Ministers from 12 countries, including the United States, have reached an agreement on the most sweeping trade liberalization pact in a generation, which will influence the worldwide economy in everything from the price of cheese to the cost of cancer treatments.
The Trans-Pacific Partnership will cut trade barriers across much of the Pacific Rim and set common worker standards for 40 percent of the world's economy. The primary negotiations were between the US and Japan, the first and third-largest economies in the world, respectively. Final talks took place in Atlanta, Georgia. Akira Amari, the Japanese economic minister in charge of the TPP talks, emerged beaming on Monday to declare a broad agreement.
The deal still needs to be approved by lawmakers in each of the dozen countries. It is poised to stand as a defining economic achievement for US President Barack Obama if it is ratified by Congress, although this will likely take months of political wrangling inside Washington as special interest lobbyists fight for the most favorable terms.
The TPP deal will affect an array of interest groups worldwide from Mexican auto workers to Canadian dairy farmers. The primary result of the agreement sets tariff reduction schedules to ease global trade on hundreds of imported items, including pork and beef in Japan to pickup trucks in the US. It also introduces global standards for intellectual property and offers other commercial protections for manufacturers.
This final round of negotiations began on Wednesday in Atlanta, although the deal has been under secret discussions for nearly eight years. One of the central points of contention in the final agreement came down to the issue of how long drug companies must keep their development of drugs a secret, until the US and Australia negotiated a compromise.
This one issue over the length of the monopolies awarded to the developers of new biological drugs threatened to derail the entire talks. Negotiating teams had been deadlocked over the question of the minimum period of protection to the rights for data used to make biologic drugs, made by companies including Pfizer, Roche Group's Genentech, and Japan's Takeda Pharmaceutical Co.
The US had sought 12 years of protection to encourage pharmaceutical companies to invest in expensive biological treatments like Genentech's cancer treatment Avastin. Australia, New Zealand, and public health groups had sought a period of five years to bring down drug costs and the burden on state-subsidized medical programs.
Negotiators agreed on a compromise on minimum terms that was short of what US negotiators had sought and that would effectively grant biologic drugs a period of five to eight years free from the threat of competition from generic versions.
A politically charged set of issues surrounding protections for dairy farmers was also addressed in the final hours of talks, officials said. New Zealand, home to the world's biggest dairy exporter, Fonterra, wanted increased access to US, Canadian, and Japanese markets.
Separately, the US, Mexico, Canada, and Japan also 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 TPP would give Japan's automakers, led by Toyota Motor Corp., a freer hand to buy parts from Asia for vehicles sold in the US but sets long phase-out periods for American tariffs on Japanese cars and light trucks.
The final version of the 30-draft agreement will not be fully released for another month but has already received stiff opposition from both parties campaigning for US president.
Democratic contender Bernie Sanders called the TPP "disastrous" for privileging the interests of multi-national corporations at the expense of workers, the environment, and the majority of the world's poorest populations, in a statement. Hillary Clinton, who pushed for the TPP deal while she was secretary of state, has softened her support since then. Most Republican candidates, including Jeb Bush, Marco Rubio, and Carly Fiorina, have expressed their support with various degrees of skepticism. Donald Trump slammed the trade deal in May, calling it a "bad deal for Americans" and a "power grab" by Obama.