The United States, Japan and 10 other Pacific basin nations on Monday agreed after years of negotiations to the largest regional trade accord in history, an economic pact envisioned as a bulwark against China’s power and a standard-setter for global commerce.
The announcement in Atlanta that weary trade officials had finally agreed on the Trans-Pacific Partnership was merely “an important first step,” the U.S. trade representative, Michael B. Froman, said. Now their agreement faces months of debate in each of the 12 nations, including in Congress, where some bipartisan opposition was immediate.
The trade issue also is certain to become a flash point of presidential politics in 2016, with populist anti-trade sentiment roiling both parties.
For a day, however, President Barack Obama could celebrate a potentially legacy-making achievement that links countries representing two-fifths of the global economy, from Canada and Chile to Japan and Australia. The trade initiative, dating to the start of his administration, is a centerpiece of Obama’s economic program to expand exports.
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“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 a statement. “We should write those rules, opening new markets to U.S. products while setting high standards for protecting workers and preserving our environment.”
The Pacific accord would phase out thousands of import tariffs as well as other barriers to international trade, like Japanese regulations that keep out some U.S.-made autos and trucks. It also would establish uniform rules on corporations’ intellectual property, and open the Internet even in communist Vietnam.
The Office of the U.S. Trade Representative said the partnership eventually would end more than 18,000 tariffs that the participating countries have placed on U.S. exports, including autos, machinery, information technology and consumer goods, chemicals and agricultural products as varied as avocados from California or wheat, pork and beef from the Plains states.
The 12 nations involved in the partnership are the U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. China, the world’s second-largest economy, is not part of the agreement, but could join later.
The overall economic and political heft of the 12-nation group suggests that, as trade officials predicted, its agreement would be a model for future accords. It would enforce higher standards of labor conditions and environmental protection, including wildlife-trafficking.
After five days and sleepless nights of tense haggling in Atlanta, the agreement came together at 5 a.m. Monday, the trade officials said.
Several potentially deal-breaking disputes had kept the 12 trade officials talking through the weekend and forced them repeatedly to reschedule the promised Sunday announcement. Final compromises covered commercial protections for drugmakers’ advanced medicines, more open markets for dairy products and sugar, and a slow phaseout —– over two to three decades — of the tariffs on Japan’s autos sold in North America.
Yet the trade agreement almost certainly will encounter stiff opposition.
Its full 30-chapter text will not be available for perhaps a month, but labor unions, environmentalists and liberal activists are poised to argue that the agreement favors big business over workers and environmental protection.
While many opponents say the trade pact will kill jobs or send them overseas, the administration contends that the United States has more to gain from freer trade with the Pacific nations. Eighty percent of those nations’ exports to the United States are already duty-free, officials say, while U.S. products face assorted barriers in those countries that would end.
Also, the administration contends that increased U.S. sales abroad would create jobs in export industries, which generally pay more than jobs in domestic-only businesses.
The accord for the first time would require state-owned businesses like those in Vietnam and Malaysia to comply with commercial trade rules and labor and environmental standards.
Froman called the labor and environmental rules the strongest ever in a trade agreement and a model for future pacts, although some environmental groups and most unions remained implacably opposed. The worker standards commit all parties to the International Labor Organization’s principles for collective bargaining, a minimum wage and safe workplaces, and against child labor, forced labor and excessive hours.
On the environment, the accord has provisions against wildlife-trafficking, illegal or unsustainable logging and fishing, and protections for a range of marine species and animals including elephants and rhinoceroses.
For the first time in a trade agreement there are provisions to help small businesses without the resources of big corporations to deal with trade barriers and red tape. A committee would be created to assist smaller companies.
The agreement also would overhaul special tribunals that handle trade disputes between businesses and participating nations.
The Associated Press contributed to this report.