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Economy

'TPP 11' talks set parameters for moving forward

Suspending rules on state-owned enterprises among sticking points

TOKYO -- Negotiators from the Trans-Pacific Partnership's 11 remaining parties have drawn up a nearly complete list of rules requested to be shelved now that the U.S. has withdrawn, but challenges in culling the exemptions loom over the push to reach a deal by November as hoped.

"The debate intensified as requests from every country got integrated," Kazuyoshi Umemoto, Japan's chief negotiator, told reporters Friday after two days of talks here wrapped up. The top trade officials will reconvene in Japan next month, hoping to strike a general agreement in time for November's Asia-Pacific Economic Cooperation conference.

The U.S. won many concessions in forging the initial TPP, but pulled out right after President Donald Trump took office. Hashing out what rules the remaining signatories wanted to suspend became a prerequisite for a November agreement. How far to let these requests go has become the major issue.

Parties are seeking to suspend the rules, rather than drop them outright, out of hope that the U.S. will eventually come back to the table.

Refining requests

At the talks Thursday and Friday, task forces compiled countries' suspension requests in three areas: legal matters, intellectual property and miscellaneous other items. The list ballooned before the talks to about 80 items, but by the end of the first day was cut back to 50. Host country Japan confirmed members' positions on each matter.

Negotiations on intellectual property and legal issues "neared a conclusion," said a source familiar with the talks. But talks on other areas -- such as regulating state-owned enterprises and liberalizing government procurement -- occasionally became muddled, in part because these were the first discussions of them. While at least no more items were added to the agenda, the goal of a single-digit list remains distant, leaving significant obstacles ahead at the next meeting.

Japan, Australia, New Zealand and Singapore say they intend to keep the rule suspension to a minimum in order to maintain an effective agreement.

But other countries, including Vietnam, Malaysia, Chile and Peru -- which the U.S. had pressed into opening their markets and loosening regulations -- have a different perspective. Some may seek to suspend more rules if enough parties agree.

With the November deadline nearing, Japan is also sending delegations for one-on-one talks with members such as Vietnam, which was unable to submit formal requests at this meeting because internal negotiations were stalled.

Domestic troubles

A further source for concern is that many members face existing or potential political trouble at home. New Zealand's general election Saturday, for instance, could throw a wrench in the works in the event of a win for the opposition Labour Party -- which supports renegotiating the TPP -- or gains for the New Zealand First party, which opposes the pact altogether.

Japan's Prime Minister Shinzo Abe is expected to dissolve the lower house of the Diet Thursday with a snap election to follow next month. That prospect has raised concerns that special interests could press for lowering Japan's low-tariff import quota on milk products laid out in the TPP. The government is reluctant to adjust the tariff, fearing that doing so would spur other countries to clamor for revisions.

Peru's opposition-held congress also forced a cabinet reshuffle Sept. 15 with a vote of no confidence, throwing the government into turmoil. Vietnam may face changes to key positions next month as well.

(Nikkei)

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