Breakthrough unlikely as new round of TPP talks open in Canada
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By Aarian Marshall
WASHINGTON, July 2, 2014 - Negotiators from the U.S. and 11 other nations will meet in Ottawa July 3-12 to discuss the Trans-Pacific Partnership (TPP), a treaty aimed at creating one of the world's biggest free trade zones. But observers say the talks - which will not involve trade ministers, including U.S. Trade Representative Michael Froman and Japanese Minister of State for Economic and Fiscal Policy Akira Amari - are unlikely to produce a breakthrough.
"No ministerial meeting is being scheduled on the margin of the officials meeting in Ottawa," Canada's Department of Foreign Affairs, Trade and Development posted on its website. Negotiators would be unable to complete a final deal without the participation of their ministers."
Other foreign trade officials have signaled a breakthrough is doubtful. "I think this year's out," Australian Minister for Trade and Investment Andrew Robb said during a mid-June conference in Canberra. “We are over 80 percent of the way. The last part is the most difficult."
Robb pointed to the difficult political situation in the U.S. Congress as a barometer for the success of negotiations. Many observers feel the talks are unlikely to bear fruit unless lawmakers first renew Trade Promotion Authority (TPA), which would allow a president to sign a trade deal that would be subject only to an up or down vote in Congress, with no amendments or filibusters.
Republicans “expect TPA will not get through this year,” Robb said he'd been told in private conversation. "Next year I think in the first half of the year there is a political opportunity in the U.S., but if [TPP talks continue] you start to run into the politics of the next presidential election."
Though some trade observers had speculated earlier this year that TPA - and perhaps the entire TPP deal - might fit into a post-election lame duck session, Jordan Schneider, an analyst at the political risk firm Eurasia Group, says that now looks unlikely.
“This is too big a piece of legislation to sneak through the dead of night,” Schneider said in an interview. “To expect that is to misunderstand the seriousness of the trade fight.”
Though Obama signaled during a recent meeting with New Zealand Prime Minister John Key that he hoped to have a deal - “something that we have consulted with Congress about, that the public can take a look at” - completed by his next trip to Asia in November, the White House's relative silence on the issue is notable. Obama has not delivered significant remarks on trade since he requested TPA during his annual State of the Union address in January.
Instead, the administration seems more focused on domestic issues, like immigration reform. And House Republicans - whose typically pro-trade stances are badly needed to push through TPA - are still reorganizing from the stunning primary defeat and imminent departure of House Majority Leader Eric Cantor, R-Va., followed by the quick ascension of former Majority Whip Kevin McCarthy, R-Calif., who will take Cantor's place in the House leadership.
Meanwhile, former U.S. Trade Representative and Agriculture Secretary Clayton Yeutter is cautioning agricultural interests to stay patient.
“[N]o one should critique the TPP agreement until there is a TPP agreement,” he told Agri-Pulse. “The ag community, the Congress, and everyone else in America will have every right to evaluate TPP and, if they wish, criticize the outcome - when there is an outcome. But we should all hold our fire while the negotiations are under way.”
In May, a number of agriculture groups - including the National Pork Producers Council, the International Dairy Foods Association and the National Association of Wheat Growers - urged the Obama administration to conclude TPP negotiations without the talks' second largest partner, Japan, unless the Asian country agreed to eliminate its agricultural tariffs.
Japan, bolstered by its strong but aging farm lobby, has vowed to protect its domestic agriculture industry, particularly its “sacred” products: dairy, rice, sugar, wheat, barley, and beef and pork.
Last month, a number of media reports indicated that the U.S. had dropped its demand that Japan eliminate all of its beef and pork tariffs under a final trade agreement. But Yeutter says agriculture should put the urgent press releases and letters to lawmakers on hold.
“All the fuss of recent weeks is a distraction that simply slows things down when it is in no one's interest to have that happen,” he noted. “Ambassador Froman and his superb negotiating team have had to defend themselves ‘in the middle of the game,' and that is simply unfair to them.” The U.S. agriculture industry's main demand - complete tariff elimination - might not be entirely prudent, Yeutter indicated.
“I would willingly cut Japan some slack on tariffs if it meant getting a better deal on non-tariff measures, policy reforms, and anything else which now impedes our exports far more than tariffs do,” he wrote.
Chuck Conner, president and CEO of the National Council of Farmer Cooperatives, agrees that complete tariff elimination might not be possible, but he said tariff reduction would have to be “very substantial.”
“If it's not, then agriculture is not going to be enthusiastic about this agreement,” Conner said in a recent interview. “And in my view, if agriculture's not 100 percent behind this really enthusiastically, it has no chance of being adopted in the two bodies of Congress. There's just no chance.”
The nations involved in the TPP talks, besides the U.S. and Japan, are Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
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