ATLANTA, Oct 5, (Agencies): Twelve Pacific rim countries sealed the deal Monday on creating the world’s largest free trade area, delivering President Barack Obama a major policy triumph. The deal on the Trans-Pacific Partnership, led by the United States and Japan, aims to set the rules for 21st century trade and investment and press China, not one of the 12, to shape its behavior in commerce to the TPP standards.
“After five years of intensive negotiations, we have come to an agreement that will create jobs, drive sustainable growth, foster inclusive development, and promote innovation across the Asia Pacific Region,” said US Trade Representative Michael Froman.
The hard-won deal to create the world’s largest free-trade area, encompassing 40 percent of the global economy, came after five days of round-the-clock talks in an Atlanta hotel.
President Barack Obama, who made the TPP a priority of his second term, said the accord reached in Georgia “reflects America’s values and gives our workers the fair shot at success they deserve.”
“When more than 95 percent of our potential customers live outside our borders, we can’t let countries like China write the rules of the global economy,” Obama said in a statement. “We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment.”
More than 18,000 taxes imposed by various countries on US products will be eliminated thanks to the partnership, he added.
The accord involves significant market openings from Canada, the United States and Japan but also sets controversial new patent standards for cutting-edge biologic drugs and demands countries like Vietnam, Mexico and Malaysia improve labor standards.
“This agreement in my view is truly transformational,” said Canada Trade Minister Ed Fast. “The magnitude and importance of rules for 21st century issues can’t be underscored enough …. It will shape the future for many trade agreements in this 21st century.”
The talks went four days past deadline to resolve conflicts over Canada and Japan opening up their dairy markets to New Zealand exports, and objections from Australia, Peru and Chile to the US push for longer biologic patent protections.
Trade ministers said the landmark deal addresses new issues like data trade, foreign investment protections and intellectual property that have not been covered in multilateral trade pacts of the past.
New Zealand Trade Minister Tim Groser said his side of the talks went to 5 am Monday morning before an agreement was set.
The deal is “profoundly important and beneficial to the generations of people in our respective countries,” he said.
The accord still must be signed and ratified by the respective countries, which also include Singapore and Brunei.
In Canada, facing a national election in two weeks, and in the United States, with elections coming in one year, that could prove particularly difficult.
US members of Congress have already warned that they will not ratify any deal that gives up too much in US interests.
Powerful Senator Orrin Hatch warned Monday that he will scour the deal “to determine whether our trade negotiators have diligently followed the law so that this trade agreement meets Congress’s criteria and increases opportunity for American businesses and workers.”
The Pacific Rim nations that secured a free trade agreement on Monday pledged to bolster cooperation on broad economic issues, including currencies.
“We are pleased to announce today that we are working to strengthen macroeconomic cooperation, including on exchange rate issues, in appropriate fora,” the macroeconomic policy authorities of the 12 Trans-Pacific Partnership nations said in a statement.
“The work to be undertaken reflects our common interest in strengthening cooperation on macroeconomic policies, and will help to further macroeconomic stability in the TPP region as well as help ensure that the benefits of TPP are realized.”