WWD.com/business-news/government-trade/tpp-talks-move-into-next-year-7305905/
government-trade
government-trade

TPP Talks Pushed Into Next Year

Negotiators say progress was made, but final deal elusive.

WASHINGTON — U.S. Trade Representative Michael Froman and trade ministers from the 11 other countries negotiating the Trans-Pacific Partnership trade accord failed Tuesday to strike an anticipated final deal in the latest round of discussions, which will push the talks into next year.

This story first appeared in the December 11, 2013 issue of WWD.  Subscribe Today.

The trade officials said, though, that they made progress on significant, outstanding issues as they wrapped up four days of talks in Singapore.

Froman, who briefed reporters on a call from Singapore, said the TPP ministers “really accomplished an enormous amount across various texts of the TPP agreement by working in a collaborative way to identify potential ‘landing zones’ on a great majority of the outstanding issues. I would describe the outcome of the meeting — great momentum. We’re now focused on building on that momentum.”

The U.S. is in talks with Vietnam, Canada, Mexico, Japan, Australia, Brunei, Chile, Malaysia, New Zealand, Peru and Singapore on the TPP trade accord. All 12 ministers said in a joint statement on Tuesday that they will “continue to work with flexibility to finalize these text issues, as well as market access issues” and plan to meet again in January. Froman told reporters that all of the ministers “left feeling very positive about what was accomplished” in Singapore.

“They all recommitted themselves to the highest possible standards…and an ambitious and comprehensive agreement, and felt like the meeting contributed very significantly to that,” he said.

The failure on the part of the negotiators to draft even a framework trade deal underscored the complexities involved on sensitive issues, which include textiles and apparel. The U.S. has proposed a yarn-forward rule of origin that requires apparel be made of fabric and yarns supplied by the U.S. or other TPP partner countries to qualify for duty-free benefits when shipped back to the U.S. Importers oppose the rule, but American textile producers claim they need it to compete.

The U.S. has also proposed a short supply program that allows importers to use third-country fabric and yarns in apparel production if the U.S. determines they are not commercially available in the TPP member countries. Industry sources have said one of the sticking points in the negotiations is a deep division between some of the countries over the textile rule origin.

There is also concern on Capitol Hill over certain provisions that could be included once a final deal is struck. In addition, there appears to be some growing momentum in the House against granting President Obama trade promotion authority, a tool many experts argue he needs to help wrap up negotiations on the TPP pact.