BANDAR SERI BEGAWAN, Brunei –At the conclusion of the 19th negotiating round here, the Japanese government announced today (Aug. 30) that chief negotiators will hold their next meeting Sept. 18-21 in Washington.

The Japanese government made the announcement at a briefing for stakeholders on the outcome of the round that was chaired by three key Diet members from the ruling Liberal Democratic Party (LDP). Koya Nishikawa, head of the LDP’s TPP committee, led the meeting, which also included a report on the round by Japanese chief negotiator Koji Tsuroka.

A joint statement issued by the 12 TPP countries at the end of the round does not mention the Sept. 18-21 chief negotiators’ meeting, nor does it indicate the date of the next ministerial meeting or formal round negotiations. A U.S. official said earlier this week that TPP countries do not plan to hold a formal round before the October Asia-Pacific Economic Cooperation (APEC) leaders’ meeting in Bali, Indonesia.

According to Japanese stakeholders briefed by their government, TPP negotiators this week discussed the possibility of holding another ministerial meeting at APEC immediately prior to the leaders’ meeting. One informed source said chief negotiators are also likely to attend the APEC meeting, and that some working groups may be asked to meet in Bali as well.

The joint statement does say that there would be further intersessional meetings on outstanding issues “in the coming weeks”, although it does not provide a firm schedule for them. This leaves unclear the extent to which countries will be able to make progress on the most difficult issues before the APEC meeting, which takes place Oct. 1-8.
According to the joint statement, several negotiating groups not meeting here — including those on labor, technical barriers to trade, e-commerce, and legal issues — are holding meetings prior to the APEC summit in Bali. Labor negotiators met Aug. 26-29 in Ottawa, and the statement said they “continued their work on the outstanding issues in the chapter.”
The Peruvian government announced the labor meeting on Aug 21, along with intersessionals on technical barriers to trade in Mexico City on Sept. 2-5; e-commerce in San Francisco on Sept. 3-6; and legal issues in Washington during the second week of September.

“The intersessional work is intended to further advance the negotiations in the lead up to [the] APEC leaders meeting in Bali, Indonesia, on the margins of which TPP Leaders are expected to meet as they have in past years,” the joint statement said. It reiterated the assessment by TPP ministers following their Aug. 22-23 meeting here that the APEC summit will be an “important milestone” as the 12 countries work to conclude the TPP this year.

Contrary to past rounds, chief negotiators did not hold a press conference here and only issued the joint statement, which describes the work done in the 19th round in the most general terms. The statement said the TPP ministers’ meeting here immediately prior to this round had “energized” the work of negotiators here.

The joint statement said negotiators advanced their technical work at this round on texts covering market access, rules of origin, investment, financial services, intellectual property (IP), competition and environment. “They also made progress on the packages providing access to each other’s markets for goods, services, investment, financial services, temporary entry, and government procurement,” it added.

“Their discussions both jointly and bilaterally were successful in identifying creative and pragmatic solutions to many issues and further narrowing the remaining work,” the statement added.

In the IP chapter, the U.S. has not yet tabled a revision to its original proposal on pharmaceutical patent protection, which aimed to provide better protection to drugs based on the speed with which companies sought marketing approval in a second TPP country. But a U.S. trade official said earlier this week that the U.S. was reaching the end of its internal deliberations on a potential new proposal without saying when and whether it would be tabled.

The initial U.S. proposal met with resistance from TPP countries. In the face of that opposition, leading U.S. business groups urged USTR in an Aug. 15 letter to seek patent protections in TPP that mirror the rules of the U.S.-Korea free trade agreement, plus data exclusivity protection for 12 years for biologic drugs.

Sources have said the only outstanding issue in the competition chapter is proposed disciplines on state-owned enterprises (SOEs), where countries have not yet even agreed on a definition of an SOE. New SOE disciplines have been a priority for the U.S. Chamber of Commerce as well as U.S. insurance firms doing business in Japan.

The Chamber last week publicly urged USTR not to sacrifice the substance of the TPP negotiations for a quick conclusion, which one informed source speculated could be a signal that the Chamber is concerned the U.S. may not pursue SOE rules with the same vigor as it has in the past.

This source noted that a commercial deal between Aflac and Japan Post to distribute cancer insurance products may have lessened the interest of U.S. insurance firms in pressing the SOE issue to the same extent as they have in the past. An opposition Japanese Diet Member attending the round here told Inside U.S. Trade that he believes the Aflac deal was related to TPP even though the Japanese government has denied it.

Negotiating groups discussing the textile rule of origin as well as special safeguard and customs procedures for textiles also met at this round.

According to an informed source, negotiators during an Aug. 26 meeting on textile rules of origin produced a consolidated list combining an initial U.S. proposal for a short supply list with the additional items requested by other TPP countries. The U.S. will now work to eliminate redundancies in order to come out with a list that can serve as a basis for countries to negotiate on what items should be removed, this source said.

Items on the short supply list would be exempted from the general yarn-forward rule the U.S. has proposed in the talks, which requires all components of a qualifying apparel items to originate in the TPP region.

In advance of the 19th round, sources on both sides of the apparel rule of origin debate said they had clear indications that the U.S. government at this point would not substantively back off its current position in favor of a yarn-forward rule, with derogations established in two short supply lists, one time-limited and one permanent. But these sources also said they ultimately did not expect that approach to prevail given Vietnam’s strong opposition.

In the Aug. 30 briefing for Japanese press, Tsuroka said Japan during the round here exchanged tariff offers with six countries and met bilaterally on goods market access with nine countries, although he did not name them. Japan did not exchange tariff offers with the U.S. and Australia due to procedural delays in those two countries.
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