TPP trade negotiations stall

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By Leith van Onselen

Negotiations for the Trans-Pacific Partnership (TPP) appear to have hit a snag, with negotiators at last week’s meeting in Hawaii still at loggerheads over certain contentious areas, most notably intellectual property, with developing countries most at odds with the US. From The Japan Times:

In the meeting from March 9, they tried to reach compromises in seven contentious areas but remained apart on intellectual property protection periods for data on medicines. They also differed on an accord for environmental protection, with Latin American participants opposing U.S. efforts to introduce strict rules, the sources said.

Negotiations are also being held-up by the US political system, which is yet to approve the Trade Promotion Authority (TPA) bill, which is required so that US President Obama can sign the agreement and then have it ratified by Congress in its entirety with a “yes” or “no” vote. Without TPA, Congress would be able to force amendments to the negotiated TPP, effectively rendering the agreement void.

With US Congress deliberations on the TPA expected to begin next month, and uncertainty over the outcome, a proposal has been made to put off negotiations for the TPP until a late-May ministerial meeting.

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Meanwhile, resistance from within the US remains a hurdle for granting the President TPA, with the TPP-skeptic American Federation of Labor and Congress of Industrial Organizations, the largest U.S. federation of labor unions, last week saying that it would suspend financial contributions to federal lawmakers as a form of resistance to the pact:

Members of Congress involved in the TPP negotiations are facing “a significant amount of pressure” from opponents of the initiative, including the AFL-CIO, Sasae suggested.

Former Rep. Jane Harman said that despite what many pundits believe, it won’t be easy for the Republican-controlled Congress to pass a TPA bill.

“I do think that the anti-trade wing of the Republican Party and the anti-trade wing of the Democratic Party are going to band together,” said Harman, now president of the Woodrow Wilson International Center for Scholars think tank.

With a bit of luck, the US Congress will fail to pass the TPA Bill, pushing negotiations into never-neverland as the agreement makes way for the 2016 Presidential Election.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.