WASHINGTON – The United States and 11 other Pacific Rim countries on Monday finalized the largest regional trade deal ever attempted, one that would lower trade barriers and raise labor and environmental standards in countries responsible for two-fifths of the world economy.
The Trans-Pacific Partnership, or TPP, is the biggest item on President Obama's trade agenda and could be one of the last major foreign policy accomplishments of his administration. It took years to negotiate because, as with any free-trade deal, countries go in pledging to lower barriers but then fight to preserve their own economic interests.
The final agreement was reached early Monday after a last few days of talks by the 12 trade ministers in Atlanta.
Though the pact will take weeks to be translated and published, Minnesota's biggest trading companies and several industry groups expressed cautious support for it. Minnesotans in Congress, who will get a yes-no vote on it later this year or early next, split roughly along party lines in their early assessment.
The U.S. trade representative's office said 18,000 different taxes on U.S. products and services in the other 11 countries will be eliminated because of TPP. In service industries, the deal prevents countries from making foreign companies establish on-site offices in order to do business.
Even as the Obama administration sang its praises, the TPP must still gain approval in the individual countries that put the pact together. In the U.S. Senate and House, the TPP has been a frequent source of controversy. Some critics say it will allow U.S. jobs to be replaced by cheaper labor overseas. Others raise human rights and environmental concerns.
As it began to look at specifics, Cargill Inc., the agribusiness giant based in Minnetonka, said in a statement that the agreement could move the world "a step closer to becoming more prosperous and more food-secure."
"We believe the Trans-Pacific Partnership will allow food to move more freely across borders from places of plenty to places of need, which benefits farmers and consumers around the world," David MacLennan, Cargill's chairman and chief executive, said.
With the deal, Minnesota's nation-leading sugar beet industry, along with other U.S. sugar producers, succeeded in limiting increases in the amounts of sugar Australia will be able to ship to America. The Australians had sought to sell 750,000 additional metric tons per year in the U.S. TPP allows for just a 65,000-ton increase.
Uncertainty about other specific details in the deal led to measured responses by Minnesota's congressional delegation.
"The Trans-Pacific Partnership is a huge trade agreement with far-reaching implications for Minnesotans, and I believe it will need to be closely scrutinized," Sen. Al Franken said. "I want to ensure that any trade deal truly benefits Minnesota's workers, business, and communities, because I have seen the damage that weak trade agreements have done to families in northern Minnesota."
Republican Reps. Erik Paulsen and John Kline offered optimistic takes. Both emphasized the positive potential of the TPP to provide more business and jobs for the state's farmers, ranchers, manufacturers and other businesses. Both promised to listen to constituents before the TPP vote and to make sure it meets guidelines set by Congress.
Spokeswomen for Democratic Sen. Amy Klobuchar and Republican Rep. Tom Emmer said their bosses would be studying details.
Democratic Rep. Keith Ellison, who represents Minneapolis and co-chairs the Congressional Progressive Caucus, has fought the TPP all along.
"While details are still emerging, we are concerned the Trans-Pacific Partnership will destroy jobs and depress wages, threaten health and safety standards, harm our air, land and water, and make it harder for patients to access lifesaving drugs," Ellison and caucus co-chairman Raúl M. Grijalva, D-Ariz., said in a statement.
Democrats from Minnesota also expressed concern about the so-called "fast track" negotiating process, which let Congress offer general goals but not negotiate specific details in trade deals. "I've been waiting on this for years now, and I think in fairness, we have to do due diligence to dig through the whole thing," Rep. Tim Walz of Minnesota told the Star Tribune.
Walz, a Democrat, noted that he had expressed concern about the currency manipulation, which he said didn't get addressed in the pact.
"Congress should have been involved on the front end, but we weren't," he said. "Now my only input is yea or nay. This is where the public is going to see the real shortfall in my opinion. It's now cast."
Staff writer Allison Sherry contributed to this report.
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