U.S., Japan trade pact stalemate keeps partners waiting

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A stalemate between the United States and Japan on farm and auto markets in Pacific trade talks is locking all the participants in a "waiting game," Chile's head of international economic relations said on Thursday.

Chile, along with nine other countries involved in talks on the Trans-Pacific Partnership trade pact, has been awaiting the outcome of bilateral U.S.-Japan talks, which had reached no clear result earlier on Thursday.

"From a practical point of view, the rounds of talks have been in a kind of waiting game and there were no rounds in recent months because the fundamental attention in the process today is on that negotiation between Japan and the United States," said Andres Rebolledo, who has overall responsibility for Chile's trade relations. "Let's see what happens."

Experts had hoped a summit on Thursday between U.S. President Barack Obama and Japanese Prime Minister Shinzo Abe would give some impetus to the TPP talks, but negotiators could not resolve differences in time. Japanese officials said talks would continue. Obama leaves Japan on Friday.

Rebolledo said an agreement between the two biggest TPP countries was important for the pace of future discussions, but also their substance. The United States is seeking better access to Japan's farm and auto markets, and any concessions from Japan would likely spark progress on other market access issues as countries move into the end game of the talks.

U.S. negotiators' lack of fast-track authority, which allows trade agreements to be put to an up-or-down vote in Congress, without amendments, was another element creating uncertainty in the talks, said Rebolledo.

A bipartisan U.S. bill was introduced earlier this year but has been put on hold following opposition from key Democrats in the lead-up to November mid-term elections. One scenario is that both the fast-track bill and a finalized TPP go to Congress in the so-called "lame duck" session after the elections.

"So it's an element that we have to pay attention to but that doesn't necessarily mean that the TPP talks are going to be subject to that. There could even be a scenario where those two debates or processes - the internal American (fast track) negotiation and the TPP - go in parallel," he said.

BACHELET'S SKEPTICAL VIEW

Chile's new center-left president, Michelle Bachelet, has a more skeptical view of the TPP than conservative predecessor Sebastian Pinera.

The Latin American free-trader, which boasts existing trade deals with all TPP participants, has convened a new TPP advisory group composed of industry bodies, farm exporters and unions and Rebolledo said he would work with the group in coming weeks.

"There are still a lot of elements and points that are open, there is a pretty long technical way to go to resolve many issues," he said.

The TPP seeks not only to abolish remaining tariffs on goods trade, but also set uniform standards on a range of issues including labor laws, environmental standards, and intellectual property protection, where the interests of developing countries sometimes do not coincide with advanced economies.

From Chile's point of view, the main sticking points were provisions relating to investment, the environment, copyright and the balance between protecting the intellectual property in pharmaceuticals and providing access to medicines, said Rebolledo.

The other countries involved in the TPP are Peru, Mexico, Canada, Australia, New Zealand, Brunei, Singapore, Malaysia, and Vietnam.

(Reporting by Rosalba O'Brien; Writing by Krista Hughes)



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