Oct 06, 2015 (LBO) – The United States and 11 Pacific Rim countries inked a trade deal that cuts trade barriers marking the end of five years tense negotiations, foreign media reports said.
The agreement reached on Monday defines the rules of the road for trade in the Asia-Pacific region.
TPP will encourage trade between the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam which account for 40 percent of the world trade.
China was not involved in the agreement.
According to the media report in the US Congress, opposition is widespread. President Barack Obama has to wait 90 days after agreement before signing the pact, and only then will Congress begin to debate it.
“Given the political sensitivity of the deal, supporters of the agreement may push to hold the vote as far ahead of next year’s elections as possible,” it said.
Many of the tariff reductions and other changes will be phased in over several years, so benefits to the US economy could take time to materialise.
Japanese Prime Minister Shinzo Abe told reporters that it is a major outcome not just for Japan but also for the future of the Asia-Pacific.
Australia also hailed the deal as a huge opportunity for businesses, farmers, and manufacturers.
“Any deal like this is of enormous benefit to us,” said Prime Minister Malcolm Turnbull. “It is a gigantic foundation stone for our future prosperity.”
Critics says that negotiations have been conducted in secret, and that it favours big corporations while Japan stands to reap huge economic benefits from the deal, for the US it is an important strategic move.
However the agreement will need to be ratified by each of the individual member countries.
Intense negotiations were seen among the auto industry with countries agonising over how much of a vehicle had to be manufactured within the TPP countries in order to qualify for duty-free status.
In agriculture countries like New Zealand wanting more access to markets in Canada, Mexico, Japan and the United States.
Canada meanwhile fought to keep access to its domestic dairy and poultry markets strictly limited.