The industry is already licking its chops in anticipation of what the TPP deal could do to bring in millions of new clients
(By Len Bracken, Rossella Brevetti and Angela Greiling Keane)
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.
With the continuing globalization of financial services the TPP accord gives Canadian investment firms and fund providers an excellent opportunity to expand into other markets broadening their revenue streams beyond our own borders.
“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.
-- Files by Will Ashworth, WP
