Pacific-Rim nations led by U.S. agree to historic trade accord

Published : Oct 5, 2015 - 21:39 Updated : Oct 5, 2015 - 22:07

A dozen Pacific-rim nations agreed to an historic trade pact that would cut trade barriers on items ranging from cars to rice, setting up a potentially contentious ratification vote before a skeptical U.S. Congress.

After a week of final talks in Atlanta, an agreement has been reached on completion of the Trans-Pacific Partnership, a pact more than five years in the making designed to boost commerce among nations that produce 40 percent of global economic output, said Akira Amari, a Japanese economics minister who is in charge of negotiations for his nation.

Akira Amari(center), Japanese minister in charge of the Trans-Pacific Partnership talks, announces on Oct. 4, 2015, in Atlanta that the countries involved in the negotiations are set to announce a landmark deal. (Bloomberg)

U.S. President Barack Obama, who sees the pact as a key element in his "pivot to Asia" foreign policy, made the accord a top priority of his remaining years in office. China was left out of the agreement, which supporters promoted as a counterweight to its growing influence.

If implemented, it would be the largest trade deal the U.S. has negotiated since the North American Free Trade Agreement took effect in 1994. The three signatories to that agreement, the U.S., Canada and Mexico, are included in this one, as is Japan.

The agreement will provide duty-free trade on most goods, and reduced tariffs on others. It will also provide mutual recognition of many regulations, including an exclusivity period for biologic drugs, which are derived from living organisms, and patent protection for pharmaceuticals. That was one of the final topics that was settled in marathon talks, as developing nations sought to have quicker access to generic medications.

Canadian Dairy

Negotiators also haggled over issues including Canada’s supply management system for dairy and other agricultural products, Australia's demand for additional access to the U.S. sugar market and regional value rules for automobiles and auto parts.

Obama persuaded Congress to consider the measure under “fast track authority” -- meaning it will be submitted for an up-or-down vote without amendments. Obama will have to notify Congress 90 days before he signs the agreement, and publish the text 60 before.

The 12 TPP countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the U.S.

"TPP is a comprehensive agreement that will open markets, set high-standard trade rules, and address 21st-century issues in the global economy," the U.S. Trade Representative’s office said in background documents.

TPP will promote jobs and growth in the U.S. and across the Asia-Pacific region, and "share American values and commitment to improve labor practices and elevate environmental standards around the world," according to the USTR.

Supporters of the pact, including the U.S. Chamber of Commerce, argue that the TPP will make it easier to sell made-in-America goods and services overseas and support U.S. jobs and economic growth.

Opponents, such as the AFL-CIO labor organization, argue that it will lead to additional outsourcing of U.S. jobs. They are expected to pressure Congress to reject that pact. (Bloomberg)