Are large multilateral free trade deals becoming just too difficult to complete?

Earlier this week, Office of U.S. Trade Representatives (USTR) officials expressed doubt that the Trans-Pacific Partnership (TPP) negotiations would be concluded this year. The challenges facing the TPP are now a part of a pattern of  difficult trade negotiations aimed to produce a large, multilateral free trade deal.  Over the last decade, many of these efforts have resulted in stalled or collapsed talks.

Today marks the end of the 17th round of TPP negotiations being held in Lima, Peru. The first round began in March 2010 in Melbourne, Australia. The TPP negotiations were anticipated to be concluded last year with nine members at the time.

In 2011, President Obama stated in Hawaii:

I’m very pleased to announce that our nine nations have reached the broad outlines of an agreement. There are still plenty of details to work out, but we are confident that we can do so. So we’ve directed our teams to finalize this agreement in the coming year. It is an ambitious goal, but we are optimistic that we can get it done.

This week former U.S. Trade Representative Carla Hills, who served under George H. W. Bush from 1989-1993, said:

I’m optimistic it will be done….I’m not optimistic it will be done this year.

Some of the same issues that threatened other large-scale multilateral trade deals have emerged in the TPP talks. Some of those issues include agricultural subsidies and intellectual property protection.

The Free Trade Area of the Americas (FTAA), which was designed to establish a trading bloc composed of all countries in the Western Hemisphere excluding Cuba, collapsed in 2005.  The Doha Round of the World Trade Organization (WTO) negotiations remain incomplete since the 2005 Hong Kong Ministerial. Agricultural trade was a highly contentious issue for both the FTAA and Doha Round of trade talks.

Perhaps, such trade deals are more difficult to complete because of a more active role of developing countries in negotiations. In other words, a few number of developed countries can no longer shape a global trade agenda with very little to no opposition. For example, Brazil and Argentina opposed an FTAA that did not include the elimination of U.S. subsidies for agriculture.   In addition, the Bolivarian Alternative for the Americas (ALBA) created another opportunity for countries such as Cuba, Venezuela and Dominica to form trade partnerships, thus weakening the possibility of an FTAA. ALBA was a response to concerns by the late Venezuelan President Hugo Chavez that the FTAA was a form of U.S. imperialism.

Large developing countries such as Brazil, China, India and South Africa were successful in stalling a WTO agreement that did not adequately address their concerns over agricultural subsidies.

The TPP is going through a similar process. Many of the TPP countries are unable to ignore domestic opposition to the agreement. Conclusion of the talks are taking longer than anticipated.

If the TPP talks are finally concluded and a deal implemented, it will remove trade barriers between 12 countries that include Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States.

Do you think that the TPP will conclude successfully (i.e., with an actual agreement)?

 

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About Dr. Sarita D. Jackson

is the President and CEO of the Global Research Institute of International Trade, a think-tank/consulting firm that examines trade policies and their impact on domestic businesses. Prior to heading GRIIT, Dr. Jackson was a tenured associate professor of political science in North Carolina and worked as a trade policy consultant for an Arlington-based consulting firm. She has participated in trade policy projects and conducted research on free trade negotiations in Botswana, Antigua and Barbuda, Dominica, Dominican Republic, Mexico and Panama. Dr. Jackson has also traveled to Chile and Argentina to study their political systems and economic integration policies.
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