The Trans-Pacific trade pact has been signed

Trade & Policy

The Trans-Pacific trade pact has been signed

Hundreds of protesters snarled traffic in Auckland, New Zealand on Thursday to protest the signing of the Trans-Pacific trade pact that was years in the making.

While ministers from a dozen countries finalized the document, groups of protesters blocked major intersections in the city, according to CNN affiliate TVNZ. The signing of the Trans-Pacific Partnership, or TPP, comes after negotiators finally reached a final agreement in October. The deal creates a free trade zone among 12 Pacific nations that together account for 40% of the world's economy.

Negotiations dragged on for years. One big reason for the delay is that government officials from each country were dealing with complicated politics back home. Japanese automakers and farmers, for example, were worried about losing business if cheaper American imports were allowed to flood Japan. Opponents in Australia warned that the deal could result in higher drug prices.

In the U.S., critics argued that U.S.-made goods would be forced to compete against products produced by low-wage workers overseas, while advocates said it would boost exports and support well-paid jobs at home. To complicate matters, negotiations took place behind closed doors, and the draft text was not released to the public. This isn't unusual for trade negotiations: leaders of countries don't want details to leak out before the final agreement is reached.

In the long-run, the deal - which excludes China, the world's second-largest economy -- could help cement American influence in the Pacific, and give the U.S. more power to set the rules of global trade across much of Asia. China has directly negotiated its own trade pacts with foreign governments in recent years. It has already signed over a dozen such free trade agreements with countries including Australia, Switzerland, Peru, Chile and Pakistan, and more are in the pipeline.