Trans-Pacific trade pact OKd

MANILA, Philippines - Twelve Pacific Rim countries on Monday reached the most ambitious trade pact in a generation, aiming to liberalize commerce in 40 percent of the world’s economy in a deal that faces skepticism from US lawmakers.

The Trans-Pacific Partnership (TPP) pact struck in Atlanta after marathon talks could reshape industries, change the cost of products from cheese to cancer treatments and have repercussions for drug companies and automakers.

Tired negotiators worked round the clock over the weekend to settle tough issues such as monopoly rights for new biotech drugs. New Zealand’s demand for greater access for its dairy exports was only settled at 5 a.m. EDT (0900 GMT) on Monday.

If approved, the pact would cut trade barriers and set common standards from Vietnam to Canada. It would also furnish a legacy-shaping victory for US President Barack Obama, who will promote the agreement on Tuesday in remarks to business leaders in Washington.

The Obama administration hopes the pact will help the United States increase its influence in East Asia and help counter the rise of China, which is not one of the TPP nations.

Lawmakers in the United States and other TPP countries must approve the deal. Five years in the making, it would reduce or eliminate tariffs on almost 18,000 categories of goods.

Initial reaction from US Congress members, including Democrats and Republicans, ranged from cautious to skeptical.

Vermont Sen. Bernie Sanders, a Democratic presidential candidate, warned the pact would cost jobs and hurt consumers. “In the Senate, I will do all that I can to defeat the TPP agreement,” he tweeted.

Many of Obama’s Democrats, as well as labor groups, fear the TPP will cost manufacturing jobs and weaken environmental laws, while some Republicans oppose provisions to block tobacco companies from suing governments over anti-smoking measures.

The United States and Australia negotiated a compromise on the minimum period of protection to the rights for data used to make biologic drugs. Companies such as Pfizer Inc, Roche Group’s Genentech and Japan’s Takeda Pharmaceutical could be affected.

The agreed terms fell short of what the United States had sought. Under the deal, countries would give drugmakers at least five years’ exclusive access to clinical data used to win approval for new drugs. An additional period of regulatory review would likely mean drug companies would have an effective monopoly for about eight years before facing lower-cost, generic competition.

Politically charged dairy farming issues were addressed in the final hours of talks. New Zealand, home to the world’s biggest dairy exporter, Fonterra, wanted increased access to U.S., Canadian and Japanese markets.

The United States, Mexico, Canada and Japan agreed to auto trade rules on how much of a vehicle must be made within the TPP region to qualify for duty-free status.

The TPP would give Japan’s automakers, led by Toyota MotorCorp, a freer hand to buy parts from Asia for vehicles sold in the United States, but sets 25-30 year phase-out periods for U.S. tariffs on Japanese cars and light trucks.

The deal between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam also sets minimum standards on issues ranging from workers’ rights to environmental protection.

Trade ministers said the TPP would in future be open to other countries, including potentially China.

Meanwhile, the Philippines intends to pursue a plan to join the after the 12 negotiating parties reached a final agreement on the trade accord.

Trade Secretary Gregory Domingo said the Philippines would want to immediately start discussions for its entry to the TPP once it opens to new members.

“We are definitely right there, on the door. We are waiting for it to open. And as soon as it opens, we’ll start discussions,” he said.

Even before the TPP was reached, the Philippine government already started consultations with six of the pact’s members including the US.

To become part of the TPP, the Philippines will need an endorsement from the 12 parties of the trade agreement.