Why Trans-Pacific Partnership negotiation stagnates

The negotiation of Trans-Pacific Partnership Agreement has entered its fourth year, but there still seems nowhere to go. Several reasons have lead to the stagnation of the negotiation.

Firstly, the negotiation is troubled by the mixed mode of bilateral and multilateralnegotiations adopted by TPP on the issue of market access. The usual method of afree trade agreement negotiation is that all members negotiate to reach a uniform tariffreduction arrangement and finally form a free trade zone. However, The United Statesproposed in the TPP negotiation to retain the existing bilateral free trade agreementsand only negotiate on market access with Vietnam and other three countries whichhave no free trade agreements with it. In this way, the United States attempts tomaintain its vested interests on sensitive products and protect its domestic market atthe same time.

Secondly, interests of the United States hidden behind "high standard" undermine thenegotiation. The United States, by using "high standard" as a disguise and takingadvantage of its technology and market edges, tries to maximize its interests throughnegotiations.

Thirdly, the TPP negotiation tries to cope with appeals of different countries with the"one size fits all" approach. Among the 11 members of the TPP, there are developed aswell as developing countries and they often hold different stances toward the sameissue. For instance, in terms of competition policies, the United States has put forwardnew requirements for state-owned enterprises, including canceling their subsidies andthe tilting government procurement toward them. Nevertheless, these requirements arefar beyond what most developing countries can bear.

Fourthly, the negotiation is subject to the U.S. domestic politics. At the very beginningof the negotiation, the United States reminded other members that the U.S. Congresswould not accept a TPP without strong labor and environmental measures. Obviously,the United States aims to lower the comparative advantages of developing countries soas to create more job opportunities for itself. 

The nine months to come will be a key period for the TPP negotiation. If the UnitedStates is not flexible enough to conclude the negotiation by the end of October, thenthe negotiation may fall into a long-term deadlock.

January 29, 2013

Source: People's Daily, China