US, 11 Pa­cific coun­tries reach TPP deal

The China Post - - FRONT PAGE - BY CHRISTO­PHER S. RU­GABER AND PAUL WISE­MAN

The United States and 11 other Pa­cific Rim coun­tries have agreed to an am­bi­tious trade pact that cuts trade bar­ri­ers, sets la­bor and en­vi­ron­men­tal stan­dards and pro­tects multi­na­tional cor­po­ra­tions’ in­tel­lec­tual prop­erty.

The agree­ment on the Trans Pa­cific Part­ner­ship was reached Mon­day af­ter marathon ne­go­ti­at­ing ses­sions in At­lanta through the week­end.

“We think it helps de­fine the rules of the road for the Asi­aPa­cific re­gion,” said U.S. Trade Rep­re­sen­ta­tive Michael Fro­man.

The TPP is de­signed to en­cour­age trade be­tween the United States, Aus­tralia, Brunei, Canada, Chile, Ja­pan, Malaysia, Mexico, New Zealand, Peru, Sin­ga­pore and Viet­nam.

Ja­panese Prime Min­is­ter Shinzo Abe wel­comed the ba­sic agree­ment as “a farsighted pol­icy for all par­tic­i­pat­ing coun­tries that share the val­ues and try to build a free and fair eco­nomic zone.”

The deal still has to be ap­proved by the U.S. Congress, where op­po­si­tion is wide­spread. Pres­i­dent Obama has to wait 90 days af­ter agree­ment be­fore sign­ing the pact, and only then will Congress be­gin to de­bate it.

As a re­sult, a vote on the agree­ment likely will not hap­pen un­til well into 2016. 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. Congress can only give the deal an up-or-down vote; it can’t amend the agree­ment.

Many of the tar­iff re­duc­tions and other changes will be phased in over sev­eral years, so ben­e­fits to the U.S. econ­omy could take time to ma­te­ri­al­ize.

Peter Petri, a pro­fes­sor of in­ter­na­tional fi­nance at Bran­deis Univer­sity, says he doesn’t ex­pect the deal to lead to any U.S. job gains. But he fore­casts it will boost U.S. in­comes by US$77 bil­lion a year, or 0.4 per­cent, by 2025, mostly by cre­at­ing ex­por­to­ri­ented jobs that will pay more, even as other jobs are lost.

The Obama ad­min­is­tra­tion has also pur­sued the deal as part of a strat­egy to lift U.S. in­flu­ence in fast-grow­ing Asia and to counter China’s grow­ing in­flu­ence. China, the world’s sec­ond-largest econ­omy, is not part of the agree­ment, but po­ten­tially could join later.

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