'Solid progress' at Pacific trade talks but no quick Japan entry

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Progress is being made in Trans-Pacific Partnership (TPP) trade talks but hurdles remain and Japan is unlikely to be set to join the next round in May, negotiators said on Wednesday, pointing to a tough road for the 11 nations hoping for a deal this year.

If Japan wants to take part, it must first hold bilateral meetings with existing members and be supported by a consensus to "keep up the good momentum" as the countries prepare for the next talks in Peru, said Singapore negotiator Ng Bee Kim.

"I don't think we're looking at Japan specifically coming on board in Lima," Ng told a news conference after the 16th round of the three-year-old talks ended in Singapore.

The TPP, which has grown from seven countries, aims to eliminate barriers to goods and services and address issues including the movement of electronic data, market access for financial firms and copyright protection.

Japanese media say Prime Minister Shinzo Abe is expected to announce on Friday that Japan would like to join the talks.

Asked about Washington's concerns, U.S. negotiator Barbara Weisel noted a recent U.S.-Japan statement confirming the TPP stance that "all goods are on the table" and the goal that "the agreement will be comprehensive and high-standard."

For the United States, the TPP is the centrepiece of its efforts to refocus economic, diplomatic and security attention on the fast-growing Asia-Pacific region but it must contend with pressure at home about access to the U.S. market.

A statement on the Singapore talks noted "solid progress" to bridge gaps in a number of areas and said there were advances on regulatory issues, telecommunications, customs and development.

The "more challenging areas" include intellectual property, the environment, competition and labour, said the statement by Singapore's Ministry of Trade and Industry.

The goal is to wrap up negotiations by the end of this year or even by the Asia Pacific Economic Cooperation (APEC) summit on the Indonesian island of Bali in October. The next round of talks in Lima is due to be held from May 15-24.

Top trade officials from the TPP countries will also meet in Surabaya, Indonesia, in mid-April on the sidelines of the annual APEC trade ministers meeting.

"As the negotiations draw to a close, high-level officials will be more actively engaged with one another on ways to address the remaining sensitive issues," the U.S. Trade Representative's office said in a statement.

Negotiations shifted into a "higher gear" during the Singapore round, with "productive exchanges" on tariff phase-out agreements for agriculture, manufactured goods and textiles as well as rules of origin, USTR said.

The TPP countries are the United States, Canada, Mexico, Australia, New Zealand, Chile, Peru, Vietnam, Malaysia, Brunei and Singapore - many of them with differing issues about opening agricultural markets, protecting intellectual property and setting rules for state-linked companies.

If Japan does join the talks, it is expected to try to keep its barriers on rice imports and other agricultural goods. Several thousand people from a Japanese farm lobby group staged a rally on Tuesday to oppose their country's participation.

CALLS FOR FLEXIBILITY

Pharmaceuticals are another tricky area. The United States wants tougher patent protection to reflect the costs of research and development but critics say that would keep drug prices too high for poor people by restricting generic versions.

Medecins Sans Frontieres (Doctors Without Borders), a humanitarian group, said the U.S. proposals "threaten to roll back internationally agreed public health safeguards and would put in place far-reaching monopoly protections."

"Too many people already die needlessly because the medicines they need are too expensive or do not exist," it said in a statement.

Vietnam, a major clothing exporter seeking greater access to the U.S. market, wants more flexible rules of origin to reflect the global supply chain but is "open to any proposal that can help us to move forward," said its negotiator, Khanh Tran Quoc.

Malaysian negotiator J. Jayasiri said his country is concerned about market access, especially for textiles, and wants "sufficient flexibilities to accommodate the kind of difficulties that we face" - including intellectual property.

In a statement, 10 business groups from TPP countries called for the negotiators "to show flexibility and narrow the range of differences" so a deal can be reached as quickly as possible.

"However, bearing in mind that TPP should be a high-quality agreement, we don't want to sacrifice substance for speed," it said.

"We welcome new parties to join the TPP but we hope that the inclusion of new participating economies would not slow down the current negotiation process." (Additional reporting by Doug Palmer in WASHINGTON; Editing by Kim Coghill and Xavier Briand)



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