The United States and 11 other Pacific Rim countries have reached a deal on the most sweeping trade liberalization pact in a generation – the TPP trade deal.
Details of the pact were emerging in statements by officials after days of negotiations in Atlanta.
The agreement first needs to be ratified by Congress. Lawmakers in other TPP countries must also approve the deal, according to The Huffington Post.
The TPP trade deal is a pact that includes the nations of Brunei, Chile, Singapore, New Zealand, Australia, Canada, Japan, Malaysia, Mexico, Peru, the United States, and Vietnam.
The TPP has been controversial because of the secrecy in the negotiations that have shaped it over the past five years and the perceived threat to interest groups like Mexican auto workers or Canadian dairy farmers.
The basic agreement must still be passed in Congress and signed into law by the President. President Obama said that Americans would have months to read the deal before he signs it into law.
One of the snags of the deal had to do with the question of how long a monopoly period should be allowed on next-generation biotech drugs.
Some publications question the deal, as well as past free-trade agreements. The Huffington Post says the U.S. has “a job-destroying trade deficit that has grown despite a long series of free-trade agreements.”
The Huffington Post calls the TPP a “profoundly anti-democratic agreement which signs away our right to govern our own economy.”
They claim that the TPP contains provisions which interfere with areas well beyond the bounds of trade. It would:
• Limit how U.S. federal and state officials could regulate foreign firms operating within U.S. boundaries, with requirements to provide them greater rights than domestic firms.
• Extend the incentives for U.S. firms to offshore investment and jobs to lower-wage countries.
• Establish a two-track legal system that gives foreign firms new rights to skirt U.S. courts and laws, directly sue the U.S. government before foreign tribunals and
• Demand compensation for financial, health, environmental, land use and other laws they claim undermine their TPP privileges.
• Allow foreign firms to demand compensation for the costs of complying with U.S. financial or environmental regulations that apply equally to domestic and foreign firms.
The tariff reduction schedules cover hundreds of imported items from pork and beef in Japan to pickup trucks in the United States. The issue of the length of the monopolies awarded to the developers of new biological drugs had threatened to ruin the talks until the end.
Negotiating teams had been deadlocked over the question of the minimum period of protection for the rights for data used to make biologic drugs made by companies like Pfizer Inc., Roche Group, and Takeda Pharmaceutical Co.
The United States had sought 12 years of protection. Australia, New Zealand and public health groups had sought a period of five years to reduce drug costs and the burden on subsidized medical programs.
Negotiators agreed on a compromise on minimum terms that was short of what U.S. negotiators had originally sought. The two-track process would grant biologic drugs a minimum period of 5 years and up to a minimum of 8 years of time free from the threat of competition from generic versions of drugs.
A set of issues surrounding protections for dairy farmers was also addressed in the final hours of talks.
The United States, Mexico, Canada and Japan 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 Huffington Post’s Kevin Kearns makes the assessment that “the agreement negotiated by President Obama is completely inadequate to serve the interests of America’s manufacturers, industrial workers, farmers,” and other groups.
The North American Free Trade Agreement between Canada, the United States and Mexico mandates that vehicles have a local content of 62.5 percent. The way that rule is implemented means that just over half of a vehicle needs to be manufactured locally. Credit has been given to this rule for a boom in auto-related in investment in Mexico.
But the TPP would give Japan’s automakers, led by Toyota Motor Corp, a freer hand to buy parts from Asia for vehicles sold in the United States.
Also, The Huffington Post states that a key problem is that the Obama administration has refused to include enforceable currency manipulation provisions in the final deal, despite an overwhelming bipartisan request from both houses of congress. This means there will still be no reprisals if a countries devalues its currency or otherwise manipulates its exchange rate.