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Trans-Pacific Partnership

TPP leaders’ meeting fails to go ahead after Canadian PM Trudeau and Japan’s Abe fail to reach agreement

Row highlights the continuing challenge to revive the Trans-Pacific Partnership after President Trump abandoned the deal

PUBLISHED : Friday, 10 November, 2017, 6:07pm
UPDATED : Friday, 10 November, 2017, 9:20pm

An agreement on the Trans-Pacific Partnership (TPP) free trade pact was put on hold on Friday after an objection from Canada led a meeting between the signatories’ leaders to be postponed, Japanese Prime Minister Shinzo Abe said.

“Unfortunately, Canada said we are not yet at a stage where we can confirm the agreement in principle reached at the ministerial level on Thursday,” Abe told reporters.

A negotiation source said Canada was dissatisfied with the way Japan chaired the TPP meetings.

Abe and his Canadian counterpart Justin Trudeau could not reach consensus on the pact in a meeting before the planned leaders’ gathering. Abe and Trudeau spoke for more than half an hour longer than first scheduled, the source said.

TPP trade deal talks reach critical point at Asia-Pacific summit

The leaders tried to clinch a clear agreement to put the deal into effect without the United States, a day after Toshimitsu Motegi, the Japanese minister for the TPP, said an “agreement in principle” had been reached.

But his statement on the agreement’s status was contradicted by Canadian Minister of International Trade, Francois-Philippe Champagne, who tweeted: “Despite reports, there is no agreement in principle on TPP.”

It is unclear whether the 11 countries can reach an agreement while the leaders are in the central Vietnamese city of Da Nang for the two-day Asia-Pacific Economic Cooperation forum summit through Saturday.

The latest development clouds the outlook for an agreement on the TPP to be reached, despite last-minute efforts by the members who had agreed to seek implementation of the pact at the earliest possible time.

Japan, the largest economy in the TPP framework, has led attempts to salvage the deal after US President Donald Trump pulled his country out of the free trade treaty in January, saying Americans would lose jobs if the country joined the multilateral deal. Trump has made clear his preference for bilateral trade agreements on many occasions.

The apparent discord suggests that the 11 countries are still at odds over which clauses of the original text should be suspended if Washington stays out of the pact, signed in February 2016 by the 11 countries and the United States.

The 11 TPP countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Including the United States, the Pacific Rim trade pact covered around 40 per cent of the global economy.

The 11-party TPP’s share of world gross domestic product drops by 13 percentage points without the United States, but trade experts say the deal would still create a free trade area with high-standard market liberalisation.

The pull-out of the United States came as a shock to the other 11 members, given that the Pacific Rim deal was a landmark pillar of Trump’s predecessor Barack Obama’s policy of a strategic rebalance, or “pivot” to the Asia-Pacific region and had significance not only economically but in security aspects amid the rise of China.

Clauses that the 11 members have decided to suspend include an agreement on an eight-year data exclusivity period for biologic pharmaceutical patents and extension of intellectual property rights, another negotiation source said.

The members have also modified a clause in the TPP that said the TPP pact can only come into force after six members, accounting for at least 85 per cent of the original 12 signatories’ combined gross domestic product, complete domestic procedures.

As the United States alone represents more than 60 per cent of the initial members’ GDP, it is impossible for the pact to come into effect under the present terms.

The negotiators plan a revised rule to allow the pact to come into force with at least six member states completing domestic procedures, the source said.