Map of countries in Trans Pacific Partnership Main_sail/ThinkstockPhotos
Schematic map of the new Trans-Pacific Partnership after the USA left.

TPP could be further delayed

The deal, which would have covered 40% of the global economy, was thrown into disarray when Donald Trump withdrew the U.S. in one of his first acts as president.

by Rosalind Mathieson, Isabel Reynolds and Nguyen Dieu Tu Uyen

After a day of confusion, a much-anticipated framework agreement on a Pacific trade deal was at risk of being scuppered, raising the prospect the pact -- already many years in the making -- could be delayed further.

Trade ministers from the 11 countries in the Trans-Pacific Partnership reached a tentative agreement in Vietnam on Thursday, according to an official with direct knowledge of the talks. However, a Friday meeting of TPP-country leaders to approve the plan was deferred and the deal is now in flux, the official said, asking not to be identified when discussing private matters. 

Signs emerged late Friday that Canada could be holding up the process. Japanese Prime Minister Shinzo Abe said the Canadian delegation had said it was not yet ready for a leaders’ agreement, broadcaster NHK reported. Japan’s Economy Minister Toshimitsu Motegi is expected to comment later in the day.

The official with knowledge of the discussions said Canada had been a no-show for the leaders’ meeting. Canadian Prime Minister Justin Trudeau’s office referred questions to his trade minister, Francois-Philippe Champagne. A spokesman said it’s not only Canada with reservations. 

“We made progress today and Minister Champagne is still at the negotiating table, but as we said coming in there is no rush to conclude,” Pierre-Olivier Herbert said in an email, citing the auto, agriculture and culture sectors as concerns, along with intellectual property. “There are outstanding issues for more than one country.”

Renewed Push 

TPP leaders have another chance to get some sort of agreement -- most likely a deal for ministers to keep talking and a time frame for doing so -- during the broader Asia-Pacific Economic Cooperation summit being held in Vietnam on Saturday. A fresh attempt will be made to secure a joint statement, a Vietnamese government official said. But that could add another wrinkle: The APEC grouping includes countries outside the TPP sphere, including the U.S. and China.

The deal, which would have covered 40% of the global economy, was thrown into disarray when Donald Trump withdrew the U.S. in one of his first acts as president due to a perceived risk to American jobs, leaving other countries scrambling to keep the deal alive. The TPP discussions in Vietnam have centered around suspending some parts of the agreement in a bid to move forward without America’s involvement. 

The apparent failure to get even a tentative agreement came after Abe had told Mexican President Enrique Pena Nieto and other regional leaders earlier in the day he welcomed the outline deal as a way of flying the flag for free trade. Then Abe’s talks with Trudeau went on for longer than expected. Abe and Trudeau met for around an hour and exchanged opinions mostly on TPP, Japan’s foreign ministry said in a statement.

The TPP was seen as a hallmark of U.S. engagement with Asia under the prior administration and a buffer against China’s rising clout. Then-Defense Secretary Ash Carter called it more strategically important than having another aircraft carrier battle group in the Pacific. It would go beyond traditional deals by including issues like intellectual property, state-owned enterprises and labor rights.

Difficult Discussions

Champagne, the Canadian trade minister, said in a Wednesday interview that speed shouldn’t take priority over reaching a good agreement. He tweeted a denial overnight of Japanese media reports that a deal had been reached.

“We are at the table, we’re being constructive, we’re being creative but let’s be honest, some are difficult discussions,” Champagne said. "For Canada it’s far more important to get the right deal than a fast deal. What we are here to do is set the terms of trade in the Asia-Pacific region for decades to come.”

Champagne said Canadians expect any agreement to benefit the middle class and “give a chance to the small and medium-sized business to join the global trade.”

Malaysian Prime Minister Najib Razak told the APEC CEO summit on Friday there had been progress by ministers in the talks and he was “reasonably confident” of an outcome.

“There was a meeting last night that went on until three this morning and we are coming up with our statement,” he said. “Of course there is work to go through, the process of ratification and some side matters that will now need to be worked out. But at least we’ve managed to salvage some kind of free trade agreement.”

--With assistance from John Boudreau and Josh Wingrove.

To contact the reporters on this story: Rosalind Mathieson in Danang at [email protected]; Isabel Reynolds in Danang at [email protected]; Nguyen Dieu Tu Uyen in Danang at [email protected]

To contact the editors responsible for this story: Daniel Ten Kate at [email protected]; Ruth Pollard, Stephen Wicary

© 2017 Bloomberg L.P

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