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Hawaii News

Trade talks hit snag over pharmaceutical, ag issues


Ministers from 12 nations negotiating a Pacific Rim trade pact held a news conference in Lahaina

Trade negotiators from the United States and 11 other Pacific nations were headed toward failure Friday, with difficult talks on the largest regional trade agreement ever breaking down over protections for pharmaceutical companies and access to agriculture markets on both sides of the Pacific.

Negotiators will return to their home countries to obtain high-level signoffs for a small number of final sticking points on the agreement, the Trans-Pacific Partnership, with bilateral talks reconvening soon.

But the breakdown is a setback for the Obama administration, which had promoted the talks in Lahaina as the final round ahead of an accord that would bind 40 percent of the world’s economy under a new set of rules for commerce.

President Barack Obama’s trade push had been buoyed by Congress’ narrow passage in June of "fast track" trade negotiating powers, and U.S. negotiators had hoped other countries could come together once Congress had given up the right to amend any final agreement.

In the end, a deal filled with 21st-century policies on Internet access, advanced pharmaceuticals and clean energy foundered on issues that have bedeviled global rade for decades: access to dairy markets in Canada, sugar markets in the United States and rice markets in Japan.

Australia, Chile and New Zealand also continue to resist the U.S. push to protect the intellectual property of major pharmaceutical companies for as long as 12 years, shielding them from generic competition as they recoup the cost of developing next-generation "biologic" medicines.

"There’s always been more than one issue," said Rep. Sander Levin, D-Mich., who was an observer.

The trade ministers who gathered in Maui this week for talks that went deep into the night did have some successes. They reached agreement on broad environmental protections for some of the most sensitive, diverse and threatened ecosystems on Earth, closing one of the most contentious chapters of the Pacific accord.

They also reached agreement on how to label exports with distinct "geographic indications," such as whether sparkling wine can be called Champagne. And they agreed on a code of conduct and rules against conflicts of interest for arbitrators who would serve on tribunals to hear complaints from companies about whether their investments were unfairly damaged by government actions.

But the failure to complete the deal — eight years in the making — means the next round of negotiations will push the U.S. ratification fight into 2016, a presidential election year. Most Republican candidates are likely to back it, but a final agreement would force Democratic front-runner Hillary Rodham Clinton to declare her position, which she has avoided.

This week, she told reporters, "I did not work on TPP" as secretary of state, although she gave a 2012 speech in Australia declaring the accord "the gold standard in trade agreements."

The push for the Pacific deal has already split most Democrats from their president. Further delay raises the prospect that a deal sealed by Obama might have to be ratified by his successor, just as George H.W. Bush’s North American Free Trade Agreement was secured by Bill Clinton.

The bright spot might have been the environmental negotiations. The completed environmental chapter would cover illegal wildlife trafficking, forestry management, overfishing and marine protection, and it could set a floor for future multilateral accords.

"As centers of biodiversity, TPP countries cover environmentally sensitive regions from tundra to island ecosystems, and from the world’s largest coral reefs to its largest rain forest," reads a summary of the environment chapter, obtained by The New York Times. "TPP’s Environment chapter addresses these challenges in detail."

Under the agreement, the 12 countries — from Peru and its rain forest to Vietnam and the Mekong Delta — must commit to obeying existing wildlife trafficking treaties and their own environmental laws. Environmentally destructive subsidies would be banned.

Failure to comply would subject a signatory to the same government-to-government compliance procedures as any other issue covered by the trade agreement, potentially culminating in trade sanctions.

Jonathan Weisman, New York Times

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