production and distribution networks across the region, she said. Pritzers remarks, delivered on 4 June at a forum organized by the American Chamber of Commerce of the Philippines (AmCham) and the Makati Business Club (MBC), were reported by Interaksyon.com. According to ABS -CBN News.com, Pritzer also lauded governments efforts in implementing economic and institutional reforms and in improving intellectual property protection and tax collection. She said US businesses hoped to deepen trade investment ties with the Asia-Pacific region.
Pritzer led a delegation of executives from US companies that were eager to invest in information technology, infrastructure, telecommunications, clean energy, financial services, education and healthcare. One of these is AES Corporation, an energy firm interested in expanding operations to the Philippines with an investment of around US$1.2billion for a 1,200 megawatt power plant in Masincloc, Zambales. Pritzer noted that another US firm, Pangea Motors, has struck a deal with transport group Pasang Masda to manufacture e- jeepneys called COMETS (City Optimized Managed Electric Transport) in the Philippines, to replace the ageing jeepneys clogging the streets of Manila.
Pritzer said foreign direct investments to the Philippines more than doubled in 2011-2012. She also cited the USs $24 billion annual bilateral trade with the Philippines and growing partnership with the Asia-Pacific region, which is expected to be home to more than half of the worlds middle class and $10 trillion in goods and services by 2022.
NZ farmers advocacy group eager for TPP
Radio New Zealand News reports that Federated Farmers, the countrys independent advocacy group for farmers and rural communities, is keen to see the TPP push ahead despite ongoing difficulties in negotiations between some members over the elimination of agricultural tariffs. Bruce Wills, the organizations president, said that the TPPs success would be clearly beneficial for NZ and its farmers.
Mr. Wills said that his group understood the benefits of freer trade, and that their concern for some time had been the slowing momentum of the TPP. He said Federated Farmers was merely voicing support for Prime Minister John Key and saying get on with it.
The TPP, he continued, was critical. If we've got some countries finding the pace too difficult, my comment would be well maybe they need to stand aside and let the majority of this 12- member group get on and sign a full and comprehensive trade deal."
2015 agreement possible, says AU official
Australian Trade Minister Andrew Robb has said the 12 members of TPP may reach an agreement early next year before the US election politics get in the way, the Associated Press reported on 18 June. Mr. Robb made the statement at a US Studies Center conference in Canberra where he also declared a deal this year had no chance of agreement despite quite a momentum. He expressed belief that in the first half of 2015 negotiations over content would more or less be over, adding: Its then just the politics.
US President Barack Obama, in a statement reported a few days later in the New Straits Times, was more optimistic, and expects that an agreement could be reached by November in time for his next Asian visit to attend the Asia- Pacific Economic Cooperation (APEC) Summit in Beijing.
President Obama said he had discussed this timeline with New Zealand Prime Minister John Key, and hoped by the time we see each other again in November we have got something that we have consulted with
TPP BRIEFS (continued on page 4)
TPP Updates/June 2014 3
Lee says the TPP shows the US is serious in engaging Asia, but the trade deal should result in a win-win situation. S ingaporean Prime Minister Lee Hsien Loong in his US visit reiterated his countrys strong support for the TPP, and expressed hope that the US Congress would ratify the deal because of its importance to the US economically as well as strategically, according to The Business Times. Prime Minister Lee was in the US for meetings with President Barack Obama and Vice President Joe Biden.
The Singaporean leader said at a dialogue in Washington, DC organized by the non-profit think tank Council on Foreign Relations, that with Chinas growing influence, Asia was a region where America played an important role even with other current foreign policy issues the US is currently facing such as Iraq, Iran, Syria and Ukraine. He urged the US to work closely with its Asian partners in forging a final TPP deal, saying that while the TPP showed the US was serious in engaging more strongly with the region, there needed to be policies, measures, specific projects on which the US worked with its partners so that the trade deal results in a win-win situation. He acknowledged that US trade policy was a key instrument to expanding influence to Asian countries, but said it was important the TPP have strong bipartisan and public support in the US.
Channel News Asia reports that the Singaporean Prime Minister also urged the business community in New York to lobby Congress in support of the TPP. We need to be able to know that between the Administration and Congress and the American people, we can work together to deliver the ratification, he said, warning that uncertainty in the US Congress may signal weakness to Washingtons negotiating partners.
President Obama has made the TPP the cornerstone of his governments economic policy for the Asia-Pacific region. However, Singapore PM asks US: Work closely with Asian partners efforts to renew fast-track authority which allows the president to negotiate trade agreements that Congress may approve or reject, but not amend have been met with opposition by lawmakers, including those from President Obamas own Democratic Party who have said in an open letter to the President that trade negotiators do not adequately consult with Congress. In April, according to World Trade Online, Republican Representative Devin Nunes, chairman of the House of Representatives Ways and Means committee, said the lack of fast-track had already derailed TPP negotiations, as seen by the lack of agreement between US and Japan over market access. Nunes said further delay in renewing fast-track authority may derail the TPP until after the next president assumes office. Meanwhile, in Malaysia, Dr. Munir Majid, visiting senior fellow at the LSE Ideas Centre and columnist for The Star Online, writes that the US desire for a gold standard TPP needs to be balanced with consideration for its partners strategic and business interests. Munir Majid said that the TPP gold standard is of US definition and seeks to uphold a liberal global system while enhancing American strategic and business interest. As such, it could become beset with non-adherence and interminable disputes unless other members interests and perspectives are incorporated. He said, for example, that the US has also sought to protect certain industries it deems sensitive, such as medicines and tobacco, in the same way Japan is now seeking to protect its agricultural sector.
The main point, Munir Majid said, is that the TPP as a platform of cooperation should take into account counter arguments and interests to an American-defined trade and investment regime.
4 TPP Updates/June 2014
Congress about, that the public can take a look at. He stressed however that there was still a lot of work to be done.
Negotiators had met in Singapore in May but were unable to agree on a time for concluding the deal. Another round of negotiations is scheduled for early July in Canada.
US dairy groups threaten to remove support
US dairy industry groups have sent a letter to US Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack threatening to withdraw support for the TPP if Japan and Canada do not provide meaningful market access for agricultural products, according to Inside US Trade. The letter, however, did not explicitly state the specific deal the dairy industry wanted the US to secure.
The TPP must remain a high standard trade agreement that can be used as a model for future U.S. trade agreements," the letter dated 3 June said. "All TPP countries must... ensure this undertaking lives up to its founding goals of comprehensive and meaningful market access." It noted that the US dairy industry has long advocated for comprehensive market access and the inclusion of Japan and Canada in TPP. According to New Zealands AgriHQ, the letter was signed by the US Dairy Export Council and the National Milk Producers Council.
TPP faces domestic scrutiny in Chile
Inside US Trade reports that a senator belonging to Chilean President Michelle Bachelets party has drafted a non-binding resolution calling on the president to evaluate the utility of continuing with TPP negotiations. Senator Juan Pablo Letelier, who accompanied President Bachelet during her recent trip to the US, is questioning whether the trade deal would amount to a net benefit for Chile. He expects the Senate to approve the resolution in July.
Chile now has very high standards for IP protection, Letelier said, while emphasizing that
the country needed to protect public interest when it comes to IP protection for medicines. US negotiators are calling for strong patent protection for biologics, a new class of drugs developed from living tissue, to allow drug firms to recover investments and continue further research, but organizations such as Doctors without Borders have warned that this could limit access to affordable medicines.
Letelier added that Chilean lawmakers also have misgivings about the certification requirement stipulating that a final agreement could not be enforced unless the US president certifies a trading partner is compliant with all the TPP provisions. He said this gave the US ultimate authority and leverage that would not be in keeping with Chiles legislative sovereignty.
US Dems call for improved labor provisions
Members of the US House Democratic Caucus have again criticized the TPP framework, this time citing the need for better protection of workers rights in the United States and abroad.
In a letter addressed to US Trade Representative Michael Froman and posted by Congresswoman Rosa DeLauro on her website, 153 House Democrats called attention to reports that Vietnam, a TPP member, has rejected a TPP requirement that workers be allowed to establish independent labor unions. They pointed as well to three other negotiating partners namely, Malaysia, Brunei and Mexico as having labor issues that need addressing in a serious and meaningful way in order for the TPP to move forward.
The House Democrats said all TPP members must have binding and enforceable plans to bring their laws and practices into compliance with the trade deals labor requirements. They added that such plans must be made public, and the changes fully implemented, before Congress takes up TPP for consideration.