The US-led Trans-Pacific Partnership Agreement (TPP) has failed to stick to the deadline of a 2013 conclusion and the 12 countries - the United States, Canada, Mexico, Peru, Chile, New Zealand, Australia, Singapore, Malaysia, Brunei, Vietnam and Japan - that are party to the negotiations, have decided to carry on the negotiations in 2014.
Many analysts, who had hoped that the success of the World Trade Organisation (WTO) Ministerial Conference at Bali would buoy the TPP negotiations, have been disappointed as they believe that the agreement can deliver a huge market access opportunity for countries.
After a meeting in Singapore, TPP trade ministers said they have failed to come up with possible landing zones in several areas where negotiations are still open. Countries like Japan, which had joined the negotiations later, are under pressure to provide more access to the agricultural market, which has traditionally been sensitive to Tokyo.
New Zealand and the US, for instance, have been reportedly pressurising Japan to open up markets for rice, beef, pork, wheat, sugar, and dairy. Japan has been reluctant to open up the market for these products as they are considered "sacred", reports said.
TPP, which has been under negotiations for over four years, will be one of the most ambitious agreements covering several new issues in areas like intellectual property rights and environment. While countries have indicated that substantial progress has been achieved, recent WikiLeaks documents suggest that the US is pressurising most of the other partners to follow its demand on issues such as intellectual property rights.
According to reports, there are "deep divisions between the United States and other nations, and great pressure is being exerted by the US negotiators to move other nations to their position". However, the US, according to leaked documents of the meeting held at Salt Lake, US in November 2013, is refusing to move on an issue that everybody has agreed to - elimination of subsidies for agricultural exports. Washington has also reportedly rejected the proposal on the table for export credits.
The biggest issue of disagreement between the US and other partners seems to be the intellectual property rights. Disagreement ranges on issues ranging from patentability criteria to supplementary protection and extending protection to new uses. There are also differences in the area of geographical indications.
South Korea has been evincing interest in joining these negotiations. However, the exact timing of its joining is yet to be decided. It is likely that Korea may be able to join only after the negotiations are concluded.
Besides the TPP, the US is also pursuing another major trade agreement - the Transatlantic Trade and Investment Partnership (TTIP) which will take place between the US and the European Union. The third round of negotiations is being held this week at Washington in which the two sides are expected to discuss openings in goods, services and investments. The two sides are also looking at issues such as energy for greater cooperation under this agreement.
The TPP and the TTIP will together boost access for US manufacturers and service providers in a big way and many analysts say that due to these large trade agreements, the United States is losing interest in multilateral negotiations under the WTO.
However, it is important to note that from a US perspective, the WTO still provides a strong platform to build trade liberalisation programmes across several countries, which cannot be achieved only through the bilateral or regional route.
The success at Bali is primarily driven by the fact that WTO member-countries are reasonably convinced that the Geneva-based multilateral forum should remain strong to boost market access opportunities for all. Regional and bilateral agreements should build on the success of multilateralism. However, what countries like the US would seek from WTO is a reasonably high level of ambition in terms of market openings so that they can push partners further into bilateral agreements. From a developing or least developed country perspective, multilateralism provides the best bet for increasing market access opportunities while at the same time safeguarding sensitive interests, which would be exposed in bilateral deals.
The writer is Principal Adviser at APJ-SLG Law Offices
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
