Macroscope | Trans-Pacific trade talks teeter as headwinds get stronger

For those who see hope in the shiny lining of dark clouds, inconclusive preferential trade negotiations could offer the World Trade Organization new opportunities.

Without wishing ill on international agreements that promise benefits despite their discriminatory downside, the difficulties facing preferential deals – especially the multi-country ones – are not so different from those confronting the WTO. And with its objective of inclusiveness and basis in non-discrimination, the WTO is the high road when it comes to international trade cooperation.

Success eluded trade ministers from the 12 nations struggling to complete the Trans-Pacific Partnership (TPP) negotiations in Hawaii last weekend. Five years of hard work is in the balance for what was touted as the most ambitious, high-standard trade agreement in a generation, covering 40 per cent of global income.

The window of opportunity to complete the negotiations in the near future is fast diminishing. Some would say what had been billed as the last chance was just that, and the window has closed.

If that is correct, President Barack Obama’s pivot and legacy, along with Prime Minister Shinzo Abe’s structural adjustment efforts, are among the most obvious casualties, although the others hardly welcome the whiff of failure and lost opportunities either.

Optimists say that a reconvened gathering in August or September, or in the margins of APEC in November, could tie things up. But politics are an obstacle. Canada has an election in October and the US primaries begin in January. Vote counts and complicated legislative procedures – especially in the United States – could scupper the TPP for at least two years, and perhaps forever in its present form.

Even if the ministers do reconvene, how easily can they settle their differences? A number of tough calls for compromise confront them. Some of the areas where TPP negotiators remain apart include dairy products, intellectual property rights for biologic medicine, auto-parts, and exceptions to the right of investors to sue states in international tribunals where health or environmental quality are at issue, such as tobacco.