THE WALL STREET JOURNAL: Election Cycles Cloud Future of Trade Talks

08/03/2015

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BY: WILLIAM MAULDIN and PAUL VIEIRA | 08/2/2015 | Source: THE WALL STREET JOURNAL

Election Cycles Cloud Future of Trade Talks

The U.S. and 11 other Pacific nations trying to hammer out a sweeping trade agreement notched progress in high-level talks in Hawaii but now face a renewed mix of thorny issues complicated by election seasons in the U.S. and Canada.

A snowballing dairy fight threatened to derail the deal last week as top ministers also grappled with an economically larger issue on how automobiles can be produced and traded within the proposed trade bloc. That disagreement pits Japan against the countries of the North American Free Trade Agreement.

In the U.S., current and former officials concede that it is now unlikely the TPP can be completed and voted on in Congress this year as the Obama administration hoped, before the peak of a presidential campaign that is already highlighting objections to the deal from unions, environmental groups and some conservatives.

Meanwhile, Canada, the third-largest economy in the group after the U.S. and Japan,embarked on an 11-week election season Sunday that could make it hard for Prime Minister Stephen Harper’s government to agree on opening up the country’s protected dairy markets to more imports from the U.S. and New Zealand. Ministers’ inability to clinch a deal in Hawaii means the Canadian government takes on a high-stakes balancing act and the country’s dairy farmers will face more uncertainty about their fate under the Pacific deal, called the Trans-Pacific Partnership, or TPP.

“The fact that they didn’t get anything done this week is a big problem for everybody,” said Wally Smith, president of the Dairy Farmers of Canada, before flying out of the Hawaiian island of Maui late Saturday.

Officials reported significant progress toward a deal and said they closed the gap on environmental rules aimed at leveling the playing field for Vietnam and other developing economies in the bloc and also narrowed outstanding differences on a range of issues such as investment rules.

“The issues are not intractable and there remains a real determination to conclude the TPP among all parties,” said Australia’s minister for trade and investment, Andrew Robb. “The resolve remains to get this done.”

Still, the continuing auto and dairy disputes prevented the trade ministers from coming to an understanding on the most divisive issues in the TPP, including labor standards and how long name-brand biologic drugs would be protected against generic imitators.

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