Trans-Pacific Partnership more exciting than Doha, trade experts say
December 12, 2011 | 04:18 PM
As trade ministers prepare to gather in Geneva this week to discuss the Doha round and the House Ways and Means Trade Subcommittee holds a hearing Wednesday on the Trans-Pacific Partnership, a panel of trade experts has declared the TPP as more exciting to American business, while a coalition of 60 agriculture groups urged the Obama administration to include Japan in the TPP group.
The Trans-Pacific Partnership Agreement is an Asia-Pacific regional trade agreement being negotiated among the United States and eight other partners: Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.
Negotiations started in 2009 and the country leaders announced in Hawaii in November that they had reached consensus on broad outlines of an agreement. Trade analysts had initially played down the importance of the agreement because several of the countries are small, but Obama administration officials have made it their signature initiative and Japan, Canada and Mexico have shown an interest in joining.
Claude Barfield
“U.S. business community hopes are sky-high,” for TPP, Claude Barfield of the American Enterprise Institute said at a discussion of global trade sponsored by the Carnegie Endowment for Peace on Wednesday. Barfield said the Doha round has gone so badly he wishes someone would kill it, while Bernard Hoekman of the World Bank described the Doha round as “in a coma.”
Hoekman said that Russia joining the WTO would be the big headline out of Geneva, but he warned that Russia still has to complete its domestic procedures to join the WTO and that the upcoming Russian elections could drag out that process. Barfield described Russia as “a mid-level nation at most” in trade terms.
Jeffrey Schott
The experts said that countries have simply been unwilling to make commitments in the multilateral agreements while they have been more comfortable making bilateral agreements. One reason, they said, is that China has become so powerful that some countries fear making trade concessions to it.
On the other hand, the Trans-Pacific Partnership “is a vibrant initiative” that is linked to the larger U.S. presence in the Pacific, said Jeffrey Schott of the Peterson Institute of International Economics.
Bernard Hoekman
Hoekman said he was a “bit of a skeptic” because most of the countries, except Japan, are already free traders, but he added that industry groups “have come together and listed things they want fixed.” If TPP is successful, those ideas could be transferred to the WTO, he added.
At the Honolulu meeting, President Barack Obama said the TPP has the potential to be a model not only for the Asia Pacific but for future trade agreements.
“It addresses a whole range of issues not covered by past agreements, including market regulations and how we can make them more compatible, creating opportunities for small and medium-sized businesses in the growing global marketplace,” Obama said. “It will include high standards to protect workers’ rights and the environment.”
U.S. farm groups have taken a particular interest in a provision that would reinforce and build upon existing rights and obligations under the World Trade Organization Agreement on the Application of Sanitary and Phytosanitary Measures.
According to an outline released by the Office of the U.S. Trade Representative, the “SPS text will contain a series of new commitments on science, transparency, regionalization, cooperation, and equivalence. In addition, negotiators have agreed to consider a series of new bilateral and multilateral cooperative proposals, including import checks and verification.”
But Japan’s signal of interest raised the prospect of gaining more access to the lucrative Japanese market, and last week 60 agriculture organizations wrote both U.S. Trade Representative Ron Kirk and Agriculture Secretary Tom Vilsack that they should allow Japan to join the negotiations.
TPP countries have agreed that all current member countries must agree to allow a new applicant to join the group.
“We urge the Obama administration to work quickly and closely with Japan to smooth the way for Japan’s full participation in the TPP,” the agriculture groups said. “The addition of Japan to these negotiations would enhance the significance of the TPP and make the agreement much more encompassing.”
The groups signing the letter included the American Farm Bureau Federation, and major commodity, meat and agribusiness trade associations.
“Japan’s economy is second only to China’s in the region, and it is our fourth largest agricultural export market overall, despite maintaining substantial import barriers in the food and agricultural sector,” the groups said.
“Even with these barriers, our exports to Japan in 2010 totaled nearly $12 billion. We understand that there are important issues to be tackled before any final decision can be made with respect to Japan’s participation, not the least of which is to gain assurances from Japan that it recognizes and accepts that the TPP must be a comprehensive agreement. We believe the Japanese government is beginning to undertake the necessary changes to domestic programs that will permit it to negotiate on that basis.”
The agriculture groups noted that Japan ”is almost certain to enter into free-trade talks with the European Union in 2012 and will be looking to negotiate with other countries if its TPP bid is rejected.”
“The opportunity to include Japan in the TPP negotiations must be seized,” the groups said. “It is an opportunity that may not present itself again.”
The Trans-Pacific Partnership Agreement is an Asia-Pacific regional trade agreement being negotiated among the United States and eight other partners: Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.
Negotiations started in 2009 and the country leaders announced in Hawaii in November that they had reached consensus on broad outlines of an agreement. Trade analysts had initially played down the importance of the agreement because several of the countries are small, but Obama administration officials have made it their signature initiative and Japan, Canada and Mexico have shown an interest in joining.
“U.S. business community hopes are sky-high,” for TPP, Claude Barfield of the American Enterprise Institute said at a discussion of global trade sponsored by the Carnegie Endowment for Peace on Wednesday. Barfield said the Doha round has gone so badly he wishes someone would kill it, while Bernard Hoekman of the World Bank described the Doha round as “in a coma.”
Hoekman said that Russia joining the WTO would be the big headline out of Geneva, but he warned that Russia still has to complete its domestic procedures to join the WTO and that the upcoming Russian elections could drag out that process. Barfield described Russia as “a mid-level nation at most” in trade terms.
The experts said that countries have simply been unwilling to make commitments in the multilateral agreements while they have been more comfortable making bilateral agreements. One reason, they said, is that China has become so powerful that some countries fear making trade concessions to it.
On the other hand, the Trans-Pacific Partnership “is a vibrant initiative” that is linked to the larger U.S. presence in the Pacific, said Jeffrey Schott of the Peterson Institute of International Economics.
Hoekman said he was a “bit of a skeptic” because most of the countries, except Japan, are already free traders, but he added that industry groups “have come together and listed things they want fixed.” If TPP is successful, those ideas could be transferred to the WTO, he added.
At the Honolulu meeting, President Barack Obama said the TPP has the potential to be a model not only for the Asia Pacific but for future trade agreements.
“It addresses a whole range of issues not covered by past agreements, including market regulations and how we can make them more compatible, creating opportunities for small and medium-sized businesses in the growing global marketplace,” Obama said. “It will include high standards to protect workers’ rights and the environment.”
U.S. farm groups have taken a particular interest in a provision that would reinforce and build upon existing rights and obligations under the World Trade Organization Agreement on the Application of Sanitary and Phytosanitary Measures.
According to an outline released by the Office of the U.S. Trade Representative, the “SPS text will contain a series of new commitments on science, transparency, regionalization, cooperation, and equivalence. In addition, negotiators have agreed to consider a series of new bilateral and multilateral cooperative proposals, including import checks and verification.”
But Japan’s signal of interest raised the prospect of gaining more access to the lucrative Japanese market, and last week 60 agriculture organizations wrote both U.S. Trade Representative Ron Kirk and Agriculture Secretary Tom Vilsack that they should allow Japan to join the negotiations.
TPP countries have agreed that all current member countries must agree to allow a new applicant to join the group.
“We urge the Obama administration to work quickly and closely with Japan to smooth the way for Japan’s full participation in the TPP,” the agriculture groups said. “The addition of Japan to these negotiations would enhance the significance of the TPP and make the agreement much more encompassing.”
The groups signing the letter included the American Farm Bureau Federation, and major commodity, meat and agribusiness trade associations.
“Japan’s economy is second only to China’s in the region, and it is our fourth largest agricultural export market overall, despite maintaining substantial import barriers in the food and agricultural sector,” the groups said.
“Even with these barriers, our exports to Japan in 2010 totaled nearly $12 billion. We understand that there are important issues to be tackled before any final decision can be made with respect to Japan’s participation, not the least of which is to gain assurances from Japan that it recognizes and accepts that the TPP must be a comprehensive agreement. We believe the Japanese government is beginning to undertake the necessary changes to domestic programs that will permit it to negotiate on that basis.”
The agriculture groups noted that Japan ”is almost certain to enter into free-trade talks with the European Union in 2012 and will be looking to negotiate with other countries if its TPP bid is rejected.”
“The opportunity to include Japan in the TPP negotiations must be seized,” the groups said. “It is an opportunity that may not present itself again.”
