Australia, Japan still optimistic amid TPP setback

Key US trade partners said Saturday they were still optimistic about reaching a deal to lower Pacific Rim trade barriers, but acknowledged that a setback in Washington made the already tight schedule even more challenging.

Japan’s Economy Minister Akira Amari, speaking to reporters in Tokyo, said there was no need to be overly pessimistic. “We are looking for the House to work toward prompt passage” of legislation granting President Barack Obama broad negotiating authority, he said.

His comments followed a vote in the US House of Representatives on Friday against a program to assist workers displaced by trade. That legislation was linked to a measure that would let the president negotiate a complete trade agreement, then present it to Congress for a vote without amendments, which is seen as a necessary prerequisite for approval.

Though the House voted in favour of the second measure, both parts of the bill need to be approved for the legislation to advance. The White House said it still hoped to get the legislation through Congress.

U.S. trade partners involved in the talks have been hoping to wrap up the trade deal this summer in order for it to be approved by Congress this year, before the presidential election campaign heats up next year.

Australia’s Trade Minister Andrew Robb said Saturday he remained optimistic of a breakthrough on the TPP, despite the political setback in Congress and the blow to momentum for a comprehensive deal.

“There is always a lot of cut and thrust in these things and politics being played,” Mr. Robb told The Wall Street Journal. “There is another opportunity next week to get the ducks lined up. But second guessing the United States is always difficult.”

Mr. Robb has come under fire at home over benefits a concluded TPP may bring, with criticism from farm groups that it may not do enough to lower US tariff barriers and quotas on Australian beef and sugar. On Saturday he said the deal would translate into more jobs, growth and living standards for Australians, including the country’s politically influential farmers.

“The TPP brings the promise of enormous benefits, new levels of market access, a more seamless trading environment across countries represent 49% of the world’s GDP and lower costs for businesses,” Mr. Robb said.

In Tokyo, Mr. Amari said Friday’s setback made an early ministerial meeting of the 12 countries engaged in the talks unlikely. The TPP countries were hoping to hold such a meeting to strike a deal as early as this month. Now such a meeting would have to wait till next month at the earliest.

If the House doesn’t reverse course, “the trans-Pacific Partnership negotiations will be put into limbo for an indefinite period of time,” wrote Richard Katz, publisher of the Oriental Economist report, after Friday’s setback for Mr. Obama.

Opponents to the TPP in Japan, including farm groups and politicians representing agricultural districts, have been hoping for just such a scenario.

Japan is believed to have agreed to eliminate most of its tariffs for pork, even though the discussions are kept secret. The Japan Pork Producers Association says the reported deal is “totally unacceptable,” and warns that such a deal “would wipe out domestic pork producers.”

In Malaysia, Prime Minister Najib Razak has invested significant political capital in the TPP, and the proposed deal is at the centre of an improving relationship with the US

“This setback will rub off negatively onto the bilateral relations between Malaysia and the US,” said Tang Siew Mun, a senior fellow at the Institute of Southeast Asian Studies in Singapore.

Source: The Australian