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 The Trans-Pacific Partnership (TPP) pact struck in Atlanta after
marathon talks could reshape industries, change the cost of products
from cheese to cancer treatments and have repercussions for drug
companies and automakers.
Tired negotiators worked round the clock over the weekend to settle
tough issues such as monopoly rights for new biotech drugs. New
Zealand's demand for greater access for its dairy exports was only
settled at 5 a.m. EDT (0900 GMT) on Monday.
If approved, the pact would cut trade barriers and set common
standards from Vietnam to Canada. It would also furnish a
legacy-shaping victory for U.S. President Barack Obama, who will
promote the agreement on Tuesday in remarks to business leaders in
Washington.
The Obama administration hopes the pact will help the United States
increase its influence in East Asia and help counter the rise of
China, which is not one of the TPP nations.
Lawmakers in the United States and other TPP countries must approve
the deal. Five years in the making, it would reduce or eliminate
tariffs on almost 18,000 categories of goods.
Initial reaction from U.S. Congress members, including Democrats and
Republicans, ranged from cautious to skeptical.
Vermont Senator Bernie Sanders, a Democratic presidential candidate,
warned the pact would cost jobs and hurt consumers. "In the Senate,
I will do all that I can to defeat the TPP agreement," he tweeted.
Many of Obama's Democrats, as well as labor groups, fear the TPP
will cost manufacturing jobs and weaken environmental laws, while
some Republicans oppose provisions to block tobacco companies from
suing governments over anti-smoking measures.
Republican Senator Orrin Hatch, who heads the Senate Finance
Committee, was wary. "I am afraid this deal appears to fall woefully
short," said Hatch, who had urged the administration to hold the
line on intellectual property protections, including for drugs.
U.S. lawmakers can approve the deal or vote it down, but not amend
it.
CURRENCY, DRUGS, DAIRY, AUTO POLICIES
Ministers said the agreement would include a forum for finance
ministers from participating countries to discuss currency policy
principles. This takes into account, in part, concerns among U.S.
manufacturers and critics who suggest Japan has driven the yen lower
to benefit its car exporters and other companies.
But Democratic Representative Debbie Dingell from Michigan, home of
the U.S. auto industry, said currency has not been fully dealt with.
"Nothing that we have heard indicates negotiators sufficiently
addressed these issues," she said.
The United States and Australia negotiated a compromise on the
minimum period of protection to the rights for data used to make
biologic drugs. Companies such as Pfizer Inc, Roche Group’s
Genentech and Japan's Takeda Pharmaceutical could be affected.
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The agreed terms fell short of what the United States had sought.
Under the deal, countries would give drugmakers at least five years'
exclusive access to clinical data used to win approval for new
drugs. An additional period of regulatory review would likely mean
drug companies would have an effective monopoly for about eight
years before facing lower-cost, generic competition.
Politically charged dairy farming issues were addressed in the final
hours of talks. New Zealand, home to the world's biggest dairy
exporter, Fonterra, wanted increased access to U.S., Canadian and
Japanese markets.
New Zealand Prime Minister John Key said the deal would cut tariffs
on 93 percent of New Zealand's exports to the United States, Japan,
Canada, Mexico and Peru. “We’re disappointed there wasn’t agreement
to eliminate all dairy tariffs but overall it’s a very good deal for
New Zealand,” Key said.
The United States, Mexico, Canada and Japan agreed to auto trade
rules on how much of a vehicle must be made within the TPP region to
qualify for duty-free status.
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 25-30 year phase-out periods for U.S. tariffs on
Japanese cars and light trucks.
The deal between Australia, Brunei, Canada, Chile, Japan, Malaysia,
Mexico, New Zealand, Peru, Singapore, the United States and Vietnam
also sets minimum standards on issues ranging from workers' rights
to environmental protection.
Trade ministers said the TPP would in future be open to other
countries, including potentially China.
"There is a real opportunity for China to be a part of this,"
Malaysian Trade Minister Mustapa Mohamed said.
Though Obama painted the deal in part as a way of stopping China
from writing the rules of the global economy, China's Ministry of
Commerce broadly welcomed the agreement in the hope it would
"promote and make common contributions to Asia-Pacific trade,
investment and economic development".
(Writing by Alistair Bell; Additional reporting by Richard Cowan in
Washington, Ana Isabel Martinez in Mexico City and Cecile Lefort in
Wellington; Editing by Ken Wills and Will Waterman)
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