By
A dozen Pacific-rim nations agreed to an
historic pact that would cut trade barriers on items ranging from cars to rice,
setting up a potentially contentious ratification vote before a skeptical U.S.
Congress.
After a week of final talks in Atlanta, an
agreement was announced Monday on the Trans-Pacific Partnership, a pact more
than five years in the making designed to boost commerce among nations that
produce 40 percent of global economic output.
“This partnership levels the playing field for
our farmers, ranchers, and manufacturers by eliminating more than 18,000 taxes
that various countries put on our products,” President Barack Obama, who sees
the pact as a key element in his “pivot to Asia” foreign policy, said in a
statement Monday. “It’s an agreement that puts American workers first and will
help middle-class families get ahead.”
The agreement will provide duty-free trade on
most goods, and reduced tariffs on others. It will also provide mutual
recognition of many regulations, including an exclusivity period for biologic
drugs, which are derived from living organisms, and patent protection for
pharmaceuticals. That was one of the final topics that was settled in marathon
talks, as developing nations sought to have quicker access to generic
medications.
China Counterweight
China was left out of the agreement, which
supporters promoted as a counterweight to its growing influence. “When more
than 95 percent 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
the statement.
The White House framed the deal as expanding
markets for U.S.-made goods and job opportunities for people in the U.S. The
pact would eliminate more than 18,000 tariffs that other nations impose now on
U.S.-made products, the White House said in an e-mailed fact sheet.
Without the agreement, those tariffs are as high
as 59 percent on the $56 billion in U.S. machinery products exported last year
to countries in TPP, the White House said.
If implemented, it would be the largest trade
deal the U.S. has negotiated since the North American Free Trade Agreement took
effect in 1994. The three signatories to that agreement, the U.S., Canada and
Mexico, are included in this one, as is Japan.
Ford Opposes
Some key lawmakers criticized or reserved
judgment on the deal as one of the largest U.S. automakers called on Congress
to reject the deal.
Ford Motor Co. told Congress not to approve the
agreement because it fails to adequately address currency manipulation
overseas, which may tip the playing field.
In a statement, Ziad Ojakli, Ford’s group vice
president for government and community relations, urged the administration in a
statement “to renegotiate TPP and incorporate strong and enforceable currency
rules. This step is critical to achieving free trade in the 21st century.”
Representative Paul Ryan, a Wisconsin Republican
and chairman of the Ways and Means Committee, said he’s not taking sides for
now.
“I am reserving judgment until I am able to
review the final text and consult with my colleagues and my constituents,” Ryan
said in an e-mailed statement.
Representative Debbie Dingell, a Michigan
Democrat whose state is home to the three largest U.S. automakers, criticized
the deal for ignoring currency manipulation, saying it’s a “bad deal for the
working men and women of the American auto industry.”
Environmental Standards
Trade ministers from the 12 nations said the
agreement will improve labor and environmental standards in the included
countries.
“We expect this historic agreement to promote
economic growth, support higher-paying jobs, enhance innovation, productivity
and competitiveness, raise living standards, reduce poverty in our countries
and to promote transparency, good governance and strong labor and environmental
protections,” the trade ministers said in a joint statement.
Negotiators haggled over issues including
Canada’s supply management system for dairy and other agricultural products,
Australia’s demand for additional access to the U.S. sugar market and regional
value rules for automobiles and auto parts.
Obama persuaded Congress to consider the measure
under “fast track authority” -- meaning it will be submitted for an up-or-down
vote without amendments. Obama will have to notify Congress 90 days before he
signs the agreement, and publish the text 60 before.
‘American Values’
The 12 TPP countries are Australia, Brunei,
Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam
and the U.S.
“TPP is a comprehensive agreement that will open
markets, set high-standard trade rules, and address 21st-century issues in the
global economy,” the U.S. Trade Representative’s office said in background
documents.
TPP will promote jobs and growth in the U.S. and
across the Asia-Pacific region, and “share American values and commitment to
improve labor practices and elevate environmental standards around the world,”
according to the USTR.
Supporters of the pact, including the U.S.
Chamber of Commerce, argue that the TPP will make it easier to sell
made-in-America goods and services overseas and support U.S. jobs and economic
growth.
Labor Opposition
Opponents, such as the AFL-CIO labor
organization, argue that it will lead to additional outsourcing of U.S. jobs.
They are expected to pressure Congress to reject that pact.
Communications Workers of America President
Chris Shelton called the pact “a bad deal for working families and
communities.”
“CWA and our allies will be certain to hold
accountable those members of Congress who support this giveaway to the 1
percent,” Shelton said in an e-mail.
U.S. Trade Representative Michael Froman said
the deal contains the strongest labor standards in any trade pact. The
obligations, which include safe work place conditions and freedom of
association, are all fully enforceable, Froman said.
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