Transcript Trans-Pacific Partnership Agreement

Trans-Pacific Partnership Agreement
A U.S. Perspective
Stephen Kho
Sally Laing
Akin Gump
Washington, D.C.
President Barack Obama, center, takes part in the Trans-Pacific Partnership meeting
at the APEC summit in Yokohama, Sunday, Nov. 14, 2010. (from www.salon.com)
© 2012 Akin Gump Strauss Hauer & Feld LLP
TPP Participants: Overview
 Original Signatories:
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Brunei
Chile
Singapore
New Zealand
 Negotiating (2008-2010):
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Australia
Malaysia
Peru
Vietnam
United States of America
TPP Participants: History of TPP Negotiations
 Trans-Pacific Strategic Economic Partnership was initiated by
Singapore, New Zealand, and Chile in 2003 as a path to trade
liberalization in the Asia-Pacific region.
 Brunei joined negotiations in 2005.
 The Trans-Pacific Strategic Economic Partnership (P-4) agreement
was concluded in 2006.
 The United States joined the negotiations to conclude outstanding
portions of the agreement (investment and financial services
provisions) in March 2008.
 Other potential members (Australia, Peru, and Vietnam) joined
shortly thereafter.
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TPP Participants: Inclusion of Mexico and Canada
 Mexico and Canada officially joined the TPP negotiations on
October 8 and 9 of this year, respectively.
 In September 2012, U.S. stakeholders expressed concerns about
Mexico and Canada joining the TPP with regards to the following
issues:
Mexico
● Intellectual property rights protection
● Opening of investment and government procurement opportunities
● Greater market access for beef and poultry products
● Easing restrictive tax authority audits of textile and apparel products
● Potential conflict with US copyright proposal
Canada
● Opening of the dairy sector
● Stronger protection for intellectual property rights
● Lowering investment barriers with U.S. companies
● Potential conflict with US copyright proposal
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TPP Participants: Potential Future Participants
 Japan
 South Korea
 Indonesia
 Thailand
 Taiwan
 Colombia
 Costa Rica
 China?
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TPP Negotiations: Overview
 The most recent round of talks was held from September 6-15,
2012 in Leesburg, Virginia.
 At a Global Services Summit panel in Washington, DC on
September 19, New Zealand’s Trade Minister stated that about half
of the 29 chapters are either almost finalized or contain
controversial issues to be settled.
 The next round of talks will be held in Auckland, New Zealand on
December 3-12, 2012.
 After the New Zealand round, TPP countries will gather in Mexico
for an intercessional meeting on regulatory coherence and
development. (Date to be determined)
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TPP Negotiation: Goals
 The TPP is intended to be a “21st century agreement.”
 From the United States’ perspective it will:
● Strengthen and deepen trade and investment ties among its
participants.
● Influence the emerging trade architecture in the Asia-Pacific region.
● Support strategic ties and relationships in the region, as part of the
“pivot to Asia.”
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TPP Negotiation: Goals
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Contents of the Agreement: The Issues
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Cross Cutting Issues
Market Access
Trade in Services
Government Procurement
Sanitary and Phytosanitary
Standards (“SPS”)
● Technical Barriers to Trade
● Intellectual Property Rights
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Investment
Rules of Origin
Labor
Environment
Temporary Entry
Trade Remedies
Customs
Cooperation and Capacity-building
 Because it is subject to a comprehensive and controversial
confidentiality agreement, the authenticated TPP text is not
available to the public.
 The TPP text is almost complete in some areas, but in others,
further work is needed on specific, and often controversial, issues.
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Contents of the Agreement: Cross Cutting Issues
 The TPP will address new issues not covered or minimally covered
by previous FTAs. These include:
● Regulatory Coherence: Reportedly a nonbinding chapter that encourages
members to establish an internal regulatory entity, that focuses on (1)
ensuring the consistency of regulations and (2) reviewing new regulatory
measures under a cost-benefit analysis.
● State-Owned Enterprises: U.S. industry wants to ensure that SOEs do
not impair market access or receive non-commercial financing or other
advantages from governments. Vietnam, Singapore, and Australia are
concerned about the requirements proposed by the U.S. in this chapter.
● Small- and Medium-Sized Enterprises: Nonbinding, and reportedly
focusing on tackling SMEs informational problems, such as a lack of
access to foreign tariff schedules and foreign import regulations.
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Contents of the Agreement: Cross Cutting Issues
● E-Commerce: Intended to enhance the viability of the digital economy by
reducing impediments affecting consumers and businesses that use ecommerce. Requires serious continued negotiations between the U.S.,
Australia and New Zealand, mostly related to privacy concerns.
● Competitiveness and Supply Chains: Business groups want the TPP to
include its own chapter on supply chains in order to promote trade
facilitation.
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Contents of the Agreement: Market Access
 The TPP is intended to increase market access for all TPP
countries to the markets of all other TPP countries. However, due
to domestic sensitivities each TPP country has its own offensive
and defensive concerns related to market access. These include:
● Dairy – New Zealand / Canada / USA
● Footwear - Vietnam
● Textiles & Apparel - Vietnam / USA
● Tobacco - USA
● Sugar – Australia / USA / Mexico
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Contents of the Agreement: Trade in Services
 As a 21st Century trade agreement, the TPP focuses not only on the
trade of goods, but also on the trade in services.
● Financial Services: Intended to improve transparency, non-discrimination,
fair treatment of new financial services, investment protections, and
dispute settlement related to financial services.
● Telecommunications: Intended to promote competiveness and access for
telecommunications providers.
● Cross-Border Services: Intended to provide fair, open, and transparent
markets for services trade, including services supplied electronically and
by small- and medium-sized enterprises, while preserving the right of
governments to regulate in the public interest.
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Contents of the Agreement: Government Procurement
 Government Procurement
● Text will require TPP countries to conduct procurement operations in a
fair, transparent, and non-discriminatory manner.
● TPP negotiators have agreed on the basic principles and are developing
the specific obligations.
● The United States is focusing only on federal government procurement.
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Contents of the Agreement: Sanitary and Phytosanitary
Standards
 Sanitary and Phytosanitary Standards
● Text will contain a series of new commitments on science, transparency,
regionalization, cooperation, and equivalence.
● USTR is pressing for TPP commitments that go beyond WTO rules.
● Trade groups have advocated for “fully enforceable” or binding upon on all
TPP countries “WTO plus” commitments.
● However, in Leesburg, reports surfaced that Australia and the United
States have decided to oppose enforceability.
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Contents of the Agreement: Technical Barriers to Trade
 Technical Barriers to Trade
● Text will promote existing rights and obligations under the World Trade
Organization Agreement on Technical Barriers, as well as build stronger
and more efficient TBT measures.
● United States tabled language that urges countries to set up a mechanism
to facilitate coordination and review of new regulatory measures at the
central government level.
● Reports state that text will reflect the WTO TBT Agreement with more
explicit guidance in some areas – such as defining characteristics of
international standards bodies.
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Contents of the Agreement: Intellectual Property Rights
 Pharmaceuticals & Access to Medicines
● IPR related to pharmaceuticals is a controversial area which will need to
balance the interest of pharmaceutical companies with national health
care systems and consumers.
● The United States is advocating a proposal known as “Trade Enhancing
Access to Medicine” which will provide mandatory 5-year period of data
exclusivity, patent term restoration and patent linkage provisions.
● Drug pricing and reimbursement are also significant issues.
 Biologics
● Issues related to the length of biologics protection continue to percolate.
The United States employs a 12 year period of biologic protection, but it is
unclear what will or has been suggested during TPP negotiations.
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Contents of the Agreement: Intellectual Property Rights
 Other Intellectual Property Rights Issues
● Internet Providers & Copyright
● Trade Secrets
● Geographic Indications
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Contents of the Agreement: Investment
 Investment
● Text will provide substantive legal protections for investors and
investments of each TPP country in other TPP countries.
● U.S. hopes to promote the ability of U.S. companies to invest overseas
while also providing such companies protection.
● Australia demands exclusion from the U.S.’s investor-state dispute
settlement mechanism.
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Contents of the Agreement: Rules of Origin
 Rules of Origin
● TPP countries have agreed that the TPP rules of origin will be objective,
transparent and predictable.
● In the U.S., sugar producers are expressing concerns that the TPP
benefits may be used by major sugar producers outside of the Agreement
if rules of origin provisions are insufficiently stringent.
● In textiles and apparel rules of origin, the United States proposed a yarnforward rule, but such a rule would cut much of Vietnam’s apparel imports
off from trade benefits.
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Contents of the Agreement: Labor & Environment
 Labor
● Text may include commitments on labor rights protection and
mechanisms to ensure cooperation, coordination, and dialogue on labor
issues of mutual concern.
● Controversial issues include whether labor rights commitments will be
subject to dispute settlement provisions and whether requirements on
minimum wage and the reduction of products made from child labor will
be adopted.
● U.S. labor proposal tabled in late 2011 would require countries to enforce
their own labor laws but also reflect the five fundamental labor in the 1998
International Labor Organization Declaration on Fundamental Principles
and Rights at Work and its Follow-Up.
 Environment
● Text should include effective provisions on trade-related issues that would
help to reinforce environmental protection.
● U.S. proposal places environmental obligations under the dispute
settlement mechanism and contains commitments on conservation, but
other countries find the extended protections too prescriptive.
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Side Bar: What is the May 10th Agreement?
 On May 10, 2007, a bipartisan group of congressional leaders and
the Bush Administration released a statement on agreed principles
in four policy areas:
● Labor – requires acceptance and enforceability of International Labor
Organizations 1998 Declaration on Fundamental Principles and Rights At
Work;
● Environment protection – requires adhere to seven major multilateral
environmental agreements;
● Intellectual property rights – agreements must include provisions related
to patents and approval of pharmaceuticals for marketing; and
● Foreign investment – each of the FTAs to state that none of its provisions
would accord foreign investors greater substantive rights in terms of
foreign investment protection than are accorded U.S. investors in the
United States.
 The principles were to be reflected in provisions in four U.S. FTAs—
with Colombia, Panama, Peru, and South Korea and form the
baseline of U.S. negotiations going forward.
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Contents of the Agreement:
Temporary Entry & Trade Remedies
 Temporary Entry
● Provisions are designed to promote transparency and efficiency in the
processing of applications for temporary entry.
● Text will likely include provisions on technical cooperation between TPP
authorities and may include specific obligations related to business
persons.
 Trade Remedies
● TPP countries will affirm their WTO rights and obligations for trade
remedy measures including antidumping remedies, countervailing duty
remedies, and safeguard actions.
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Contents of the Agreement: Customs & Capacity-building
 Customs
● TPP text will work to ensure that goods are released from customs as
quickly as possible while preserving the ability of customs authorities to
strictly enforce customs laws and regulations.
● U.S. supports text that would create an expedited customs process for
reviewing shipments sent by express delivery separately from normal
shipments while Australia believes this is unnecessary.
● United States has requested a “de minimis” level of two hundred dollars
for express shipments in the customs chapter.
 Cooperation & Capacity-building
● Several cooperation and capacity building activities have already been
implemented and additional activities are being planned to assist
developing countries in achieving the objectives of the agreement.
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TPP United States Political Issues
 Obama Administration's failure to ask Congress for Trade
Promotion Authority (TPA expired in 2007)
 Senate Republicans’ dissatisfaction with the labor and
environmental protection proposals of the TPP
 Civil society groups’ complaints regarding the confidentiality of the
negotiation process
Chief U.S. Negotiator Barbara Weisel speaks with a stakeholder at the TPP
Stakeholder Engagement Event in San Diego, California (from
http://www.ustr.gov/tpp).
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TPP protestors in New Zealand.
Side Bar: What is Trade Promotion Authority?
 Trade Promotion Authority (“TPA) (also called “fast track”) is a short
cut for trade agreement approval in the United States.
 Generally, TPA is a statutory mechanism under which Congress
● Defines negotiating objectives and requirements in advance;
● Requires certain consultative procedures; and
● Authorizes the President to enter into trade agreements on tariff and
nontariff barriers.
 If the President follows the statutory obligations, the Agreement will
receive expedited consideration from Congress, including
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Expedited legislative procedures;
Limited debate;
No amendments; and
An up or down vote.
 TPA preserves the constitutional role of Congress while bolstering
the negotiating credibility of the Executive Branch.
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Future Negotiations & Developments
 The 15th round of Negotiations will be held December 3-12 in
Auckland, New Zealand.
 TPP officials from several countries have stated that the agreement
will not be finalized at the end of 2012.
 Negotiations will continue into 2013.
Thank you!
Do you have any questions?
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