Obama Official Sees Momentum to Conclude Asia-Pacific Trade Pact

The 12 nations negotiating a Pacific trade pact are “keenly focused” on reaching an agreement as ministers prepare to meet in Hawaii this month, according to U.S. Trade Representative Michael Froman.

Froman acknowledged sticking points remain to the Trans-Pacific Partnership on issues including market access. He wouldn’t be drawn on a specific time line after five years of negotiations, but said he’s optimistic ahead of the next discussions.

“The outstanding issues fall into two categories, market access and rules. And there’s been good progress on both,” Froman said in Singapore on Wednesday in an interview. “Our focus is on trying to conclude this deal with all 12 countries.”

Japan’s Economy Minister Akira Amari this week suggested the possibility of reaching a broad agreement first, with countries to submit their final concessions after a framework has been agreed to.

Amari called for TPP members to offer their final concessions during the ministerial meeting in Hawaii. “Even though there may be countries that are behind in preparations, we cannot afford to let the TPP become adrift,” he said.

The pact would create a market from the U.S. and Mexico to Japan and Vietnam, representing about 40 percent of the world’s economic output. The talks were given a boost in June when Congress expanded negotiating authority for President Barack Obama, setting up the potentially deal-clinching meeting in Maui.

‘Concrete Manifestation’

The agreement is a cornerstone of Obama’s effort to focus American attention toward Asia at a time China is asserting itself as a regional power and crafting its own institutions to counter the U.S.-led global economic order. China isn’t part of the TPP negotiations.

Froman said the trade deal is a “concrete manifestation” of the U.S. rebalance toward Asia. “We think the TPP can make a major contribution to that engagement, and reinforce our commitment to the region,” he said.

The negotiations have lasted longer than initially expected, in part as the pact with its 29 sections would go beyond the traditional parameters of a trade agreement.

The talks stemmed from an earlier trade pact between Brunei, Chile, Singapore and New Zealand. The U.S. joined the negotiations in 2010.

Beef, Cars

The TPP, now a draft that is confidential, would cover such things as rules on the free flow of data -- aimed at preventing trade barriers to Internet-based commerce -- and rules on intellectual property. Some of the thorniest issues involve traditional conflicts.

The U.S. is pushing Japan to open its long-protected agricultural market for beef, pork, dairy and rice products. Japan is seeking the end of U.S. tariffs on cars and trucks for its auto industry.

“Our discussion with Japan has largely been around agriculture and motor vehicles and we made very good progress over the course of the last year, particularly the last several months, and last week,” Froman said.

Canada faces pressure to make changes to the regime of quotas and tariffs that protect its agriculture market, with New Zealand calling for more tariff elimination for dairy products.

“With Canada, we still have market access issues around dairy and poultry to work out,” Froman said. Transition periods for countries to achieve the TPP’s intellectual property standards have also not been decided on, he said.

Chief TPP negotiators will meet July 24-27 followed by the trade ministers July 28-31.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE