Skip to main content

Market Overview

Trans Pacific Trade Pact Finally Agreed

Share:
Trans Pacific Trade Pact Finally Agreed

After long and laborious negotiations, the United States and 11 other countries have agreed on a trade agreement, dubbed the Trans-Pacific Partnership (TPP). The deal faced criticism from industry groups, politicians and voters around the globe, but President Barack Obama announced that the pact had been finalized on Monday.

What Is It?

The deal opens up cross border trade between American and Asian markets and is expected to significantly increase imports and exports between member countries. The deal does away with many of the taxes that used to apply to trade between TPP nations and makes it easier to conduct international business.

Winners

The deal will likely benefit a wide range of industries in the US, especially those that purchase materials from Asian nations. For that reason apparel companies stand to gain from lower import taxes on materials they purchase from partner countries. U.S. livestock producers are also cheering the deal as it will cut down on food inspection requirements and lower taxes on farm goods. However, its logistics companies that may come out on top following the agreement, as increased trade means better deals for firms like United Parcel Services, Inc. (NYSE: UPS).

Losers

However, the effects of the TPP aren't expected to be positive for every sector. Pharmaceuticals are forecast to take a hit from the deal as companies like Biogen (NASDAQ: BIIB) and Pfizer Inc. (NYSE: PFE) complained that the pact doesn't adequately protect data for biologic medicines. Automakers were also critical of the agreement, as the rules will significantly reduce import taxes on foreign-made cars, which will likely boost their popularity among the American public.

 

Related Articles (BIIB + UPS)

View Comments and Join the Discussion!

Posted-In: Trans Pacific Trade PactNews Global Top Stories Markets Best of Benzinga

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com