The TPP agreement, which includes the United States and 11 other countries in the Pacific Rim and the Americas, covers a range of industries and promises to reduce or eliminate tariffs and quotas on numerous products.
Trade negotiators from 12 countries, including the United States, who were holed up in an Atlanta hotel, reached a deal on the Trans-Pacific Partnership in the early morning hours Monday, according to multiple media reports.
The trade agreement covers a range of industries and promises to reduce or eliminate tariffs and quotas on numerous products traded between the member countries. In addition to the United States, TPP includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Some of the last minute wrangling between the countries focused on market access for dairy and certain pharmaceutical products.
The Obama administration has long argued the deal will bring a boost to U.S. products, including agricultural goods, automotive parts, building products, chemicals, consumer goods, fish, footwear, forest products, high-tech instruments, health products, infrastructure materials, information technology, metals and ores, machinery products, minerals and fuels, and textiles, traded with the TPP markets.
According to a report released by the Office of the U.S. Trade Representative this summer, U.S.-manufactured footwear in TPP nations currently faces quotas and tariffs of more than 100 percent. The United States exported $824 million of footwear worldwide in 2014, and $370 million of that went to TPP countries. In another example, tariffs on U.S.-made building products in TPP countries are as high as 60 percent. TPP countries imported nearly $29 billion of the $46 billion in global U.S. exports of U.S. building products in 2014.
Many U.S. agricultural exports to TPP member countries face even higher tariffs. USTR noted, for example, the United States exported $6.7 billion in pork products overseas in 2014, with $4.7 billion of that imported by TPP countries.
The long-awaited TPP has been routinely plagued by setbacks, including the battle in Congress to restore trade promotion authority for President Obama. Obama signed TPA into law in late June, giving the president a more open hand to negotiate trade deals like the TPP and a similar deal he is currently negotiating with European nations, the Transatlantic Trade and Investment Partnership.
Various industry organizations and companies are praising the deal this morning.
“Trade agreements are vital for American retailers large and small. They help merchants provide high-quality, low-cost goods to U.S. consumers, and provide new overseas market opportunities for American companies and workers,” National Retail Federation Senior Vice President for Government Relations David French said in a statement. “It’s taken hard work on the part of U.S. negotiators to conclude this agreement, and we congratulate United States Trade Representative Michael Froman and his team for achieving an agreement.”
“Through better rules and opening foreign markets further, an effective TPP agreement has the potential to improve the conditions for mutual trade and investment among countries accounting for 40 percent of world economic output,” said Bill Reinsch, the National Foreign Trade Council’s president.
“Each day, UPS alone handles six percent of U.S. GDP and two percent of global GDP. TPP will help UPS customers across multiple sectors by bringing down tariffs, accelerating the release of goods through customs, and supporting the participation of small businesses in regional and global supply chains,” added David Abney, chief executive officer of UPS.
There have been some industry, labor and environmental organizations, however, who have adamantly opposed the trade pact from the start.
“Amazingly, the public is still not able to see the contents of a completed pact that has been negotiated entirely behind closed doors. But we know enough about the pact to understand that, if passed, it would undermine decades of environmental progress and threaten our climate,” warned Sierra Club Executive Director Michael Brune.
The Obama administration’s biggest obstacle with the Trans-Pacific Partnership may still be yet to come. TPP could face significant opposition on Capitol Hill, where it must win over a majority of lawmakers in an “up-or-down” (yes-or-no) vote to approve trade pact’s implementation.
Trade delegates reach deal on Trans-Pacific Partnership
