2nd LD Writethru: Pacific free trade talks fail to reach final deal

Trade representatives from 12 Pacific Rim countries on Friday failed to reach a final Trans-Pacific Partnership (TPP) deal that would cover about 40 percent of global economic output, with major sticking points remaining in the areas of market access and intellectual property.

"We have made significant progress" during this week's meeting, but there are still "a limited number" of difficult issues remaining to be resolved, U.S. Trade Representative Michael Froman said at a closing press conference after wrapping up four-day ministerial meeting here.

"Ministers and negotiators leave Hawaii committed to build on the momentum of this meeting by staying in close contact as negotiators continue their intensive engagement to find common ground," Froman said, adding that he is confident "we will be able to tackle the remaining issues successfully".

Dairy market access was one of the major obstacles in this week's intensive trade talks.

"You can see clearly that there are one or two really hard issues, and one of them is dairy," New Zealand Trade Minister Tim Groser said at the press conference, noting that negotiators have not reached a deal on the meaningful commercial market access of dairy products this week.

"In every negotiation that I've been involved over the last 30 years, dairy is always on the last issue to be resolved or one of the last two issues to be resolved because it is so distorted for so many years," Groser said, highlighting the difficulty of dealing with dairy market access.

As Canadian Prime Minister Stephen Harper faces re-election in October, Canada has been reluctant to significantly open its market to more dairy imports, which frustrated dairy producers in the United States, Australia and New Zealand.

But Canadian Trade Minister Ed Fast dismissed the speculation that the upcoming federal election would stall the trade talks. "When our partners reconvene...Canada will again be at the table as a constructive partner with a sincere desire to complete these negotiations," Fast said.

While the United States and Japan have said they are getting close to making a deal, the two biggest players in the TPP have not yet completed their bilateral market access negotiations of agriculture and autos, which is essential for the overall TPP negotiations to be concluded.

In terms of rules on the intellectual property rights, the big question of whether other TPP countries will agree to the U.S. demand for 12 years of data protection for biologic medicines is still up in the air, according to media reports.

Froman said trade ministers will continue to engage intensively in the coming period with the goal of resolving outstanding issues, but there's no date set yet as to when the next round of negotiations will be held to hammer out a deal.

Optimism has grown in recent weeks that this week's meeting could be the final round of negotiations on the broad TPP agreement after U.S. Congress granted the trade promotion authority, also known as the fast-track authority, to President Barack Obama.

That trade authority would allow the U.S. president to submit trade deals to Congress for an up-or-down vote without amendments, which is crucial for the swift congressional consideration of a TPP deal.

But trade negotiations at the final stages are always the most difficult, with no breakthrough reached among major sticking points in the TPP trade talks this week.

Failure to reach a deal in the coming weeks could raise questions about the Obama administration's ability to get the TPP deal passed in Congress before the 2016 U.S. presidential campaign heats up, as the U.S. president has to notify congress 90 days before signing a trade agreement, according to trade experts.

The TPP talks involve Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. Endi