Bid to get a China-backed Asia trade pact in 2016 seen failing short

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[June 17, 2016]  By Rebecca Howard and Charlotte Greenfield

WELLINGTON (Reuters) - A raft of thorny issues including market access and trade barriers makes it very unlikely 16 Asia-Pacific countries can hammer out a proposed economic "partnership" by the end of this year.

The week-long 13th round of negotiations to create a Regional Comprehensive Economic Partnership (RCEP), under way in Auckland, New Zealand, ends on Saturday. The talks kicked off in 2013.

The original aim had been to wrap up by the end of 2015 a trade deal that involves a total population of more than 3 billion and annual trade volume of over $17 trillion.

But there's no sign of progress that would produce even by this December a pact acceptable to the 10 governments in the Association of Southeast Asian Nations (ASEAN) plus China, Japan, South Korea, India, Australia and New Zealand.

"This is a very complex negotiation," said New Zealand chief trade negotiator Mark Trainor, noting that the countries involved range from some of the world's least developed to some of the richest.

"It is a difficult process to bring it in to land, given those complexities," he said on Friday.

Stephen Jacobi, director of the New Zealand International Business Forum, said while negotiators are working to an end-year deadline, it is "difficult to see how they'll pull all the pieces together in time."

NOT READY TO CLOSE

Deborah Elms, executive director of the private Singapore-based Asian Trade Centre, said progress wasn't anywhere near enough for a 2016 deal.

"If we are just talking about some countries making adjustments to initial offers we are not ready to close. We are not in that ballpark," she said.

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Containers are stacked up at PSA's Tanjong Pagar container terminal in Singapore July 24, 2015. REUTERS/Edgar Su/File Photo

In addition to trade, intellectual property provisions are also an issue. Medecins Sans Frontieres warns that India will be negatively impacted if some intellectual property provisions are included as access to affordable medicine could be severely restricted.

New Zealand Trade Minister Todd McClay told Reuters there could be an agreement by year-end but the "challenge will be the quality of the outcome, the quality of the deal".

He said New Zealand is not "willing to forego a high quality outcome for an issue of timing."

China and India, not in the unratified Trans-Pacific Partnership agreement, have been keen to help create RCEP.

He Ping, a trade expert at Fudan University in Shanghai, said the New Zealand meeting should have marked the "final sprint" toward a deal but "right now it seems it is hard to get that sense of urgency with RCEP."

(Additional reporting by Michael Martina; Editing by Richard Borsuk)

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