[CTC] During TPP Tour, Froman Delivers Ultimatum To Malaysian Lawmakers

[Arthur Stamoulis]

Millions in modern-day slavery … meh.  Not respecting intellectual property, you’re outta here...
Inside U.S. Trade - 07/17/2015
During TPP Tour, Froman Delivers Ultimatum To Malaysian Lawmakers
Posted: July 16, 2015
U.S. Trade Representative Michael Froman told Malaysian lawmakers in a meeting this week the United States is ready to close a Trans-Pacific Partnership (TPP) deal this month with almost all of the parties involved and warned that Malaysia will be "left behind" if it cannot agree to the terms, according to a source familiar with the meeting.

The source told Inside U.S. Trade that Froman described Washington's negotiations with other parties -- including Vietnam and Singapore -- as effectively wrapped up and said that participants will seek to bring TPP "to some kind of a conclusion" when ministers meet later this month in Hawaii.

"According to him … all the countries are on the same page, there are one or two issues involving one or two countries, but by and large they're in the concluding stage and they're coming to some agreement on this," the source said. The source added that Froman, in contrast to prior meetings with Malaysian lawmakers, was no longer trying to lobby them on particular issues, but instead stressed that at this point, "either you're in or you're out."

The source said Froman, who met with the members of parliament July 13 during a July 11-15 trip to Kuala Lumpur and Singapore, underscored that Malaysia still has not made commitments on TPP rules issues regarding state-owned enterprises, intellectual property and government procurement. Froman characterized Vietnam as having resolved similar issues with the U.S. during high-level meetings in Washington earlier this month, but said Malaysia still has to "come to a decision" on these points, according to this source.

But this source, a critic of TPP, predicted that because of the political sensitivity of those issues, Malaysian Prime Minister Najib Razak would have a difficult time selling concessions in these areas even to his own party, especially given the corruption scandal now engulfing his government. Froman also met with Najib during his trip.

In his public comments this week, Froman gave no hint that the U.S. is considering the possibility of some countries being left out of the deal, although he did indicate for the first time publicly that Washington is hoping that this month's ministerial will bring about the conclusion of a TPP deal.

"We're working with all of the countries in the region to address the last few issues. We've got a meeting set up at the end of this month and we're going to work very hard to make sure that's a productive meeting and to try and reach closure on as many issues as possible, ideally on the rest of the agreement," Froman said in a July 15 interview with the Singapore-based network Channel NewsAsia.

The possibility that some TPP countries could be left out, however, was hinted at this week by Japanese TPP Minister Akira Amari, who said in a July 14 press conference that Japan is hoping for a deal to be struck in Hawaii, but that some countries might not be ready to join by that time.

"We must make the ministerial meeting in Hawaii the last ministerial meeting to conclude the negotiations," Amari said, according to an informal translation of his remarks. "It is important for all the 12 countries to reach a conclusion. Japan will make the utmost effort to achieve this, but if there should be a country that cannot get ready, [then] there is an option for it to join later."

When asked to elaborate, Amari declined to name which countries he was referring to. But he said TPP cannot be allowed to "drift" because of the inability of some countries to finalize an agreement in Hawaii. Amari added the U.S. and Japan hope to wrap up their bilateral negotiations during the upcoming meetings.

"Even if there is a country that cannot be ready, or a country that does not consider to conclude in Hawaii, we cannot let the TPP drift because of them," he said. "And I think it is one of the options we can take, that even if a country cannot get ready by Hawaii, we can conclude the TPP negotiations anyway, and enact it, then the country can come back and join the agreement."

Some TPP observers have also suggested that Canada might ultimately be left out of a TPP deal, given its reluctance thus far to come forward with an offer to open its markets for agricultural commodities that are currently subject to supply management constraints, including dairy and poultry. One industry source this week said there was still no sign, roughly a week away from the kickoff of the Hawaii round, of Ottawa developing a proposal.

Other private-sector observers have also doubted the feasibility of concluding the TPP deal at the end of this month, primarily due to the scope of market access issues still left to be addressed.

Najib's office described Froman's meeting with the prime minister as a "courtesy call" after it occurred.The U.S. trade official was also set to meet with Singapore's trade minister, Lim Hng Kiang, upon arriving in that country, which is adjacent to Malaysia.

In the Channel NewsAsia interview, Froman said during his meetings in Malaysia he discussed the country's poor human trafficking record.

Malaysia's placement on "Tier 3" of the 2014 Trafficking in Persons report has thrown into doubt whether the TPP could be subject to fast-track procedures if considered by Congress. This is because of a provision in the Trade Promotion Authority law that strips such protections from any trade deal with a Tier 3 country.

However, the State Department has recently signaled it may upgrade Malaysia's status to the "Tier 2 Watch List," in what critics say is a cynical maneuver to smooth TPP's passage (see related story).

According to the Malaysian source, U.S. Ambassador to Malaysia Joseph Yun -- who joined Froman in the meeting with lawmakers -- said State's report would be released within the next week, but would not comment on what Malaysia's ranking would be.

Froman's Asia trip came on the heels of a visit to Mexico City, where he met with Mexican Economy Secretary Ildefonso Guajardo Villarreal on July 10. Guajardo's office released a statement this week saying that the two had reviewed pending issues in TPP and analyzed the steps needed to close out the deal "this year." -- Ryan Rainey and Ben Hancock
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