Biggest trade deal since NAFTA reached; what TPP means for business

Businesses potentially have a lot to gain from the Trans-Pacific Partnership, the biggest trade deal since the North American Free Trade Act was signed into law in 1993.

But the devil will be in the details of the agreement, which was reached Monday between the U.S. and 11 other nations: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The text of the lengthy deal has not been released yet, but the U.S. Trade Representative has released a summary of its 30 chapters.

The potential is there to help U.S. businesses boost their exports. Nearly 45 percent of U.S. goods exports already go to these 11 countries, and the deal will lift 18,000 different tariffs on U.S. exports, according to the USTR.

“If we can get this agreement to my desk, then we can help our businesses sell more Made in America goods and services around the world, and we can help more American workers compete and win,” said President Barack Obama.

Groups representing exporters, such as the National Association of Manufacturers and the Business Roundtable, praised U.S. officials for completing negotiations on the agreement. But they said they wanted to review the details before passing judgment on it.

So does the AFL-CIO, which accused the U.S. of rushing to reach the agreement despite concerns about it, such as fears that it would further speed the offshoring of American jobs.

“We will evaluate the details carefully and work to defeat this corporate trade deal if it does not measure up,” said AFL-CIO President Richard Trumka.

In order to go into effect, the deal has to passed by Congress.

The U.S. Business and Industry Council, which represents small domestic manufacturers, contended the agreement failed to include enforceable currency manipulation provisions.

This is “an open invitation for TPP member countries Japan, Malaysia and Singapore to continue their unfair, anti-competitive currency practices without fear of consequences,” said USBIC President Kevin Kearns.

In any negotiation, there are winners are losers. Here are some from the business community:

Small businesses

The TPP includes a chapter specifically aimed at making sure small businesses benefit from it. Each country will develop a website targeting small and medium-size businesses that will explain the agreement and how smaller companies can take advantage of it. Plus, an international committee will meet regularly to see how well the agreement is serving small businesses and consider ways to enhance it.

“TPP is the first trade deal to ensure small businesses stand to gain from global trade by dedicating a chapter specifically to breaking down the barriers to exporting faced by small businesses,” said SBA Administrator Maria Contreras-Sweet.

Only 5 percent of U.S. small businesses now export, which means there’s “huge potential for small businesses to expand their businesses by exporting,” the White House said.

The TPP will make that “cheaper, easier and faster … by creating efficient and transparent procedures that move goods quickly across borders,” according to the White House.

The technology industry

The agreement includes enforceable measures to ensure the free flow of data across borders, which will benefit Internet companies and users. It also bans countries from requiring that companies build data centers or other facilities in their nations in order to access their markets.

“TPP has the potential to support America’s high-tech industry through critical intellectual property protections, encryption standards and localization policy rules of the road.” said Lisa Malloy director of policy communications and government relations for Intel.

The Telecommunications Industry Association also was pleased with the deal.

“Last year, the Asia-Pacific region was the largest telecommunications market in the world at $1.8 trillion,” said TIA CEO Scott Belcher. “The TPP will further open this region to exports of U.S.-manufactured goods, promoting jobs and economic growth here at home.”

The pharmaceutical industry

U.S. pharmaceutical companies are disappointed that the agreement did not protect data for biologic medicines for 12 years. Instead, the deal calls for five to eight years of protections, meaning cheaper biosimilar versions of biologics — advanced medicines made from living organisms — could come to market more quickly.

Twelve years “was not a random number,” said John Castellani, president and CEO of the Pharmaceutical Research and Manufacturers of America, “but the result of a long debate in Congress, which determined that this period of time captured the appropriate balance that stimulated research but gave access to biosimilars in a timely manner.

“Europe grants at least 10 years of data protection, so this new agreement puts America behind the eight ball when it comes to competing with European nations,” said Stephen Ezell, vice president for global information policy at the Information Technology and Innovation Foundation.

The tobacco industry

The agreement prevents the tobacco industry from mounting legal challenges to other countries’ restrictions on tobacco use.

“This provision is a critical step toward ending the tobacco industry’s growing abuse of trade agreements to challenge life-saving tobacco control measures all over the world,” said a joint statement issued by Tobacco-Free kids, American Cancer Society, American Heart Association and American Lung Association. “It sets a strong precedent for other trade agreements and boosts efforts to combat a global tobacco epidemic that kills millions each year.”

Picking on tobacco didn’t sit well with Sen. Thom Tillis, R-N.C.

“Breaking the long-standing tradition of not picking winners and losers in trade agreements, the Obama Administration has decided to use the TPP as a laboratory for partisan politics by discriminating against specific agricultural commodities,” Tillis said. “This sets a dangerous precedent for future trade agreements, and I will not only vote against the TPP, but actively work to help defeat its ratification in the Senate.”