New Pacific Rim agreement is largest trade deal in history

Published October 6th, 2015 - 10:09 GMT

Twelve Pacific Rim countries reached an agreement Monday on a trade pact that will lift most duties on trade and investment, set new business standards and protect intellectual property rights, the countries' trade ministers said.

"After more than five years of intensive negotiations, we have come to an agreement that will support jobs, drive sustainable growth, foster inclusive development and promote innovation across the Asia-Pacific region," the ministers said in a statement after reaching final agreement on the Trans-Pacific Partnership (TPP).

"Most importantly, the agreement achieves the goal we set forth of an ambitious, comprehensive, high standard and balanced agreement that will benefit our nation's citizens," they said after concluding the deal in Atlanta, where the last round of talks were held.

The US-led initiative, which US President Barack Obama aims to make one of his signature achievements, would encompass nearly 40 per cent of the world's economy and cover about 800 million people. The United States hopes it will tilt the economic balance of power in the region away from China.

The Pacific Rim countries involved in the negotiations are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.

The 30-chapter agreement includes elimination and reduction of about 18,000 tariffs on industrial and agricultural goods, including textiles and clothing; rules on trade in services and financial goods; and commitments on the free flow of Internet and digital commerce.

It sets out rules for patents, trademarks and other intellectual property across the trade zone, including specific provisions about pharmaceuticals, and enforces labour and environmental standards.

Exact details of the deal had yet to be released, but the White House pointed to the elimination of tariffs of up to 70 per cent on US cars as well as tariffs on machinery, poultry, soybeans and fruit.

Obama, who made the agreement one of the pillars of his foreign policy agenda as part of a focus on Asia, must now push the measure through Congress. His own Democrats have expressed skepticism of the deal, which they fear would hurt US jobs and manufacturing.

Obama has sought to paint the deal as opening up new markets for US companies and said Monday that it "reflects America's values and gives our workers the fair shot at success they deserve."

"When more than 95 per cent of our potential customers live outside our borders, we can't let countries like China write the rules of the global economy," he said. "We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment."

Other parties to the agreement, including Mexico and Chile, expressed satisfaction with the agreement.

"I hail the end of negotiations for the TPP, a cutting-edge deal with which Mexico strengthens its commercial integration with the world," Mexican President Enrique Pena Nieto said on Twitter. "The Trans-Pacific Partnership will mean more investment opportunities and well-paid jobs for Mexicans."

But a coalition of US labour groups expressed disappointment with the deal, saying it included "problematic concessions."

"Rushing through a bad deal will not bring economic stability to working families nor will it bring confidence that our priorities count as much as those of global corporations," AFL-CIO president Richard Trumka said.

Labour groups and other opponents frequently point to a the North American Free Trade Agreement (NAFTA), which they allege cost US jobs, but the White House said the TPP includes tough environmental and labour regulations that will replace some of the problematic provisions in NAFTA.

The deal must be approved by Congress, which awaits the final text. Once that is delivered, Congress will have 90 days to review it and vote before Obama can sign it.

In June, Obama signed legislation that gave him what's known as fast-track authority, meaning Congress can only vote yes or no on the package without complicated amendments that undo the negotiated terms of the deal.

White House spokesman Josh Earnest said he could not provide details of the timeline for moving forward as details of the agreement still needed to be finalized and translated.

Disagreements over rules for the automotive, dairy and pharmaceutical industries had proved late sticking points as negotiations for the deal entered their final hours.

The US and European Union are negotiating a separate trade deal - the Transatlantic Trade and Investment Partnership - which would create the world's largest free trade zone.

EU Trade Commissioner Cecilia Malmstrom welcomed the development as "good news for world trade" and said she hoped the US-European talks could now be approached "with an even greater focus from both sides."

Earnest noted the European negotiations are not as advanced.

The Obama administration has faced a time crunch to finalize the trade deals before the president leaves office in January 2017 and before the November 2016 presidential and congressional elections, which are widely expected to stall talks on the European deal.

By Anne K Walters

© 2022 dpa GmbH

You may also like