【News】 TPP ministerial meeting unlikely to be held by end of August (Aug. 7, 2015)


Trade ministers involved in the 12-member Trans-Pacific Partnership initiative are unlikely to meet again in the end of this month, as it would be difficult to solve conflicting points among the members, Akira Amari, minister in charge of the talks, indicated on Thursday, Aug. 6.

“It would be safer to schedule a ministerial meeting following the negotiations to deal with remaining issues,” Amari told reporters after meeting Prime Minister Shinzo Abe to report on the prospects of the negotiations.

He made the remarks apparently because of differences which are yet to be ironed out among member nations regarding such issues as market access to dairy goods, patent protections for new drugs and rules of origin for automobiles.

Meanwhile, both the Japanese and the United States governments want to reach agreement under the TPP scheme and let their respective Diet and Congress approve it before the end of this year, as Japan is expecting the Upper House election and the U.S. the presidential election next year. Negotiations on key agricultural products are nearing the finish line and could be agreed upon any time since Amari is eager to hold the ministerial meeting as soon as possible.

The ministers missed out on a broad agreement when they met in Hawaii between July 28 and 31, mainly because New Zealand continued to demand for increased access to dairy markets in Japan and other countries and because the member nations could not resolve conflicts concerning the length of drug patents. Amari had said after the meeting that another ministerial session was eyed for late August aimed at striking a deal.

There was speculation the session may take place along with the meeting of economy ministers from the Association of Southeast Asian Nations which is slated between Aug. 22 and 25 in Malaysia. But New Zealand has maintained its hardline stance on dairy markets and it would be difficult for Japan to negotiate on the issue even on a working level. Bilateral negotiations with the U.S. are also unlikely, as some of senior U.S. negotiators have gone on summer vacation.

In addition, Japan is at odds with Mexico and Canada over rules of origin for automobiles, becoming another stumbling block in the conclusion of the talks.

Rules of origin are used to determine the national sources of products. In order for imports to be considered tariff free, they have to meet the minimum local procurement requirements within the TPP bloc.

According to negotiation sources, Canada and Mexico showed up at the talks in Hawaii to find that the United States had already cut a deal with Japan on how much vehicle content needs to come from TPP member countries. Mexico, which is facing strong pressure from the domestic auto sector to protect their production and employment, was particularly frustrated.

Canada and Mexico are believed to be urging TPP member countries to agree on auto terms that are close to rules for the North American Free Trade Agreement, which stipulates that 62.5 percent of the net cost should originate in the region. But Japan has set a rate of 40 percent under past economic partnership agreements. Because Japanese auto manufacturers procure parts from countries outside the TPP bloc such as Thailand and China, Japanese cars might not become subject to tariff elimination under local procurement requirements close to the NAFTA rule of origin.

(Aug. 7, 2015)

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