Background Briefing on the Trans-Pacific Partnership

Special Briefing
Senior Administration Official
Bali, Indonesia
October 8, 2013


SENIOR STATE DEPARTMENT OFFICIAL: Great. So before we get started, I just wanted to give you two other brief updates some of you have asked about, and President Putin spoke about one of them already. (Laughter.) That’s fine. But – and obviously this is all on background for attribution. I can be a Senior State Department Official. Of course, Senior Administration Official over here, [Senior Administration Official].

But Secretary Kerry and President Putin had a 15-minute pull-aside this morning during the morning plenary session. They discussed recent developments on Syria; of course, the UNSCR and the progress made by investigators on the ground. But they also – they focused their conversation mainly during this time on Geneva and the importance of moving forward with the Geneva Conference. They talked about the Secretary’s meeting with Foreign Minister Lavrov and their ongoing commitment to scheduling that.

He also had a brief conversation with Chinese President Xi Jinping as well, and I believe – I’ll have to check this – I believe that was this morning as well. I will double-check that for all of you. But they talked about their shared interest in infrastructure growth and development in this region, their commitment to that. And they also – the Secretary also thanked him for his efforts on North Korea. And they briefly discussed Syria and Iran, but it was a very brief, brief discussion.

QUESTION: Did anything --

QUESTION: Like, how brief? Like, how many minutes?

SENIOR STATE DEPARTMENT OFFICIAL: I will check, but I think it was more in the five-minute range than longer than that.

QUESTION: Oh, so nothing came up on the South China Sea?

SENIOR STATE DEPARTMENT OFFICIAL: It was a short conversation that did not cover every issue that is important to us, between the United States and China.

QUESTION: Where were they?

SENIOR STATE DEPARTMENT OFFICIAL: I’ll have to check that for you.


SENIOR STATE DEPARTMENT OFFICIAL: I mean, it was around one of the sessions, but I’ll check.

QUESTION: Did they sit down? Were they standing up?

SENIOR STATE DEPARTMENT OFFICIAL: I don’t know. The – I don’t know on the China one. On the Russia one, they kind of walked around a little bit.

QUESTION: So on the Russia one, because when I was at the photo --


QUESTION: -- I saw both of them kind of walk out, and then there was a moment of handshaking, and it almost looked like they were talking then, because they were late. Everyone else had kind of settled.

SENIOR STATE DEPARTMENT OFFICIAL: I believe it was before that.

QUESTION: It was right before?

SENIOR STATE DEPARTMENT OFFICIAL: But I’ll just have to check the specific logistics of when.


SENIOR STATE DEPARTMENT OFFICIAL: Okay. Good. With that, let’s turn it over to the bigger event of the day.

SENIOR ADMINISTRATION OFFICIAL: Wow, okay. (Laughter.) Well, I’m – thanks for doing this. As you know, we just completed a TPP leaders meeting, which was a very productive meeting. And you have the statement coming out of that meeting. On the off-chance that you’re not all trade experts in your free time, I’m happy to walk through elements of it and highlight some of the significance of the statement.

First of all, as you may well know, President Obama launched the Trans-Pacific Partnership a few years ago. It was a leaders meeting in Yokohama on the margins of APEC, and then again in Honolulu when we were chairing APEC. And the goal of the TPP is to create an ambitious, comprehensive, high-standard agreement that introduces new disciplines into the trading system to reflect sort of current challenges in the trading system. And we have been making significant progress over the last few years toward that objective. We’ve had 19 rounds of negotiations, several ministerial meetings, a few leaders meetings, dozens of inter-sessional meetings, and including this week, where we had meetings of our chief negotiators, of trade ministers, and then today, the meeting of TPP leaders.

The goal of the agreement – as I said, is when we talk about an ambitious or comprehensive agreement, it means the coverage of the agreement, that it should be as broad as possible, covering as many sectors as possible, and reducing or eliminating tariffs. And then – and then there are new issues that we’re dealing with for the first time in TPP, like state-owned enterprises or certain elements of environment and labor and intellectual property rights protection. And our goal there is to set high standards and then deal with the specific issues that the countries might have.

So today’s leaders meeting was, again, a very good discussion. Hey.

QUESTION: I couldn’t find this room. Sorry.

SENIOR ADMINISTRATION OFFICIAL: You had virtually all the leaders there. President Humala had to leave early and the Sultan of Brunei had to leave early. But otherwise you had all the leaders there. Secretary Kerry served as the head of – took the President’s place and played a very important role in the meeting both in terms of presenting the U.S. perspective but also in helping to lead the discussion with Prime Minister Key of New Zealand. New Zealand serves as the secretariat, so to speak, of TPP, and so he played that role accordingly.

And coming out of the meeting, the leaders agreed and reaffirmed the objective of completing the negotiations this year. And that’s an ambitious objective. There’s still – we’ve been making a lot of progress; there still are some significant issues to deal with. We’re in the endgame, but we’ve really been moving the ball forward, including this week, among the negotiators and the trade ministers. And so we – the leaders reaffirmed that objective.

So maybe I’ll stop there and take questions.

QUESTION: Well, I mean, on that issue of --


QUESTION: -- completing the negotiations this year, we – I mean, everybody – and I’m sure my colleague asked you this morning – was – we’ve been hearing so many different sides of this, and a lot of the Asian leaders saying no, it’s not possible to finish this year. So how much agreement, or how did that agreement come around at that language, saying that you’re going to try and finish it this year? Or, I mean, you’ve said yourself it’s ambitious.

SENIOR ADMINISTRATION OFFICIAL: Right. Well, leaders – the leaders reaffirmed that the objective is to complete the negotiations this year. As always, the substance drives the timetable. None of us are going to agree to a bad agreement simply to meet a deadline. I think the collective view is it is ambitious, but it’s doable. And certainly the progress that was made over this last week, and really since earlier this summer – we had a very productive round in Malaysia, a very productive round in Brunei, ministerial meetings in Brunei and here again, and the progress made during that period has created a lot of momentum for addressing the remaining issues.

In any trade negotiation, the hardest issues are always left to the end, and I think countries are beginning to understand the complexity of the issues that remain in this endgame, and now the negotiators are coming together to try and find creative solutions for dealing with them.

QUESTION: So there is a possibility it could run over into next year?

SENIOR ADMINISTRATION OFFICIAL: Well, it’s – the objective is to complete it this year.


QUESTION: What are – sort of from the U.S. perspective, what are the hardest things still left to do and what is – what are your arguments to get over those?

SENIOR ADMINISTRATION OFFICIAL: There are open issues across any number of chapters, because, again, in a trade agreement, nothing is agreed to until everything is agreed to. So various parts of the negotiations come together very much at the end. I think on chapters like state-owned enterprises, intellectual property rights, the environment, these are areas where we are working with our partners to develop new disciplines to go – to ensure that we’re dealing with the broad range of issues that affect trade and investment. And – but it means that we’re all collectively working to define these new disciplines. This isn’t – these are areas where there may not be a simple template to take from another agreement and put it in here; we need to work on it together to try and develop one.

QUESTION: How is --

QUESTION: I’m sorry, you said SOEs, environment, and what was the third issue that that you --

SENIOR ADMINISTRATION OFFICIAL: Intellectual property rights.

QUESTION: And IP – okay. Intellectual property rights. But this is following up on what Lesley was saying. She made the point that various leaders, including Malaysia, have said that they can’t – I mean, the Malaysian Minister has come right out and said we’re not going to be able to complete this by the end of this year, and part of that is the Bumiputera issues that they have, as I understand it.

SENIOR ADMINISTRATION OFFICIAL: Well, every country has issues of sensitivity, and that’s the goal of the negotiations, is to work through those issues and find ways of establishing high standards in new disciplines, while dealing with the sensitivities in a flexible, targeted – targeted way.

QUESTION: So does that mean there could be a deal, but just absent Malaysia, for example, or absent Japan (inaudible) culture?

SENIOR ADMINISTRATION OFFICIAL: We just left a meeting where all the leaders agreed to – maybe you missed it – agreed to reaffirm the goal – the objective of completing negotiations this year. That’s the objective. We’re going to – again, it’s ambitious. There are a number of complex issues to address, but that’s the objective we’re going to be going towards.

QUESTION: Okay. So how big a presence in the room is the, sort of, alternative idea of trade deals with China when you have these meetings?

SENIOR ADMINISTRATION OFFICIAL: Lots of countries around this region – virtually all countries around this region are engaged in a whole range of trade discussions – bilateral, FTAs, trilateral discussions, regional agreements, other plural-lateral agreements – and so we don’t view these as inconsistent, mutually exclusive, conflicting, or even competitive. Anything that’s moving the ball forward in terms of opening markets and trade liberalization can all contribute to binding the region more closely together, integrating the region, and strengthening the multilateral trading system.

QUESTION: Even when China offers, sort of, absurdly sweet deals?

SENIOR ADMINISTRATION OFFICIAL: Well, again, there are – certainly the negotiations that we’re involved in, whether it’s TPP or our approach to some of the negotiations at the WTO in Geneva, have all been organized around the importance of achieving high standards in new disciplines. That’s our approach, because we think that’s the right thing for a multilateral trading system and the, I think, the other 11 TPP partners, by definition, share that perspective because we’re all working towards that objective. There may be other approaches out there, but our focus is on a high standard, ambitious, comprehensive agreement.

QUESTION: Is there the possibility to have phased in parts of the agreement so developing countries such as Vietnam may be able to come in on certain parts of the agreement at a later stage? If it’s (inaudible)?

SENIOR ADMINISTRATION OFFICIAL: In any – again, in any trade agreement, there are lots of different variables: the standard itself, how it’s implemented, the staging of its implementation, whether there are exceptions, and carve-outs. And that’s part of what the negotiation is all about at this stage. Trying to, again, establish the highest possible standard and then dealing with specific country issues, including through tools like staging, to give them the flexibility that they need to achieve the objective.

QUESTION: So that, sort of, I guess, answers one question – be like, how can you possibly get agreement with Vietnam to play by the same rules on state-owned enterprises as the United States within the next couple of months?

SENIOR ADMINISTRATION OFFICIAL: Right, and then – and so the goal over the next – this next period is to define that high standard, and then what individual flexibilities, including staging, might be necessary to allow countries to achieve those objectives.

QUESTION: So how close are you to the end?


QUESTION: So I mean, I know, I mean --

QUESTION: Two months.


QUESTION: Isn’t that the whole point? Two months?

SENIOR STATE DEPARTMENT OFFICIAL: The goal is two and a half months. (Laughter.)

SENIOR ADMINISTRATION OFFICIAL: I mean, it’s like – hey. Look --

QUESTION: It’s not going to be two and a half months.

SENIOR ADMINISTRATION OFFICIAL: -- it’s hard to – there are 29 chapters in TPP.

QUESTION: Exactly, yeah.

SENIOR ADMINISTRATION OFFICIAL: Nothing is agreed to until everything is agreed to. We have a robust work program with pathways for every issue to ensure that we're making – with the objective of making progress in parallel on the various issues so that it can come together at the end into a balanced package. And that's – we’ve got negotiations on an ongoing basis around the various issues.

It's an ambitious timetable. There are these complex issues. Countries, I think, are focused now on the complexity of the remaining issues. That's not surprising, in the last stage of a trade negotiation, that countries would be focused in getting their arms around some of the most challenging issues, and that's where we are. But there is a tremendous amount of focus, a tremendous amount of commitment to the process, and engaging on an ongoing way with the goal of resolving these.

QUESTION: What would be the secret where – like, Doha still hasn't got – they are still failed in many respects. These twelve countries are still – come across as a very diverse range of economies at different stages. And yet you're trying to make a more ambitious pact. How come TPP can succeed in the next couple of months where Doha has failed?

SENIOR ADMINISTRATION OFFICIAL: That is a very good question. Like, I think our perspective on why Doha failed is that the major emerging economies were not willing to make commitments commensurate with their role in the international economy – so they weren't willing to open up their economy in areas like services or manufactured products access in a way that reflected, in many respects, their global competitiveness. And in that context, it was impossible to come up with – in our view, it was deadlocked to come up with an overall package.

Now what we've been able to do over the last couple years is get the international community – there is now a consensus in the international community to focus on fresh, credible approaches to making progress on elements of the Doha agenda in the hopes of creating positive momentum. And we're two months away now from a WTO ministerial back here in Bali where the contours of a package are clearly evident with trade facilitation at its core, and something on agriculture, and something on development. And that was a big focus of the leaders discussion yesterday at APEC. It was a big focus of the APEC Ministers discussion earlier this week when the director general of the World Trade Organization was here. And a lot of our trade negotiators are very much focused on trying to bring closure to that package.

QUESTION: Today some people (inaudible) describe what's going to happen in December as sort of Doha-light and full of all these caveats and --


QUESTION: -- and exceptions, and only picking the ones that you can agree on. But TPP is supposedly more ambitious --


QUESTION: -- it's the gold standard, say.


QUESTION: How do you get that gold standard with Vietnam, with Singapore, with --

SENIOR ADMINISTRATION OFFICIAL: Well, before any of these countries joined TPP, before we joined TPP, which was then the P4, before any of the other countries joined what then became TPP, we went through a rigorous process of consultations about this objective of achieving a high-standard agreement. And I'll take the example of Vietnam, where the issue of state-owned enterprises clearly poses certain challenges to Vietnam. But in consultation with the Government of Vietnam, they made clear that they see the reform of the SOE sector as something that they want to pursue and see TPP as being consistent with and supportive of that.

The prime minister of Japan, at the meeting today, spoke also about how TPP fit into his approach of economic reform. So I think countries who are participating in TPP are doing so, in part, because it does support a more ambitious agenda that they want to pursue.

QUESTION: Of reform?

SENIOR ADMINISTRATION OFFICIAL: It depends on the issue. Yeah, market access reform, integration. So it's a self-selected group that wants to achieve that high standard, high-discipline agreement.

QUESTION: How much of the meeting today – I mean, do you think anything was lacking because the President wasn't there?


QUESTION: Would there have been anything – would you have made more progress on something if the President had been there?

SENIOR ADMINISTRATION OFFICIAL: Certainly it was regrettable that he wasn't able to be there, and – but we were very fortunate to have Secretary Kerry serving in his place. And I think we were able to maintain the momentum of this last week's set of meetings, together with the other leaders who are similarly focused on doing so, as we are.

QUESTION: Was there a discussion at all during today about just the general state of the global economy, or of the economies here?

SENIOR ADMINISTRATION OFFICIAL: I was not party to that – any such discussion.




SENIOR STATE DEPARTMENT OFFICIAL: Or the earlier plenary sessions?

QUESTION: During the TPP or --

SENIOR ADMINISTRATION OFFICIAL: Well, today's TPP meeting was really focused --


SENIOR ADMINISTRATION OFFICIAL: -- almost completely on TPP, but in the context of the importance of growth in this region, of regional integration, of this being a very important mechanism for achieving that integration.

There was discussion yesterday in the APEC leaders summit, which I attended, and Secretary Kerry attended sessions today, so I don't know what – whether it was discussed there. But yesterday there was also a discussion of global growth and, again, how the multilateral trading system fit into that.


QUESTION: Thank you.

SENIOR STATE DEPARTMENT OFFICIAL: Do you have one more? Okay, go ahead, go ahead.

QUESTION: An unnamed Indonesian official said that – sort of expressed a bit of irritation that TPP was stealing the limelight here, and that they basically moved the TPP negotiations out of the official venue, and that they didn't want more negotiations here in Bali in December. Is there any truth to any of that?

SENIOR ADMINISTRATION OFFICIAL: Well, I think the Indonesians have done a terrific job here at APEC, managing a very successful – not only the APEC leaders meeting, but a whole year of APEC-related activities. And I think it's been a tremendous success. And we're very hopeful that, come December, when they host the ministerial meeting here, the WTO ministerial meeting here, that that will also be very successful. So we work very closely with them on that, and obviously we're engaged also with the TPP countries here.

But we are very – have been very much involved and, really, across all of the U.S. Government. State Department, USTR play a leading role on engagement with APEC, but it involves a very broad agenda, and a lot of agencies, and we've been trying to be very supportive of the Indonesian agenda.

SENIOR STATE DEPARTMENT OFFICIAL: (Inaudible) actual last question.

QUESTION: Thank you. (Laughter.) Thanks, [Senior Administration Official.]

SENIOR ADMINISTRATION OFFICIAL: Is this the last question, or the last-before-the-last?

QUESTION: The penultimate (inaudible). Okay. Sorry.

I know that the statement says that you guys all believe you're on track to finish by the end of the year, but that is completely in contradiction to what the Malaysian minister said publicly and on television several times and in his press conference. So what I'm trying to understand is: Were certain assurances given to people like Malaysia and to – over Bumiputera and to Japan over agriculture? To certain parties were assurances given that something is going to be possible so that they can get on track at the end of the year? Or is there a possibility that there could be some deal at the end of the year that's a platform, and that other countries within the 12 could join once their issues are resolved?

SENIOR ADMINISTRATION OFFICIAL: Well, I haven't seen the specific comments of the Malaysian prime minister.

QUESTION: No, not prime minister, the trade minister --


QUESTION: Yeah, I can send them to you.

SENIOR ADMINISTRATION OFFICIAL: -- that you're referring to, there was a --

QUESTION: They said it's not possible.

SENIOR ADMINISTRATION OFFICIAL: Well, there was a very good discussion among leaders both about where we are in the negotiations, the progress that's been made, and the remaining issues that need to be addressed. And it is clear that there are a number of complex issues that need to be addressed. And as I said before, that's not atypical given where we are in the negotiations. As you enter the final stage, as you enter the endgame, those sorts of issues are the ones that are left, and do become the focus.

On the substance, every country will have issues of priority and issues of sensitivity. And Malaysia will have them and Japan will have them, the U.S. will have them. And the goal of the negotiation is to figure out how to establish the highest possible standard while addressing those issues.

So again, all I can say, again, is leaders affirm the objective of completing negotiations this year. I think there’s a recognition that’s an ambitious timetable, that there are complex issues that are – need to be dealt with, and they're beginning to focus on those. I'm sure that no country is going to sign on to an agreement that doesn't meet their interests just to meet a deadline, and that the substance of the negotiations will ultimately dictate the timetable.

QUESTION: But they can join the platform later, then, let's say 10 --

SENIOR ADMINISTRATION OFFICIAL: I didn't say that. I said we're focused -- all 12 are focused on --


SENIOR ADMINISTRATION OFFICIAL: -- the objective of completing the negotiations this year.

QUESTION: So if one has a problem, you hold it up until everyone is --

SENIOR ADMINISTRATION OFFICIAL: I didn't say that. I said all 12 are focused on the objective of completing the negotiations.

SENIOR STATE DEPARTMENT OFFICIAL: All right. Thanks, everyone.

PRN: 2013/T15-10