9
Oct

AFTER more than five years of negotiations, representatives from 12 countries in Asia and the Americas finally struck a deal today on the Trans-Pacific Partnership, an ambitious and contentious free-trade pact. It is the biggest and deepest multilateral trade deal in years, encompassing countries that account for 40% of the world’s economy. But it might prove even more important than that if it succeeds in its ambition to “define the rules of the road” for trade in Asia, as Michael Froman, America’s lead negotiator, put it.

Mr Froman’s office estimates that TPP will see more than 18,000 tariffs on American products reduced to zero. But tariffs, which have already been greatly reduced among TPP’s members, are not the most touted bit of the treaty. More important are the minimum standards for the protection of intellectual property, workers and the environment. All parties will be compelled to follow the International Labour Organisation’s basic principles on workers’ rights, for example. By the same token, countries that do not live up to the deal’s environmental rules can be pursued through the same dispute-settlement mechanism that will be used to adjudicate commercial grievances. There are even rules barring countries from favouring state-owned enterprises—a big step for the likes of Malaysia and Vietnam. Read more…

Published in The Economist on 5 Oct. http://www.economist.com

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