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Proposed trade pact faces rejection, detractors warn

By Kevin Dayton

LAST UPDATED: 5:42 a.m. HST, Nov 13, 2011

While President Barack Obama and participants at the Asia-Pacific Economic Cooperation summit celebrated progress made on a proposed Asia trade pact, some critics predicted Saturday that deep divisions among the participating nations will doom the current draft of the agreement.

Lori M. Wallach, director of the Washington, D.C.-based Public Citizen's Global Trade Watch, said world leaders at APEC are papering over a growing political backlash in Japan, Australia, New Zealand, Peru and Vietnam.

The resistance to the agreement has been sparked by leaked specifics on the draft Trans-Pacific Partnership agreement that relate to financial services, the pharmaceutical industry and other areas, she said.

Wallach said she expects the talks aimed at an Asia-Pacific free-trade pact will continue, but many of the current proposals are so unpopular that "I think it is either a new deal, or no deal."

Japanese Prime Minister Yoshihiko Noda announced Friday that Japan will join the TPP discussions, a move seen as politically risky because Japan uses high tariffs to protect its politically influential farming sector. The proposed free-trade agreement is designed to eliminate tariffs and encourage international trade.

A joint statement released Friday by the leaders of nine nations participating in the Trans-Pacific Partnership talks declared that the effort had reached "a milestone," and the group released a description of the "broad outlines" of an agreement.

"We have committed here in Honolulu to dedicate the resources necessary to conclude this landmark agreement as rapidly as possible," said the announcement from the group, comprising the U.S., Chile, Malaysia, Australia, New Zealand, Peru, Singapore, Vietnam and Brunei.

The statement included few specifics of the proposal. Wallach said leaked information revealed that provisions are being discussed that, in effect, would stall production of some new generic drugs, or would block the use of drug formularies that include purchasing preferences for cheaper generic drugs for use in government health programs.

Wallach strongly opposes those provisions, and said they are highly controversial in Peru, Vietnam and Australia. Other provisions that would limit regulation of certain financial transactions and services have stirred resistance in Singapore and Malaysia, she said.

Shoko Uchida, co-coordinator of a nongovernmental organization called the Pacific Asia Resource Center, said the TPP is opposed by farmers and others in Japan who believe it would wipe out Japanese rice production.

Uchida is part of a 13-member delegation including a group of farmers who came to Hawaii from Japan to oppose APEC and the free-trade zone. Members of the group joined in an anti-APEC march Saturday from Old Stadium Park to Waikiki.

"If Japan joins TPP, the small farmer can live no longer," she said. She said farming in Japan would be overwhelmed by cheap imports, and that other Japanese industries would be undercut as well.

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