Trade ministers from a dozen Pacific nations in Trans-Pacific Partnership Ministers meeting post in TPP Ministers 'Family Photo' in Atlanta, Georgia October 1, 2015. (Reuters)
Washington/ Sydney:
The long-awaited text of a landmark US-backed Pacific trade deal was released today, revealing the details of a pact aimed at freeing up commerce in 40 percent of the world's economy but criticized for its opacity.
If ratified, the Trans-Pacific Partnership (TPP) will be a legacy-defining achievement for US President Barack Obama and his administration's pivot to Asia, aimed at countering China's rising economic and political influence.
China has responded with its own Regional Comprehensive Economic Partnership (RCEP), a proposed 16-nation free-trade area including India that would be the world's biggest such bloc, encompassing 3.4 billion people.
But TPP, which will set common standards on issues ranging from workers' rights to intellectual property protection in 12 Pacific nations, was kept largely from public scrutiny, angering transparency advocates concerned over its broad implications.
It is opposed by labor unions and many of Obama's fellow Democrats, including presidential candidate Hillary Clinton, who backed the developing trade pact when she was secretary of state during Obama's first term.
Some pro-trade Republican lawmakers are also wary of the deal, heralding a tough fight to get the deal through Congress, although this is not expected before March. Republican White House contender Donald Trump has labeled it a "disaster."
The deal does not include measures demanded by some US lawmakers to punish currency manipulation with trade sanctions or set monopoly periods for next-generation biologic drugs at 12 years.
Agreement on the pact, which was more than five years in the making, was trumpeted a month ago after intense talks in Atlanta broke a deadlock over trade in dairy products, pharmaceuticals and autos.
The fine print will be important. Details on local content thresholds for the auto industry are sketchy, for example, and US footwear importers are waiting to see how long duties will stay.
The TPP would be a boon for factory and export economies like Malaysia and Vietnam. Anticipated tariff perks are already luring record foreign investment into Vietnamese manufacturing and both countries are expected to see increased demand for their key exports, from palm oil and rubber to electronics, seafood and textiles.
That could put pressure on several of Asia's major developing economies, including the Philippines and Indonesia, which have recently expressed interest in signing up to the pact. Thailand said it was studying the deal and may consider joining.
Japan has pledged to ease trade barriers on imported French fries and butter products which have been in short supply in the Asian market while Malaysia will eliminate tariffs on all imported alcohol for the first time in a trade agreement.
Other firsts cited by the partners - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam - include the first commitments to discourage imports of goods produced by forced labor and to adopt laws on acceptable working conditions, and the first prohibition on harmful fisheries subsidies.
If ratified, the Trans-Pacific Partnership (TPP) will be a legacy-defining achievement for US President Barack Obama and his administration's pivot to Asia, aimed at countering China's rising economic and political influence.
China has responded with its own Regional Comprehensive Economic Partnership (RCEP), a proposed 16-nation free-trade area including India that would be the world's biggest such bloc, encompassing 3.4 billion people.
But TPP, which will set common standards on issues ranging from workers' rights to intellectual property protection in 12 Pacific nations, was kept largely from public scrutiny, angering transparency advocates concerned over its broad implications.
It is opposed by labor unions and many of Obama's fellow Democrats, including presidential candidate Hillary Clinton, who backed the developing trade pact when she was secretary of state during Obama's first term.
Some pro-trade Republican lawmakers are also wary of the deal, heralding a tough fight to get the deal through Congress, although this is not expected before March. Republican White House contender Donald Trump has labeled it a "disaster."
The deal does not include measures demanded by some US lawmakers to punish currency manipulation with trade sanctions or set monopoly periods for next-generation biologic drugs at 12 years.
Agreement on the pact, which was more than five years in the making, was trumpeted a month ago after intense talks in Atlanta broke a deadlock over trade in dairy products, pharmaceuticals and autos.
The fine print will be important. Details on local content thresholds for the auto industry are sketchy, for example, and US footwear importers are waiting to see how long duties will stay.
The TPP would be a boon for factory and export economies like Malaysia and Vietnam. Anticipated tariff perks are already luring record foreign investment into Vietnamese manufacturing and both countries are expected to see increased demand for their key exports, from palm oil and rubber to electronics, seafood and textiles.
That could put pressure on several of Asia's major developing economies, including the Philippines and Indonesia, which have recently expressed interest in signing up to the pact. Thailand said it was studying the deal and may consider joining.
Japan has pledged to ease trade barriers on imported French fries and butter products which have been in short supply in the Asian market while Malaysia will eliminate tariffs on all imported alcohol for the first time in a trade agreement.
Other firsts cited by the partners - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam - include the first commitments to discourage imports of goods produced by forced labor and to adopt laws on acceptable working conditions, and the first prohibition on harmful fisheries subsidies.
© Thomson Reuters 2015
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