The deal on the Trans-Pacific Partnership, led by the United States and Japan, aims to set the rules for 21st century trade and investment and press China, not one of the 12, to shape its behaviour in commerce to the TPP standards.
"After five years of intensive negotiations, we have come to an agreement that will create jobs, drive sustainable growth, foster inclusive development, and promote innovation across the Asia Pacific Region," said US Trade Representative Michael Froman.
The hard-won deal to create the world's largest free-trade area, encompassing 40 per cent of the global economy, came after five days of round-the-clock talks in an Atlanta hotel.
United States President Barack Obama, who made the TPP a priority of his second term, said the accord reached in Georgia "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," Obama said in a statement. "We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment."
More than 18,000 taxes imposed by various countries on US products will be eliminated thanks to the partnership, he added.
The accord involves significant market openings from Canada, the United States and Japan but also sets controversial new patent standards for cutting-edge biologic drugs and demands countries like Vietnam, Mexico and Malaysia improve labour standards.
"This agreement in my view is truly transformational," said Canada Trade Minister Ed Fast.
"The magnitude and importance of rules for 21st century issues can't be underscored enough ... It will shape the future for many trade agreements in this 21st century."
The twelve nations covered by the pact are Australia, the United States, New Zealand, Canada, Singapore, Vietnam, Malaysia, Japan, Mexico, Peru, Brunei, and Chile.
The talks went four days past deadline to resolve conflicts over Canada and Japan opening up their dairy markets to New Zealand exports, and objections from Australia, Peru and Chile to the US push for longer biologic patent protections.
New Zealand's IT industry recently expressed concerns that the NZ government would acquiesce to reintroducing software patent protections under regulations potentially to be imposed by the TPP.
"We're an export-driven sector, so we love free trade," Ian Taylor, president of IITP and CEO of Dunedin tech firm Animation Research, said in a letter to Trade Minister Tim Groser.
"However, this can't come at the cost of the future of the technology industry, and that's what it will be if New Zealand's current law banning software patents is traded away in the TPP."
Australian Trade Minister, Andrew Robb, said the deal would eliminate 98 percent of all tariffs encountered by Australian businesses while maintaining that the government delivered on a promise by the government not to change Australia's existing 5 years of data protection for biologic medicines.
"Concerns that the price of medicines would increase have proven to be absolutely unfounded," Robb said.
Robb added that the TPP would not require Australia to change its patent or copyright regimes.
The full text of the agreement has yet to be released, with member nations so far only issuing summaries.
"TPP negotiating parties are now finalising arrangements for the release of the TPP text, and it will be released well in advance of signature," Robb said. "Each country will then undertake its domestic treaty-making process."
"For Australia, this will involve tabling the treaty text in parliament along with a National Interest Analysis and a review by the Joint Standing Committee on Treaties to which all interested parties can make submissions."