Jane Kelsey: Trade talks failing to deliver on deadline

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Ministers at the TPPA talks in Brunei say they are headed towards 'possible landing zones on sensitive and challenging issues'. Photo / AP
Ministers at the TPPA talks in Brunei say they are headed towards 'possible landing zones on sensitive and challenging issues'. Photo / AP

Question: When is the end game of a negotiation no longer the end game? Answer: When the political forces driving it decide to cut their losses sooner rather than later to minimise the potential loss of face.

In this case, the faces being saved are the political leaders of the 12 countries currently negotiating the Trans-Pacific Partnership Agreement (TPPA).

Last November they set a target for concluding the deal by the end of 2013, more than three years after they began. The leaders are due to meet again in Bali, Indonesia, in early October on the sidelines of the Apec meeting. Missed deadlines risk becoming a habit. They also discredit the hype that the TPPA will deliver gold standard 21st-century rules that the other Apec countries, including China, will aspire to sign on to.

The US, which is driving the project, has a dilemma. Obama needs a deal. He has yet to successfully negotiate a single free trade agreement. His trade office is under sequester and has no budget to continue expensive TPPA negotiations, let alone the new talks on a parallel deal with the European Union.

Obama also needs the Congress to grant him "fast track" negotiating authority, without which it can pick apart any final agreement. That means satisfying multiple, conflicting lobbies. Fast track cannot happen before the end of 2013, if at all. But other countries will be wary of signing anything without it.

Other champions of the TPPA also have a dilemma. New Zealand's Tim Groser will fear for his grand plan that it can morph into an Asia-wide free trade deal. He has said no deal is better than a low quality deal. But no deal may be the result.

Pushing too hard could see some countries walk away. Chile's former chief negotiator wrote a media column warning the TPPA is high-risk for developing countries. The Malaysians are under huge domestic pressure and are conducting public cost-benefit analyses. They have clear bottom lines and have rejected any firm deadlines. This week's 19th round in Brunei is the first for Japan. The US Congress is demanding Japan makes undeliverable concessions, including accepting rules that target alleged currency manipulation. These tensions are producing a classic double-speak that reiterates the goal for 2013 while anticipating the failure to deliver.

Two weeks ago the US Trade Representative - their trade minister - declared the negotiations were in their "end game" stage. On Thursday and Friday last week the TPPA trade ministers, including Groser, met in Brunei. Their four-paragraph statement talked of "entering the final stage" and "possible landing zones on sensitive and challenging issues".

Yet the Australian minister was not there; the Government is in caretaker mode pending the election. Chile and Peru's representatives were apparently not allowed to attend much of the ministerial meeting. The ministers' media conference lasted barely 20 minutes.

The Obama Administration has since said it "won't sacrifice quality" for the deadline. There is no choice. A number of its "must-have" chapters remain effectively at stalemate.

One is intellectual property, which covers both internet copyright and pharmaceuticals. The US has still not tabled text on biologics, which involves lucrative but ethically and culturally controversial patents connected with living organisms, such as cloning.

The chapter on state-owned enterprises has sat largely untouched since the US tabled it a year ago. Most countries, including New Zealand, fear it could impede the important public roles of state entities, from Kiwibank and the part-privatised SOEs to health authorities and universities. Australia is trying to help the US out by contributing alternative text. But only four days of talks are scheduled for the chapter in Brunei.

A third major conflict is what the environment chapter covers and whether it is enforceable. Malaysia is reportedly tabling a complete exclusion for tobacco policies. Then the US is still refusing to table anything meaningful for New Zealand on dairy and Australia on sugar.

This does not mean that people should not be concerned. Obama could put enormous pressure on other political leaders in Bali in October. For reasons unconnected with the TPPA, politicians could agree to a deal for the sake of the deal, irrespective of the consequences.

The biggest problem is that we will not know. These obsessively secretive negotiations are about to go further underground.

The current round in Brunei from August 22-30 has been billed as the last formal negotiations. Only a handful of groups dealing with the 29 chapters in the agreement will be there. Apparently others will meet secretly in different countries before Apec in October. Ominously, the pharmaceutical talks are scheduled for Washington.

This development spells the end of the "stakeholder" process. While it has been frustrating and largely cosmetic, it has impacted on some negotiators. No formal process will make it even harder for outsiders to get any information or to meet with negotiators who are worried and want to talk to independent experts.

The TPPA remains a high-stakes game that the US wants, and needs, to win. But we will know even less about it from the end of this round than we do now.

- NZ Herald

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