Japan, Canada and nine other Pacific Rim economies have offered a rebuke to Donald Trump, declaring they had solved their differences and would press on with an expansive new trade deal on the first anniversary of the US president’s withdrawal.
Mr Trump made pulling out of the Trans-Pacific Partnership negotiated by the Obama administration one of his first official acts when he took office a year ago, a move that critics have called a strategic gift to China.
But in a sign of how the rest of the world is ready to move on without the US, the 11 remaining countries announced on Tuesday that they would go ahead and sign the agreement in Chile on March 8 after overcoming last-minute objections from Canada.I
n an added irony, the announcement came on the same day that Mr Trump was due to sign into law new tariffs on imports of solar cells and washing machines — his first major move to erect trade barriers.
“The decision for all 11 countries to participate is epoch-making for our country and the future of the Asia-Pacific region,” Toshimitsu Motegi, Japan’s economy minister, said on Tuesday following talks by the pact’s chief negotiators in Tokyo.
Speaking at the World Economic Forum in Davos, Justin Trudeau, Canada’s prime minister, hailed the pact as “the right deal” for “sustaining growth and prosperity” and said it fitted with his goal of “progressive” trade deals.
Mr Motegi said the pact would send a signal to “parts of the world” where there “may be a movement towards conservatism”. But he left the door open for the US. “We will explain again to America the importance of [the deal] and I hope they will come back,” he said.
Mr Trump has said he would prefer to pursue bilateral deals with TPP members including Japan, and administration officials say pushing for those will be a priority this year. But the government of Shinzo Abe and others have so far refused to begin negotiations over any such deals, with many countries warily eyeing the Trump administration’s aggressive bid to renegotiate the North American Free Trade Agreement with Canada and Mexico, who are both TPP members.
The TPP is widely seen as one of the most ambitious trade agreements ever negotiated because of new standards it sets on issues such as data flows.
It will also lay down a marker to China by setting high legal standards for trade while opening up the possibility that other countries such as South Korea — and possibly even the UK— could join the pact, which has been renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP.
Steven Ciobo, Australia’s trade minister, said the new deal, which serves as an umbrella set of rules for separate bilateral market access agreements between members, would deliver big economic gains.
“The agreement will deliver 18 new free trade agreements between the CPTPP parties,” he said. “For Australia that means new trade agreements with Canada and Mexico and greater market access to Japan, Chile, Singapore, Malaysia, Vietnam and Brunei.”
To secure the deal the remaining members agreed last year to suspend many of the most contentious rules sought by the Obama administration over years of negotiations. Among those are tough intellectual property rules and key elements of an investor-state dispute system that had been one of the TPP’s most contentious features.
Canada, which is now engaged in tense negotiations with the US over an update of Nafta, baulked at signing the trans-Pacific deal in November due to concerns over rules for vehicles and its cultural industries. But a Canadian official said on Tuesday that those had been resolved via a series of side letters.
Lim Hng Kiang, Singapore’s trade minister, told Bloomberg that a similar letter would deal with Vietnamese concerns over the imposition of labour provisions. New rules over the conduct of state-owned enterprises that Malaysia and Brunei had a problem with would be frozen, he said.
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