Trans-Pacific Partnership is a Reality
Negotiators from the U.S. and 11 other Pacific Rim nations have forged the biggest international free trade agreement in recent history, setting the stage for a vote in Congress early next year.
The landmark, multi-lateral Trans-Pacific Partnership (TPP), was reached in Atlanta, Georgia, following nine days of talks that went through the night Saturday as trade officials broke a deadlock over the length of monopoly protections for new, cutting-edge drugs.
Supporters say the pact would tear down barriers to trade and raise labor and environmental standards among Pacific Rim nations that serve as home to 800 million people and account for about 40 percent of world economic output.
The countries covered by the trade pact are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the U.S. China, one of the two largest and most powerful economies on the Pacific Rim, is an obvious non-player.
The deal must be approved by Congress in an up-or-down vote, as well as by the governments of 11 other countries.
Despite progress on several issues, the talks stalled on several longstanding disagreements, including the length of time a monopoly pharmaceutical companies should be given on new biotech drugs.
The issue pitted the U.S., which has argued for longer protections, with Australia and five other delegations who said such measures would strain national healthcare budgets and keep life-saving medicines from patients who cannot afford them.
According to sources close to the negotiations, Australia was satisfied with a compromise that would preserve its existing five-year protection period coupled with a buffer of extra time.
Another was the trade in autos and auto parts between the U.S. and Japan. Both countries had reached agreement in principle on in talks that had also included Canada and Mexico.
That agreement is expected to give U.S. automakers, led by General Motors and Ford, two decades or more of tariff protection against low-cost pickup truck imports from Thailand or elsewhere in Asia.
Industry and transportation leaders were quick in voicing their praise for the new Pacific free trade pact.
“The prosperity of the U.S. is inextricably entwined with that of the rest of the world,” said Kurt Nagle, president and CEO of the Association of American Port Authorities. “We believe this agreement, and others pending, will increase trade and U.S. exports. This increase in trade will provide more jobs in our ports and throughout the nation.”
Trade agreements like the TPP “are vital for American retailers large and small. They help merchants provide high-quality, low-cost goods to U.S. consumers, and provide new overseas market opportunities for American companies and workers,” commented National Retail Federation Senior Vice President for Government Relations, David French. “It’s taken hard work on the part of U.S. negotiators to conclude this agreement, and we congratulate United States Trade Representative Michael Froman and his team for achieving an agreement.”
A separate bilateral deal between Washington and Tokyo would also pledge an opening of Japan’s market and a reduction in the non-tariff barriers that U.S. officials and auto industry representatives have said kept imported vehicles to less than 10 percent of the Japanese market for decades.
The deal will now move to the political arena, as participating governments pushing to ratify the deal by their legislatures. “I would hesitate in saying this is a done deal,” said Frank Samolis, chair of the international trade practice at the law firm Squire Patton Boggs. “Many of the countries involved in TPP now have get the deal agreed within in their own jurisdictions, which may not be an easy sell. With looming elections in Canada this month and the United States next year, there are some difficult intra-country negotiations to be now to be done.”