I hate to say “I told you so” but, well, “I told you so.”
Back in March 2010, I warned that the Trans-Pacific Partnership (TPP) agreement, a preferential trade agreement between the United States and then seven– and now 11, with the subsequent addition of Canada, Malaysia, Mexico and almost-officially Japan– other Asia-Pacific economies would be a hard slog, and that the signs towards a significant degree of liberalization were not promising. I followed that up with news about what then-United States Trade Representative Ron Kirk told a closed-door meeting with dairy lobbyists, and what it said more broadly about the administration’s commitment to free trade.
Today comes news from the latest round of TPP negotiations in Lima, Peru that industry groups have raised concerns about the way that the United States and Peru are approaching the negotiations: i.e, by negotiating with individual countries bilaterally rather than offering the same market access to all of the TPP members at once, a concept trade wonks call a “plurilateralism.” In addition, the United States is not re-negotiating market access with any of the TPP countries with which it already has an agreement (that’s six of the eleven other members).
Pluralizing the deal would be more fitting for an agreement that the Obama administration touted as being a “21st Century” agreement to reflect new world trade realities, like global supply chains. It would lessen the potential for an unholy mess that businesses find unworkable. A Wal-Mart representative said at the meeting “it’s a little hard to see how you have this very comprehensive agreement if we have bilateral market access negotiations that everybody doesn’t necessarily understand, and how you essentially plurilateralize those with common sets of rules of origin.” (Rules-of Origin are the methods by which customs officials determine the origin of a product, and thus which tariff rate should apply. They can get really messy when supply chains are complex).
So what did the U.S. and Peruvian chief negotiators say when they were called out on the self-defeating bilateral approach? They gave answers which do not pass the laugh test (the following quotes come from the same article linked to above, all emphases my added):
Read the rest of this post →In response to [a] question, Weisel and Peruvian chief negotiator Edgar Vasquez both defended the bilateral approach to negotiating goods market access. Weisel argued that it makes more sense to import zero tariff rates that the U.S. already has with various TPP countries into the new agreement, rather than conducting a new market access negotiation with those countries.