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Expanded TPP negotiations begin; negotiations continue with Korea and will commence soon with India

23 April 2010

Negotiations are finally underway for the expanded Trans Pacific Partnership Agreement (the TPP), which – as discussed in the December 2009 edition of Connected Asia Pacific – is intended to be an expanded version of New Zealand’s P4 Agreement with Brunei Darussalam, Singapore and Chile. 

The first round of meetings was held in Melbourne over 14-19 March 2010.  The second round is scheduled to take place in Los Angeles from 14-18 June 2010. 

The United States Trade Representative’s (USTR) website reported a successful beginning, describing the first round as “extremely productive”.  This enthusiastic assessment conflicts with some informal reports indicating that the round lacked energy and specifics, and that momentum is yet to be built.  In any event, the focus is presently on creating a framework and initial exchanges of views.  Negotiating groups on rules of origin, agriculture, technical barriers to trade, intellectual property rights and legal and institutional issues met during the first two days.  Issues of labour, the environment, investment, textiles and apparel, e-commerce, competition, telecommunications and trade capacity building were also discussed. 

The initial consensus appears to favour retaining the original P4 Agreement, which will be expanded and amended rather than replaced by an entirely new instrument.  As previously reported, the US remains keen to extend the TPP negotiations to Japan, Malaysia and Korea (as well as possibly Canada).  These early signs give rise to the distinct prospect that any eventual agreement may by necessity be a more modest document than that conjured up by USTR Ron Kirk’s claim to Congress that the TPP would “develop a new model for US trade negotiations”

A circumspect beginning may also reflect President Obama’s cautious approach to trade law issues, given his election on a diffident trade platform.  A former Chairman of the US International Trade Commission (ITC), Alfred Eckes, recently assessed President Obama’s record on trade issues in 2009, including surveying the US domestic reaction to the TPP.  Mr Eckes declared that – due particularly to concerns about Vietnam as a party and New Zealand’s dairy strength – the TPP “could become the next hot-button trade debate in the tradition of NAFTA, CAFTA and the China Permanent Normal Trade Relations”.  The United States National Milk Producers Federation has already told the ITC that it is critical that all US-New Zealand dairy trade be excluded from the TPP FTA.

John Key’s 14 April 2010 speech to the US/NZ Council in Washington offered his response to these US domestic pressures:

“Being part of the TPP could turn the tide for the United States’ share of exports to Asia, which has been declining over recent years....I know that New Zealand and United States exporters share the same frustrations with the failure of trade policy and regulations to keep up with the evolution of business practices....New Zealand and our TPP partners feel a strong sense of urgency to seize the momentum this negotiation now has.  We want to make sure our negotiators deliver this deal in a timeframe that will deliver for business.”

Despite these strong words, it is clear that it is still early days for the TPP.

A fourth round of negotiations for the New Zealand-Korea FTA is scheduled to take place in Wellington in May 2010.  The parties have now exchanged text for all chapters of the draft agreement and are in the process of consolidating these into a single document.  At present, it appears that – like the Hong Kong CEP – the agreement may not include an investment chapter, such as that included in the NZ-China, the Australia-NZ-ASEAN and the NZ-Malaysia FTAs.

In January 2010, formal Indian government approval was granted to begin negotiations on the NZ-India FTA.  These will begin in the next few months.