The U.S. and 11 partner nations have reached an agreement on the Trans-Pacific Partnership (TPP). The agreement will lower trade barriers and set commercial rules for the participants, which make up 40% of the global economy.
The U.S. Trade Representative and international counterparts concluded negotiations on Monday over several contentious issues, including the opening of U.S. agricultural markets in Japan and Canada, and the tightening of intellectual property rules for pharmaceuticals and technology.
The trade ministers issued a joint statement which read: “After more than five years of intensive negotiations, we have come to an agreement that will support jobs, drive sustainable growth, foster inclusive development and promote innovation across the Asia-Pacific region.” This announcement sets the stage for the creation of a formidable economic trade bloc which will be able to challenge China’s influence in the region by reducing tariffs, opening foreign investment and implementing new rules governing labor and the environment.
President Obama has announced that the agreement will eliminate more than 18,000 taxes that partner nations currently place on U.S. exports. The U.S. has also secured intellectual property protections for biologic drugs which ensures five years minimum exclusivity against generics.
The U.S. and its TPP partners are also drafting a separate pledge whereby nations would agree not to devalue their currencies in any way that would undercut their competition.
The agreement will still need to be ratified by lawmakers in all 12 countries. The White House must publish the official text of the agreement, and the President must also notify Congress that he intends to sign it 90 days prior. A tough battle in Congress may ensue over ratification, which could carry implementation into the next administration.
If you have any questions regarding how TPP may impact your business, please contact one of the attorneys or trade professionals at Rock Trade Law.