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TRADE WARS
Pacific nations eye 'stepping-stone' trade deal
by Staff Writers
Washington (AFP) Oct 17, 2011


The United States and eight other Pacific countries hope to announce the crux of a major trade deal at an Asia-Pacific summit next month, officials said Monday, a step toward an elusive APEC-wide accord.

US trade officials said leaders from nine nations should herald the "broad outlines of an agreement" at an Asia-Pacific Economic Cooperation summit, which will be hosted by President Barack Obama in his native Honolulu on November 12-13.

The deal, which has been at least two years in the making, would bind countries that together account for a quarter of world economic output.

Negotiators from the nine are to gather in Lima from Wednesday for 6-10 days of talks to finish sketching the accord, said Carol Guthrie, a spokeswoman for the US Trade Representative.

More negotiations will likely be necessary after the Honolulu meeting, but the deal is expected to cover supply chain management, intellectual property protection, investment, rules on state-owned firms and a host of other trade issues.

"It's comprehensive, it's going offer access to a couple of very important growing markets in Vietnam and Malaysia and a developed market in New Zealand," said Douglas Goudie, head of international trade policy at the US National Association of Manufacturers.

Many hope the agreement --- between Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, United States and Vietnam -- will provide a stepping stone to a deal that would include regional powerhouses China, Japan and Russia.

While the so-called Trans-Pacific Partnership (TPP) talks appear to be bearing fruit, broader talks to create a fully-blown Asia-Pacific free trade deal have long withered on the vine.

Trade groups hope that the Honolulu meeting and the TPP's conclusion will inject some political momentum into that process.

Covering around 50 percent of global commerce, a deal that covers all 21 economies of APEC has the potential to significantly recast world trade flows.

"I think any APEC-wide free trade agreement is inherently a long-term concept, but this is an important step along the way," said John Goyer of the US Coalition of Service Industries.

According to trade experts, Japan may now play a key role in deciding whether the TPP becomes the basis of a major hemispheric deal, or another in the long list of multilateral accords.

"The more countries are engaged in that negotiation, the more appealing it becomes to other countries,' said Goyer.

That is a view shared by Joshua Meltzer, an Australian former trade diplomat now with the Brookings Institution: "We have to see which countries after this current batch want to join."

"Japan for a year now at least has at senior levels of the government wanted to join the TPP," he said.

But he said the March 11 earthquake-tsunami disaster put that on hold.

"The earthquake changed that domestic political calculation for Japan," said Meltzer.

"Essentially it's given the (Japanese) agriculture ministry and the agricultural industry an opportunity to argue that now is not the time to liberalize the agricultural sector; we need to focus on rebuilding it instead."

"The question now is whether that argument is going to win the day."

The Honolulu summit could give Prime Minister Yoshihiko Noda a platform to announce his choice.

Beyond Japan, the likes of Canada, the Philippines, South Korea and Taiwan have indicated their possible interest in joining. But not, so far, China.

"There is no discussion at this stage of China joining the TPP," said Meltzer.

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