Vietnam, Canada holding up TPP

New Zealand Prime Minister Ardern arrives for the APEC CEO Summit in Danang. Photo: Reuters
New Zealand Prime Minister Ardern arrives for the APEC CEO Summit in Danang. Photo: Reuters

Vietnam could be the place where the final Trans-Pacific Partnership deal is reached but it could also be the agreement's downfall.

The Apec host nation is understood to be the holdout as final talks come down to the wire.

It is now understood that Canada is also holding up proceedings.

The leaders are in the hotel complex where the meeting is to be held but they are buried away in side meetings.

Leaders of the remaining 11 nations will come together on Friday afternoon (local time, six hours behind NZ) for a meeting in which it was hoped a final deal could be signed off.

There was a false start last night when ministers clapped and cheered, believing they'd finally reached consensus after long hours around the negotiating table.

But New Zealand Trade Minister David Parker said when the deal was presented to officials a team from one nation, which he would not name, disagreed.

"One of the parties said that they had not reached agreement and that we don't have an agreement," he said adding, that it was not New Zealand or Canada.

It's understood Vietnam, a developing nation, is seeking exemptions to labour standards in the agreement, at least in the early years.

Vietnam's labour standards are below internationally accepted levels.

PM Ardern speaks with session moderator Tian Wei. Photo: Reuters
PM Ardern speaks with session moderator Tian Wei. Photo: Reuters

The original 12-member agreement, which included the US, gave Vietnam a five-year grace period for meeting labour standards.

Officials and some leaders including Japan's Prime Minister Shinzo Abe are working to resolve the issue ahead of the TPP leaders' meeting.

An agreement has been reached for New Zealand on the controversial investor- state dispute settlement clauses, and while officials did not secure everything they hoped around that issue it was resolved to a point the team was happy with.

"It has been improved but not completely resolved. We've made it clear that for the future we're not on for ISDS clauses and we've made progress in respect of this agreement," Parker said.

After touching down in Da Nang, Vietnam just after midnight Thursday (NZT) for the Apec Summit, Prime Minister Jacinda Ardern said negotiations were down to the wire.

"It's definitely coming to a head. There are a number of countries that do want to see a conclusion. It's hard to know whether or not you'd be able to maintain your ongoing negotiating position the longer it drags on," Ardern said. She has held bilateral talks with the leaders of Vietnam, Japan, Malaysia and Singapore ahead of the TPP leader talks.​

Ardern had earlier already tackled tough issues like climate change during her first foray on to the world stage at Apec but a gift from her Vietnamese counterpart provided a bit of light-hearted relief.

A Vietnamese naval soldier stands quard at Thuyen Chai island in the Spratly archipelago. REUTERS...
It's understood Vietnam, a developing nation, is seeking exemptions to labour standards in the agreement, at least in the early years. Photo: Reuters

Vietnamese Prime Minister Nguyen Xuan Phuc presented Ardern with a portrait of herself.

Photos of the moment show Ardern, with her hands to her face, looking surprised and amused by the unusual present.

Earlier, sitting next to the vice president of the world's largest public oil and gas company, Ardern called for an end to subsidies for fossil fuels.

Instead the world needs to find the right incentives to drive change toward sustainable resources, she told the Apec CEO's Summit where she appeared on a panel alongside Exxon Mobil vice president Robert Franklin.

Ardern has frequently described climate change as the greatest issue of her generation and did so again on Friday.

"It's literally lapping at our feet," she said.

"Our relative size or contribution doesn't matter when it comes to our international responsibility. No matter how small we are we have a role to play, as we all do."

Ardern shared her Government's plan for a climate commission and a transition to 100 per cent renewable energy by 2035.

Described by the panel moderator as "one of the youngest and most vibrant leaders we have ever seen on this stage" Ardern took aim at the US$500 billion spent by governments every year to subsidise fossil fuels which is four times the amount spent on renewables.

"We must faze them out. It is incumbent on us to begin incentivising investment in the right technologies."

Franklin said energy had to be provided in a way that was affordable to all users but acknowledged it had to be done in a way that was respectful to the environment.

Exxon Mobil, the world's largest publicly listed oil and gas company, has indicated in the past that climate change would not stop it selling fossil fuels.

"Having theoretical resources which are not affordable for consumers punishes economies around the world and we've seen that many times," Franklin said.

He talked up the substitution of natural gas and coal as being behind to the largest industrial sector.

"People don't like to hear it but in practice it has reduced CO2 emissions in the US by more than every [solar] panel and every wind turbine," he said.

But he added that fact wasn't to say governments and industries shouldn't explore those options.

Ardern finished up the panel by recognising the issue of competing demands around the affordability of renewable energy for developing nations, but pointed out that many of those would feel the effects of climate change first.

- Additional reporting by AAP.

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