A year after an abrupt US withdrawal left a fledgling 12-nation Pacific trade pact for dead, the 11 remaining states will sign a revamped deal Thursday aimed at slashing tariffs.
The agreement—rebranded as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—has been championed as an antidote to growing US protectionism under President Donald Trump, AFP reported.
“We are not going to be derailed by Trump’s decision” to withdraw the US, said Felipe Lopeandia, Chile’s top trade negotiator, ahead of the ratification ceremony in Santiago.
After years of negotiations, the original deal—the Trans-Pacific Partnership, or TPP—was signed in February 2016 by 12 countries that border the Pacific Ocean.
But it fell victim to Trump’s “America First” policy, when he removed the pact’s major linchpin before the deal could get under way.
The CPTPP aims to slash tariffs between the 11 members and foster trade to boost growth. It will “send a political signal to the world and to the United States itself, that this is a global agreement,” said Lopeandia.
Coming in the same week that Trump risked a trade war over his decision to introduce tariffs on imported steel and aluminum, the deal is seen by some members as striking a blow against protectionism.
Washington’s exit meant a drastic downsizing of the original agreement—which with US involvement represented 40% of the global economy.
But the pact—though a diminished one involving 13.5% of global GDP—remains hugely significant, according to Ignacio Bartesaghi of the Catholic University of Uruguay’s business school. “There is no trade agreement involving that number of countries, and one that has 30 chapters which deal with all the most modern topics of international trade,” Bartesaghi said.
More than 20 provisions were suspended or changed in the new agreement, mostly rules over intellectual property originally inserted at the demand of US negotiators. Analysts noted these provisions were not canceled, however, with some suggesting the door is being left ajar for the US.
Chilean authorities say the new chapter on intellectual property protection is now “more balanced”.
“The CPTPP will establish a new standard for other regional economic integration agreements, and even for future negotiations in the World Trade Organization and in Asia-Pacific Economic Cooperation,” said Chile’s foreign ministry, which is hosting Thursday’s landmark signing.
The 11 states represent a market of 500 million people, greater than that of the European Union’s single market. The pact will come into force 60 days after it is fully ratified by six of the 11 members.
The 11 TPP countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
