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Pacific trade pact talks move into third day, hang in the balance

Japanese Economy Minister Akira Amari (L) and US Trade Rep. Michael Froman participate in a press conference in Lahaina, Maui, Hawaii July 31, 2015. Pacific Rim trade ministers failed to clinch a deal on Friday to free up trade between a dozen nations after a dispute flared between Japan and North America over autos, New Zealand dug in over dairy trade and no agreement was reached on monopoly periods for next-generation drugs. REUTERS/Marco Garcia - RTX1MMP5

By Krista Hughes and Ana Isabel Martinez

ATLANTA (Reuters) - Trade ministers from a dozen Pacific nations meeting in Atlanta extended talks on a sweeping trade deal into a third day in a move officials said would either produce a breakthrough or send them home with the future of the agreement in doubt.

U.S. Trade Representative Michael Froman was asking ministers to stay for another 24 hours, through Friday evening, in a bid to wrap up the Trans Pacific Partnership trade deal, two people briefed on the talks said.

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.

Several officials said a final deal could come quickly if key issues are cleared in remaining talks Thursday. 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.

"It’s complicated, but we are continuing with the aim of achieving an agreement. By the late evening we could have clarity,” said one person involved in the closed-door discussions.

The TPP would liberalize trade in 40 percent of the world economy for a region stretching from Vietnam to Canada.

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.


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 (PM.N) and Japan Tobacco Inc (2914.T) 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.

Mexican Economy Minister Ildefonso Guajardo said officials were "very near" to resolving an impasse over trade in autos, one of the main hurdles to a broader deal.

“We made a lot of progress in the auto issue but still we are pending in a couple of areas where we need to close,” Guajardo said. “We are ready. What we need is everything to fall into place at the same time.”

Australian Dairy Industry Council chairman Noel Campbell said there was little movement toward Australia's goals of more access for dairy and sugar exports.

"The negotiators have got very little room to move, they've got people looking over their shoulders  ... saying 'you can't do this until a deal's been done on that,' so it's quite difficult for anything to happen."

(Additional reporting by Kevin Krolicki in Atlanta and Susan Cornwell in Washington; Editing by Bernard Orr)