The freshly inked Trans-Pacific Partnership (TPP) – the biggest trade pact in two decades encompassing 40 percent of the world economy – may be hailed as transformational, but it will take many years before the economic benefits are actually felt, say analysts.
After five years of talks, a dozen countries across the Pacific Basin - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam – on Monday clinched a landmark free-trade agreement that will reportedly reduce or eliminate tariffs on almost 18,000 categories of goods.
It is the largest trade deal the U.S. has negotiated since North American Free Trade Agreement (NAFTA) and the Uruguay Round were signed over twenty years ago.
"For a start, there are several hurdles to overcome before it is implemented," says Andrew Kenningham, senior global economist at Capital Economics.
First off, the deal must be ratified by each country's legislature - a sticky process that could take several months.
In the U.S., which is leading the initiative, many of President Barack Obama's fellow democrat legislators, 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.
"Democrats are opposed, as are leading Republican presidential candidates, including Donald Trump. With presidential elections due next year, the TPP may well get blocked in Congress," said Kenningham.