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This file contains country-by-country updates on the status of the Trans-Pacific Partnership ratification effort in member countries.
A minister Oct. 20 told a Senate committee that the government expects to introduce TPP legislation to parliament early next year. Parliament's Joint Standing Committee on Treaties is due to make its report in December. Oct. 28 was the last day for making submissions to a separate Senate inquiry into the TPP conducted by the Senate Foreign Affairs, Defense and Trade References Committee. The committee will report on Feb. 7, 2017.
The Senate committee TPP inquiry is expected shortly to set dates for public hearings.
Provisions on pharmaceuticals and the investor-sate dispute settlement mechanism have proved to be the dominant concerns in the two parliamentary inquiries. With respect to ISDS, the debate has largely centered on whether they would stop or slow efforts by governments to introduce “public good” legislation. Concerns about pharmaceuticals have focused on the possibility that TPP ratification might slow access to cheaper, generic versions of extremely expensive biologic medicines.
The only realistic pathway for ratification is for the coalition government led by Prime Minister Malcolm Turnbull and the Labor opposition to team up to secure passage of relevant legislation through the Senate. The two parties have done so with a number of other free trade agreements. However, Labor so far has not publicly said whether it will support TPP ratification.
Prime Minister Justin Trudeau said it would be “difficult to imagine” Canada turning its back on three of its top five trading partners by not signing the TPP. But former prime minister Brian Mulroney, who signed the North American Free Trade Agreement and its U.S.-Canada predecessor, said Canada’s position doesn’t matter because the deal is doomed due to hostility in the U.S. Congress and global concerns about trade initiatives.
The House of Commons International Trade Committee is continuing its public hearings on the TPP so it can provide a recommendation to the government on whether to ratify the deal. No future meetings are currently scheduled, but the committee held its 40th meeting on Oct. 27.
Canada expects to benefit from the deal’s expanded temporary entry for business people. That's based on new commitments from Australia, Brunei, Malaysia and New Zealand to permit business visitors providing after-sales service, new commitments from Chile and Mexico on access for after-lease services and improved commitments on intra-company transfers from Australia, Chile, Japan, Malaysia, New Zealand and Vietnam. It also includes new commitments from Australia, Chile, Japan, Malaysia and Mexico to extend temporary entry privileges, and the right to work, for spouses of Canadian business people.
No progress is expected on ratification until after the Canadian Parliament’s ongoing review of the TPP is completed, which is unlikely to happen before the U.S. presidential election in November.
President Michelle Bachelet named Paulina Nazal as the new director of the Economic Relations Office of the Ministry of Foreign Relations. Nazal previously managed Chile's relations with the Asia-Pacific Economic Cooperation forum, the Organization for Economic Cooperation and Development and the World Trade Organization. She also led negotiations for Chile on the TPP.
The ruling center-left coalition suffered a heavy defeat in municipal elections across Chile on Oct. 23, losing several key cities to the center-right opposition. The result is seen as a bellwether for next year's congressional and presidential elections.
The TPP is the first major trade pact to include a chapter dedicated to small and medium-sized enterprises (SMEs). The deal establishes a series of mechanisms to facilitate their participation in international trade, such as improving access to information, electronic documentations and special treatment for SMEs in government tenders. An SME Committee, made up of the 12 member countries, will be responsible for sharing information and promoting these benefits through seminars, workshops and websites.
The government has said several times that it will submit legislation to ratify the TPP to Congress by the end of the year, although doubts have been raised whether this is possible given the packed legislative agenda.
The Senate passed a key piece of labor legislation on Oct. 13 that would strengthen collective bargaining rights in Mexico and better ensure protection of these rights for workers. The legislation, known as the Labor Justice Amendment to the Constitution, modifies existing labor laws to establish an independent labor court in place of the current federal labor boards, which arbitrate all labor disputes. The legislation also establishes a separate ministry to serve as a registry for collective bargaining agreements, and provides some guarantees that access to all union contracts be provided to workers. The right to collective bargaining is one of the International Labor Organization provisions that must be upheld by all members of the TPP in order to receive benefits from the agreement.
Any amendment to the Constitution must be passed by 32 local legislatures and by the House of Deputies by a two-thirds majority in order to go into effect. These votes are expected prior to the end of the year.
The TPP requires all member countries to maintain the five labor freedoms established by the International Labor Organization, including the freedom of association, the right to collective bargaining, the elimination of forced labor, the abolition of child labor and the elimination of discrimination in respect of employment and occupation. All TPP parties must settle labor disputes through the same dispute settlement mechanisms used for commercial disputes, which includes possible trade sanctions.
An analysis of the text is being carried out by nine separate committees in the Mexican Senate, and leaders from the leading Institutional Revolutionary Party and the National Action Party have indicated their support of the agreement. Several officials have said a vote is planned before the end of 2016.
A select committee of Parliament Oct. 27 released its report on the Trans-Pacific Partnership Agreement Amendment Bill. It includes changes to clarify the commencement date, an amendment to provisions on penalties for copyright breaches and regulation-making powers on technological protection measures and on investment screening. The bill would amend 10 existing laws.
The majority report recommends passage of the bill with amendments on various matters.
Trade minister Todd McClay will give his “second reading speech” on the bill on Nov. 3, a step that starts the final stages of debate on the legislation.
Issues likely to crop up in debate on the bill include the ramifications of the TPP agreement's copyright provisions, which the government has acknowledged will impose a net cost on the country. The government says the net costs of extending the copyright term from 50 years to 70 years will be vastly outweighed by other benefits of the TPP.
The bill is likely to pass Parliament.
Peru’s government is coming up on a nine-month deadline to respond to observations of its labor legislation made by the U.S. Department of Labor under the bilateral free-trade agreement that took effect in February 2009. The Office of Trade and Labor Affairs, a division of the department’s Bureau of International Labor Affairs, raised concerns about Peruvian legislation (Decree Law 22342) that allows for the use of three-month temporary contracts on a permanent basis in certain export sector, such as garments, to encourage investment and lower costs.
Labor lawyers who filed the complaint with the Labor Department under the pact say the manner in which the case is resolved could have an impact on the TPP, because the Peru-U.S. trade agreement was used as a model for the TPP. The complaint calls for Peru to repeal Law 22342 and a similar law that governs temporary contracts in the agro-export sector (Law 27360), as well as strengthen its labor inspection division. Both areas are also covered in the TPP Chapter 19 on labor issues.
Chapter 19, Article 19.4, states: “The Parties recognize that it is inappropriate to encourage trade or investment by weakening or reducing the protections afforded in each Party’s labor laws. Accordingly, no Party shall waive or otherwise derogate from, or offer to waive or otherwise derogate from, its statutes or regulations.”
While Peru’s Congress has not yet started debate on the TPP, President Pedro Pablo Kuczynski’s government maintains that it will be approved this year.
By Len Bracken
The Office of the U.S. Trade Representative Oct. 27 hosted a conference call with business leaders on how to pressure Congress to hold lame-duck votes on the TPP. The business leaders are organized by Business Forward, which has hosted fly-ins of business executives for White House briefings on the TPP. The next outreach effort will be directed toward Congress.
The most important outstanding issue for lawmakers is the term of intellectual property rights protection for biologic drugs. Watch for any sign that the administration and Senate Finance Committee Chairman Orrin Hatch (R-Utah) have reached an agreement on a “fix” for the problems highlighted by the senator. Those problems include the discrepancy between the 12-year term of exclusivity protection afforded to brand name manufacturers in U.S. and the two options outlined in the TPP.
Article 18.51 of the TPP concerning biologics states that countries must provide one of two options: “a period of at least eight years” of marketing exclusivity protection or at least five years of test data exclusivity and “other measures” that “deliver a comparable outcome.” There is no time element associated with the “other measures” but it is widely assumed that the “comparable outcome” means that they would comprise at least three years to be equivalent to the first option. This section also says that the TPP parties would consult after 10 years, or as otherwise decided, to review the period of exclusivity.
Senate Majority Leader Mitch McConnell (R-Ky.) is standing by his position that the TPP will not ratified this year and instead will be left for the next president. Others on Capitol Hill said work on moving the agreement in 2016 is proceeding behind the scenes among the staffs of the Senate Finance and House Ways and Means committees.
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