Asia trade talks heat up as fast-track battle rages

NEW YORK — Talks have accelerated on what would be the biggest trade deal in world history thanks to a Republican Congress that wants to give President Barack Obama more power to negotiate the agreement and a group of Asian nations that are closer than ever to making concessions on consumer goods sold around the globe.

Here at the Asia-Pacific trade talks, a mad scramble is underway among pharmaceutical giants, major clothing companies and big agricultural groups who are trying to influence the outcome of the Trans-Pacific Partnership negotiations, a proposed agreement stretching from Chile to Japan that would encompass 40 percent of global gross domestic product and about a third of world trade.

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“There’s a real air of seriousness about concluding these talks and getting to the finish line, and everything I saw here this week reaffirms that the U.S. government is firmly committed to trying to get this done in the 30 to 60 days or whatever the time period is,” said Augustine Tantillo, president of the National Council of Textile Organizations, which lobbies on behalf of the U.S. textile industry.

Tantillo and other lobbyists and interest groups were busy meeting with officials from Vietnam, New Zealand and the 10 other countries in the talks, which are taking place at the Sheraton New York Times Square Hotel. Trade officials could be spotted holding court at large circular tables as lobbyists and advocates pitched their positions on everything from apparel rules to access to medicines.

Dozens of lobbyists and industry group leaders descended on the hotel this week to roam the halls in an attempt to push negotiators toward their positions on controversial areas like drug patents and agricultural protections, which are still unresolved after nearly five years of negotiations.

At the same time, trade officials are taking notice of the new atmosphere in Washington. Obama is, for the first time, publicly calling for “trade promotion authority” legislation that will ease the passage of the agreement in Congress.

“This is throwing talks into a higher gear as we enter the home stretch,” said Trevor Kincaid, a spokesman for the Office of the U.S. Trade Representative. “While Congress and the administration are preparing for the end game, so are the teams.”

“We are making good progress in a number of areas and teams are checking remaining issues off the list,” Kincaid added.

Pressure to complete a deal is growing. At some point next month, lawmakers are preparing to introduce the trade promotion bill, which has been buoyed by the GOP takeover of Congress last November that put Senate Republicans only a handful of votes away from a filibuster-proof majority of support for trade and widened the margin of trade-friendly Republicans in the House.

The fast-track bill, as the legislation is also known, would expedite the passage of the Asia-Pacific deal in Congress by putting it to an up-or-down vote, limiting debate and preventing lawmakers from offering amendments to the agreement. Its passage is expected to give countries in the deal, which have a combined GDP more than two-thirds greater than that of the NAFTA nations, more confidence to negotiate without fear of Congress picking the agreement apart and reversing hard-won gains or concessions — a magical ingredient that will catalyze the talks, moving them into the endgame.

“We’ve seen a great level of optimism by the United States since the midterm elections, and U.S. industry stakeholders have been promoting a highly positive spin about TPA,” said Yves Leduc, director of international trade for the Dairy Farmers of Canada. “I think there is recognition that 2015 is the window in which they are working,” he said.

With the legislation imminent, the uncertain deadlines that have plagued the talks are giving way to a more concrete timeline for getting a deal done in the coming months. Trade ministers could meet as soon as March, when they would try to reach an “agreement in principle” representing what a final deal will look like, sources close to the negotiations said here this week.

The shortened timeline is forcing action at the negotiating table, prompting the country officials and interest groups to tip their hands on their true bottom lines. Whatever the negotiators decide to include in the trade deal could have a ripple effect on entire industries, with the potential to offshore more U.S. textile jobs and impact the financial feasibility of drug research and development, to name two possibilities.

Those and other interest groups say they are fighting for their lives and those for whom they advocate — in some cases literally — as in the case of strict new drug patent rules that could limit access to cheap generic medicines in the developing world.

For Leduc, it’s now a matter of mounting a major defense. Canada protects his industry and others — poultry and eggs — through a so-called supply management system, which restricts imports and tightly controls production as a way of stabilizing those sectors — and they’re coming under fire in the 11th hour to open up their markets to more U.S. imports.

The chairman of the House Ways and Means Committee, Wisconsin Republican Paul Ryan, wielded a block of smoked Gouda from his home state while stressing the importance of prying open dairy access to the Canadian market during a trade hearing with U.S. Trade Representative Michael Froman this week. U.S. negotiators were unsuccessful in gaining such access through the NAFTA.

“Exports are becoming only more important in the entire U.S. dairy sector …” Ryan said. “I’m concerned that Japan is not doing nearly enough and that Canada is not even negotiating to remove significant tariff and nontariff barriers to U.S. dairy.”

Other groups are rushing to make sure final concessions reflect their interests.

“We’re still very much focused on the negotiators,” said Rohit Malpani, director of policy and advocacy at Doctors Without Borders. “We still think there is opportunity for other countries to really push back against what continues to be the worst trade agreement in terms of access to medicines that has ever been negotiated.”

His organization has been making its position known in the skies above New York City, flying an aerial banner along the Hudson River that reads: “Doctors to Obama: Keep #TPP Away From Our Medicines.”

The U.S. pharmaceutical industry is pushing for strong patent protections and long periods of data protection for cutting-edge biological drugs. Companies argue those protections are needed to create a financial incentive for recovering the massive costs involved in developing the medicines.

It was a point that Froman alluded to in outlining both sides of the issue at Tuesday’s hearing. “We have 40 million Americans whose jobs are related to IP [intellectual property]-intensive industries,” Froman said. “And our goal is on one hand to promote innovation and creativity in this country, and also to ensure access to affordable medicines particularly in developing countries.”

Public health advocates like Malpani, however, argue that much of what the industry is demanding would only extend patent monopolies in developing countries and cut off access to affordable generic versions.

They weren’t pulling any punches this week when they brought in Nobel Prize-winning economist Joseph Stiglitz to brief negotiators on what he argues is at stake in the agreement’s drug provisions.

“Maybe not in your family, but in somebody else’s family somebody will die as a result of what you do or do not do in this agreement, or their lifestyle will be affected significantly,” he told room full of trade officials.

U.S. textile industry officials were also out in force this week, pressing U.S. officials to stand firm on rules that would help preserve an industry that has been in dire straits for years. Vietnam, an apparel-making powerhouse, is pushing for a deal that would be boon to its massive export industry, which is second only to China’s in size.

“We’re here this week delivering the same very clear and consistent message that an agreement has to be balanced,” Tantillo said. “It has to be good and not just for folks who do the final assembly such as apparel makers, it also has to balanced for folks who produce the inputs, the components, the yarns and fabrics.”

Past trade deals have been careful to safeguard what’s left of the American textile industry, guided by vigilant members of Congress with strong textile constituencies.

Washington is already standing firm behind a “yarn-forward” rule that would allow tariff reductions only for clothing sewn from fabric made in TPP countries. Right now, Vietnam gets much of its cloth from China, which is currently excluded from the deal.

The domestic industry is also continuing to push for “reasonable” periods of time for phasing out tariffs on textile imports from Vietnam.

“We believe the government is fully absorbing our input,” Tantillo said.

But big apparel companies like Gap and Nike, which have major production in Vietnam, want the rules of origin to be more flexible, allowing tariff cuts on clothes and shoes made of fabric from China and other countries not currently in the agreement — and they’re starting to gain a voice in Congress from members whose districts or states are home to the companies’ headquarters or production facilities.

“You’ve got members asking if the rules of origin are going to be flexible enough to do business,” said Steve Lamar, executive vice president of the American Apparel and Footwear Association. “That’s not a line of questioning you’ve seen in the past.”

Source: Politico