The historic trade deal struck by the U.S. and 11 other Pacific nations would benefit a number of U.S. industries, analysts and trade groups said Monday. But they say the deal won’t be a positive across the board.
[ by Robert Schroeder | October 5, 2015 | MarketWatch ]
The U.S. and the 11 other countries including Japan reached agreement Monday on the Trans-Pacific Partnership, a deal to lower trade barriers to goods and services and also to set commercial rules for two-fifths of the global economy. Congress will consider the deal, and a contentious fight is expected.
Stefanie Miller, a research analyst with Height Securities, said she expects big U.S. technology companies, the U.S. apparel industry and the U.S. agricultural sector would benefit.
“It…appears that the final deal will be a positive for the U.S. apparel industry, which stands to gain from reduced or eliminated tariffs on certain materials up the supply chain,” Miller told MarketWatch in an email.
Augustine Tantillo, president of the National Council of Textile Organizations, said in a statement: “Our briefings at the Atlanta TPP round lead us to believe that U.S. negotiators were able to achieve a well-balanced and reasonable outcome for U.S. textile manufacturers and our partners within the Western hemisphere.” The council’s members include Fruit of the Loom Inc., a subsidiary of Berkshire Hathaway Inc.
The Semiconductor Industry Association, whose members include Qualcomm QCOM, -0.16% and Texas Instruments TXN, -0.15% , also lauded the deal. The group noted the deal contains rules preventing market-access restrictions on commercial products with encryption, and other new requirements.
The U.S. pharmaceutical industry, meanwhile, said it was unhappy with the deal — as did a key member of Congress.
The group Pharmaceutical Research and Manufacturers of America, or PhRMA, said it was “disappointed” that the deal did not secure 12 years of data protection for biologic medicines. The group’s members include Biogen BIIB, -3.68% and Pfizer. PFE, -1.91%
Sen. Orrin Hatch, the Utah Republican who leads the Senate Finance Committee, has long backed 12 years of exclusivity for biologic drugs, according to The Wall Street Journal. “I am afraid this deal appears to fall woefully short,” he said in a statement.
“We expect TPP will be a negative for U.S. pharmaceutical companies who are likely to face shorter biologics exclusivity timeframes under this deal,” said Miller of Height Securities.
Eurasia Group President Ian Bremmer predicted job losses in some sectors, especially manufacturing. But he said it would boost the U.S. economy overall.
Mike Huckabee, the former Arkansas governor seeking the Republican presidential nomination, said the deal is a “punch in the gut” to American workers.
President Barack Obama will have to work hard to sell the deal to skeptics in Congress. White House press secretary Josh Earnest said Obama will speak about the deal on Tuesday at the Department of Agriculture.
Another analyst predicted the deal would narrowly clear Congress.