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ECONOMY > Trade

TPP 11 mulls review of agreed-upon items included at U.S. insistence

  • June 8, 2017
  • , Sankei , p. 2
  • JMH Translation

The 11 countries participating in the Trans-Pacific Partnership (TPP) agreement have begun a review of some agreed-upon items added in response to strong pressure from the U.S., Sankei learned on June 7. The TPP 11 excludes the U.S. Items to be reviewed include the rule of origin for textiles and apparels and the protection period for biologics development data. The review is aimed at working cooperatively towards the effectuation of the agreement without the U.S. by quelling member countries’ discontent. However, allowing changes to the already agreed-upon items may trigger a burst of requests from member nations, testing Japan’s ability to lead discussions.

 

The TPP agreement has adopted a stricter rule of origin than many other free trade agreements. It requires (1) spinning of yarn or thread, (2) weaving or knitting of fabric, and (3) assembly of the final product to occur within the TPP region for textile products to be granted a tariff reduction or a tariff exemption. Vietnam was reluctant to agree to the rule because it will prevent the country from using inexpensive Chinese materials. The U.S., however, strongly pushed for the regulation.

 

Vietnam has persuaded domestic opponents to the rule by playing up the expansion of textile exports to the U.S. The Southeast Asian nation seems to be insisting that the rule of origin needs to be reviewed, such as reducing the number of necessary processes, in order for the country to accept the validity of the agreement without the U.S.

 

On the other hand, the protection period for pharmaceutical development data designates the period during which competitors cannot use the development data of another company without permission.

 

The U.S., home to the word’s largest pharmaceutical industry, had insisted throughout the TPP negotiations on 12 years of data protection. However, Australia and New Zealand, which want to use affordable generic drugs, demanded that the period be limited to five years. After rigorous negotiations, signatories agreed on eight years being more practical. However, some member states are calling for the period to be reduced to five years following the U.S. withdrawal. Be that as it may, should the period be changed to five years, it would return to eight years should the U.S. decide to rejoin the TPP.

 

The eleven TPP member nations will coordinate to hold a meeting of chief negotiators in the Japanese hot springs resort town of Hakone, Kanagawa Prefecture, from July 12 to 14. Participants will identify problems pertaining to the effectuation of the agreement without the U.S. and suggest detailed options before the opening of the Asia-Pacific Economic Cooperation (APEC) summit to be held in November.

 

Japan wishes to minimize the revision of the agreed-upon items to bring the TPP deal into force early. The 11 nations have agreed not to change the items in the field of tariffs. In regards to trade rules, which will be the primary focus of discussion, agreements regarding the easing of investment regulations are expected to be maintained.

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