[CTC] Australian Ambassador Rules Out TPP Side Letters, Renegotiation

[Arthur Stamoulis]

INSIDE US TRADE
Australian Ambassador Rules Out TPP Side Letters, Renegotiation

June 24, 2016 
Australia's ambassador to the United States has made clear <http://insidetrade.com/node/154886> to the U.S. government and business groups that demanding commitments beyond those reflected in the text of the Trans-Pacific Partnership is a nonstarter, regardless of the form they would take.

“Renegotiation of the agreement in any form or in some other form of additional commitment is not an option and would jeopardize approval [of the deal] by the other TPP countries,” Australian Ambassador Joe Hockey wrote in a May 5 letter to U.S. business groups, with a copy to U.S. Trade Representative Michael Froman. He said he hopes the U.S. will “not seek to renege on the commitments it made when the TPP deal was struck in Atlanta in October 2015, and then signed in Auckland in February 2016.”

His comments largely reflect that of other TPP ambassadors regarding U.S. demands for additional concessions, except for the apparent attempt to rule out side letters.

Hockey responded to a May 4 letter by six of the seven trade associations that form the U.S. Business Coalition for TPP which urged TPP ambassadors <http://insidetrade.com/node/154285> to quickly resolve outstanding issues identified in the U.S. by business and members of Congress in order to speed up TPP ratification here. The Business Roundtable was the sole coalition member not signing the letter.

The May 4 letter was sent without prior clearance with the Obama administration and was perceived by the White House as an effort to circumvent its attempts to placate congressional demands. It was seen by TPP countries as an attempt at blame shifting, according to informed sources.

The ambassador's message is at odds with demands being made by Senate Finance Committee Chairman Orrin Hatch (R-UT), who has publicly stated <http://insidetrade.com/node/154730> that “side agreements and other approaches” could resolve his complaints about the insufficient period of marketing exclusivity for biologic drugs. Hatch has demanded that biologics be protected with 12 years of marketing exclusivity, a length of time longer than what is required under TPP.

The White House and Hatch have not been able to reach a compromise, and some pro-TPP sources this week said it is hard to see how one would be reached. In addition, Australia has not been approached by USTR regarding implementation issues, including biologics, sources said.

The Australian government is currently in caretaker mode as the country prepares for a July 2 national election. Protections provided for biologics in TPP, and alleged U.S. pressure on Australia to provide beyond five years of exclusivity, has become an election issue <http://insidetrade.com/node/154416> there.

The opposition Labor Party is charging that the current government -- which is seeking reelection -- will concede to further changes to the marketing exclusivity period for biologics. In response, Australian Minister for Trade and Investment Steven Ciobo in April reiterated his opposition to moving “one iota on biologics when it comes to the Trans-Pacific Partnership."

Officials from Australia and Chile have said TPP rules on biologics as they stand now will not require any changes to their domestic laws, both of which provide for five years of exclusivity.

TPP would require participants to comply with one of two options, the first of which is to provide at least eight years of exclusivity. The second option is to provide five years of exclusivity and undertake additional regulatory measures that administration officials say should effectively extend that protection to eight years.

Hockey in the letter also echoed a claim made in April by Singapore's Ambassador the U.S. Ashok Kumar Mirpuri, that complaints about the TPP deal by members of Congress or business groups must be resolved by the White House, not with other TPP partners <http://insidetrade.com/node/154055>.

“Issues of domestic concern must be addressed by each TPP government with its own stakeholders,” Hockey stated in his letter. “It was clear from the outset of the negotiations that all TPP countries would need to work with their stakeholders to manage issues of concern.”

Hockey also stressed that the U.S. was not the only country to make controversial concessions in order for a final TPP deal to come together, and that other TPP partners have begun their domestic implementation processes despite also being in an election year.

“No one country secured everything it had hoped for and, indeed, all countries had to accept provisions that were unpopular and controversial in their own jurisdictions,” he wrote. “Opposition to parts of the TPP is certainly not unique to the United States."

In Australia and Japan, “the legislative process is already well underway, even on the eve of domestic national elections,” according to the letter.

Hockey also laid out the strategic case for congressional approval of TPP while reiterating that working for passage of the TPP in the U.S. is and will remain his top priority. He said that in his three months tenure, he met with “around forty key Congressmen and Senators, a range of Administration officials, businesses and other stakeholders in Washington and across the United States” to lobby for the deal.

He also made the case that failure to pass TPP will cause the erosion of U.S. leadership in the Asia-Pacific as countries continue to negotiate the Regional Comprehensive Economic Partnership (RCEP) led by China. According to Hockey, “there is a real sense of urgency among the participating governments in the Asian region to conclude [RCEP] by the end of this year.”

The six members of the U.S. Business Coalition for TPP which sent the May 4 letter are the American Farm Bureau Federation, the Emergency Committee for American Trade, the National Association of Manufacturers, the National Foreign Trade Council, the U.S. Council for Business and the U.S. Chamber of Commerce.

 
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