TOKYO -- Trade ministers from the 12 Trans-Pacific Partnership countries will meet from Sept. 30 to hammer out disagreements left unresolved after previous talks, aiming for a broad agreement before the political climate shifts.
Two to three days of talks will be held in the U.S. city of Atlanta. Free trade rules for most of the 31 areas covered by the TPP were settled at the last round of talks in July. But intense disagreement remains on dairy products, automobiles, intellectual property for pharmaceuticals, and other areas where national interests are at stake. Chief negotiators will meet ahead of the ministerial talks, seeking to lay the groundwork for consensus.
Contention over rules for dairy products worked to derail agreement at July's meeting in Hawaii, and little progress on the issue has been made since. New Zealand seeks to drastically expand its dairy exports. But Japan, Canada, the U.S. and others still hold that the country's demands greatly outstrip their ability to accept imported dairy products.
Japan disagrees with Mexico and Canada over place-of-origin rules for autoparts and finished vehicles, despite their talks with the U.S. last week on the issue. Japan wants tariffs removed on autos and parts made chiefly from components sourced in Thailand and other non-TPP nations. But Mexico and others seek to restrict duty-free imports to vehicles and parts made over 50% from components originating in TPP participants, fearing that automakers could end up leaving their borders for emerging Asia.
The question of a protection period for data on new pharmaceuticals is still outstanding. The U.S. is pushing for as lengthy a time frame as possible, giving drug companies the ability to profit longer from proprietary medicines. Australia and others seek a shorter period to enable the rapid development of cheaper generics.
Time running out
"I think we can come to an agreement with one more round of ministerial talks," said Akira Amari, Japan's economic and fiscal policy minister, after the July round. But participants have since shown few signs of bridging outstanding gaps, raising fears that the next meeting could end in a similar stalemate.
And yet a meeting will be held because setting deadlines is the only way to build momentum for an agreement. Garnering the will for a ministerial meeting and making progress in contentious areas is essentially a "chicken-and-egg problem," a Japanese negotiator said.
"The likelihood that the participants can come to an agreement at this stage is 60-70%," according to a Japanese government source.
If nations do not reach consensus soon, political developments could threaten to scuttle the project for the time being. Canada's position on the TPP could change drastically after the Oct. 19 general election there. Primary races for the next U.S. presidential election will begin in 2016, stealing political focus from the TPP and slashing the chances of an agreement.
The U.S. and Japan have narrowed their own disagreements down to a small number of areas and aim to iron them out soon. Japan is still leery of setting its quota of tariff-free rice imports as high as the U.S. desires, while the American side is reluctant to immediately end tariffs on autoparts imports as deeply as the Japanese would like.