Pacific Trade Talks End Without Pact on Market Access Issues

Ministers negotiating a U.S.-led trade pact to link countries around the Pacific failed to resolve questions on market access during talks in Singapore, centered around Japan’s protection of its farmers.

“Market access is in some aspects the heart and soul of any trade agreement so until that’s done, we don’t have an agreement,” New Zealand Trade Minister Tim Groser told reporters after four days of talks on the Trans-Pacific Partnership. “We’re still working on the meat and potatoes here, which is what trade access is about.”

Negotiators on the TPP, an agreement that would cover an area with about $28 trillion in annual economic output, have faced differences over issues from agricultural tariffs to intellectual property. Leaders from the U.S. to Malaysia and Japan must also deal with opposition to the pact from lawmakers at home, which will have to be overcome once the initial pact is finalized.

The deadline for completion last year was missed and ministers are no longer publicly stating a timeframe for the agreement to be wrapped up, even as U.S. President Barack Obama is due to visit Asia in April. Countries negotiating the pact have postponed reaching an agreement until May, the Kyodo News agency reported today, citing sources it didn’t identify.

“The substance of the negotiations should determine the timetable” for completion of the talks, U.S. Trade Representative Michael Froman told reporters during a conference call from Singapore today.

‘Landing Zones’

Froman said negotiators made progress on issues including trading rules for state-backed companies, telecommunications and food-safety standards. While the nations don’t yet have a deal on market access and intellectual property, Froman said they were able to agree on most of the “landing zones.”

“Everyone here’s excited about the work that we completed,” he said. Froman told reporters at the briefing that negotiators haven’t made plans for future meetings.

The TPP goes beyond usual trade deals that focus on tariffs and traditional goods such as agriculture. It would establish rules for digital commerce and include environmental standards and protection for companies that compete against government-backed businesses.

“Significant gaps remain in the more difficult areas such as intellectual property rights, state-owned enterprises and the environment,” Malaysia Minister of International Trade and Industry Mustapa Mohamed said in a statement after the talks. “There is still a lot of work that remains to be undertaken by the negotiators.”

Japan Farmers

Still, the talks “haven’t been broken off or set adrift, and we’ve made good progress,” Japan’s Economy Minister Akira Amari said, according to Kyodo.

Japan’s defense of its farming industry and reluctance to allow access for U.S. automobiles are among issues impeding progress on the deal. Prime Minister Shinzo Abe seeks to increase agricultural efficiency in the nation’s 1.2 million rice farms and remove hurdles to his pursuit of free-trade pacts including the TPP.

“This really is the point where the rubber meets the road and we’re going to be asking countries to put up or shut up, and no one will we be asking that more of than our Japanese friends,” Tami Overby, vice president for Asia at the U.S. Chamber of Commerce, said in an interview yesterday. “All of the ministers have agreed this deal doesn’t get better with time, it’s going to get harder,” she said.

‘All 12’

There is some discussion on whether Japan will give ground on agriculture protection, Overby said. “I don’t want to overblow that but I’ve heard a couple of conversations that maybe we do it without them.

‘‘If Japan remains as entrenched as they have been, what choice do the countries have? We’re not going to lower the ambition and what’s the point to keep talking about this for four more years?” she said.

There remain questions around agriculture and agricultural market access in Japan, plus breaking down barriers to the auto market, Froman told reporters in a later briefing in Singapore.

“Our focus is on achieving an agreement among all 12 of us and that agreement needs to be that comprehensive, high-standard agreement,” he said. “That remains our focus.”

The countries in the pact are the U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

To contact the reporter on this story: Sharon Chen in Singapore at schen462@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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