For more than a year, TPP partners have been holding their breath in hopes that the world’s fifth largest economy would join the negotiations. Except for its membership in the WTO, Japan has been a reluctant player in regional and bilateral FTA fora. It has held back because of a number of domestic protectionist measures, the most important of which is protection for domestic rice farmers. The prospective value of preferential access to the Japanese market provides TPP negotiators with an excuse to lower the level of ambition and consider exclusions for sensitive sectors, at least during a 10-year phase-in period.
The United States is likely to try to retain tariffs on sugar. For Canada it’s dairy. Vietnam wants to keep protections for state-owned enterprises. Australia is opposing investor-state dispute settlement and New Zealand is likely to block measures that would affect its pharmaceutical pricing system.
As we begin the 17th round of negotiations in Lima, assurances that the talks would be complete by the end of 2013 seem unlikely. With a dozen economies now scrambling to put markers on the table for sensitive sectors while also trying to address the regulatory realities of an integrated, digitized global economy, it appears that the honeymoon is over and the real work has begun.
Excerpt from feature article, forthcoming from Public Diplomacy Magazine, Summer 2013.