Has the Trans-Pacific Partnership scheme hit a stumbling block? Questions are lingering as the ministerial-level talks in Singapore in late February ended without a final deal. This outcome raises a red flag as it is the second failure to meet the deadline in as many months. Nor has there been any mention of a new deadline, for that matter.
Of course, the issue is not simply about deadlines: after all, deadlines can be missed and adjusted. What grabs outsiders’ attention, however, is that the Singapore meetings have apparently underscored a wide gap in positions among the key players.
In particular, the United States and Japan showed that there’s still a long way to go to reach a compromise on the issue of market access for agricultural products and automobiles. Can they resolve all these differences in the next few months? It’s anyone’s guess. Will President Obama secure the fast-track authority to complete the TPP deal? Things are getting more complicated.
Some speculate that a breakthrough will be sought when President Obama comes to Asia in late April. But that is just one month away. It is doable but the stars would have to be aligned for a mega-FTA scheduled to cover almost 40 percent of the global GDP to be inked. Since last November when it registered its “interest” in the pan-Pacific agreement, Korea has fretted about when the final deal will be struck. The unexpected delays may now make it possible for Seoul to join the negotiations before they close.
Like most negotiations, very little is known about what is on the negotiating table. It has been speculated that the agreement aims to cover a wide range of issues including digital commerce, state-owned enterprise, labor and the environment, beyond the standard points of tariff reductions and market access. The only public glimpse into the agreement was provided by the documents posted by WikiLeaks in January. Although the source was not disclosed, the website has posted the environmental chapter of the TPP being discussed as of November 2013.
The draft environmental chapter shows that “new” issues are being discussed at the negotiating table. A perusal of the environmental chapter further indicates that the TPP is being used as a platform for issues that have stayed out of the reach of trade agreements thus far ― such as fisheries subsidies and binding dispute settlement for environmental measures. Again, this is just one chapter and the full spectrum of new issues being discussed for the agreement is not known to outsiders. For example, some in the United States are calling for the agreement to address foreign-currency manipulation ― another “hot button” issue for a trade pact.
These pieces of the puzzle tell us that many issues being discussed at the TPP are from a menu different from those of previous agreements. By all accounts, the TPP will not follow the usual playbook, which brings up many questions for countries like Korea that are sitting on the fence. To be precise, Korea is not sitting on the fence, but is now apparently ready to step down into the field, but not knowing exactly what is going on creates hesitation and concern.
Against this backdrop, preliminary discussions with other participating countries have become more important for Korea in making an official decision to join. This week, preliminary talks with Japan, the last among the 12 participating countries, are taking place in Tokyo.
Once the preliminary talks are over, a clearer picture will be available. The critical question then is what the administration would or should do with all the novel issues in the new playbook. There is no textbook precedent to turn to, as we have never dealt with these issues before.
By Lee Jae-min
Lee Jae-min is an associate professor of law at Seoul National University. ― Ed.