BUSINESS

Trans-Pacific Partnership Talks Pushed To Take-It-Or-Leave-It Phase

10/03/2015 08:56 EDT | Updated 10/04/2015 11:59 EDT

ATLANTA -- A day of decision lies ahead for international trade talks as 12 countries must determine Sunday whether to tune out nagging individual worries in order to create the world's largest trade zone.

Ministerial meetings in Atlanta have dragged on three days longer than scheduled and it appears this might be the make-or-break moment for concluding the Trans-Pacific Partnership here, and now, before the Canadian election.

A few final irritants have pushed negotiations into the take-it-or-leave-it phase, after which some ministers have a G20 meeting in Turkey including Japan's envoy who has made it clear he's gone after Sunday.

The final issues include an important feud over how to regulate next-generation pharmaceuticals. On that issue, Canada is essentially a neutral bystander. But it's a full-fledged disputant in another final-hour tussle, this one involving a more traditional industry -- dairy -- and how much of it to accept in imports.

Countries face the following dilemma: Accept the deal now, warts and all. Or wait, and risk that this decade-long project dies a slow, politically driven death.

It became clear relatively early Saturday that all-night negotiations had failed to conclude agreements on those few issues, delaying yet another day the planned celebratory news conference announcing the deal.

"Ministers have agreed to stay (until Sunday),'' one source said, as hopes for a deal Saturday faded.

So what began as a two-day ministerial meeting in an Atlanta convention centre will have wound up lasting five days, amid widespread desire from deal proponents to get it done now before elections in Canada, the U.S., Peru and Japan.

In Canada, the NDP's sudden opposition is an early example of the political headwinds it could face. Next comes the U.S. primaries and presidential election. Trade-skeptical presidential candidates like Donald Trump and Bernie Sanders are already urging establishment colleagues to oppose the deal.

This deal would need to be ratified in national parliaments. And fears about its prospects in the U.S. Congress are precisely at the root of one of the late-hour irritants.

The United States and Australia are involved in a staredown over cutting-edge, cell-based pharmaceuticals. At stake in their scuffle is not only the deal, but also how 800 million people in the TPP region would access revolutionary new medicines.

The Americans face political pressure to keep those medicines more expensive, for longer. Because the pact already faces uncertain prospects in the U.S. Congress, the American side must keep every possible vote onside -- including from those lawmakers whose campaigns are generously funded by pharmaceutical companies.

They have already agreed to whittle down their patent-style protections on these treatments, from the 12 years that is current U.S. policy down to a new TPP rule of eight years. After that period, cheaper, generic-like biosimilar versions of the product could come to market.

The Australian government faces pressure from its public. That country allows five years' exclusivity. It doesn't want to budge upward, despite industry insistence that a too-small exclusivity period could hurt the very companies discovering these treatments. Canada is somewhat of a bystander in that dispute, as it already applies the eight-year standard.

The last big sticking point involving Canada is dairy. As negotiators worked until at least 4 a.m. Saturday, sources say Canada, the U.S., New Zealand and others were involved in a multi-sided talks about providing more access to each other's milk, cheese and butter.

Canada's dairy sector is 90-per-cent closed to foreign competition and the government is under political pressure -- especially in Quebec and Ontario -- to keep foreign products off Canadian grocery shelves. With an election weeks away, the NDP has made the issue a centrepiece of its campaign.

The hallways at the convention centre hosting the talks were suddenly filled Saturday with nervous chatter about what the delays meant for the TPP, which some backers believe could be drowned in politics if it doesn't get to shore this weekend.

Critics of the deal fear that any gains in trade would be offset by the loss of good-paying jobs at auto plants and dairy farms, with greater foreign competition. They also warn that the deal, which was crafted with heavy input from U.S. businesses but far less from labour and civil-society groups, could transfer power from people and governments to corporations.

But it would be a historic mistake if these talks collapsed, said one Canadian business group at the conference.

The TPP is about more than tariffs and quotas, said Cam Vidler of the Canadian Chamber of Commerce. He said it's a rare opportunity for the international community to modernize itself in several important ways:

  • He said it would establish clear rules in China's backyard. Guidelines regulating the behaviour of state-backed enterprises would provide an international precedent, should the emerging giant ever join the agreement.
  • Developing countries would win important seats at an international table -- this after repeated failures in reforming old institutions, like the International Monetary Fund, to recognize new global players.
  • It would support new technologies, like cloud-computing. By limiting the circumstances under which a country could shut off data, he said it would protect the bricks and mortar of the 21st-century economy.

"Each country needs to be careful to get a deal they can live with,'' Vidler said.

"But we don't want to nickel-and-dime this thing either. You've got to look at the big picture. We've got to look at what this means for our economies and our business communities and our citizens and our workers 10, 20, 30 years from now.''

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