• Sat
  • Sep 20, 2014
  • Updated: 8:57am
NewsAsia
TRADE: ANALYSIS

Delay in sealing transpacific free-trade pact hampers US Asia pivot

PUBLISHED : Wednesday, 11 December, 2013, 9:37pm
UPDATED : Thursday, 12 December, 2013, 2:52am

The failure to finalise a landmark transpacific trade pact this year as planned has dealt a blow to US President Barack Obama's policy pivot to Asia.

While negotiators say they have made substantial progress, myriad hurdles remain to creating a bloc encompassing a third of global trade. One of the biggest will be winning the backing of the US Congress.

As recently as October, the goal of the leaders of the 12 nations in the Trans-Pacific Partnership, or TPP, was to reach an agreement this year, although most analysts had viewed that as unrealistic given the complexity of the pact and the political pressures governments face.

Labour groups and lawmakers from Obama's own Democratic party wasted little time in pouncing on the indecisive outcome on Tuesday of closed-door deliberations in Singapore. Trade ministers said they had identified "potential landing zones" for most of the outstanding issues, but gave few specifics. They plan to meet again next month.

"The failure in Singapore makes clear the administration is far from reaching agreement with the other countries and reaching a deal the Congress can support," Democratic congresswoman Rosa DeLauro said.

With sizeable numbers of Democrats coming out against the deal, principally because they argue it will cost American jobs, the administration will be counting on strong Republican support, which is not guaranteed in the bitterly partisan political atmosphere in Washington.

The administration views TPP as key to boosting American exports in Asia's fast-growing markets and demonstrating US economic leadership in a region where China looms increasingly large. That supports a diplomatic and military effort by Obama to shift US foreign policy focus after a decade of costly war in Afghanistan and Iraq.

The TPP is ambitious. It aims to reduce tariffs on goods and services to close to zero among disparate economies and address issues beyond the scope of previous trade pacts. These include labour and environmental standards, intellectual property and competitive advantages of state-owned companies.

Originally, Obama called for TPP to be completed by the end of last year. In the meantime, Japan joined the negotiations, which has complicated things but given the pact a strategic clout it lacked before. The other nations are Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

"The result in Singapore was disappointing but not surprising - and not fatal, provided they keep moving toward agreement in the first half of next year," said Matthew Goodman, a former Obama adviser. He said the new deadline was probably April.

Share

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

This article is now closed to comments

joyalsofi
Let's have some analysis of just what the secretive TPP means for the public. Or at least what little we know of it from leaked drafts. This is no ordinary trade deal and the people of the world not only deserve a long look at it but a seat at the negotiating table as well.
 
 
 
 
 

Login

SCMP.com Account

or