No final deal is expected at the summit, which runs through Sept. 15 at the Hilton Chicago. But there are plans for leaders of the nine TPP countries ? Australia, New Zealand, Peru, Chile, Vietnam, Malaysia, Singapore, Brunei and the United States ? to sign off on the "broad outlines" of a final agreement in November, so substantial progress could be made in Chicago.
The talks have sparked protests by opponents of NAFTA-style trade agreements but support from mainstream U.S. farm and business groups.The Tribune talked to Andrew Shoyer, a partner in the Washington, D.C.-based office of Sidley Austin LLP, about the pact and its effect on the U.S. and state economy. Sidley Austin advises companies, trade associations and governments on the use of World Trade Organization, NAFTA and other treaty-based trade and investment rules. At the TTP meeting, the law firm will represent the interests of several large corporations in the apparel, shipping, pharmaceutical and biotech industries.
Q: What are the key questions the TPP will address in Chicago?
A: One of the important issues that will be discussed is tax. The question is, how quickly will each country agree to go to zero on the tariff charge of the products of the other groups. Another topic will be the treatment of subsidies and state-owned enterprises, so that U.S. companies can compete fairly with companies that are owned or supported by governments.
Global supply chains will also come up because so much business is done across very long distances now. One of the things the TPP negotiations can do is reduce the bottleneck at borders. That will help, in particular, small- and medium-size business that rely on suppliers and need to get their goods to market as quickly as possible. We haven't seen that in previous free trade agreements.
Q: Why are these talks important to Chicago?
A: The impact of this agreement on the Illinois economy could be profound. (According to the U.S. government, in 2010, Illinois' exports totaled nearly $50 billion, of which $33 billion, or 67 percent, went to the Asia-Pacific region.) But also for the U.S., one of the most important things is to be competitive in the Pacific region. What we have done in the last years is to slow down because of a lot of political turmoil around negotiations on trade agreement. And a number of our competitors have moved ahead ? that would include Canada, the European Union certainly; Japan has become more aggressive, and China is becoming more aggressive.
Q: The TPP wants to present a proposal by November, when the Asia-Pacific Economic Cooperation Forum meeting is held. What progress has been made so far?
A: Some progress has been made, but there is still a significant amount of work to be done after Chicago. Nobody expects this round to be the final round. There is another meeting scheduled in Peru in October. In November, when President Obama will be hosting the meeting of the leaders of the APEC, the hope is to have ready the outlines of a final deal in place.
Q: What have been the biggest sticking points so far on the pact?
A: One is the protection of foreign investors ? Australia has traditionally not agreed on such protection. Another issue is that the U.S. has not done a free trade agreement with New Zealand, one of the largest exporters of dairy products in the world. That's a concern for U.S. dairy producers, who fear additional competition. What makes it easier is that the U.S. has already negotiated free trade agreements with Chile, Peru, Australia and Singapore, so we have gone through the technical process of negotiating before, and we know the other side.
Q: Critics claim that the TPP promotes interests of large corporations and undermines the rights of workers.
A: I've heard that, but I don't see how. The agreement requires each government to apply their own laws consistent with the International Labor Organization.
Reuters contributed.
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