Pace of Trade Negotiations Raises Some Concerns

The apparent lack of significant progress between the United States and Japan to resolve market access issues on agriculture products and automobiles is raising some concerns about the prospects of completing the Trans Pacific Partnership (TPP) negotiations ahead of the U.S. elections in November.

Following President Obama’s meetings in Tokyo last week with Japanese Prime Minister Abe, the administration stated that the bilateral discussions provided a “breakthrough” and a “path forward.” However, there were no details or general concepts provided on the scope of the discussions.

“Complete or near complete liberalization of tariffs and removal non-tariff barriers has been one of the guiding principles of the TPP negotiations and has been strongly supported by the U.S. food and agricultural sector, including the U.S. Grains Council,” said Floyd Gaibler, USGC director of trade policy and biotechnology.

The level of trade liberalization that would be achieved under TPP would establish a precedent as well as a strategic economic response to the rise of emerging economies, including China, that are anticipated to join the current 12-member country TPP group when negotiations are completed.

“Complicating the negotiations is the lack of Trade Promotion Authority (TPA) that would set up expedited procedures under which implementing bills for trade agreements are considered by Congress within a specified time frame and subject to an up-or-down vote without amendment,” Gaibler said.

The administration has consistently argued that negotiation of a strong TPP agreement is necessary to build momentum for TPA. However, recent public statements by the administration have shifted the emphasis by acknowledging that the lack of TPA has made the negotiations more difficult.

Separately, industry groups on both sides of the Atlantic are voicing concerns that the lack of significant progress in the negotiations on the Trans-Atlantic Trade and Investment Partnership (T-TIP) between the United States and the EU, raising fears that T-TIP could be in danger of stalling. For agriculture, significant differences remain with regard to market access treatment for sensitive products. In particular, to develop an agreement satisfactory to U.S. stakeholders, the EU needs to remove contentious sanitary and phytosanitary barriers and significantly improve the EU’s asynchronous biotechnology policy process.

Key TPP negotiators are scheduled to meet May 12-15 in Vietnam. Significant progress will be needed to complete the negotiations by the end of the year or early 2015. Separately, the fifth round of the T-TIP negotiations is scheduled for May 19-23 in Washington, D.C.