TPP: Waiting for godot?

The 5th anniversary of negotiations is just around the corner.  The first substantive talks in Australia began in March 2010 with tremendous enthusiasm.  Here was a rare trade agreement that would take high ambition and high quality as objectives from the opening moment. 

The intervening years have been a long, hard slog.  Adding new members along the way (like Malaysia, Canada, Mexico and Japan) complicated talks.  Moving to a deal with 12 members increased the potential benefits but also brought new sets of sensitive issues to address. 

Getting the agreement done means that 12 countries have to convince themselves that the deal on the table is the best possible outcome at this point in time.  There is no way that every member will be able to receive all of their original objectives, so each must decide how far to compromise. 

The problem is that no individual member has an incentive to be the first to drop their objections or to accept less than ideal outcomes in their most important areas.  Negotiators have to believe that they are in the final moments of bargaining before they can solve the last, most challenging topics. 

This is why the shifting goalposts are problematic.  If the finish line keeps moving backwards, then officials can never be certain that the time has come to resolve the toughest issues. 

Why did this latest “deadline” change?  It’s not entirely clear, but two explanations are likely.  First, some members of Congress have been very blunt about how the TPP agreement cannot be concluded until Congressional authorization in the form of Trade Promotion Authority (TPA) is in place.  The push is on to get TPA concluded in Washington, but will likely take until March before this vote will take place.  Thus, any announcement of TPP “substantial closure” cannot take place at the time of the originally scheduled TPP ministerial round in March.

Second, the deal cannot be substantially concluded until members agree that they are ready to close.  Most of the focus has been on Japan and their difficulties in getting a suitable bargain on the remaining agricultural items (the five “sacreds” as noted in an earlier Talking Trade post). 

These are certainly challenging.  But a focus on Japan has obscured other member issues.  The United States, for example, will likely have to concede something on autos.  For example, American negotiators have apparently been holding out for phase-outs on tariff reductions in cars for 25-30 years.  This is clearly incompatible with the timelines used elsewhere in the deal (and certainly flies in the face of the “high ambition” objectives of the agreement).

The Canadians have not yet prepared their own market access concessions in dairy.  Any change in Canada’s supply management system is highly sensitive and politically challenging.  Yet getting the TPP done means that Canada cannot expect to receive 100% of what it wants at the end.  Crafting a bargain that will satisfy both Canada and its partners that want ambitious market openings in this sector takes time.   In the end, the best deal might be the one that leaves everyone the least unsatisfied or unhappy.

There are other challenges in timing as well.  Some of the most sensitive points that remain to be locked into the agreement are still not confirmed—like the extent and reach of state owned enterprise (SOE) rules, the listing of rules and regulations that will not change after the TPP comes into effect (non-conforming measures), specific timing for implementation of rules for different members in areas like intellectual property rights (where some members will have longer timeframes for implementation of certain provisions), and so forth.

Officials appear to have decided that getting it all done will take more than a few more days and will require another round of talks at the chief negotiator level (with a few working groups also feverishly trying to wrap up their outstanding issues).  Thus, the hoped-for “final” ministerial has been pushed to April.

Perhaps, this time, the April “deadline” will stick and we will finally be able to stop waiting for Godot to arrive.