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Politics

TPP 11 to discuss writing US out of trade pact

Drug data protection, tariffs among issues for negotiators at next week's Japan meeting

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Japan's Nobuteru Ishihara, center, leaves a meeting of the TPP 11 during the Asia-Pacific Economic Cooperation ministers' conference in Hanoi on May 21, 2017.   © Reuters

TOKYO -- Representatives of the 11 countries trying to salvage the Trans-Pacific Partnership trade and investment agreement will meet in Japan next week to discuss in depth for the first time how to proceed without America.

The negotiators will gather in the mountain resort town of Hakone, southwest of Tokyo, for three days starting Wednesday in the first TPP talks held in Japan.

The original 12 countries reached a broad agreement in 2015 after five years of negotiations. But in January, the new administration of President Donald Trump announced its withdrawal from the TPP, leaving its partners in the lurch since the current deal requires U.S. ratification to enter into force.

Yet Japan and other countries eager to keep the pact alive have talked the less enthusiastic members into continuing dialogue. In May, ministers of the 11 remaining countries met in Vietnam. Japan's cabinet point man for the TPP, Nobuteru Ishihara, said afterward that he was able "to confirm the commitment of the 11 countries to bringing a pact into effect soon."

The meeting next week will delve into the details of modifying the current deal. One necessary change involves the conditions for an agreement to go into effect. As things stand, at least six countries totaling 85% or more of the group's aggregate gross domestic product must ratify the agreement. The U.S. alone accounted for 60% of the combined GDP among the original 12.

Japan open to shorter drug data protection

More important, however, is whether to reopen agreed-on tariffs and rules. Many countries want to shorten the period for which drug development data is protected, according to a Japanese government source. The U.S., home to a powerful pharmaceutical industry, had pushed for a longer exclusivity period, and the group eventually settled on eight years.

The longer new-drug developers can keep testing data locked up, the more money they can earn. But emerging markets have to wait that much longer for cheaper generic versions. Japan is open to a shorter period. One proposal would revert to eight years should the U.S. return to the fold.

Meanwhile, the tariff schedules stand like "delicate glasswork that has barely managed to accommodate the demands of each country," a source said.

Japan and Australia -- wary of starting an endless spiral of amendments -- seek to maintain the status quo. But Malaysia and Vietnam, which saw a more open U.S. market as a key motivation for joining the pact, may seek to renegotiate the agreed-on tariffs.

Japan tried to hold the line on TPP tariffs in negotiations on a economic partnership with the European Union, with which it reached a broad agreement Thursday.

The EU had demanded Japan drop tariffs on all cheese imports. But Japan came up with the compromise of a low-tariff import quota instead to avoid going lower than it did in the TPP. In this way, "Japan made sure there are no side-by-side comparisons of specific tariffs with what it has agreed to under the TPP," a person close to the negotiations said.

Trade negotiations often proceed by a domino effect where one advance brings about others, so the Japan-EU agreement could jump-start talks on a revised TPP. Japan aims to reach a general agreement among the 11 countries by the end of this year and thus wants to minimize changes. But reconciling the conflicting interests in the group within such a time frame will prove no easy challenge.

Ahead of the meeting next week, Japan appointed a new chief to lead its negotiation team. Kazuyoshi Umemoto, Tokyo's ambassador to Italy, will replace the current chief negotiator Keiichi Katakami, who has also served as deputy foreign minister.

(Nikkei)

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