US and Asia Pacific Rim nations plan trade pact

THE US and eight other Pacific Rim nations aim to forge a free-trade pact before President Barack Obama hosts an APEC summit in Hawaii in a year, Chile’s president said yesterday.

Leaders of the nine nations met for the first time yesterday at a summit in Japan to discuss the so-called Trans-Pacific Partnership (TPP) pact which would oblige members to scrap tariffs and other trade barriers.

The group did not include China which favours negotiating trade reforms in alternative forums that include only Asian economies and not the US.

“The goal we set out today in a meeting with President Obama is that before the next APEC meeting in November in Honolulu we will have the TPP in force, and that is a very demanding task,” said Chile’s President Sebastian Pinera.

“So we’ll have rounds of negotiations, the first in New Zealand and the second in Chile,” he said, speaking on the sidelines of a wider summit of the 21-member Asia Pacific Economic Cooperation (APEC) forum.

He said that the nine countries “will hopefully be ready before we celebrate the upcoming APEC summit in Honolulu”.

The fresh push was launched as APEC, often derided as an ineffectual talk shop, conceded it had failed to reach its goal set in 1994 to remove trade and investment hurdles for developed members by this year.

Obama hailed the benefits of free trade on Saturday, saying “with every $1 billion we sell in exports, 5,000 jobs are supported at home”.

The White House said at yesterday’s meeting that “the leaders noted that, with the negotiations well underway, TPP is now the most advanced pathway to Asia-Pacific regional economic integration”.

“They also reiterated their goal of expanding the initial group of countries out in stages to other countries across the region, which represents more than half of global output and over 40 percent of world trade.”

For now the TPP has just four signed-up countries – Brunei, Chile, Singapore and New Zealand – but five others are in talks to join: the US, Australia, Malaysia, Peru and Vietnam.

Japan’s Prime Minister Naoto Kan attended as an observer, and South Korea has reportedly indicated interest in joining, as has Canada.

In the meeting, the leaders “reaffirmed their objective of negotiating a high-standard agreement”, said the White House.

APEC host Japan has deferred a decision on joining TPP by six months amid strong domestic opposition over fears free trade would badly damage the country’s highly protected and inefficient farm sector.