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 behaviour 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 per cent 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 per cent 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. ‘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 5:00am 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 would 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.’ Reuters adds: The TPP deal has been controversial because of the secret negotiations that have shaped it over the past five years and the perceived threat to an array of interest groups from Mexican auto workers to Canadian dairy farmers. Although the complex deal sets tariff reduction schedules on hundreds of imported items from pork and beef in Japan to pickup trucks in the United States, one issue had threatened to derail talks until the end — the length of the monopolies awarded to the developers of new biological drugs. Negotiating teams had been deadlocked over the question of the minimum period of protection to the rights for data used to make biologic drugs, made by companies including Pfizer Inc, Roche Group’s Genentech and Japan’s Takeda Pharmaceutical Co. The United States had sought 12 years of protection to encourage pharmaceutical companies to invest in expensive biological treatments like Genentech’s cancer treatment Avastin. Australia, New Zealand and public health groups had sought a period of five years to bring down drug costs and the burden on state-subsidized medical programs. Negotiators agreed on a compromise on minimum terms that was short of what US negotiators had sought and that would effectively grant biologic drugs a period of about years free from the threat of competition from generic versions, people involved in the closed-door talks said. The Washington, DC-based Biotechnology Industry Association said it was ‘very disappointed’ by reports that US negotiators had not been able to convince Australia and other TPP members to adopt the 12-year standard approved by Congress. ‘We will carefully review the entire TPP agreement once the text is released by the ministers,’ the industry lobby said in a statement. A politically charged set of issues surrounding protections for dairy farmers was also addressed in the final hours of talks, officials said. New Zealand, home to the world’s biggest dairy exporter, Fonterra, wanted increased access to US, Canadian and Japanese markets. Separately, the United States, Mexico, Canada and Japan also agreed rules governing the auto trade that dictate how much of a vehicle must be made within the TPP region in order to qualify for duty-free status. The North American Free Trade Agreement between Canada, the United States and Mexico mandates that vehicles have a local content of 62.5 per cent. The way that rule is implemented means that just over half of a vehicle needs to be manufactured locally. It has been credited with driving a boom in auto-related in investment in Mexico. The TPP would give Japan’s automakers, led by Toyota MotorCorp, a freer hand to buy parts from Asia for vehicles sold in the United States but sets long phase-out periods for US tariffs on Japanese cars and light trucks.
