* Most ambitious trade pact in a generation
* Ratification hurdle still to come after deal
* Talks have been under way for five years
* China left out of Pacific group
(Adds China reaction)
By Krista Hughes and Kevin Krolicki
ATLANTA, Oct 5 (Reuters) - Twelve Pacific Rim countries on
Monday reached the most ambitious trade pact in a generation,
aiming to liberalize commerce in 40 percent of the world's
economy in a deal that faces skepticism from U.S. lawmakers.
The Trans-Pacific Partnership (TPP) pact struck in Atlanta
after marathon talks could reshape industries, change the cost
of products from cheese to cancer treatments and have
repercussions for drug companies and automakers.
Tired negotiators worked round the clock over the weekend to
settle tough issues such as monopoly rights for new biotech
drugs. New Zealand's demand for greater access for its dairy
exports was only settled at 5 a.m. EDT (0900 GMT) on Monday.
If approved, the pact would cut trade barriers and set
common standards from Vietnam to Canada. It would also furnish a
legacy-shaping victory for U.S. President Barack Obama, who will
promote the agreement on Tuesday in remarks to business leaders
in Washington.
The Obama administration hopes the pact will help the United
States increase its influence in East Asia and help counter the
rise of China, which is not one of the TPP nations.
Lawmakers in the United States and other TPP countries must
approve the deal. Five years in the making, it would reduce or
eliminate tariffs on almost 18,000 categories of goods.
Initial reaction from U.S. Congress members, including
Democrats and Republicans, ranged from cautious to skeptical.
Vermont Senator Bernie Sanders, a Democratic presidential
candidate, warned the pact would cost jobs and hurt consumers.
"In the Senate, I will do all that I can to defeat the TPP
agreement," he tweeted.
Many of Obama's Democrats, as well as labor groups, fear the
TPP will cost manufacturing jobs and weaken environmental laws,
while some Republicans oppose provisions to block tobacco
companies from suing governments over anti-smoking measures.
Republican Senator Orrin Hatch, who heads the Senate Finance
Committee, was wary. "I am afraid this deal appears to fall
woefully short," said Hatch, who had urged the administration to
hold the line on intellectual property protections, including
for drugs.
U.S. lawmakers can approve the deal or vote it down, but not
amend it.
CURRENCY, DRUGS, DAIRY, AUTO POLICIES
Ministers said the agreement would include a forum for
finance ministers from participating countries to discuss
currency policy principles. This takes into account, in part,
concerns among U.S. manufacturers and critics who suggest Japan
has driven the yen lower to benefit its car exporters and other
companies.
But Democratic Representative Debbie Dingell from Michigan,
home of the U.S. auto industry, said currency has not been fully
dealt with. "Nothing that we have heard indicates negotiators
sufficiently addressed these issues," she said.
The United States and Australia negotiated a compromise on
the minimum period of protection to the rights for data used to
make biologic drugs. Companies such as Pfizer Inc (NYSE:PFE) PFE.N , Roche
Group's Genentech and Japan's Takeda Pharmaceutical 4502.T
could be affected.
The agreed terms fell short of what the United States had
sought. Under the deal, countries would give drugmakers at least
five years' exclusive access to clinical data used to win
approval for new drugs. An additional period of regulatory
review would likely mean drug companies would have an effective
monopoly for about eight years before facing lower-cost, generic
competition.
Politically charged dairy farming issues were addressed in
the final hours of talks. New Zealand, home to the world's
biggest dairy exporter, Fonterra FCG.NZ , wanted increased
access to U.S., Canadian and Japanese markets.
New Zealand Prime Minister John Key said the deal would cut
tariffs on 93 percent of New Zealand's exports to the United
States, Japan, Canada, Mexico and Peru. "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.
The United States, Mexico, Canada and Japan agreed to auto
trade rules on how much of a vehicle must be made within the TPP
region to qualify for duty-free status.
The TPP would give Japan's automakers, led by Toyota Motor
Corp 7203.T , a freer hand to buy parts from Asia for vehicles
sold in the United States, but sets 25-30 year phase-out periods
for U.S. tariffs on Japanese cars and light trucks.
The deal between Australia, Brunei, Canada, Chile, Japan,
Malaysia, Mexico, New Zealand, Peru, Singapore, the United
States and Vietnam also sets minimum standards on issues ranging
from workers' rights to environmental protection.
Trade ministers said the TPP would in future be open to
other countries, including potentially China.
"There is a real opportunity for China to be a part of
this," Malaysian Trade Minister Mustapa Mohamed said.
Though Obama painted the deal in part as a way of stopping
China from writing the rules of the global economy, China's
Ministry of Commerce broadly welcomed the agreement in the hope
it would "promote and make common contributions to Asia-Pacific
trade, investment and economic development".
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BREAKINGVIEWS-Trade mega-deal will go only so far economically
ID:nL1N1251ZR
Graphic on TPP trade http://graphics.thomsonreuters.com/15/tpp/
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(Writing by Alistair Bell; Additional reporting by Richard
Cowan in Washington, Ana Isabel Martinez in Mexico City and
Cecile Lefort in Wellington; Editing by Ken Wills and Will
Waterman)