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TPP talks progress, but tariffs still a hindrance

HANOI — Talks among 12 nations, including Singapore, drafting a Pacific-region trade agreement have made progress on rules regulating state-owned enterprises (SOEs), with differences over tariffs remaining one of the obstacles to a final deal, said a top United States negotiator.

Japanese farmers protesting against 
the TPP. Tokyo has demanded  exemptions for its agricultural sector, with tariffs on items such as rice and beef kept. 
Photo: Reuters

Japanese farmers protesting against
the TPP. Tokyo has demanded exemptions for its agricultural sector, with tariffs on items such as rice and beef kept.
Photo: Reuters

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HANOI — Talks among 12 nations, including Singapore, drafting a Pacific-region trade agreement have made progress on rules regulating state-owned enterprises (SOEs), with differences over tariffs remaining one of the obstacles to a final deal, said a top United States negotiator.

“There has been important progress made this week,” said Ms BarbaraWeisel in Hanoi, where representatives from the Trans-Pacific Partnership (TPP) countries wrapped up 10 days of talks yesterday.

“We have spent successive rounds trying to narrow the gaps. There was very good progress on SOEs here.”

The TPP would create a free-trade zone from Australia to Peru, with US$28 trillion (S$35 trillion) in economic output or 39 per cent of the global total.

The deal is a major part of US President Barack Obama’s bid to bolster American influence in Asia, as China flexes its economic and military muscle. Talks around the pact are entering a critical phase as Mr Obama’s term approaches its last two years and the looming presidential campaign threatens to slow its passage.

“They are under pressure and I think most of the delegations understand that,” said Ms Deborah Elms, executive director of the Asian Trade Centre in Singapore, at the Hanoi TPP talks. “They have been talking in general terms. No one wants to concede anything until the last 48 hours.”

The pact, which does not include China, will be the biggest trade deal in US history. The TPP goes beyond typical trade pacts that focus on reducing tariffs and highlights issues such as protection for firms that compete against government-backed businesses and stricter safeguards for patents.

“We are not done and further work is needed, but we have made a significant step forward on some of the most challenging provisions in the SOE text,” said Ms Weisel. “We want to negotiate this chapter in a way that addresses the real sensitivities countries have, without undermining the obligations we are seeking to negotiate.”

Another area of progress was in sanitary standards in the agricultural sector, she added. Other tough areas in negotiations remain around intellectual property protection, the environment and various specific market access issues, including agriculture.

Some of the biggest sticking points concern Japan’s efforts to safeguard protections for its farmers. Tokyo has demanded special exemptions for its agricultural sector, with tariffs on rice, wheat, sugar, dairy, beef and pork maintained. Japan’s trade representative was more pessimistic than Ms Weisel.

Substantial gaps remain between America and Japan and more talks are needed, Mr Hiroshi Oe, the Japanese ambassador to the TPP, told reporters yesterday, after meeting US Trade Representative Wendy Cutler in Tokyo.

The countries in the pact include the US, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. China, which has been excluded from the TPP, is separately moving trade talks with countries such as South Korea, Japan and Australia. BLOOMBERG

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