By Joe Kelly
The breakdown in negotiations to secure a deal for a Pacific-wide free-trade pact has raised questions about the US economic commitment to Asia, freer markets and its strategic pivot to the region.
Trade Minister Andrew Robb, who last week said US leadership would be critical to securing a deal, yesterday warned that its unwillingness to reduce protection for key industries was a major impediment to clinching a deal.
Mr Robb said that promises made by the Obama administration to US congressman and senators had “tied their hands” when it came to opening up industries to greater international competition.
“In the US system, there’s no great party discipline — it’s all about what can I protect in my own patch,” he told ABC radio.
“I keep saying to the Americans it is a deal to reduce protection, not increase it or maintain it.”
Talks to conclude the Trans-Pacific Partnership covering 40 per cent of global GDP broke down at the weekend in Hawaii, with “reasonable progress” on medicines undermined by failures to reach agreement on car and dairy tariffs. The ANZ bank’s head of institutional and international banking, Andrew Geczy, said the breakdown in talks was “another example (of) the USA’s positioning weakening in the global economic debate”.
Mr Geczy said the establishment of the Asian Infrastructure Investment Bank was the first time such a body had succeeded without American backing. “Now we have the TPP — another sign of declining US influence on the global economic stage,” he said.
The US wants to increase the data protection period on biologic drugs, derived from living organisms, to up to 12 years, with Tony Abbott defying a personal plea in a phone call from President Barack Obama to support protections in this area. Head of the East Asian Bureau of Economic Research at the ANU, Peter Drysdale, said Australian negotiators were “totally right to hold out against the biologics intellectual property protection” pushed by the US pharmaceutical lobby, which would increase the cost of the PBS.
“The TPP has been over-hyped as a ‘platinum-standard’ trade agreement. It’s always been tightly structured around US negotiating interests,” he said.
He said the big-ticket item from the deal — its effective incorporation of a Japan-US bilateral free-trade agreement — was at risk and warned that Japanese Prime Minister Shinzo Abe was also losing political capital over unpopular security legislation at home.
Head of the United States Studies Centre at Sydney University, Bates Gill, said he was struck by how a “lot of old-fashioned trade issues”, including basic market access concerns for farmers and manufacturers, were the big sticking points. “Every day that passes makes it less likely congress will get to it this year,” he said.
This article was originally published at The Australian