The United States, Japan and 10 other countries around the Pacific reached a historic accord to lower trade barriers to goods and services in 40 percent of the global economy.
For the US, the Trans-Pacific Partnership (TPP) agreement opens agricultural markets in Japan and Canada, tightens intellectual property rules to benefit drug and technology firms, and establishes an economic bloc to challenge China’s influence in the region, the Wall Street Journal reported.
President Barack Obama hailed the accord on Monday, saying it would open new markets to American products and set high standards for protecting workers and the environment.
“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,” Obama was quoted as saying in a statement.
“It includes the strongest commitments on labor and the environment of any trade agreement in history, and those commitments are enforceable, unlike in past agreements.”
He said the TPP would strengthen US relationships with partners and allies in a key region. The deal includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.
The deal is a victory for Obama, who sees it as boosting economic growth, enhancing competitive industries and binding like-minded Pacific countries at a time when China, which is not a part of the bloc, is adopting a more assertive economic and military posture in the region, the newspaper said.
The agreement, however, faces a steep challenge in the US Congress, where only a handful of Democrats support Obama’s trade policy, and Republican support is unpredictable in the 2016 election year, according to the report.
The deal, if approved by Congress, will expand the North American Free Trade Agreement launched two decades ago to include Japan, Australia, Chile, Peru and several Southeast Asian nations.
Trade ministers said the TPP would be open to other countries in the future, including potentially China, Reuters reported.
“There is a real opportunity for China to be a part of this,” Malaysian Trade Minister Mustapa Mohamed was quoted as saying.
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