25 February 2014

For immediate release

TPPA Singapore meet ends with a whimper, not a roar

‘The ministerial meeting of the Trans-Pacific Partnership trade ministers ended with a whimper in Singapore today’, said University of Auckland law professor Jane Kelsey, who is observing the meeting.

‘The four-paragraph statement from the ministers was totally anodyne. They could just as easily reissued the statement from December – although that one said the ministers would meet the next month. There was no reference to next steps this time round’, Professor Kelsey reported.

There are two major reasons for the ongoing failure to conclude the deal. First, the crucial market access negotiations for agriculture are in deadlock as the US and Japan maintain deeply entrenched positions over market access for agriculture.

‘New Zealand and the other nine countries are bystanders as the elephants in the room battle it out.’

The US is demanding major concessions from Japan on its ‘five sacred products’ of rice, beef and pork, sugar, wheat and dairy, as well as automobiles, but is unwilling to make concessions itself. However, the US is equally unwilling to open its automobile market to Japan’s light trucks.

Even if the US and Japan do make a deal that suits themselves, there is no guarantee it would be extended to the others and may be of limited use if it was. Both countries have been insisting that market access negotiations are bilateral.

‘New Zealand would have very little leverage in bilateral negotiations with the US or Japan’, Kelsey observed. ‘The chances of getting anything significant out of this deal seem incredibly slim’.

Tim Groser has said repeatedly that New Zealand will walk away from such an outcome. ‘How long are we going to keep pouring scarce resources into this negotiation, where the potential returns are so low and risks to regulatory sovereignty are so high?,’ Professor Kelsey asked.

‘There is no sign that a breakthrough is imminent. Instead, the diplomatic speak has become increasingly acerbic, with the US and Japan accusing each other of intransigence’, Professor Kelsey observed.

The US has publicly floated the possibility that Japan might leave the talks if it is not able to meet US demands. President Obama’s visit to Japan in April has been cut back to allow him to include South Korea.

‘That is a conscious snub to Japan, where Obama was due to dine with the Emperor. Two nights and one day allows very little time for discussion on the TPPA alongside the other foreign policy concerns, including Japan’s tense relationship with China.’

Professor Kelsey suggests that moves by the US to push Japan into a corner could backfire. There is enormous pressure back in Tokyo, including in the governing party.

The second, related roadblock is that governments cannot make decisions on a number of outstanding policy and regulatory issues. Some are genuine red lines that governments won’t cross. Others are being held back for trade-offs. But in a number of chapters, such as investment, State-owned enterprises, intellectual property and environment, negotiators are still working through substantive issues.

‘What happens next is anyone’s guess’, Kelsey said. ‘If Japan and the US do a deal the dominoes could fall quite quickly as governments make compromises on other major issues. But New Zealand will still be a bit player in a game driven by the major powers’.

Officials will continue meeting. But it is expensive to do so. Professor Kelsey calculates that the latest ministerial cost New Zealand taxpayers around $100,000.

There will opportunities for ministerial meetings alongside APEC in May and in Sydney in July for the G-20 meeting. But Kelsey observed that ‘the ministers can’t keep meeting without a guaranteed outcome’.

ENDS

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