Trans-Pacific Partnership trade deal is reached

World Leaders React to Trade Agreement

ATLANTA — The United States, Japan and 10 other Pacific Rim nations on Monday reached final agreement on the largest regional trade accord in history, teeing up what could be the toughest fight President Obama will face in his final year in office: securing approval from Congress.

The conclusion of the Trans-Pacific Partnership, after years of negotiations and a series of sleepless nights here, was merely “an important first step,” conceded Michael B. Froman, the United States trade representative, as he and other weary officials announced their accord.

Now the deal faces months of scrutiny in Congress, where some bipartisan opposition was immediate. That debate will unfurl against the backdrop of a presidential campaign in which populist anti-trade talk against the deal is already prominent.

Still, for Mr. Obama the accord could be a legacy-making achievement, drawing together countries representing two-fifths of the global economy, from Canada and Chile to Japan and Australia, into a web of common rules governing trans-Pacific commerce. It is the capstone both of his economic agenda to expand exports and of his foreign policy “rebalance” toward closer relations with fast-growing eastern Asia, after years of American preoccupation with the Middle East and North Africa.

“When more than 95 percent of our potential customers live outside our borders, we can’t let countries like China write the rules of the global economy,” Mr. Obama said in a statement. “We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment.”

That argument — that the Pacific pact would be a bulwark against China’s power and a standard-setter for global commerce — will be central to the president’s hard sell ahead to Congress, administration officials said.

For Mr. Obama to win Congress’s approval, he will have to assemble a bipartisan coalition of lawmakers, building out from the political center to marginalize resistance on the left and right. Earlier this year, the president relied heavily on Republicans to win approval of so-called fast-track trade authority, which will allow a vote on the Pacific accord without threat of amendments or filibuster.

This time, the president probably will need more Democrats’ votes. Final concessions his team made in Atlanta angered the tobacco and brand-name pharmaceutical industries, which in turn could cost the president support among Republicans who were allies on the fast-track issue. Also, many conservatives oppose giving Mr. Obama any big accomplishment. And anti-trade talk from presidential candidates — the Republican front-runner, Donald J. Trump, called it “a terrible deal” on Twitter on Monday — most likely will embolden the conservatives.

Among Democrats, too, opposition from the presidential arena is certain to bleed into debate over the Pacific pact.

Senator Bernie Sanders of Vermont, who is running for the Democrats’ 2016 nomination, began a fund-raising appeal within hours of the deal’s announcement. “Wall Street and big corporations just won a big victory to advance a disastrous trade deal,” he said in a statement. “Now it’s on us to stop it from becoming law.”

The pressure now builds on Hillary Rodham Clinton to take a stand. She promoted the trade talks as Mr. Obama’s secretary of state, but as a presidential candidate she has expressed enough wariness before liberal audiences that her support for an agreement is widely in doubt.

The Pacific accord would phase out thousands of import tariffs as well as other barriers to international trade, like Japanese regulations that keep out some American-made autos and trucks. It also would establish uniform rules on corporations’ intellectual property, and open the Internet even in communist Vietnam.

The Office of the United States Trade Representative said it eventually would end more than 18,000 tariffs that the participating countries have placed on American exports, including autos, machinery, information technology and consumer goods, chemicals and agricultural products as varied as avocados in California and wheat, pork and beef from the Plains states.

The trade ministers who negotiated it predicted the overall economic and political heft of the 12-nation group would turn the accord into a model for future trade agreements. It would overhaul the system for settling disputes between nations and foreign companies, while barring tobacco companies from using that process to block countries’ antismoking initiatives. Negotiators said it also would enforce higher standards for labor conditions and environmental protection, including wildlife-trafficking.

By law, Congress will have months to deliberate, perhaps to next April. Mr. Froman said he did not know when Mr. Obama would officially notify Congress that he intends to sign the accord, but once he does, that notice will give Congress 90 days to first consider it. Additional time most likely will be needed, congressional and administration officials said.

The administration wasted no time beginning its campaign for approval. Mr. Froman flew back to Washington as soon as he and the other trade officials announced their agreement to start reaching out to Congress, as well as to interest groups and industries that afternoon.

Key members of Congress in both parties and interest groups influential in Washington expressed ambivalence at best or outright opposition, though the agreement’s 30-chapter text will not be available for perhaps a month.

The Ford Motor Company quickly condemned the agreement, saying in a statement that it would not meaningfully address currency manipulation by American trading partners, like Japan, that has the effect of lowering prices for their exports to the United States.

Representative Sander Levin, a congressman from Detroit and a point man on trade for his party as ranking Democrat on the House Ways and Means Committee, released an ambiguous statement that also cited a continued concern over currency policies — one shared by scores of lawmakers — and disappointment that the agreement did not do more to force Mexico to allow truly independent unions.

The entire trade agreement came together only at 5 a.m. Monday, after five days and sleepless nights of tense haggling secluded in an Atlanta hotel. When the 11 men and one woman (Magali Silva of Peru) filed onto a dais in a hotel ballroom several hours later to meet reporters, scores of aides burst into applause, and some ministers joined in.

Mr. Froman read their joint statement that hailed a “historic agreement.” But the ad-libbed comments of several ministers — including those from New Zealand and Canada, who hours earlier had been at the center of a final, heated standoff over dairy exports — attested to a shared sense of accomplishment. (Other parties to the Pacific pact are Singapore, Vietnam, Malaysia and Brunei.)

Canada’s minister, Ed Fast, who had to negotiate just weeks before federal elections in his country, with anti-trade critics on the attack, conceded there had been “very tough discussions.”

But, he added, “at the end of the day, here we are as 12 T.P.P. partners, having achieved something that at times many people didn’t think was achievable.”

Tim Groser of New Zealand, a small nation that is a major dairy exporter and would gain new access to markets in Canada, the United States and elsewhere, interjected, “Look, long after the details of this negotiation on things like tons of butter have been regarded as a footnote in history, the bigger picture of what we’ve achieved today will be what remains.”

The ministers confirmed that one of the most challenging issues was dealing with so-called biologics, which are advanced medicines made from living organisms. The United States sought up to 12 years’ protection for drug makers to withhold data needed to produce generic “biosimilars,” as an incentive for their innovations, while Australia and Peru led most other nations in fighting for no more than five years of protection.

The compromise set a mandatory minimum of five years, without setting a maximum, leaving both sides to declare victory. “We do think we have a balanced result,” said Ms. Silva of Peru.

But that compromise raised questions from a significant source, Senator Orrin Hatch of Utah, chairman of the Senate Finance Committee, which has jurisdiction over trade. Mr. Hatch had shepherded fast track through the Senate, but has demanded no compromise on the American position protecting pharmaceutical giants.

The decision to bar tobacco companies from using the deal’s dispute resolution tribunals to challenge antismoking law may cost the accord support among Republican lawmakers from tobacco states.

But without those compromises, a final accord may not have been possible.

Only by dawn had negotiators settled on expanding access to dairy and sugar markets, especially in the United States and Canada. Also in final days, the United States and Japan agreed to long periods before American tariffs on Japanese vehicles sold in this country are phased out — 30 years for trucks, 25 for autos, and up to 15 years for some auto parts. –http://www.nytimes.com/2015/10/06/business/trans-pacific-partnership-trade-deal-is-reached.html?_r=0

David M. Herszenhorn contributed reporting from Washington.