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[SINGAPORE] After four days of intensive haggling, trade ministers of 12 countries yesterday failed to meet a year-end deadline to hammer out a Trans-Pacific Partnership trade agreement in Singapore.
A joint statement from them said that they have only made "substantial progress" towards a done deal. The ministers will meet again next month to work on the TPP agreement, which Trade and Industry Minister Lim Hng Kiang suggested is within sight.
The TPP, an ambitious trade pact that goes beyond a traditional free trade agreement, is being negotiated by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. These countries make up 40 per cent of the global economy. Other countries may join the pact later.
Only days earlier, Prime Minister Lee Hsien Loong told Japan broadcaster NHK that Singapore was hopeful of a TPP deal before the end of the year, despite the complexity of the issues involved.
Mr Lim told reporters yesterday that deadlines are seldom met in trade pacts, but they help to sharpen the negotiators' focus on completing them.
The TPP had already missed an earlier deadline, the one set for 2012 by US President Barack Obama.
Yesterday's joint statement, read out by US Trade Representative Michael Froman, said the ministers have "identified potential 'landing zones' for the next majority of key outstanding issues in the text".
"We will continue to work with flexibility to finalise these text issues as well as market access issues," it added.
Mr Lim explained that the "landing zones" referred to trade-offs whose identification would help make it easier for a deal to be concluded.
According to Mr Lim, the TPP covers 29 chapters, each covering a "topic", such as state-owned enterprises or intellectual property rights. Some "seven to eight chapters" are fully agreed upon and "closed". Most of the others are more or less completed but still need cleaning up because of some technical issues.
Only "seven to eight" chapters remain "big issues" that have been holding up a deal. They include market access - in particular the opening up of Japan's car and farm markets - and patent issues, especially on medicines.
These chapters still need "substantial work" but could be fixed over "the next few weeks or months", according to Mr Lim.
Australia's chief trade negotiator, Chris Decure, said the 12 countries are "very determined" to see the TPP take off and become a model for a 21st century trade pact.
Tim Groser, New Zealand's Minister of Trade, said the TPP trade talks have built up a strong momentum to push through a deal. This is why, according to Japan's Senior Vice-Minister Yasutoshi Nishmura, the ministers are meeting so soon to take advantage of it,
Mr Lim said Singapore has yet to conclude an FTA with Canada and Mexico. With a TPP deal, it would have one with them. For the other TPP countries which are already Singapore's FTA partners, the TPP will yield more benefits because it covers more than traditional FTAs.
He said the TPP will also be "complementary" to the limited global trade pact which the World Trade Organization managed to seal last week. The WTO multilateral trade deal will be able to tackle tougher issues that regional and bilateral FTAs can't tackle, such as export subsidies for agricultural products.
But he also cautioned against the "spaghetti bowl" effect that could complicate trade when there are too many FTAs with too many rules of origins. "We've got to ensure there's coherence and that the rules of origin converge rather than diverge."