US multinationals have warned Washington not to compromise and weaken a landmark Asia-Pacific free-trade pact in order to complete the deal by the end of this year.
After three years of talks, US President Barack Obama’s administration is making a last push to finalize the proposed Trans-Pacific Partnership (TPP) that would establish a free-trade bloc stretching from Vietnam to Chile.
The ambitious agreement would encompass 800 million people, about a third of world trade and nearly 40 percent of the global economy.
Obama had hoped to personally iron out the deal with other leaders at the APEC summit in Indonesia this week, but was forced to cancel at the last minute because of the US government shutdown.
“[Obama] set a very aggressive goal to try and get the TPP agreements done by the end of the year,” US Secretary of Commerce Penny Pritzker told reporters on Sunday on the sidelines of the APEC meeting.
Major multinationals, such as Wal-Mart Stores, Inc and FedEx Inc, have expressed concern that the tight deadline could make US negotiators vulnerable to compromise.
“For Wal-Mart, we would like to see a high-quality agreement, which is that no sectors and no products are excluded. That there are no compromises that leak into the process for the purpose of speed,” said Scott Price, chief executive of the US retailer in Asia. “If it takes more time in order to have a high quality agreement, that’s what we should have.”
US government officials have indicated the agreement might not eliminate all tariffs among the 12 countries, consisting of the US, Japan, Canada, Mexico, Australia, New Zealand, Peru, Chile, Vietnam, Malaysia, Singapore and Brunei.
The US is under pressure in the talks to scrap import curbs on politically sensitive products such as sugar, dairy items, footwear and clothing.
In exchange, its partners would adopt new rules on digital trade and the operations of state-owned enterprises, and bolster protections for workers and the environment.
“I don’t think that President Obama not being here will delay things at all,” APEC executive director Alan Bollard said. “[But] there is a risk that others could potentially use that as a bargaining excuse and everybody needs to be aware of that, this is a very complex negotiation.”
Washington, which has touted the deal by saying that 5,000 US jobs are created for every additional US$1 billion of exports, could seek to exclude some of the 11 countries to ensure an agreement was reached on time.