WASHINGTON, July 29, 2015 – Negotiations on the Trans-Pacific Partnership moved into a critical phase yesterday as the top trade ministers from the U.S. and 11 other Pacific Rim nations joined the talks in Hawaii.
Their deputies had been meeting since July 24, hoping to smooth the way for their bosses to conclude the ambitious trade agreement that would involve about 40 percent of the world’s gross domestic product. But there’s been little word of progress – or lack of it – from the talks, which the U.S. is hosting on the island of Maui.
Before the talks began, U.S. Trade Representative Michael Froman said “considerable progress” had been made recently in closing gaps on remaining issues – raising hopes in many quarters that a deal could finally be struck, after five years of negotiations.
One of the biggest snags, at least among agricultural issues, appears to be Canada’s insistence on protecting its dairy market, with total receipts last year exceeding $6 billion, through a system of supply management, quotas and protective tariffs.
Wally Smith, the president of Dairy Farmers of Canada, summed up his group’s stance in a July 23 message to his membership, as posted on the DFC website: “It is DFC’s top priority to defend and promote our system of supply management as trade negotiations continue to progress,” Smith said. “Dairy Farmers of Canada has resolved to insist the government and Canadian parliamentarians make no dairy sector concessions in the Trans-Pacific Partnership.” A similar message got a standing ovation at the group’s recent convention in Vancouver.
But the pressure is building, both from foreign and domestic sources. A number of prominent U.S. lawmakers, including House Agriculture Committee Chairman Mike Conaway and Ways and Means Chairman Paul Ryan have said Canada needs to open its dairy market or face removal from TPP. Even Japan, which is zealously guarding its so-called sacred agricultural products, including rice, pork and beef, has suggested that Canada may be ousted from the talks.
Domestically, Andrew Dickson, the general manager of Manitoba Pork, said it’s unthinkable that Canada could be left out of the TPP. “This is very important to us in Manitoba,” he told Agri-Pulse in a recent interview. “If we don’t get this right, our industry could be out of business. We can’t be in a tariff position at an unequal level to the U.S.
“In the end,” he said, “I think Canada will negotiate the best package it can for the Canadian people as a whole.”
Dickson pointed that the U.S. is also under pressure, especially from Australia, to open up its sugar market, which is protected much the same way as dairy is in Canada. “When all parties come to the table, everybody has their own issues to deal with,” Dickson said.
Beyond agriculture, there are plenty of other issues that could preclude an agreement being reached in Hawaii, including intellectual property rights, battles over drug costs, control of the Internet, environmental standards and workers’ rights.
Clayton Yeutter, a former U.S. Trade Representative and Agriculture Secretary, said at a recent forum in Washington that chances were “slim” for an agreement in Hawaii, and that the heads of state may have to get personally involved to finalize any deals.
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