The Trans-Pacific Partnership (TPP) trade agreement will create a new economic bloc which reduced barriers between US, Japan and 10 other nations involved in a controversial and sweeping trade agreement that covers about 40% of the world economy.
This controversial trade deal was signed after five days of talks in Atlanta in the US but has been under negotiation for five years and was delayed repeatedly by negotiations over drug patents.
However, the other countries included in the TPP are Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
US president Barack Obama said in a statement that the trade deal “reflects America’s values and gives our workers the fair shot at success they deserve”.
“When more than 95 percent of our potential customers live outside our borders, we can’t let countries like China write the rules of the global economy,” he said.
“We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment.”
Japanese Prime Minister Shinzo Abe told news reporters the trade deal was a “major outcome not just for Japan but also for the future of the Asia-Pacific”.
If ratified by the individual countries involved, the agreement has the potential to influence market in everything from dairy produce to cancer treatments.
Supporters say it could be worth billions of dollars to the countries involved but critics say it was negotiated in secret and is biased towards corporations.