22 Aug 2016

Former US trade official urges TPP concessions

8:49 am on 22 August 2016

Uncertainty about the future of the Trans Pacific Partnership has prompted a former American trade representative to urge the 12 countries involved to go back to the negotiating table.

The delegates gather after the signing ceremony

The delegates after the TPP signing ceremony in Auckland. Photo: MFAT

The best hope for its passage in its present form appears to be if United States President Barack Obama can steer it through Congress in the lame duck session before the new president takes office. The Republican and Democrat contenders - Donald Trump and Hillary Clinton - are opposed to the TPP.

But time is running out.

With influential Republicans demanding concessions before they will back it, a former US trade representative Clayton Yeutter said the TPP will fail in the US unless the other countries make concessions, including accepting longer monopoly protection periods for next generation drugs called biologics.

"I think it will be a relatively confined negotiation but I do believe it has to happen or the votes will not be there."

Mr Yeutter said New Zealand could, in turn, push for greater dairy access.

Dairy Companies Association of New Zealand chairman Malcolm Bailey said while he would like better access in what was a disappointing outcome for the dairy industry, he feared reopening the TPP would lead to the deal unravelling completely.

"That in effect could take you back to the start line.

"Every player could say ''e want to undo some of this and have another go'. And the timeline on that extends to who knows what. So we believe it's best to just box on with what has been negotiated," Mr Bailey said.

The New Zealand government is standing firm.

"All TPP signatories, including the United States, have been clear that the agreement is not open to re-negotiation. TPP reflects a carefully-balanced outcome that will deliver economic benefit for each and every member. I see no reason for New Zealand to change its position," said Trade Minister Todd McClay.

New Zealand is also part of talks to secure an Asian trade deal - the Regional Comprehensive Economic Partnership - that includes China, but not the US.

Mr Yeutter worries that the US risks handing China the initiative in setting future trade rules.

"In my view, it would set the US back enormously and obviously work for the benefit of China.

"A lot of the Asian countries would immediately say to themselves what are we going to have to do to get along with China? Do we need to join with them in a trade agreement?" Mr Yeutter said.

Asian Trade Centre executive director Deborah Elms said the US was in danger of damaging its ability to negotiate free trade deals if TPP failed.

"Washington has this sense that somehow you cannot do the TPP, and everybody else will continue to negotiate with Washington. I think that's a mistake.

"I think if the TPP doesn't pass, I don't see why New Zealand would ever, at least in the near term, sit down with the Americans and negotiate on any other important trade deals. Because why would New Zealand do that? Why would Australia do that? Why would Japan do that?

"They've just been badly burned by the United States on an agreement that is largely in the US interest as it is," Dr Elms said.

Public Citizen's Global Trade Watch director Lori Wallach points out polls show Americans are not opposed to free trade, but are against corporates having too much power over governments.

She thinks TPP can be done under Hillary Clinton, but it'll be one without investors suing governments or longer patent protection periods for drugs.

"I believe she'd be keen to have an agreement amongst Pacific rim countries but not one that has many of the specific things that the TPP has," said Ms Wallach.

"She would have to make some pretty sizeable changes to come up with an agreement."

Ms Wallach doesn't expect the TPP will be a priority for Mrs Clinton if she does become president, and it could be at least two years before there's any movement to restart talks.

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