Asian states hail deal on world's largest free trade area

Asian members of the newly-minted Trans-Pacific Partnership Tuesday hailed the deal to create the world's largest free trade area, with Japan calling it the start of a "new century" for the region.

Delegates from 12 Pacific Rim nations finally managed to hammer out an agreement in Atlanta (BSE: ATLANTA.BO - news) , Georgia on Monday -- five years after the US-led talks first began.

Spanning about two-fifths of the global economy, the hard-won deal aims to set the rules for 21st century trade and investment and press non-member China to shape its behaviour in commerce, investment and business regulation to TPP standards.

Under the deal 98 percent of tariffs will be eliminated on everything from beef, dairy products, wine, sugar, rice, horticulture and seafood through to manufactured products, resources and energy.

Those involved are the US, Canada, Japan, Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Asian members were quick to follow President Barack Obama in declaring the agreement a win, even if most nations were forced to compromise on key issues and exact details of the deal remain scant.

"It (Other OTC: ITGL - news) 's the opening of a new century for the Asia-Pacific region," Japanese Prime Minister Shinzo Abe told reporters, hailing the emergence of a "huge economic zone".

Australian Prime Minister Malcolm Turnbull described the agreement as "a gigantic foundation stone for our future prosperity".

His New Zealand counterpart John Key said it was the culmination of two decades of work and would offer "more jobs, higher incomes and a better standard of living".

Malaysia also hailed the deal, saying it had managed to avoid restrictions on its politically sensitive system of favouring the ethnic Malay majority economically.

China, which is not party to the talks, gave the agreement a cautious welcome, with the Ministry of Commerce describing TPP as "one of the key free trade agreements for the Asia-Pacific region".

But there was no indication whether it might join itself.

- 'Devil's in the detail' -

Consensus in Atlanta was only reached after a number of countries made concessions on protected industries, moves which might be hard for domestic voters to swallow.

And critics lambasted the way many details are still secret.

"The lack of access to details in the text means governments can put a positive spin on the deal, but the devil is in the detail, and we won't have the detail for at least another month," said Patricia Ranald, coordinator of the Australian Free Trade and Investment Network.

The accord must be signed and ratified by the respective countries and many may face uphill battles, not least the United States as it tries to convince a sceptical Congress.

As the largest Asian economy included in the deal, it is little surprise Abe has touted the Atlanta agreement.

The Japanese premier has faced a torrid few months, with the country lurching back towards recession despite his "Abenomics" reforms and a backlash over the decision to abandon decades of pacifism to allow troops to fight abroad.

"Without a success in TPP, the Abe government would have had very little to show in its fight for structural reforms," Martin Schulz, senior economist at Fujitsu Research Institute, told AFP.

Japanese carmakers hope for easier access to global markets.

But Abe has infuriated the agricultural lobby, usually staunch supporters of his Liberal Democratic Party.

Although Japan secured exclusions for some domestically sensitive products -- such as rice, sugar beet, beef, pork and dairy products -- many farmers remain deeply critical of the TPP.

A protest was planned for later Tuesday outside Abe's office.

New Zealand also did not get everything it hoped for.

"We're disappointed there wasn't agreement to eliminate all dairy tariffs but overall it's a very good deal for New Zealand," Key said.

And while the deal grants Australia access to the lucrative US sugar market, cane growers were unhappy they will only be allowed to send an extra 65,000 tonnes of sugar.

The biggest loser, however, is likely to be Asia's largest economy.

But Japan's Abe said he hoped China would one day join the club.

"If China participates in this system in the future, that will contribute to both Japan's security and the stability of the Asia-Pacific region," he said.