GHY Tradelines

(Japan Times)

The 11 countries involved in the Trans-Pacific Partnership free-trade negotiations began their 17th round of talks in Lima on Wednesday with the focus on whether exceptions should be made to the general rule of tariff elimination.

Even though Japan gained the unanimous backing of the members last month to become the 12th member of the talks, it cannot take part until the U.S. completes the 90-day notice required by Congress to admit it. The earliest Japan can join is expected to be the July round in Malaysia.

With Japan seeking to protect its rice and other sensitive agricultural products by retaining tariffs through the TPP negotiations, decisions by the existing members at the 10-day meeting could affect Tokyo’s plans for the talks. Decisions already made by TPP members are not renegotiable as countries aim to conclude a deal by the end of the year. Read more here.
 

(EU Observer – Lisbeth Kirk)

Special treatment of culture “makes sense,” European Commission president Jose Manuel Barroso has said in relation to upcoming EU-US trade talks.

Speaking at the European Business Summit in Brussels on Thursday (16 May), he noted that “cultural diversity” has a special mention in the EU treaties, allowing member states to treat related products – such as books, films and music – differently to other items in the internal market. “Having special quotas and cultural subsidies is accepted in Europe and the European Commission wants to keep it,” he said. Read more here.
 

(Mark Weisbrot – Huffington Post)

The Trans-Pacific Partnership (TPP) is a very special trade agreement. It is so special that our government officials who are negotiating it want to keep it completely secret from us. It’s like a special Christmas present so they want it to be a surprise! And to make sure it’s a surprise, they won’t even let a single member of Congress see what they are negotiating. However, hundreds of corporations have been given access to the draft text.

This should give you some idea of our government’s trade agenda. President Obama says that he wants to create jobs through trade, but this agreement is more likely to cost jobs here than to create them. Leaked drafts of parts of the agreement indicate that our negotiators are trying to increase patent protection for pharmaceutical companies, for example. This will not create jobs, although it may make our big drug companies and their shareholders richer.

When our government tells us such an agreement will create jobs in the U.S., they are saying that the agreement will increase our exports faster than imports. So, for the TPP, they are saying that we will increase our exports to Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and now possibly Japan faster than our imports from these countries. That is unlikely. We were promised the same thing with NAFTA two decades ago, but it didn’t work out that way at all. Read more here.
 

(BJ Siekierski – iPolitics)

If the Harper government learned anything from its belated push to join the Trans-Pacific Partnership negotiations, it was that it’s better to be eager early.

They don’t intend to make the same mistake twice.

On Friday morning, the prime minister’s director of communications, Andrew MacDougall, is briefing the media with senior government officials on the prime minister’s trip to Peru and Colombia next week.

Though MacDougall probably won’t say it this plainly, there’s a simple reason for the three-day visit: membership in the Pacific Alliance. Read more here.
 

(STR Trade Report)

In its second annual G-20 Business Scorecard, the International Chamber of Commerce rates as “poor” efforts by G-20 member nations over the past year to implement business community recommendations on trade and investment. This rating stands in contrast to the ICC’s evaluation of G-20 efforts on anti-corruption (fair), energy and the environment (fair), and financing for growth and development (good). Overall the G-20 earned a score of “fair,” compared to a “poor” rating in 2012, which the ICC states “suggests that the G-20 is responding to the calls of business but that renewed efforts and increased international cooperation will be required to achieve reform on major global challenges.”

Within the trade and investment area, the ICC rates as “poor” G-20 efforts to promote multilateral trade liberalization and rulemaking within the World Trade Organization (largely due to the ongoing impasse in the Doha Round negotiations) and roll back measures restricting trade and investment that have been imposed in the wake of the global economic downturn. However, efforts to finalize a WTO trade facilitation agreement, make trade and investment a permanent item on the agenda, and improve the international investment environment were deemed “fair.”
 

(Tim Fernholz – Quartz)

UK prime minister David Cameron really thinks a free trade deal between the European Union and the United States is a good idea, judging by his article (paywall) this morning on his agenda for a summit of the world’s eight largest economies next month:

Trade makes the cake bigger so everyone can benefit. Take the free trade area between Europe and the U.S. on which we hope to launch negotiations when President Obama is in Northern Ireland for the G-8 next month. This deal could add as much as £10 billion to the British economy and £63 billion ($97 billion) to U.S. GDP. But the rest of the world would benefit too, with gains that could generate €100 billion ($132 billion) world-wide.

However, Cameron also thinks that UK voters should vote on whether or not to leave the European Union in 2017 (assuming he wins an election in 2015). Cameron’s Conservative party has long been skeptical of the European common market and the rules drafted by the European Parliament in Brussels. The multi-year currency car crash that is the euro crisis has not exactly engendered optimism about the project. Today, a plurality of UK citizens would vote to leave Europe’s common market. Read more here.
 

(Huffington Post)

President Barack Obama and British Prime Minister David Cameron on Monday pledged to pursue a broad trade agreement between the U.S. and European Union, amid growing domestic unrest with the Obama administration’s plans to include new political powers for corporations in the deal.

Negotiations have not formally begun, but a series of meetings between U.S. and EU officials have established some ground rules and the preliminary scope of the talks. Since tariffs are already low or nonexistent, the agreement will focus on regulatory issues. That emphasis has concerned food safety advocates, environmental activists and public health experts, who fear a deal may roll back important standards.

Obama and Cameron were vague on Monday, while celebrating the potential for a trade pact to create jobs. “Our extensive trade with the U.K. is central to our broader transatlantic economic relationship, which supports more than 13 million jobs,” Obama said at a press conference Monday. “I believe we’ve got a real opportunity to cut tariffs, open markets, create jobs, and make all of our economies even more competitive.” Read more here.
 

(AFP)

European culture ministers from Germany, France and 12 other member nations have called for the audiovisual sector to be exempted from negotiations for an EU-U.S. free trade deal. The French initiative emerged on Tuesday, the day after British Prime Minister David Cameron, on a visit to Washington, said that all subjects and products should be up for discussion in the coming negotiations on the proposed free trade area.

Speaking at the White House after talks with U.S. President Barack Obama, Cameron said on Monday there is a “real chance” that the negotiations could be launched in earnest by next month’s Group of Eight summit in Northern Ireland. However, he added that such talks on the ambitious Transatlantic Trade and Investment Partnership have to cover all subjects. “To realize the huge benefits this deal could bring would take ambition and political will. That means everything on the table, even the difficult issues and no exceptions,” he said. Read more here.
 

(Toboc.com)

China, arguably the fastest growing economy in the world, and one of European Union’s biggest trading partners, isn’t looking good to get that elusive Free Trade Deal with the EU anytime soon.

The EU, a global trading behemoth, is open to establishing free trade deals with the United States and Japan but feels that a planned investment accord is the most sensible next step when dealing with China. As quoted by an unnamed EU official, the Free Trade Agreement (FTA) could present itself as the logical next step in this evolving relationship.

EU is China’s largest market in terms of sales volume and revenue generated and a Free Trade Agreement (FTA) would obviously help the Chinese cause. Last month, when EU foreign affairs head Catherine Ashton visited China, the FTA issue was the prominent item on the table next to the spicy Shezwan Rice and Peking duck. EU’s current stand holds on the fact that a FTA with the United States at this point will have a kickback effect that will positively influence EU’s trading relations with China too. Read more here.
 

(Julian Beltrame – CP)

The Canada-European Union free trade talks are nearing an end with agriculture issues the last major stumbling block to an agreement both sides say will boost economic growth, the EU ambassador Matthias Brinkmann said Thursday.

In a free-wheeling discussion with Canadian reporters, Brinkmann suggested that most other issues in the four-year talks have been resolved or are close to being resolved, and that two specific sticking points — how much Canadian beef to Europe and how much European cheese to Canada — is keeping the sides from a deal.

“I think we have the landing zones identified for all sectors … but like in most negotiations it’s agriculture which is the most difficult one,” he said. Read more here.
 

(Reuters)

China has raised concerns about European Union plans to negotiate an ambitious free trade deal with the United States, fearing it is a protectionist move, a senior EU official said on Tuesday.

Chinese officials queried EU foreign policy chief Catherine Ashton about the issue when she visited Beijing at the end of April for talks with Foreign Minister Wang Yi and other Chinese leaders. [...]

China worried about whether the plan was “a pulling of the wagons into a circle to … insulate the transatlantic economy from the rest of the world or is it, as we argue, even greater opening of both economies?” the EU official said, briefing journalists on condition he was not further identified. Read more here.
 

(Reuters)

Canada is close to finalizing a long-delayed free-trade deal with the European Union but will not set a timetable for reaching an agreement, even though the EU is set to start talks with the United States, a top official said on Monday. [...]

“Our negotiators … (are) bridging the very small remaining handful of issues. These are difficult discussions but our negotiators are finding creative ways of bridging the outstanding gaps,” said Canadian Trade Minister Ed Fast. Read more here.
 

(Marietje Schaake – EurActiv)

With the eurozone in crisis, a downward spiralling economy, rising unemployment taking centre stage throughout the EU, one word has created a positive buzz in Brussels lately: TTIP (pronounced: Tee-TIP). From Commission officials and trade MEPs to business and consumer rights organisations, the prospect of reaching a broad Transatlantic Trade and Investment Partnership has brought much needed energy and excitement to Washington and Brussels.

It is not the first time the world’s largest trading blocs have tried to break down remaining barriers in the vast amounts of trade and investment crossing the Atlantic. This time the momentum seems right and stakes are high. Political capital has been invested by President Barack Obama and EU leaders alike. Besides the US and EU economies languishing for jobs and growth, the window of opportunity to jointly set standards for future economies is closing rapidly. Emerging trade blocs are evolving into powerhouses wishing to play increasingly active and competitive roles on the world stage. Read more here.
 

(Burnaby Now)

Yes, everyone’s in a tizzy since the Americans announced they’re considering charging a fee to Canadian border crossers.

While bridges across the Lower Mainland are springing up with tolls, we’ve always taken it for granted that a trip to the States will be gratis.

Well, for a certain value of free. A border crossing fee, especially one of $1 to $10, won’t deter anyone from making a once-a-year trip to see Disneyland or their American friends or relatives.

But there are those who cross the border every day – truckers, mostly, but some folks choose to live in Canada and work in the U.S., or vice versa. Read more here.
 

(Global Times)

The recent news about Japan eagerly joining the Trans-Pacific Partnership (TPP) talks touched a raw nerve in China. Combined with similar plans from Vietnam and some other Southeast Asian neighbors, China’s worries about the TPP are growing.

The TPP did not attract much attention in 2003, when it was founded, but its potential was enormously strengthened since the US announced its interest in the original four-party partnership.

The entry of the US has not only added weight the influence of the new free-trade zone, but spurs the member states to form new trade rules outside the framework of the WTO. Read more here.
 

(Michael Geist – The Star)

While the need for business insight as part of trade talks is understandable, the two-tier approach raises serious concerns about the lack of transparency.

As the future of the proposed Canada – European Union Trade Agreement becomes increasingly uncertain – the EU has been unwilling to compromise on the remaining contentious issues leaving the Canadian government with a deal that offers limited benefits and significant costs – the Trans-Pacific Partnership Agreement (TPP) is likely to emerge as the government’s new top trade priority.

The TPP has rapidly become of the world’s most significant trade negotiations, with participants that include the United States, Australia, Mexico, Malaysia, New Zealand, Vietnam, Japan, and Canada. There is a veil of secrecy associated with the TPP, however, as participants are required to sign a confidentiality agreement as a condition of entry into the talks. Despite those efforts, there have been occasional leaks of draft text that indicate the deal could require major changes to Canadian rules on investment, intellectual property, cultural protection, procurement, and agriculture. Read more here.
 

(Mike Palmedo – Infojustice.org)

Pressure on Capitol Hill for Trade Promotion Authority (TPA) is growing.

TPA – called “fasttrack” in the 1990s when it was used to negotiate NAFTA – allows the executive branch to negotiate trade agreements that Congress cannot amend during the ratification process.  It also sets procedural rules under which trade agreements are negotiated, and the objectives of the United States for the outcomes of trade negotiations.

At last week’s Senate Finance Committee hearings on the Trans Pacific Partnership, Chairman Max Baucus said that he “would like to see a bipartisan TPA [Trade Promotion Authority] bill introduced by June.” [...]

TPA was last granted to the executive branch in the Trade Act of 2002, but the authority expired in 2007. The Trade Act of 2002 included specific negotiating objectives for USTR for each section of trade agreements, including intellectual property.  Assuming the upcoming TPA legislation is structured the same way as the expired TPA, this presents an opportunity for public interest IP advocates to weigh in on what USTR’s goals should be when it tables text for future agreements. Read more here.
 

(Dean Baker — Aljazeera)

The US-EU free trade pact and TPP are about securing regulatory gains for major corporate interests, writes Baker.

In polite circles in the United States, support for free trade is a bit like proper bathing habits: It is taken for granted. Only the hopelessly crude and unwashed would not support free trade.

There is some ground for this attitude. Certainly, the US has benefited enormously by being able to buy a wide range of items at lower cost from other countries. However, this does not mean that most people in the country have always benefited from every opening to greater trade.

And it certainly does not mean that the country will benefit from everything that those in power label as “free trade”. That is the story we are seeing now as the Obama administration is pursuing two major “free trade” agreements that in fact have very little to do with free trade and are likely to hurt those without the money and power to be part of the game. Read more here.
 

(Globe & Mail)

The federal government is putting a hard sell on Japanese auto makers to boost investment here as Canada and Japan open sweeping free-trade negotiations.

Ed Fast, Minister of International Trade, and Christian Paradis, Industry Minister, met Nissan Motor Co. Ltd. and Toyota Motor Corp. officials earlier this month amid free-trade talks that will address Japan’s desire to eliminate a key Canadian automotive trade policy – a 6.1-per-cent tariff that Canada levies on vehicles imported from outside North America.

One question for the two ministers is whether they can trade that tariff for a new assembly plant or expanded factories and potentially thousands of jobs or settle for increased access to Japan for other Canadian products or some other less visible trade-off. Read more here.
 

(Peter Lee – Asia Times)

Oscar Wilde wrote, “When the gods wish to punish us, they answer our prayers.” Perhaps this is how Kurt Campbell feels today.

Campbell, after all, as assistant secretary for East Asia in Hillary Clinton’s State Department, was a key architect and proponent of the “pivot to Asia”, which was meant to elicit satisfactory behavior from China – and, in the process, demonstrate US leadership and relevance – by confronting the PRC with a phalanx of Pacific democracies (plus Vietnam of course) determined to impose liberal security, economic, and human rights norms on the rogue superpower.

The inevitable result of US backing has been an increased willingness of the Philippines, Vietnam, and Japan to stand up to China, which has contributed a virtuous cycle of Chinese hostility and a further defensive cleaving of the smaller nations to the United States. Read more here.