The U.S. and 11 other Pacific Rim countries have reached a deal on the region’s largest trade deal in its history, the Trans Pacific Partnership.
Negotiations for the sweeping trade agreement, which ties together 40 percent of the world’s economy, wrapped up overnight in Atlanta, where member nations including Vietnam, Mexico, Japan and Canada have been in marathon talks for the past five days trying to finalize the loose ends.
The deal, which is expected to reduce or eliminate tariffs for footwear and apparel, has been in negotiations for the past five years and, if passed by Congress, would be a major achievement for the Obama administration expanding U.S. power in the eastern hemisphere and countering the growing influence of China.
Ambassador Michael Froman of the U.S. trade office said he was confident that the agreement “defined the rules of the road in the Asia Pacific region” and that the deal reached was an “ambitious, high-standard trade agreement” that also took into account high labor and environmental standards for the variety of nations in the deal.
The text of the full agreement is expected to be released soon.
“We are extremely pleased and excited by today’s announcement that the U.S. has reached an agreement on the Trans-Pacific Partnership,” said Matt Priest, president of the Footwear Distributors and Retailers of America. “TPP has the potential to provide a once in a generation opportunity for the industry that could strengthen job creation and help drive innovation.”
The hurdles for the deal aren’t quite over yet however, as Congress must approve the Partnership in full. Experts agree that with presidential elections underway and the previous challenge to the President Obama’s trade promotion authority by the House of Representatives, it is likely going to be a fight for passage. The deal will be presented to Congress early in 2016.
Foreshadowing the challenges ahead here in the U.S., Presidential democratic candidate and Sen. Bernie Sanders released a statement this morning against the deal. In a surprise move, Republican Sen. Orrin Hatch of Utah came out against the current agreement after helping to craft the strategy to get Obama’s trade powers passed by Congress earlier this summer. “While the details are still emerging, unfortunately I am afraid this deal appears to fall woefully short,” he said.
Opponents to the agreement argue that it will ship more U.S. jobs overseas and will not have enough labor or environmental protections in place. Additionally, critics have also been quick to point out that the deal and its contents have been negotiated in secret for the past several years.
The footwear industry is largely a proponent of the deal, with Nike committing to 10,000 new U.S. jobs with the TPP and other major companies ranging from Gap Inc. to Wolverine World Wide and Caleres Inc.
Industry group American Apparel and Footwear Association said in a statement released this morning that it was “hopeful that the final agreement contains provisions to enable our members-as well as the millions of U.S. workers they employ and the billions of customers they serve-to benefit from the deal as soon as it is implemented.”
The members of the Partnership are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam.