Twelve Countries Finish Pacific Rim Trade Deal

The U.S. and eleven other nations reached a wide-reaching trade agreement on Oct. 5 that could govern more than 40% of the world’s economic output, if it is approved.

The Trans-Pacific Partnership includes provisions on labor, environmental protection, and e-commerce laws and would eliminate thousands of international tariffs.

“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,” says President Barack Obama.

The American Chemistry Council, the U.S. chemical industry’s major trade association, strongly supports the pact. The deal would mean a more predictable trading environment for the chemical industry, which accounts for 14% of U.S. exports, says Cal Dooley, president of the association.

However, the pharmaceutical industry is unhappy over a last-minute compromise that loosened intellectual property protections it sought for biologic medicines.

A compromise reached last week would provide up to eight years of protections for some biologic drugs. That is fewer than the 12 years the pharmaceutical industry had wanted, but it’s more than the five years that many Democrats and health care advocacy groups had lobbied for.

Opponents say that the deal will encourage U.S. companies to send more business to low-wage workers abroad. Environmental groups are particularly concerned about a provision that would allow companies to challenge a country’s regulations or court rulings in a special international trade tribunal.

But Obama says the deal “includes the strongest commitments on labor and the environment of any trade agreement in history, and those commitments are enforceable, unlike in past agreements.”

A Pacific Rim trade agreement has been under negotiation for a decade, but contentious issues from agriculture subsidies to high-tech industry protections slowed down the talks. Participating nations are the U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

Now Obama has to push the deal through Congress. A vote is not expected until 2016.—Andrea Widener