TPP Round 15: The Beginning of the End?

Dec 3, 2012

Auckland:  Following last month’s meeting in Cambodia between President Obama and the Asian leaders of the countries negotiating the Trans-Pacific Partnership (TPP) trade agreement, Australian Prime Minister Julia Gillard told reporters that “an agreement (will be) reached by October 2013” when the APEC Leaders meet in Bali, Indonesia. With negotiators and business representatives gathering in Auckland this week to begin the 15th round of negotiations on the TPP, does this mark the beginning of the end?

This may be the round that will set the framework for bringing these 11 countries (United States and Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam) towards a final deal eight months from now.

At least … we hope it is.

The TPP agreement is hugely consequential to America’s future economic success and job creation. Nearly 40% of U.S. merchandise exports go to the other 10 countries participating in the TPP talks, and the sooner we get a deal in place that removes trade barriers and levels the playing field for American companies, the better.

However, we must still address some difficult topics if we are to reach the finish line. It is no surprise that what remains on the table for negotiation are the sensitive issues that take genuine political will. These decisions do not get easier with time, so it seems that this current round is as good as any to face the music:

  • Comprehensive market access: All TPP members have made the commitment to comprehensively open their markets. For the United States and each of the 10 other countries taking part, this means tough decisions. The United States has sensitivities in such sectors as apparel and footwear and commodities such as sugar and dairy; other countries have their own politically-sensitive industries and products. However, if we are to achieve our high ambitions in such areas as intellectual property, cross-border data flows, and state-owned enterprises (SOEs) — see below — the U.S. administration will have to screw up its courage and improve its market access offers.
  • Protections for intellectual property: Intellectual property is the cornerstone of innovative economies; it fuels everything from life saving medicines to blockbuster films to green technologies. Studies show that with every incremental increase in patent, copyright, and trademark rights, domestic R&D and homegrown innovation also increase. If the TPP is going to contribute to building innovative firms and advancing new growth, then a modern and robust IP chapter is critical. This means ensuring the provisions to protect IP are comprehensive, commercially meaningful, and provide genuine incentive for innovation.
  • Cross-border data flows: Despite billions of individuals and businesses relying on the movement of data across borders as part of today’s global economy, the international legal and policy framework has not kept pace with the rapid changes in technology. Businesses and individuals are forced to navigate a maze of national, bilateral and global arrangements governing the storage and transfer of data. The TPP agreement represents an opportunity to set a new, unified standard that will promote increased trade and investment. It is not easy policy to navigate, and there are legitimate privacy and security concerns which must be accommodated; but successfully addressing this issue is vital if the TPP is to be considered a true 21st Century agreement.
  • Competitive state-owned enterprises: The TPP countries have recognized that in order for this trade deal to succeed in leveling the playing field for international commerce, SOEs that operate in competition with private actors must be held to the same commercial standards as private firms. To achieve this, the final TPP agreement must enforce a level of discipline and transparency which will prevent anti-competitive behavior and remove government favoritism. Anything short of enforceable provisions in this area would be a failure by the TPP countries to address some of the most significant barriers to fair trade and investment today.

This is no simple negotiation. But if we have any hope of getting this deal done, we need to start by translating the political will of our leaders into real negotiating outcomes.

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