Kevin Krolicki http://blogs.reuters.com/kevin-krolicki Kevin Krolicki's Profile Tue, 06 Oct 2015 01:00:20 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.5 Historic Pacific trade deal faces skeptics in Congress http://www.reuters.com/article/2015/10/06/us-trade-tpp-idUSKCN0RZ0ZV20151006?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/kevin-krolicki/2015/10/06/historic-pacific-trade-deal-faces-skeptics-in-congress/#comments Tue, 06 Oct 2015 00:01:59 +0000 http://blogs.reuters.com/kevin-krolicki/?p=399 ATLANTA (Reuters) – Twelve Pacific Rim countries on Monday reached the most ambitious trade pact in a generation, aiming to liberalize commerce in 40 percent of the world’s economy in a deal that faces skepticism from U.S. lawmakers.

The Trans-Pacific Partnership (TPP) pact struck in Atlanta after marathon talks could reshape industries, change the cost of products from cheese to cancer treatments and have repercussions for drug companies and automakers.

Tired negotiators worked round the clock over the weekend to settle tough issues such as monopoly rights for new biotech drugs. New Zealand’s demand for greater access for its dairy exports was only settled at 5 a.m. EDT on Monday.

If approved, the TPP pact would cut trade barriers and set common standards for a region stretching from Vietnam to Canada. It would also furnish a legacy-shaping victory for U.S. President Barack Obama, who will further promote the agreement on Tuesday in remarks to business leaders in Washington.

The Obama administration hopes the pact will help the United States increase its influence in East Asia and help counter the rise of China, which is not one of the TPP nations.

Lawmakers in the United States and other TPP countries must approve the deal. Five years in the making, it would reduce or eliminate tariffs on almost 18,000 categories of goods.

Initial reaction from U.S. Congress members, including Democrats and Republicans, ranged from cautious to skeptical.

Vermont Senator Bernie Sanders, a Democratic presidential candidate, warned the pact would cost jobs and hurt consumers. “In the Senate, I will do all that I can to defeat the TPP agreement,” he tweeted.

Many of Obama’s Democrats, as well as labor groups, fear the TPP will cost manufacturing jobs and weaken environmental laws, while some Republicans oppose provisions to block tobacco companies from suing governments over anti-smoking measures.

Senator Orrin Hatch, a powerful Republican who heads the Senate Finance Committee, was wary. “I am afraid this deal appears to fall woefully short,” said Hatch, who had urged the administration to hold the line on intellectual property protections, including for drugs.

U.S. lawmakers have the power to review the agreement and cast an up-or-down vote, but not amend it.

“This is really a 2016 issue for Congress to consider, not a 2015 issue,” U.S. Trade Representative Michael Froman said.

CURRENCY, DRUGS, DAIRY, AUTO POLICIES

Ministers said the agreement will include a forum for finance ministers from participating countries to discuss currency policy principles. This takes into account, in part, concerns among U.S. manufacturers and critics who suggest Japan has unfairly driven the yen lower to the benefit of its car exporters and other companies.

But Democratic Representative Debbie Dingell from Michigan, home of the U.S. auto industry, said currency has not been fully dealt with. “Nothing that we have heard indicates negotiators sufficiently addressed these issues,” she said in a statement.

The United States and Australia negotiated a compromise on the minimum period of protection to the rights for data used to make biologic drugs. Companies such as Pfizer Inc, Roche Group’s Genentech and Japan’s Takeda Pharmaceutical Co could be affected.

Negotiators agreed on terms that fell short of what the United States had sought. Under the deal, countries would give drugmakers at least five years of exclusive access to the clinical data used to win approval for new drugs. An additional several years of regulatory review would likely mean drug companies would have an effective monopoly for about eight years before facing lower-cost, generic competition.

Politically charged dairy farming issues were addressed in the final hours of talks. New Zealand, home to the world’s biggest dairy exporter, Fonterra, wanted increased access to U.S., Canadian and Japanese markets.

New Zealand Prime Minister John Key said the deal would cut tariffs on 93 percent of New Zealand’s exports to the United States, Japan, Canada, Mexico and Peru. “We’re disappointed there wasn’t agreement to eliminate all dairy tariffs but overall it’s a very good deal for New Zealand,” Key said.

The United States, Mexico, Canada and Japan agreed to auto trade rules on how much of a vehicle must be made within the TPP region to qualify for duty-free status.

The TPP would give Japan’s automakers, led by Toyota MotorCorp, a freer hand to buy parts from Asia for vehicles sold in the United States, but sets 25-30 year phase-out periods for U.S. tariffs on Japanese cars and light trucks.

The deal between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam also sets minimum standards on issues ranging from workers’ rights to environmental protection.

Trade ministers said the TPP would be open to other countries in the future, including potentially China.

“There is a real opportunity for China to be a part of this,” Malaysian Trade Minister Mustapa Mohamed said.

(Writing by Alistair Bell; Additional reporting by Richard Cowan in Washington, Ana Isabel Martinez in Mexico City and Cecile Lefort in Wellington; Editing by Kevin Drawbaugh, Meredith Mazzilli and Ken Wills)

]]>
http://blogs.reuters.com/kevin-krolicki/2015/10/06/historic-pacific-trade-deal-faces-skeptics-in-congress/feed/ 0
Historic Pacific trade deal faces sceptics in U.S. Congress http://uk.reuters.com/article/2015/10/06/uk-trade-tpp-idUKKCN0RZ1RP20151006?feedType=RSS&feedName=everything&virtualBrandChannel=11708 http://blogs.reuters.com/kevin-krolicki/2015/10/06/historic-pacific-trade-deal-faces-sceptics-in-u-s-congress/#comments Tue, 06 Oct 2015 00:01:29 +0000 http://blogs.reuters.com/kevin-krolicki/?p=401 ATLANTA (Reuters) – Twelve Pacific Rim countries on Monday reached the most ambitious trade pact in a generation, aiming to liberalize commerce in 40 percent of the world’s economy in a deal that faces scepticism from U.S. lawmakers.

The Trans-Pacific Partnership (TPP) pact struck in Atlanta after marathon talks could reshape industries, change the cost of products from cheese to cancer treatments and have repercussions for drug companies and automakers.

Tired negotiators worked round the clock over the weekend to settle tough issues such as monopoly rights for new biotech drugs. New Zealand’s demand for greater access for its dairy exports was only settled at 5 a.m. EDT (0900 GMT) on Monday.

If approved, the TPP pact would cut trade barriers and set common standards for a region stretching from Vietnam to Canada. It would also furnish a legacy-shaping victory for U.S. President Barack Obama, who will further promote the agreement on Tuesday in remarks to business leaders in Washington.

The Obama administration hopes the pact will help the United States increase its influence in East Asia and help counter the rise of China, which is not one of the TPP nations.

Lawmakers in the United States and other TPP countries must approve the deal. Five years in the making, it would reduce or eliminate tariffs on almost 18,000 categories of goods.

Initial reaction from U.S. Congress members, including Democrats and Republicans, ranged from cautious to sceptical.

Vermont Senator Bernie Sanders, a Democratic presidential candidate, warned the pact would cost jobs and hurt consumers. “In the Senate, I will do all that I can to defeat the TPP agreement,” he tweeted.

Many of Obama’s Democrats, as well as labour groups, fear the TPP will cost manufacturing jobs and weaken environmental laws, while some Republicans oppose provisions to block tobacco companies from suing governments over anti-smoking measures.

Senator Orrin Hatch, a powerful Republican who heads the Senate Finance Committee, was wary. “I am afraid this deal appears to fall woefully short,” said Hatch, who had urged the administration to hold the line on intellectual property protections, including for drugs.

U.S. lawmakers have the power to review the agreement and cast an up-or-down vote, but not amend it.

“This is really a 2016 issue for Congress to consider, not a 2015 issue,” U.S. Trade Representative Michael Froman said.

CURRENCY, DRUGS, DAIRY, AUTO POLICIES

Ministers said the agreement will include a forum for finance ministers from participating countries to discuss currency policy principles. This takes into account, in part, concerns among U.S. manufacturers and critics who suggest Japan has unfairly driven the yen lower to the benefit of its car exporters and other companies.

But Democratic Representative Debbie Dingell from Michigan, home of the U.S. auto industry, said currency has not been fully dealt with. “Nothing that we have heard indicates negotiators sufficiently addressed these issues,” she said in a statement.

The United States and Australia negotiated a compromise on the minimum period of protection to the rights for data used to make biologic drugs. Companies such as Pfizer Inc (PFE.N: Quote, Profile, Research), Roche Group’s Genentech and Japan’s Takeda Pharmaceutical Co (4502.T: Quote, Profile, Research) could be affected.

Negotiators agreed on terms that fell short of what the United States had sought. Under the deal, countries would give drugmakers at least five years of exclusive access to the clinical data used to win approval for new drugs. An additional several years of regulatory review would likely mean drug companies would have an effective monopoly for about eight years before facing lower-cost, generic competition.

Politically charged dairy farming issues were addressed in the final hours of talks. New Zealand, home to the world’s biggest dairy exporter, Fonterra (FCG.NZ: Quote, Profile, Research), wanted increased access to U.S., Canadian and Japanese markets.

New Zealand Prime Minister John Key said the deal would cut tariffs on 93 percent of New Zealand’s exports to the United States, Japan, Canada, Mexico and Peru. “We’re disappointed there wasn’t agreement to eliminate all dairy tariffs but overall it’s a very good deal for New Zealand,” Key said.

The United States, Mexico, Canada and Japan agreed to auto trade rules on how much of a vehicle must be made within the TPP region to qualify for duty-free status.

The TPP would give Japan’s automakers, led by Toyota MotorCorp (7203.T: Quote, Profile, Research), a freer hand to buy parts from Asia for vehicles sold in the United States, but sets 25-30 year phase-out periods for U.S. tariffs on Japanese cars and light trucks.

The deal between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam also sets minimum standards on issues ranging from workers’ rights to environmental protection.

Trade ministers said the TPP would be open to other countries in the future, including potentially China.

“There is a real opportunity for China to be a part of this,” Malaysian Trade Minister Mustapa Mohamed said.

(Writing by Alistair Bell; Additional reporting by Richard Cowan in Washington, Ana Isabel Martinez in Mexico City and Cecile Lefort in Wellington; Editing by Kevin Drawbaugh, Meredith Mazzilli and Ken Wills)

]]>
http://blogs.reuters.com/kevin-krolicki/2015/10/06/historic-pacific-trade-deal-faces-sceptics-in-u-s-congress/feed/ 0
Pacific trade negotiators reach landmark deal, fight over approval looms http://uk.reuters.com/article/2015/10/05/uk-trade-tpp-idUKKCN0RZ1RP20151005?feedType=RSS&feedName=everything&virtualBrandChannel=11708 http://blogs.reuters.com/kevin-krolicki/2015/10/05/pacific-trade-negotiators-reach-landmark-deal-fight-over-approval-looms/#comments Mon, 05 Oct 2015 15:45:05 +0000 http://blogs.reuters.com/kevin-krolicki/?p=397 ATLANTA (Reuters) – The United States and 11 other Pacific Rim countries have reached a deal on the most sweeping trade liberalisation pact in a generation but the accord on Monday faced initial scepticism in the U.S. Congress.

In a deal that could reshape industries and influence everything from the price of cheese to the cost of cancer treatments, the 12 countries will cut trade barriers and set common standards. Details of the pact were emerging in statements by officials after days of marathon negotiations in Atlanta.

The Trans-Pacific Partnership would affect 40 percent of the world economy and stand as a legacy-defining achievement for U.S. President Barack Obama, if it is ratified by Congress. Lawmakers in other TPP countries must also approve the deal.

Initial reaction from key U.S. lawmakers was sceptical.

Vermont Senator Bernie Sanders, a U.S. Democratic presidential candidate, said he was disappointed and warned the pact would cost U.S. jobs and hurt consumers.

“Wall Street and other big corporations have won again,” he said in a statement, vowing to “do all that I can to defeat this agreement” in Congress.

Senate Finance Committee Chairman Orrin Hatch, a Republican, said he feared the TPP could fail to break down trade barriers for American-made products.

“While the details are still emerging, unfortunately I am afraid this deal appears to fall woefully short,” Hatch said.

The TPP has been controversial because of the secret negotiations that have shaped it over the past five years and the perceived threat to interest groups from Mexican auto workers to Canadian dairy farmers.

Obama said the pact will “level the playing field” for American workers and businesses and added that Americans would have months to read the deal before he signs it into law.

BIOTECH COMPROMISE

The trade talks had snared on the question of how long a monopoly period should be allowed on next-generation biotech drugs, until the United States and Australia negotiated a compromise.

Although the complex deal sets tariff reduction schedules on hundreds of imported items from pork and beef in Japan to pickup trucks in the United States, the issue of the length of the monopolies awarded to the developers of new biological drugs had threatened to derail talks until the end.

Negotiating teams had been deadlocked over the question of the minimum period of protection to the rights for data used to make biologic drugs, made by companies including Pfizer Inc, Roche Group’s Genentech and Japan’s Takeda Pharmaceutical Co.

The United States had sought 12 years of protection to encourage pharmaceutical companies to invest in expensive biological treatments like Genentech’s cancer treatment Avastin. Australia, New Zealand and public health groups had sought a period of five years to reduce drug costs and the burden on state-subsidized medical programs.

Negotiators agreed on a compromise on minimum terms that was short of what U.S. negotiators had originally sought and that through a two-track process would effectively grant biologic drugs a minimum period of 5 years and up to a minimum of 8 years, aiming to achieve a comparable outcome across both tracks, free from the threat of competition from generic versions.

A politically charged set of issues surrounding protections for dairy farmers was also addressed in the final hours of talks, officials said. New Zealand, home to the world’s biggest dairy exporter, Fonterra, wanted increased access to U.S., Canadian and Japanese markets.

Separately, the United States, Mexico, Canada and Japan agreed rules governing the auto trade that dictate how much of a vehicle must be made within the TPP region in order to qualify for duty-free status.

The North American Free Trade Agreement between Canada, the United States and Mexico mandates that vehicles have a local content of 62.5 percent. The way that rule is implemented means that just over half of a vehicle needs to be manufactured locally. It has been credited with driving a boom in auto-related in investment in Mexico.

The TPP would give Japan’s automakers, led by Toyota MotorCorp, a freer hand to buy parts from Asia for vehicles sold in the United States but sets long phase-out periods for U.S. tariffs on Japanese cars and light trucks.

The deal being readied for expected announcement on Monday also provides minimum standards on issues ranging from workers’ rights to environmental protection and sets up dispute settlement guidelines between governments and foreign investors separate from national courts.

(Reporting by Krista Hughes and Kevin Krolicki; Additional reporting by Alistair Bell in Washington and Ana Isabel Martinez in Mexico City; Editing by Meredith Mazzilli)

]]>
http://blogs.reuters.com/kevin-krolicki/2015/10/05/pacific-trade-negotiators-reach-landmark-deal-fight-over-approval-looms/feed/ 0
Pacific trade negotiators reach landmark deal, fight for approval to follow http://www.reuters.com/article/2015/10/05/trade-tpp-idUSL3N1252R620151005?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/kevin-krolicki/2015/10/05/pacific-trade-negotiators-reach-landmark-deal-fight-for-approval-to-follow/#comments Mon, 05 Oct 2015 12:18:11 +0000 http://blogs.reuters.com/kevin-krolicki/?p=395 ATLANTA, Oct 5 (Reuters) – Pacific trade ministers have
reached a deal on the most sweeping trade liberalization pact in
a generation that will cut trade barriers and set common
standards for 12 countries, an official familiar with the talks
said on Monday.

Leaders from a dozen Pacific Rim nations are poised to
announce the pact later on Monday. The deal could reshape
industries and influence everything from the price of cheese to
the cost of cancer treatments.

The Trans-Pacific Partnership would affect 40 percent of the
world economy and would stand as a legacy-defining achievement
for U.S. President Barack Obama, if it is ratified by Congress.

Lawmakers in other TPP countries must also approve the deal.

The final round of negotiations in Atlanta, which began on
Wednesday, had snared on the question of how long a monopoly
period should be allowed on next-generation biotech drugs, until
the United States and Australia negotiated a compromise.

The TPP deal has been controversial because of the secret
negotiations that have shaped it over the past five years and
the perceived threat to an array of interest groups from Mexican
auto workers to Canadian dairy farmers.

Although the complex deal sets tariff reduction schedules on
hundreds of imported items from pork and beef in Japan to pickup
trucks in the United States, one issue had threatened to derail
talks until the end – the length of the monopolies awarded to
the developers of new biological drugs.

Negotiating teams had been deadlocked over the question of
the minimum period of protection to the rights for data used to
make biologic drugs, made by companies including Pfizer Inc
, Roche Group’s Genentech and Japan’s Takeda
Pharmaceutical Co.

The United States had sought 12 years of protection to
encourage pharmaceutical companies to invest in expensive
biological treatments like Genentech’s cancer treatment Avastin.
Australia, New Zealand and public health groups had sought a
period of five years to bring down drug costs and the burden on
state-subsidized medical programs.

Negotiators agreed on a compromise on minimum terms that was
short of what U.S. negotiators had sought and that would
effectively grant biologic drugs a period of about years free
from the threat of competition from generic versions, people
involved in the closed-door talks said.

The Washington, D.C.-based Biotechnology Industry
Association said it was “very disappointed” by reports that U.S.
negotiators had not been able to convince Australia and other
TPP members to adopt the 12-year standard approved by Congress.

“We will carefully review the entire TPP agreement once the
text is released by the ministers,” the industry lobby said in a
statement.

FINAL HOURS

A politically charged set of issues surrounding protections
for dairy farmers was also addressed in the final hours of
talks, officials said. New Zealand, home to the world’s biggest
dairy exporter, Fonterra, wanted increased access to
U.S., Canadian and Japanese markets.

Separately, the United States, Mexico, Canada and Japan also
agreed rules governing the auto trade that dictate how much of a
vehicle must be made within the TPP region in order to qualify
for duty-free status.

The North American Free Trade Agreement between Canada, the
United States and Mexico mandates that vehicles have a local
content of 62.5 percent. The way that rule is implemented means
that just over half of a vehicle needs to be manufactured
locally. It has been credited with driving a boom in
auto-related in investment in Mexico.

The TPP would give Japan’s automakers, led by Toyota Motor
Corp, a freer hand to buy parts from Asia for vehicles
sold in the United States but sets long phase-out periods for
U.S. tariffs on Japanese cars and light trucks.

The TPP deal being readied for expected announcement on
Monday also sets minimum standards on issues ranging from
workers’ rights to environmental protection. It also sets up
dispute settlement guidelines between governments and foreign
investors separate from national courts.

(Reporting by Krista Hughes and Kevin Krolicki; Additional
reporting by Ana Isabel Martinez in Mexico City; Editing by Will
Waterman and Chizu Nomiyama)

]]>
http://blogs.reuters.com/kevin-krolicki/2015/10/05/pacific-trade-negotiators-reach-landmark-deal-fight-for-approval-to-follow/feed/ 0
Pacific trade negotiators close in on landmark deal, fight for approval to follow http://www.reuters.com/article/2015/10/05/us-trade-tpp-idUSKCN0RZ0ZV20151005?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/kevin-krolicki/2015/10/05/pacific-trade-negotiators-close-in-on-landmark-deal-fight-for-approval-to-follow/#comments Mon, 05 Oct 2015 10:45:42 +0000 http://blogs.reuters.com/kevin-krolicki/?p=393 ATLANTA (Reuters) – A dozen Pacific Rim nations prepared on Monday to announce the most sweeping trade liberalization pact in a generation, a deal that could reshape industries and influence everything from the price of cheese to the cost of cancer treatments.

The Trans-Pacific Partnership seeks to cut trade barriers and set common standards for 40 percent of the world economy and would stand as a legacy-defining achievement for U.S. President Barack Obama, if it is ratified by Congress.

Lawmakers in other TPP countries must also approve the deal.

The final round of negotiations in Atlanta, which began on Wednesday, had snared on the question of how long a monopoly period should be allowed on next-generation biotech drugs, until the United States and Australia negotiated a compromise.

The TPP deal has been controversial because of the secret negotiations that have shaped it over the past five years and the perceived threat to an array of interest groups from Mexican auto workers to Canadian dairy farmers.

Although the complex deal sets tariff reduction schedules on hundreds of imported items from pork and beef in Japan to pickup trucks in the United States, one issue had threatened to derail talks until the end – the length of the monopolies awarded to the developers of new biological drugs.

Negotiating teams had been deadlocked over the question of the minimum period of protection to the rights for data used to make biologic drugs, made by companies including Pfizer Inc, Roche Group’s Genentech and Japan’s Takeda Pharmaceutical Co.

The United States had sought 12 years of protection to encourage pharmaceutical companies to invest in expensive biological treatments like Genentech’s cancer treatment Avastin. Australia, New Zealand and public health groups had sought a period of five years to bring down drug costs and the burden on state-subsidized medical programs.

Negotiators agreed on a compromise on minimum terms that was short of what U.S. negotiators had sought and that would effectively grant biologic drugs a period of about years free from the threat of competition from generic versions, people involved in the closed-door talks said.

The Washington, D.C.-based Biotechnology Industry Association said it was “very disappointed” by reports that U.S. negotiators had not been able to convince Australia and other TPP members to adopt the 12-year standard approved by Congress.

“We will carefully review the entire TPP agreement once the text is released by the ministers,” the industry lobby said in a statement.

FINAL HOURS

A politically charged set of issues surrounding protections for dairy farmers was also addressed in the final hours of talks, officials said. New Zealand, home to the world’s biggest dairy exporter, Fonterra, wanted increased access to U.S., Canadian and Japanese markets.

Separately, the United States, Mexico, Canada and Japan also agreed rules governing the auto trade that dictate how much of a vehicle must be made within the TPP region in order to qualify for duty-free status.

The North American Free Trade Agreement between Canada, the United States and Mexico mandates that vehicles have a local content of 62.5 percent. The way that rule is implemented means that just over half of a vehicle needs to be manufactured locally. It has been credited with driving a boom in auto-related in investment in Mexico.

The TPP would give Japan’s automakers, led by Toyota MotorCorp, a freer hand to buy parts from Asia for vehicles sold in the United States but sets long phase-out periods for U.S. tariffs on Japanese cars and light trucks.

The TPP deal being readied for expected announcement on Monday also sets minimum standards on issues ranging from workers’ rights to environmental protection. It also sets up dispute settlement guidelines between governments and foreign investors separate from national courts.

(Reporting by Krista Hughes and Kevin Krolicki; Additional reporting by Ana Isabel Martinez in Mexico City; Editing by Will Waterman)

]]>
http://blogs.reuters.com/kevin-krolicki/2015/10/05/pacific-trade-negotiators-close-in-on-landmark-deal-fight-for-approval-to-follow/feed/ 0
Japan demands U.S. find drugs compromise in Pacific trade talks http://www.reuters.com/article/2015/10/03/us-trade-tpp-idUSKCN0RX0NB20151003?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/kevin-krolicki/2015/10/03/japan-demands-u-s-find-drugs-compromise-in-pacific-trade-talks/#comments Sat, 03 Oct 2015 18:03:28 +0000 http://blogs.reuters.com/kevin-krolicki/?p=391 ATLANTA (Reuters) – Japan called on the United States to find a way to break a deadlock over protections for next-generation medicines on Saturday as talks on a sweeping trade pact were extended for another 24 hours.

Negotiators have been up all night trying to broker a deal on the 12-nation Trans-Pacific Partnership, which will create a free trade zone covering 40 percent of the world economy.

A push by the United States to set a longer period of exclusivity for drug makers who develop biological drugs like Genentech’s Avastin cancer-treatment has run into opposition from other TPP economies and is holding up a broader deal.

Japanese Economy Minister Akira Amari said he had agreed to a U.S. request to stay on in the southern city of Atlanta for another 24 hours, but said the United States had to find a way forward on biologics.

“I said there were two conditions for us to accept that proposal: first, this would be the last chance, in other words there had to be certainty of getting a deal on pharmaceuticals; second, because of the schedule, Japan could not accept any further extension,” Amari told reporters.

The United States allows pharmaceutical companies an exclusive period of 12 years to use clinical data behind the approval for a new biological drug.

The Obama administration had previously proposed lowering that threshold to seven years but has pushed a proposal for an eight-year minimum in the TPP talks in Atlanta.

Australia, along with others such as New Zealand and Chile, have been unwilling to offer more than five years protection for the medicines since longer terms will push up the cost of state-subsidized medical programs.

Drug companies argue that a longer period is needed to create an incentive for developing treatments for diseases such as cancer and arthritis.

The impasse is holding up a deal on dairy trade, the main other sticking point in the talks. New Zealand, home to the world’s biggest dairy exporter Fonterra (FCG.NZ: Quote, Profile, Research, Stock Buzz), is insisting on increased access to U.S., Canadian and Japanese markets.

Canadian Prime Minister Stephen Harper, whose party faces a general election later this month, said the talks had made progress.

“Let me assure everyone that we will only conclude a deal that is in the best interests of our country,” he told reporters in Montreal.

Harper’s Conservatives are on course to win the most seats in the Oct. 19 election but may lose their majority, and the main opposition party has said it would not feel itself bound by any TPP deal that Harper negotiated.

Canada’s parliament also would have to approve any TPP pact.

TPP trade ministers, most of whom arrived in Atlanta on Wednesday, had initially hoped to wrap up talks by Thursday.

(Additional reporting by Krista Hughes and Ana Isabell Martinez in Atlanta and David Ljunggren in Montreal; Editing by Raissa Kasolowsky)

]]>
http://blogs.reuters.com/kevin-krolicki/2015/10/03/japan-demands-u-s-find-drugs-compromise-in-pacific-trade-talks/feed/ 0
Pacific trade ministers vow to reach deal but extra time needed http://www.reuters.com/article/2015/10/02/trade-tpp-idUSL1N12133R20151002?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/kevin-krolicki/2015/10/02/pacific-trade-ministers-vow-to-reach-deal-but-extra-time-needed/#comments Fri, 02 Oct 2015 01:16:15 +0000 http://blogs.reuters.com/kevin-krolicki/?p=387 ATLANTA, Oct 1 (Reuters) – Trade ministers from a dozen
Pacific nations meeting in Atlanta extended talks on a sweeping
trade deal until Saturday in a bid to get a final agreement on
the most ambitious trade pact in a generation.

Officials extended talks originally scheduled to wrap up on
Thursday in a determined effort to produce a breakthrough on the
Trans-Pacific Partnership., which would liberalize trade in 40
percent of the world economy for a region stretching from
Vietnam to Canada.

“No-one wants to leave without an agreement,” Mexican
Economy Minister Ildefonso Guajardo told Reuters after a second
plenary session of top officials from all 12 nations. “The good
news is that we will not leave here without one.”

Observers pointed to progress on autos, Canada’s pledge to
compensate farmers hurt by imports and signs of a possible
compromise on patent protection for new drugs as evidence of
advancement.

“We are starting to see the path to an agreement and have
agreed to make final efforts,” Japanese Economy Minister Akira
Amari told reporters, although conditions were still difficult.

Several officials said a final deal could come quickly if
key issues — intellectual property protection for medicines and
trade in dairy and autos — are cleared in remaining talks.

The alternative would be for ministers to try to reconvene
in November, although that risked losing momentum in a process
that has already run five years.

A deal would be a legacy-defining achievement for U.S.
President Barack Obama. But the trade deal is seen as a threat
by an array of interest groups from Mexican auto workers to
Quebec dairy farmers to cancer patients who worry that it could
push the cost of new therapies out of reach.

CONGRESSIONAL CONCERNS

In a reassertion of concern in Congress, a group of U.S.
lawmakers from both parties sent a letter to U.S. Trade
Representative Michael Froman and Treasury Secretary Jack Lew on
Wednesday.

“We urge you to take the time necessary to get the best deal
possible for the United States, working closely with us,” said
the letter signed by House Ways and Means Committee Chairman
Paul Ryan and Senate Finance Committee Chairman Orrin Hatch as
well as the senior Democrats on those two committees.

Several Republicans attacked a new U.S. proposal to ensure
governments would be free to enact anti-smoking measures without
fear of legal action by tobacco companies.

That could prevent companies like Philip Morris and
Japan Tobacco Inc from using rules to protect foreign
investors to challenge public health measures but falls short of
the sweeping measure anti-smoking groups had hoped for.

Guajardo said talks on auto trade had progressed but were
not over yet.

The auto issue is crucial for Japan, whose automakers, led
by Toyota Motor Corp, depend on sales to the U.S.
market and want flexibility on sourcing auto parts.

But Mexico, which has experienced a boom in auto-related
investment over the last two decades, wants to protect its
manufacturers against increased competition from Asia.

(Additional reporting by Krista Hughes in Atlanta and Susan
Cornwell in Washington; Editing by Bernard Orr and Diane Craft)

]]>
http://blogs.reuters.com/kevin-krolicki/2015/10/02/pacific-trade-ministers-vow-to-reach-deal-but-extra-time-needed/feed/ 0
Pacific trade talks step closer to clearing auto parts hurdle http://www.reuters.com/article/2015/10/01/us-trade-tpp-idUSKCN0RU2XR20151001?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/kevin-krolicki/2015/10/01/pacific-trade-talks-step-closer-to-clearing-auto-parts-hurdle/#comments Thu, 01 Oct 2015 04:35:45 +0000 http://blogs.reuters.com/kevin-krolicki/?p=385 ATLANTA (Reuters) – Negotiators trying to clinch a Pacific Rim free trade deal made headway on Wednesday over how to remove a stumbling block and give automakers a freer hand to sell cars in the United States with more parts purchased in Asia.

People briefed on the closed-door talks said Canada and Mexico signaled a willingness to open the North American auto market to more parts made in Asia, one of the key hurdles to sealing a broader deal on the Trans-Pacific Partnership.

The TPP seeks to cut trade barriers and set common standards among a dozen nations reaching from Japan to Chile, but talks have become snared over a small set of issues, including dairy trade and patent periods for biologic drugs.

Japan has pushed hard during talks in Atalanta for a deal on auto parts, a crucial issue for Japananese carmakers, led by Toyota Motor Corp, who depend on sales to the U.S. market and want flexibility in how and where they source parts.

“We have to head into this with the expectation that we can wrap things up,” Japanese Economy Minister Akira Amari was quoted by Japanese media as saying.

Australian Trade Minister Andrew Robb said ministers meeting on Wednesday had detailed remaining issues.

“There’s an intent there. We are now swapping different versions of possible outcomes, but we have got a lot to do,” Robb told Reuters after the plenary session on the TPP.

An earlier round of talks in July had failed after Mexican officials objected to a proposal by Japan and the United States on autos concerning the “rules of origin” that determine whether a vehicle can be exported without tariffs.

In Atlanta, officials from Mexico and Canada were aiming for a 45-percent threshold for local content on vehicles, two people briefed on the talks said.

If it becomes part of the final trade deal, it would mean more than half of a vehicle could be sourced from outside the 12 countries participating in the TPP and still be sold in the United States – the bloc’s largest market – without tariffs.

Separately, Japan was pushing for a local sourcing threshold of 32.5 percent for individual auto parts, the people briefed on the talks said.

Those thresholds would be below the two-decade old North American Free Trade Agreement rules which have been credited with driving the auto industry boom in Mexico.

Ministers will meet again on Thursday but no deal is seen likely before Friday.

Monopoly periods for next-generation biologics drugs remain an unresolved issue.

Protestors gathered outside the talks on Tuesday to protest trade rules which could mean longer delays in bringing generic versions of such drugs to market for some TPP countries.

“Even one year’s delay in affordable treatment can be a death sentence,” said breast cancer patient Zahara Heckscher. Heckscher was later taken away in handcuffs by local police when she refused to leave the venue in downtown Atlanta without seeing a draft of the TPP text.

New Zealand Prime Minister John Key said the pact could be scuppered if negotiations were to drag on.

Speaking at the Asia Society in New York City, Key said New Zealand, home to the world’s largest dairy exporter Fonterra, was still not happy with dairy market access.

With presidential elections in the United States set for November 2016 and some opposition in Congress to the deal, time is of the essence to complete the agreement, which become part of President Barack Obama’s legacy.

“The window of opportunity to complete TPP is closing so you wouldn’t say it’s impossible to complete the deal if it doesn’t take place in Atlanta, but it does become more difficult,” Key said.

TPP leaders are scheduled to meet at an Asia-Pacific Economic Cooperation summit in the Philippines in mid-November, which Key said was “probably the last opportunity for 2015″ to close the trade deal.

(Additional reporting by David Brunnstrom in New York; Writing by Krista Hughes; Editing by Toni Reinhold and Simon Cameron-Moore)

]]>
http://blogs.reuters.com/kevin-krolicki/2015/10/01/pacific-trade-talks-step-closer-to-clearing-auto-parts-hurdle/feed/ 0
Japan’s wary manufacturers resist Abe’s urge to splurge http://www.reuters.com/article/2015/04/05/us-japan-capex-idUSKBN0MW00B20150405?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/kevin-krolicki/2015/04/05/japans-wary-manufacturers-resist-abes-urge-to-splurge/#comments Sun, 05 Apr 2015 01:06:22 +0000 http://blogs.reuters.com/kevin-krolicki/?p=383 KUSATSU, Japan (Reuters) – Hirotoshi Ogura, a self-described “factory geek”, is Daikin Industries’ (6367.T: Quote, Profile, Research, Stock Buzz) master of doing more with less – and part of the reason Japan’s recovery remains stuck in the slow lane.

As Japan heads into the season of peak demand for room air-conditioners, Ogura and other Daikin managers have been tasked with figuring out how to boost output by some 20 percent at a plant in western Japan that six years ago the company had almost given up on as unprofitable.

The wrinkle: they have no budget for new capital investment at the 45-year-old Kusatsu plant. The still-evolving workaround shown to a recent visitor involves home-made robots for ferrying parts, experimental systems using gravity rather than electricity to power parts of the line, more temporary workers on seasonal contracts and dozens of steps to chip away at the 1.63 hours it takes to make a typical new air conditioner.

“We can do a lot without spending anything,” says Ogura, a 33-year Daikin veteran who joined the company just after high school. “Anything we need, we first try to build ourselves.”

Like Daikin, a number of Japanese manufacturers are shifting production back to Japan from China and elsewhere to take advantage of a weaker yen. Rival Panasonic (6752.T: Quote, Profile, Research, Stock Buzz) has pulled back some production of room air-conditioners, Sharp (6753.T: Quote, Profile, Research, Stock Buzz) has brought back production of some refrigerators, and Canon (7751.T: Quote, Profile, Research, Stock Buzz) has repatriated some output of high-end copiers, according to a list compiled by Nomura.

But even as output recovers, Japanese companies remain cautious about new capital investment in factories and equipment. The trend is especially pronounced for smaller firms down the supply chain.

After increasing capital spending by 6 percent in the just-completed fiscal year, small manufacturers plan a 14 percent decrease in the current year, according to the Bank of Japan’s quarterly survey released this week. Big manufacturers like Daikin plan a 5 percent increase, but overall investment remains 10 percent below pre-crisis 2007 levels.

Over the same time, corporate earnings have increased by 11 percent, shares have rallied – Daikin’s are up more than four-fold from its 2008 low – and Japanese companies have socked away a record 87 trillion yen ($730 billion) in cash.

NO MOOD FOR RISK

For Prime Minister Shinzo Abe’s economic revival plan to work, pulling Japan out of decades of stagnation and deflation, companies need to be willing to use that cash for new investment in a way they have so far baulked at in the more than two years since he took office, economists say.

“It turned out that the government and the BOJ were wrong in thinking monetary easing would boost capital spending,” said Taro Saito, director of economic research at NLI Research Institute. “Low growth expectations appear to outweigh the benefit from lower interest rates, keeping companies from boosting capital spending.”

For Daikin, there is a wariness that the slumping demand and sharply higher yen that almost forced the closure of the Kusatsu plant in 2009 could return at any time. Sales in Japan represent just 25 percent of Daikin’s air-conditioning sales now, down from over a third in 2009.

But managers also say the lean years have forced the company to innovate at its four home factories, a theme mirrored at Daikin’s production mentor, Toyota Motor (7203.T: Quote, Profile, Research, Stock Buzz).

At the urging of Toyota president Akio Toyoda, Japan’s top automaker last week unveiled the results of a five-year-old program to re-engineer the way it makes cars to cut the costs of retooling existing factories and building new ones.

Already running its factories at 90 percent of capacity, Toyota expects to be able to cut the cost to retool an existing production line for a new model by half of what it cost in 2009 and cut the investment needed for the new plants it is planning for Mexico and China by 40 percent from earlier levels.

Like Daikin, the savings at Toyota will come by a thousand cuts, from smaller and more efficient paint booths to a faster and more flexible robot welding system that will also be installed at factories in Japan.

Atsushi Takeda, chief economist for the Itochu Economic Research Institute, said there was not much Abe’s government could do to shake companies out of their caution, apart from cutting regulations and encouraging new industries, areas where progress has been slow. Most Japanese companies still see better growth outside Japan and are investing accordingly.

“Companies were so hard hit by the excessive yen strength after the Lehman shock they want to be convinced there won’t be a reversal of the weak yen over the next five to 10 years,” Takeda said. “They are in no mood to take risk.”

($1 = 119.6800 yen)

(Editing by Will Waterman)

]]>
http://blogs.reuters.com/kevin-krolicki/2015/04/05/japans-wary-manufacturers-resist-abes-urge-to-splurge/feed/ 0
Exclusive: Japan tax agency, Hong Kong join FBI in reviewing Universal casino payments – sources http://www.reuters.com/article/2015/03/19/us-universal-casino-probes-idUSKBN0MF2II20150319?feedType=RSS&feedName=everything&virtualBrandChannel=11563 http://blogs.reuters.com/kevin-krolicki/2015/03/19/exclusive-japan-tax-agency-hong-kong-join-fbi-in-reviewing-universal-casino-payments-sources/#comments Thu, 19 Mar 2015 20:09:08 +0000 http://blogs.reuters.com/kevin-krolicki/?p=381 TOKYO/BILOXI, Mississippi (Reuters) – Japan’s tax authorities have begun a review of how slot machine maker and casino developer Universal Entertainment (6425.T: Quote, Profile, Research, Stock Buzz) accounted for $40 million in payments made in 2010 to an associate of the Philippines’ top gambling regulator at that time, people with knowledge of the matter told Reuters.

Separately, the payments are also a focus of a previously undisclosed criminal investigation by Hong Kong’s Independent Commission Against Corruption, sources said. The ICAC has become involved because the transfers under review passed through bank accounts based in Hong Kong, those people said.

On Wednesday, Universal said in a statement that its U.S.-based subsidiary, Aruze USA, had received a subpoena from a grand jury in the United States that it believed was related to “suspicion” of bribery related to the payments. The company did not say when that subpoena had been received or where that federal grand jury was seated.

Universal said it believed it would not face charges in the United States “as long as a fair and proper investigation is conducted.” The statement by Universal was the first time the company had acknowledged a subpoena or confirmed the existence of a grand jury as part of the federal investigation.

The FBI has been investigating whether payments that originated in a bank account held by Aruze USA that were made in 2010 to Rodolfo Soriano, an associate of the then-head of the Philippine gaming regulator, constituted a violation of U.S. anti-bribery laws, according to people with knowledge of the probe. At the time of the payments, Universal was seeking tax and other concessions related to a casino it is building on Manila Bay.

The National Bureau of Investigation in the Philippines investigated the case as potential bribery but said it was suspending that probe because it did not have access to witnesses in Japan. Soriano did not respond to a request for comment.

Lewis Tam, a spokesman for Hong Kong’s ICAC, said the agency “would not comment on individual cases.” The FBI declined to comment. A spokesman for Japan’s National Tax Agency said it was policy to not comment on specific cases.

Universal had no immediate comment beyond its statement.

MISSISSIPPI RENEWS LICENSE

In recent months, the FBI has continued to gather evidence and interview witnesses, sources have said. The FBI investigation has been underway since 2012.

In addition to the bribery question, the FBI has been examining whether an offered payout to a former Universal employee in Japan to stop cooperating with its investigation constituted obstruction of justice or witness tampering, people with knowledge of the matter said.

The offer of a payment was made in July 2013 by a lawyer for Universal to a former Universal employee if he retracted claims and stopped cooperating with investigators, according to records reviewed by Reuters.

Japanese tax authorities began examining Universal’s accounting in 2014 and went this week to the company’s headquarters near Tokyo Bay, sources said.

The scope of the tax agency’s audit was not clear. The agency has the power to bring criminal cases if it determines there is evidence of wrongdoing, but it has not indicated that the review of Universal has moved from an audit to a more formal investigation.

Universal has blamed the transfers on the unauthorized actions of former employees. The company convened an outside panel of experts which found that while there was no evidence of bribery, the payments pointed to governance problems. Universal restated its accounting for the payments twice in 2013.

Universal has said that $10 million was improperly accounted for as payment for a bad loan. The company has yet to determine how the remaining $30 million was used.

The developments came as Mississippi’s gaming regulator on Thursday renewed the license held by Universal’s founder and controlling investor, billionaire Kazuo Okada, to sell slot machines in the state, saying it based its decision on its own investigation and not on press reports about the allegations of bribery.

The Mississippi Gaming Commission voted to approve the “suitability” status of Okada, whose license had come up for a nine-year review. The commission also approved the license of Aruze Gaming America, Okada’s slot machine subsidiary.

It did, though, add a new clause to Okada’s gaming license that would trigger a review for possible revocation in case the probes by the FBI and others are not resolved satisfactorily, the commission’s executive director Allen Godfrey told Reuters.

“The allegation is very concerning to me, but until there is something I can hang my hat on, I can’t act,” he said.

The hearing was the first public appearance in the U.S. by Okada since the FBI launched its probe.

    Reuters and Japan’s Asahi newspaper are among the media outlets that have reported on the FBI’s investigation.

    “You may have some doubts as to what I’ve been doing because of the reports in the press, including Reuters and Asahi Shimbun,” Okada said through an interpreter before the commission made its ruling. “These are all misunderstandings. They portray me as if I’m a bad person but that’s not the case.”

    Okada has sued Reuters for defamation based on that reporting. A Reuters spokeswoman said the company stands behind its reporting.

(Reporting by Kevin Krolicki in Tokyo and Nathan Layne in Biloxi; Additional reporting by Manuel Mogato in Manila; Editing by Martin Howell)

]]>
http://blogs.reuters.com/kevin-krolicki/2015/03/19/exclusive-japan-tax-agency-hong-kong-join-fbi-in-reviewing-universal-casino-payments-sources/feed/ 0