ATLANTA—The U.S. and 11 countries around the Pacific were in the home stretch Sunday on talks to complete a sweeping trade agreement that would lower barriers to goods and services and set commercial rules of the road for two-fifths of the world's economy.

Resolving final differences in the pact will set the stage for debates within national legislatures, with the U.S. Congress likely posing the biggest challenge. President Barack Obama will have to allay unease over the Trans-Pacific Partnership within both parties in the midst of a heated presidential campaign. Under existing rules, the deal couldn't go to a vote before Congress until early next year.

The trade deal has been in the works since 2008 but has been stymied by disputes over sensitive industries, and observers cautioned that while an agreement is close, it could be delayed as negotiators try to iron out objections from a small number of countries.

After the U.S. and Australia reached a tentative accord on perhaps the most difficult dispute in the talks—the length of intellectual-property protection afforded to biologic drugs—many officials expected further progress would quickly follow on the remaining issues, including dairy products, New Zealand's biggest export. But Chile and Peru remain concerned about the complicated biologic drugs deal, and other issues also haven't been put to bed, according to people following the talks.

"It's not done yet, but we've obviously largely completed with the Americans," said Australian Trade Minister Andrew Robb, adding that there are 10 other countries in the talks with their own issues.

The result: Officials were still negotiating in Atlanta on Sunday evening, the fifth day of talks, although the U.S. remains optimistic a deal could be reached. Some ministers need approval from top-level government officials back home to close a deal, a step likely to delay any announcement.

A third dispute—about rules for automobile assembly—is essentially resolved, according to officials and people following the talks.

U.S. officials expressed optimism Sunday that representatives from the 12 countries—which don't include China—could close the remaining gaps and reach some sort of agreement before leaving Atlanta. Japanese Economy Minister Akira Amari is set to leave the talks Monday.

"My sense is there will be a close today," Tami Overby, senior vice president for Asia at the U.S. Chamber of Commerce, said Sunday. "I don't think it's going to be a perfect deal, but I hope it's going to be a very good deal," she said, adding the details would have to be analyzed with members.

While officials said the U.S. and Australia have all but eliminated their differences on the drug spat, Chile, Peru and other countries remained concerned about adding to the price of drugs through long exclusivity periods that slow generic imitations. A pathway to settle the medicine dispute could allow New Zealand and the U.S. to work out differences over dairy, New Zealand's No. 1 export.

Canada and Japan are expected to increase access to their tightly controlled dairy markets, but New Zealand wants the U.S. to provide significant access, too. Sen. Ron Wyden (D., Ore.) and Rep. Paul Ryan (R., Wis.), two key lawmakers overseeing trade policy, have insisted that dairy producers in their states gain more access to Canadian consumers. U.S. lawmakers don't want to make it too easy for New Zealand to sell more dairy products in the U.S. because it could threaten less-competitive U.S. dairy farms.

An agreement would be a major victory for Mr. Obama, who has pointed to the TPP as part of his administration's rebalancing of foreign policy toward fast-growing economies in Asia, though the president still faces a steep challenge in the months ahead to win approval for the deal in a deeply divided Congress. A handful of Democrats support Mr. Obama's trade policy, and Republican support is unpredictable in the 2016 election year, depending on the stance of presidential candidates and new leadership in the House.

Legislation designed to expedite passage of the agreement through Congress passed narrowly this summer, and a variety of factors, including the presidential campaign, could make the final deal a hard sell.

The odds of passage will hinge in large part on the final language in a number of provisions, ranging from the strengthening of rights for labor unions to whether U.S. cigarette companies will face legal restrictions within TPP countries.

"If a final agreement is announced, I will carefully scrutinize it to see whether my concerns about rushing into a deal before meeting all U.S. objectives are justified," Sen. Orrin Hatch (R., Utah), chairman of the Senate Finance Committee, said in a statement on Sunday.

U.S. labor unions and their allies among consumer and environmental groups are among the biggest critics of the TPP. The left-wing opposition has prevented Mr. Obama from getting many fellow Democrats—already skeptical the deal will help workers—to support his trade policy.

An array of Republican lawmakers object to provisions that would strengthen the say of labor groups, impinge on the ability of tobacco companies to fight against packaging and other laws overseas, and possibly harm local industries, from dairy to sugar.

Commercial regulations in the pact—including intellectual-property rules and arbitration that lets investors challenge governments—are meant to put pressure on China and other developing countries with looser standards for trade and investment.

Mr. Obama spoke with Australian Prime Minister Malcolm Turnbull on Thursday about the trade deal, and foreign diplomats say senior U.S. officials have pressed their counterparts abroad in an effort to win support among the 12-nation group for rules that would provide a long-term period of exclusivity for biologic drugs, protecting the name-brand products against generic imitators.

The U.S. has been pushing for up to 12 years of exclusivity for biologics, while Australia wanted five years of protection, plus another year while regulatory steps are completed. Officials in Atlanta were discussing a complicated compromise that would provide eight years of exclusivity for biologics in some circumstances, according to people following the negotiations.

Dozens of protesters descended on downtown Atlanta during the talks, including a cancer patient who said she has taken three biologic drugs and wants less exclusivity for major drug makers so she can have access to cheaper generic alternatives. The protester was arrested and charged with trespassing after she declined to leave the Westin Peachtree Plaza hotel, where the talks are being held.

On Sunday, protesters screaming "stop TPP" burst into the hotel again, unveiling a sign in the lobby before security removed them. Minutes later, protesters on an upper floor dropped leaflets calling the TPP a "corporate power tool" into the lobby.

Write to William Mauldin at william.mauldin@wsj.com

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(END) Dow Jones Newswires

October 04, 2015 20:55 ET (00:55 GMT)