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U.S. trade official says to seek TPP deal by year-end

(L-R) Mexico's President Felipe Calderon, Indonesia's President Susilo Bambang Yudhoyono, New Zealand's Prime Minister John Key, Russia's Pr
(L-R) Mexico's President Felipe Calderon, Indonesia's President Susilo Bambang Yudhoyono, New Zealand's Prime Minister John Key, Russia's Pr

By Randy Fabi and Lesley Wroughton

NUSA DUA, Indonesia (Reuters) - The United States maintained it hopes to seal an ambitious trade pact on schedule by year-end despite resistance in some countries and the absence of President Barack Obama from a regional summit that is ironing out differences on the pact.

U.S. Trade Representative Michael Froman said on Tuesday that world trade ministers may discuss the U.S.-proposed Trans-Pacific Partnership (TPP) on the sidelines of a World Trade Organization meeting that starts on December 3, with a goal of reaching a deal by year-end.

But several outstanding issues remain, he told reporters at the Asia-Pacific Economic Cooperation (APEC) summit on the Indonesian island of Bali, citing issues ranging from intellectual property to state-owned enterprises, labor and the environment. The WTO meeting will also be held on Bali.

The three-year-old TPP talks, now involving 12 nations, are aimed at establishing a free-trade bloc that would stretch from Vietnam to Chile to Japan, encompassing 800 million people, about a third of world trade and nearly 40 percent of the global economy.

A major goal of the Obama administration, the TPP would tear down trade barriers in areas such as government procurement and set standards for workers' rights, environmental protection and intellectual property rights.

Obama had hoped to settle the outstanding issues in discussions with other leaders at the APEC meeting but was forced to cancel his visit because of the fiscal standoff and partial government shutdown in Washington.

The TPP, by seeking unprecedented access to domestic markets, is proving highly sensitive in developing countries such as Malaysia and Vietnam, whose political systems could be shaken by intrusions in areas such as government procurement and state-owned enterprises.

Japanese news agency Kyodo said leaders of countries involved in the TPP negotiations, including Japan, will reiterate a pledge on Tuesday to conclude a deal within the year, saying they have made "significant progress" at the APEC summit.

The leaders' statement is unlikely to state the 12 TPP countries have agreed in principle on the pact but is expected instead to say they are "on track" to meet the envisioned deadline, Kyodo reported.

'NOT SUBSTANTIALLY FINISHED'

Proponents call the TPP, the most ambitious trade pact since the demise of the Doha round of global talks, a "high-standard" agreement to eliminate tariffs and tackle an unprecedented range of non-tariff barriers that restrict growth.

Obama has touted the deal by saying that 5,000 U.S. jobs are created for each extra $1 billion in exports created under the pact.

For the United States, the TPP would complement its shift of diplomatic and military resources to Asia to tap the region's fast growth and balance the growing influence of China, which has not joined the pact.

To its opponents, including a range of advocacy groups globally, the TPP represents an encroachment of U.S. economic might that gives big corporations unprecedented powers to challenge national policies in the name of free trade.

More intrusive than other trade pacts, the TPP seeks to regulate sensitive areas such as government procurement, intellectual property and the role of state-owned enterprises as well as giving corporations more rights to sue governments.

In TPP nations such as Malaysia, Japan, and Vietnam, reform-minded leaders are seen as using the pact as external leverage to break down vested interests and force liberalization of protected, inefficient sectors.

The Singapore Straits Times newspaper said a draft statement to be released on Tuesday shows that leaders will likely report that TPP talks are not "substantively finished".

(Reporting by Randy Fabi, Writing by Jason Szep, Editing by Raju Gopalakrishnan)

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