The Trans-Pacific Partnership (TPP) is a free-trade agreement being negotiated by 12 nations, and if endorsed will be the largest trade deal in the world.

The TPP would bring together the economies of the US, Australia, New Zealand, Japan, Singapore, Malaysia, Brunei, Vietnam, Chile, Canada, Mexico and Peru - accounting for about a third of global economic output.

Currently, the North American Free Trade Agreement (NAFTA) between the US, Canada and Mexico is the world's largest free-trade area, producing $US17 trillion worth of goods and services.

In comparison, the economic output of the TPP is estimated to be worth about $US28 trillion.

The Australian Government says it will pursue a TPP outcome that "eliminates or at least substantially reduces barriers to trade and investment".

The Department of Foreign Affairs and Trade (DFAT) says the pact will also deal with "behind-the-border impediments" to trade and investment.

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The TPP could boost Australia's trade by "delivering new market access for producers and businesses", especially with countries Australia does not have an existing free-trade agreement, DFAT adds.

China not invited to join pact

The Americans, who have spearheaded the TPP negotiations, insist it would create "gold standards" to deal with 21st-century economic issues such as intellectual property.

But some analysts have cautioned the agreement has the potential to alienate China.

Beijing initially expressed strong opposition to the TPP, viewing it as another US containment tool, although it has recently adopted a slightly more accepting tone.

Speaking at the Asia-Pacific Economic Cooperation (APEC) summit, China's president Xi Jinping said there was enough space in the Asia-Pacific region for every nation to grow.

"China cannot develop in isolation of the Asia-Pacific and the Asia-Pacific cannot prosper without China," Mr Xi told APEC business leaders meeting in Bali.

"China will firmly uphold regional peace and stability. Without peace, development is out of the question, like water without a source or a tree without roots."

Meanwhile, China is pursuing a rival free-trade deal involving 16 Asia-Pacific nations.

'We've made significant progress'

TPP talks began three years ago and president Barack Obama has said he wants a deal by the end of the year.

US trade representative Michael Froman sounded upbeat following talks with counterparts during the APEC summit.

"The TPP countries are strongly committed to working to conclude negotiations this year," Mr Froman told reporters.

The US official said negotiators had tackled some sensitive issues, such as weakening the influence of state-owned enterprises, intellectual property and environment regulations.

"We've made significant progress this week and we look forward to briefing the TPP leaders about that progress and getting their political level guidance to facilitate the conclusion of negotiations," Mr Froman added.

Prime Minister Tony Abbott also appeared optimistic an agreement over the TPP could be finalised soon.

"Inevitably there are issues, there are always are. There's always horse-trading in these negotiations. But in the end, if you can come to a deal, everyone is better off," he said.

"Our objective is ever freer, ever more liberal trade, not just in goods but in services as well."

Concerns over the TPP

Campaigners for government transparency and civil liberties in Australia have expressed concern about the TPP and its provisions on intellectual property and the reach of US laws.

Pirate Party Australia says it is critical about the lack of transparency in the TPP negotiations and the content of the proposed deal.

"The only time that the Australian public will be able to comment on the text is when it is finished and signed," said the party's president, Simon Frew, in a statement.

"There is no opportunity to critique and to provide input, or to even see what is being planned. We are talking about potentially major changes to Australian laws and the public is being shut out.

"Pirate Party Australia has attended and presented at numerous 'consultations' and negotiating rounds, where representatives from DFAT have given half-answers and limited indications of what changes will actually be required by the agreement."

DFAT says it is "normal practice" in international negotiations to keep documents confidential.

"Even if it were possible to release negotiating texts, these texts would be potentially misleading. The obligations under discussion evolve as negotiation rounds progress," a statement on the website explains.

"Initial claims are amended gradually over the course of many negotiating rounds until all parties reach their final positions, delivering text that all parties can agree.

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"The difference between early works-in-progress texts and the final text can be vast. The text has no status until all parties have agreed to it."

Elsewhere, major American multinationals such as Wal-Mart and FedEx have expressed concern about the deal's tight deadline, which could make US negotiators vulnerable to compromise.

"For Wal-Mart, we would like to see a high-quality agreement, which is that no sectors and no products are excluded," said Scott Price, chief executive of the US retailer in Asia.

"That there are no compromises that leak into the process for the purpose of speed.

"If it takes more time in order to have a high-quality agreement, that's what we should have."

ABC/wires