U.S. looks for edge in Pacific trade pact



When Vietnamese officials issued new Internet rules this year, the U.S. tech industry shuddered.

The regulations clamp down on political speech, require firms to invest in local computer infrastructure to store information on Vietnamese users and could force chipmakers to strip standard encryption features from processors.

As the U.S. and 11 other nations near a new trade agreement in the Asia-Pacific region, it is those restrictive local standards that have become the focus in a debate that could shape the future of industries vital to U.S. economic growth.

The Transpacific Partnership involves its share of old-school disputes, but the more significant fights are over the regulation of the Internet and e-commerce, the rules for the patent and sale of biopharmaceuticals, and the oversight of logistics, consulting, energy management and other service industries in which the U.S. holds an edge. Vietnam’s efforts are a symbolic fork in the road: One path leads to a more restrictive, expensive environment for business, and the other toward a freer global flow of commerce.

U.S. government and industry officials say that if a pact can be struck among the 12 nations involved — including Vietnam, Japan, Canada, Mexico and Singapore — it will prove broadly influential and set the terms of commerce throughout the Asia-Pacific region.

For many in emerging technology and other industries, the global rules for trade and investment have yet to be set, and “the goal here is to have more U.S.-based policies” rather than ones found in countries such as China that try to force firms to invest locally or turn over technology to local partners, said Michelle Weinof the Information Technology and Innovation Foundation.

“It is about bringing the rest of the world up to the level of the U.S.,” she said.

But opponents say that fewer local restrictions means less local control. Through some 20 rounds of negotiation, the TPP talks have been criticized as broadly undemocratic, setting what could become important domestic regulations through diplomatic negotiation rather than through an open legislative process. That might serve the U.S. well, but it could leave other countries with higher drug prices and less local technology investment, opponents contend.

Negotiations over the TPP are thought to be nearing completion. An initial legislative battle over U.S. trade policy is expected early next year, when Congress will be asked to grant President Barack Obama the same fast-track authority that allowed his predecessors to negotiate trade treaties and receive a quick up or down vote.

There will certainly be no shortage of prominent industries lined up to make the case for approval.

Logistics and other service firms see potential for the U.S. if markets throughout Asia can be deregulated, allowing them to overhaul shipping, distribution, management and other systems.

Biotechnology companies say the pact can extend to other nations the 12 years of protection they now have under U.S. law on the research used in the development of biopharmaceutical products.