TWELVE Pacific Rim countries yesterday sealed a deal to create the world’s largest free-trade area, delivering US President Barack Obama a major policy triumph, a United States Official said.
Agreement on the Trans-Pacific Partnership (TPP), led by the US and Japan, aims to set the rules for 21st century trade and investment and intends to press China, not one of the 12, to shape its behavior in com¬merce to the TPP standards.
US Trade Representative Michael Froman announced the hard-won deal on the sixth day of talks in Atlanta, Georgia.
In Tokyo, Prime Minister Shinzo Abe confirmed the “broad agreement.” Besides the US and Japan, the deal includes Australia, New Zealand, Canada, Mexico, Peru, Chile, Vietnam, Singapore, Brunei and Malaysia.
Agreement came after talks between 12 ministers in Atlanta went four days past deadline to resolve conflicts over how to protect the rights of creators of biologics, a cutting edge class of drugs, and how to open more markets to trade in dairy products.
The TPP will affect 40 percent of the world economy, reshape industries and influence everything from the price of cheese to the cost of cancer drugs. It will also stand as a legacy-defining achievement for Obama, if it is ratified by Congress.
Lawmakers in other TPP countries must also approve the deal.
The final round of negotiations in Atlanta, which began on wednesday, had snared on the question of how long a monopoly period should be allowed on next-generation biotech drugs, until the US and Australia negotiated a compromise.
The TPP deal has been controversial because of the secret negotiations that have shaped it over the past five years and the perceived threat to an array of interest groups, from Mexican auto workers to Canadian dairy farmers.
Although the complex deal sets tariff reduction schedules on hundreds of imported items from pork and beef in Japan to pickup trucks in the US, one issue had threatened to derail talks until the end — the length of the monopolies awarded to the developers of new biological drugs.
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.
The US had sought 12 years’ protection to encourage drug companies to invest in expensive treatments. Australia, New Zealand and public health groups had sought a period of five years to bring down the burden on state-subsidized medical programs.
Negotiators agreed on a compromise on minimum terms that was short of what US negotiators had sought, people involved in the closed-door talks said.
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.