Sanitary and phyto-sanitary (SPS) issues will be the real market access determiners in the talks.  Commitments need to go beyond those made under the WTO, often referred to as ‘WTO-plus’.  The USTR may propose new language making SPS disciplines fully enforceable, including those that go beyond WTO rules.  If they would not be enforceable under TPP dispute settlement, they would not be settled at the WTO because they would be stricter than WTO requirements.

According to an October report in Inside U.S. Trade, Australia may propose export competition disciplines that could require significant changes in the USDA GSM-102 export credit guarantee program and food aid programs.  The proposal is expected to be similar to a 2008 WTO Doha round draft text that would limit loan length to six months, about the same as can be secured in the private market.  The longest GSM-102 guarantee is two years.  There has already been pushback from U.S. groups involved with credit guarantees and ones directly supplying food aid.  The USTR’s office is pursuing further consultations with U.S. groups.

As the TPP negotiations move toward completion, six members of the group are gearing up for talks for a Regional Comprehensive Economic Partnership (RCEP) by ASEAN, China, Japan, South Korea, India, New Zealand and Australia.  The two groups overlap with Australia, New Zealand and four ASEAN countries (Brunei, Vietnam, Malaysia and Singapore) members of both groups.  Some U.S. companies have raised concerns about the RECP having a lower level of standards on issues like intellectual property rights.  New Zealand and Australian discount those concerns and see both agreements as consistent with APEC’s goal of wider regional cooperation.  Negotiations are expected to begin in early 2013 and be completed by the end of 2015.

President Obama and ASEAN leaders also announced last week at the East Asia Summit in Cambodia a new U.S.-ASEAN Expanded Economic Engagement (E3) initiative.  It will promote economic cooperation and the pursuit of high standards trade agreements.

Some businesses and trade officials are rightly concerned about the number of agreements now being negotiated in Asia, but that activity is the result of recognition that there are economic benefits from having cross border supply chains more closely aligned.  If the U.S. can secure workable provisions for sanitary and phytosanitary issues and lower tariffs for agricultural products, the growth in incomes in Asia will be good for the demand for U.S. agricultural products.

Talk of completing the TPP within the next year has raised the issue of having Trade Promotion Authority (TPA) to allow for an up or down vote in Congress with no amendments.  TPA expired on June 30, 2007 and President Bush did not ask for continuation because he did not appear to have the votes in a Congress controlled by Democrats.  President Obama has not asked for the authority and the Administration is committed to asking for it at the ‘appropriate time’.

Critics of the TPP negotiations believe the President does not the authority to negotiate because the Congress has not given him negotiating objectives.  Now is the time to resolve the issue before an agreement is reached.  The movement toward freer trade should not be sidetracked by conflicts between Congress and the Obama Administration.

Ross Korves is an Economic Policy Analyst with Truth About Trade & Technology.