Reform of state-run firms one of TPP’s biggest hurdles
Japan News | July 15, 2014
Reform of state-run firms one of TPP’s biggest hurdles
By Miyuki Yoshioka / Yomiuri Shimbun Staff Writer
OTTAWA—Emerging economies are at odds with developed countries in negotiations for the Trans-Pacific Partnership free trade pact, clashing over the reform of their state-run firms to ensure a fair playing field for foreign capital.
Japan, the United States and other advanced countries have urged emerging nations to abolish preferential treatment such as subsidies for state-owned firms. However, countries such as Vietnam and Malaysia have shown strong resistance, as state-run companies form the core of their economies.
At the TPP meeting in Ottawa, emerging economies agreed to abolish preferential treatment with some exceptions and submitted lists of firms they wanted to treat as exceptions. However, developed nations say there are too many firms on the list and plan to ask them to lower the number.
A Vietnamese official who is involved in the TPP negotiations said Saturday during an interview with The Yomiuri Shimbun that it would be difficult for them to do so, as making concessions is a life-and-death matter economically.
In Vietnam, state-owned companies account for about 40 percent of the country’s gross domestic product.
The two sides have also locked horns over environmental issues related to controlling the relaxation of environmental standards, partly to promote investment.
In the TPP negotiations, participating countries have in many cases drawn up rules based on existing international treaties. However, the debate has become deadlocked over environmental standards as negotiators are discussing which treaties the TPP should base its rules on.
Meanwhile, the United States has abandoned a conciliatory approach as a midterm election is approaching, a source close to the TPP negotiations said. It is believed that the United States is acting in consideration of environmental organizations, which are a support base for the ruling Democratic Party.
Also, little progress has been made over the matter of intellectual property rights. The various sides agreed that copyrights on music shall be protected for 70 years after the death of the creator.
How rules to protect agricultural and fishery brands should be drawn up is another contentious point at the TPP negotiations.
