In TPP, U.S.-Japan Talks On Autos & NTMs Will Occur On 'Separa...

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In TPP, U.S.-Japan Talks On Autos & NTMs Will Occur On 'Separate Tracks'
Posted: April 12, 2013

The Office of the U.S. Trade Representative today (April 12) announced that, once Japan joins the Trans-Pacific Partnership (TPP) talks, the U.S. intends to hold negotiations with Japan on automotive trade barriers and a broad list of other non-tariff measures (NTMs) on two "separate tracks" from the overarching TPP talks. However, USTR intends to conclude all of these pieces of the negotiation with Japan at the same time, Acting USTR Demetrios Marantis said. "[W]e are going to have the TPP negotiations and then, in parallel, a set of auto negotiations and a set of NTM negotiations," Marantis told reporters this morning. "And these will all proceed with respect to the same timing, meaning that we will not close with Japan on TPP unless we are able to close on all of these issues -- the auto issues, the NTM issues and TPP. And that's an understanding that has been made very clear to our counterparts in Japan." Marantis also appeared to say that the goal is to conclude the separate parallel bilateral negotiations with Japan on autos and NTMs at the same time the overall TPP agreement is concluded. TPP partners say they are trying to conclude the talks by the end of the year, although many observers believe that deadline is impossible to meet, especially now that Japan is also entering the negotiations. When pressed on whether the U.S. would refuse to close out a deal with the 10 other TPP partners with which it is negotiating if, for example, it cannot reach a deal with Japan on automotive trade, Marantis was less clear. "[W]e have a lot of work to do with Japan in the areas of autos, NTMs and on our market access negotiations generally with TPP. And we will close all of those at the same time," he responded. One Japanese source, however, noted that a formal exchange of letters between Japan and the U.S., also unveiled today, is quite ambiguous on the question of timing for the U.S.-Japan talks. For instance, the letters confirm that a list of NTMs will be "addressed" by the two sides "by the conclusion of the TPP negotiations between the two countries." On autos, the letters are even more vague, stating only that parallel talks will commence when Japan joins the TPP talks. This source argued that the two sides have flexibility to determine exactly how they handle the timing of various parts of the TPP negotiations, and signaled that the two sides could potentially keep talking even after an initial TPP deal among the broader membership is reached. A U.S. private-sector source agreed that it remains a bit unclear how all of these pieces would fit together. "I would just say it's not clear from the USTR press release or Sasae's letter how the sequencing of a successful TPP conclusion and a successful U.S.-Japan bilateral negotiation would be resolved," he said, in reference to the formal letter from Japanese Ambassador Kenichiro Sasae to Marantis. The two sides appear to have left some wiggle room on these questions, and the U.S. may not want the broader talks to become bogged down by Japan-specific issues, he said. On the press call, Marantis stressed that the outcomes of the U.S.-Japan negotiations on automotive issues would be made binding under the dispute settlement procedures of the final TPP deal. However, he hinted that the same is not necessarily true of the outcomes on NTMs, as the U.S. and Japan will look to make progress on a variety of different non-tariff measures, and it remains a bit unclear how those results will be captured. "So there is a difference between the results in the automotive sector, which is one single sector, versus how we will memorialize the results on the NTMs, which cover a whole variety of sectors," he said. Therefore, there will "likely be different ways in which we memorialize our outcomes," he added. A USTR fact sheet says those ways include legally binding agreements, exchange of letters, and new or amended regulations or laws. As a result of the breakthrough announced this morning, the U.S. is now supportive of Japan's bid to join TPP. However, Australia, New Zealand, Canada and Peru are still engaged in consultations with Tokyo, and Japan cannot officially enter until all TPP parties support its bid. This formal group endorsement could happen at the April 20-21 Asia-Pacific Economic Cooperation trade ministers meeting, sources have said. After that, USTR will formally notify members of Congress that it intends to open up new trade negotiations with Japan, which will trigger a 90-day period of consultations with the Hill before Japan can actually join the TPP negotiations. On the press call, Marantis said it was premature to speculate on exactly when the U.S. would notify Congress about Japan's TPP participation.

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In TPP, U.S.-Japan Talks On Autos & NTMs Will Occur On 'Separa...

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In their parallel talks on NTMs, U.S. and Japan plan to tackle a wide list of issues. These include issues related to the insurance operations of Japan Post; issues related to transparency; mergers and acquisitions; intellectual property rights (IPR); the use of standards; government procurement; competition policy; express delivery; and sanitary and phytosanitary (SPS) measures, according to a fact sheet. When it comes to IPR, the U.S. will look to discuss copyrights, technological protection measures, and civil and criminal enforcement procedures. On IPR, the fact sheet also states that the two sides will "uphold certain core principles with respect to its system of protection for geographical indications, including protecting prior trademark rights, safeguarding the use of generic terms, and ensuring due process." This appears to be an effort by the U.S. to ensure that Japan does not agree to recognize any GIs that could hamper the ability of U.S. exporters to ship there. On SPS measures the talks will center on accelerating and streamlining risk assessments related to common food additives and address other issues related to fungicides and gelatin/collagen for human consumption, according to USTR. Marantis also noted that, through the bilateral consultations held thus far with Japan, the U.S. is confident that Tokyo is prepared to meet the high standards in TPP. He noted that, in a February joint statement issued by both governments, Japan said it would submit all goods to negotiations in TPP. However, the outcomes unveiled this morning do not contain much detail on agricultural commitments, besides the provisions on SPS discussions.

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