Business groups on Friday urged the United States and other countries not to weaken a proposed Asia-Pacific free trade deal by excluding certain sectors, like dairy or sugar, from the pact. The groups from US, New Zealand, Peru and Singapore also pressed in a joint statement for an agreement that would "eliminate border restrictions on trade in goods and services and investment no later than 2020."
Negotiators from those four countries and five others - Vietnam, Malaysia, Chile, Australia and Brunei - are holding their 8th round of talks on the proposed Trans-Pacific Partnership pact through September 15 in Chicago. The countries hope to agree on the "broad outlines" of a high-quality, cutting-edge trade deal in November, when President Barack Obama will host the annual summit meeting of the 21-member Asia Pacific Economic Cooperation (Apec).
The large Apec group also includes China, Japan, South Korea and Russia and others in Asia and the Americas. Countries often exclude a few politically-sensitive sectors from the tariff phase-outs and other market openings required under free trade agreements, so it would not be unusual if the Trans-Pacific Partnership pact also did that.
US dairy and sugar producers are particularly concerned about further market openings under the agreement, and other TPP countries have their own sensitive products. However, there is intense pressure on TPP negotiators not to exclude any sector since advocates hope the pact will eventually be expanded to all 21 members of Apec, creating the long-envisioned Free Trade Area of the Asia Pacific.
"TPP countries must open up all sectors of their economy to the goods, services and investments of other TPP partners, creating a regional agreement that will simplify trade and reduce complexity," about 75 US companies and trade associations said in a letter earlier this week. "Trying to shield particular sectors will only lead to a downward spiral and limit what the TPP can achieve among the current TPP partners, as well as with future partners," the US Business Coalition for TPP said.
Japan, the world's third largest economy, has been considering whether to join the TPP talks and is expected to announce its decision in November. US business groups are eager for Japan to join, but not if Tokyo makes demands to exclude agriculture and other sensitive sectors that slow down the negotiations or reduce the overall quality of the pact.
Meanwhile, the United States is expected to outline its long-awaited proposals in Chicago for rules on "state-owned enterprises," which have a big role in the economies of some TPP countries such as Malaysia and Vietnam. US companies want strong rules to ensure state-owned firms don't receive more favourable government treatment than private enterprises. That's important not just because of current TPP members, but potential entrants like China.
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