Market News & Headlines >> Agreement Reached on TransPacific Trade Partnership
After roughly eight years of talks, negotiators from the United States and 11 other Pacific Rim countries have reached a deal on the Trans-Pacific Partnership (TPP) free trade pact, which covers about 40% of global economic output.
The far-reaching pact would cut trade barriers, set labor and environmental standards and protect multinational corporations' intellectual property across member nations. Parties to the TPP include the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
U.S. Agriculture Secretary Tom Vilsack touted the agreement’s benefits for U.S. farmers. "An agreement on the Trans-Pacific Partnership (TPP) negotiations provides a more level playing field in trade for American farmers. The agreement would eliminate or significantly reduce tariffs on our products and deter non-science based sanitary and phytosanitary barriers that have put American agriculture at a disadvantage in TPP countries in the past,” Vilsack said.
Vilsack noted that despite the past trade barriers, countries in the Trans-Pacific Partnership currently account for up to 42% of all U.S. agricultural exports, totaling $63 billion. “Thanks to this agreement and its removal of unfair trade barriers, American agricultural exports to the region will expand even further, particularly exports of meat, poultry, dairy, fruits, vegetables, grains, oilseeds, cotton and processed products,” he said.
Japan has reportedly agreed to cut tariffs on pork and beef imports from TPP partners and has also agreed to increase imports of butter, rice and wheat from TPP partners.
One of the last sticking points overcome in five days of nearly non-stop negotiations in Atlanta was protection for the intellectual property of so-called biologic drugs, complex medicines derived from living cells cultured in a laboratory. U.S. negotiators had sought 12 years of exclusivity for biologics, but reportedly settled for eight in a complicated compromise worked out with Australian negotiators.
The TPP is expected to be subject to intense debate in Congress and a vote on the pact will likely not happen for a number of months. President Obama must wait 90 days before signing the agreement, and Congress must wait until after he signs it to begin the process of voting on it. After passing “fast-track” trade legislation, also known as presidential trade promotion authority earlier this year, Congress can only vote yes or no on the TPP. It cannot amend the agreement.
One problem is that the TPP agreement does not contain language on currency manipulation that members of Congress had sought. In late September, 160 members of Congress wrote to President Obama urging that the pact contain measures to stop member countries from manipulating their currencies in order to give their exports a price advantage.