World Economy

Negotiators Strike Pacific Trade Deal

Negotiators Strike Pacific Trade DealNegotiators Strike Pacific Trade Deal

The US, Japan and 10 other Pacific Rim economies have reached agreement to strike the largest trade pact seen anywhere in two decades, in what is a huge strategic and political win for US President Barack Obama and Japan’s Prime Minister Shinzo Abe.

The Trans-Pacific Partnership covers some 40% of the global economy and will create a new Pacific economic bloc with reduced trade barriers relating to the flow of everything from beef and dairy products to textiles and data as well as new standards and rules for investment, the environment and labor, NewsNow reported.

Beyond that, however, it represents the economic backbone of the Obama administration’s strategic “pivot” to Asia and a response to the rise of the US’s chief rival, China, and its growing regional and global influence. It is also a key component of the “third arrow” of economic reforms that Abe has been pursuing in Japan since taking office in 2012.

After five years of negotiations and a final round of marathon talks that went around the clock in Atlanta over the past six days negotiators had been inching towards deals on the final sticking points. These include how long pharmaceutical companies should enjoy monopoly periods for next-generation “biologics” drugs and what access to their markets for dairy products countries like Canada, Japan and the US should provide to exporters like New Zealand.

A planned announcement of the deal was delayed repeatedly on Sunday night as negotiations dragged on. But officials continued to exude confidence that they could reach a consensus.

The deal announced on Monday by trade ministers from the 12 countries still must be signed formally by the countries’ leaders and ratified by their parliaments. In the US Obama is likely to face a tough fight to get the deal through Congress next year, especially as presidential candidates like Republican frontrunner Donald Trump have argued against the TPP.

Critics around the world have also lambasted the deal for being negotiated in secret and being biased towards corporations, criticisms that are likely to be amplified when the national legislatures seek to ratify the TPP in the months to come.