Pacific trade push sees momentum — and criticism

Published by rudy Date posted on April 4, 2011

Nine Pacific nations including the United States are moving ahead on building a ambitious free trade zone, but few believe they will meet a self-imposed November (Berlin: NBXB.BE – news) deadline as criticism mounts.

President Barack Obama brought the United States into talks on the Trans-Pacific Partnership (TPP) in 2009, breathing new life into a once-obscure group and giving him a chance to shape his own trade agenda.

The US Trade Representative’s office reported “considerable progress” during talks that closed Friday and called for “as much progress as possible” before a November summit in Hawaii of the Asia-Pacific Economic Cooperation (APEC) bloc.

Trade Minister Lim Hng Kiang of Singapore, the host of the week-long talks, also spoke of forward movement but said: “It will take time and commitment to reach a consensus on all issues.”

The TPP involves nine APEC members — Australia, Brunei, Chile (Frankfurt: 164698 – news) , Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam. Asia’s two largest economies, China and Japan (NYSE: MCO – news) , are not part of the group but have not ruled out joining.

“No one expects a full agreement with every ‘i’ dotted and every ‘t’ crossed by November,” said Representative Rick Larsen, a member of Obama’s Democratic Party from export-reliant Washington state.

But, he added: “There is an expectation that there will be a big step forward on negotiations.”

With nine countries involved, there is no shortage of disputes — and criticism has come not just from the usual critics of globalization.

Representative Don Manzullo, a Republican who heads the House Foreign Affairs subcommittee on East Asia (KOSDAQ: 900110.KQ – news) and supports free trade in principle, has voiced concern over lack of protection for intellectual property under the TPP.

New Zealand is considering ending patents for software on the grounds that such protections stifle innovation.

“We need to look after American interests first and not just sign an agreement because it helps our engagement in Asia,” said Nien Su, a senior aide to Manzullo.

Several lawmakers from US dairy states have demanded that the sector be taken off the table in the TPP. New Zealand is the world’s biggest dairy exporter, led by Fonterra, the country’s largest company.

In turn, left-leaning activists in Australia, New Zealand and elsewhere have expressed concern that US exporters would force up prices of medicine and bring in genetically modified foods that do not meet local regulations.

Lori Wallach, director of US advocacy group Public Citizen’s Global Trade Watch, warned against a free trade pact that involves nations with controversial records on labor rights, particularly Vietnam.

Wallach said that even if the TPP is reached by November, it would prove risky for Obama to seek its approval by Congress in 2012, when he is up for re-election.

“These are fights that can be avoided. It’s like backing up into a meat grinder,” she said of Obama’s policy.

Obama is already embroiled with a trade feud in Congress as he seeks approval of a pact with South Korea but Republicans press him to finalize agreements with Colombia and Panama as well.

Secretary of State Hillary Clinton, in a speech to an APEC meeting in March, said the TPP offered a chance to create “a new kind of trade agreement” that “promotes not just more growth, but better growth” and could be expanded eventually to the whole Asia region.

Calman Cohen, who heads the Emergency Committee for American Trade business group, said the TPP would give the United States a seat as the dynamic region shapes its economic future.

The pact would also boost relations with all eight countries, which “will aid the United States as it seeks to advance other important priorities that are beyond the scope of a trade agreement,” Cohen said.

Walter Lohman, director of the Asian Studies Center at the conservative Heritage Foundation, said the TPP could help keep the APEC bloc relevant. The United States has striven to be part of Asia’s institutions as China rises.

But Lohman called for more political will to match negotiators’ energy level.

The call for “‘as much progress as possible’ is just not the kind of goal that is going to inspire the commitments necessary to complete it in any relevant timeframe,” Lohman said. —

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