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TPP Members, Canada Strike Trade Deal Without US

File photo of trade ministers and delegates of TPP in Danang, Vietnam in November.File photo of trade ministers and delegates of TPP in Danang, Vietnam in November.

Canada and the remaining members of the old Trans-Pacific Partnership agreed Tuesday to a revised trade agreement that will forge ahead without the United States and give Canadians more access to Japan’s massive economy.

The deal, which follows two days of high-level talks in Tokyo, was confirmed by a spokesman for International Trade Minister Francois-Philippe Champagne. The partners are now expected to work toward signing the agreement by early March, The Canadian Press reported.

The announcement came just hours after a Canadian government official said Ottawa was optimistic that a revised Asia-Pacific pact would be reached as early as Tuesday.

The official, who spoke on condition of anonymity, told The Canadian Press that Ottawa believed a deal could be struck, even as it pushed for more progress on negotiations surrounding the automotive and cultural sectors.

After the announcement, another Canadian government official said Champagne pressed his counterparts for an exemption on culture-related elements that had been part of the original deal.

Canada, the official said, will protect its cultural sector in the updated deal through legally binding side letters with each partner.

On autos, the official argued Canada made progress in support of its automotive sector and ensured it can compete anywhere on a level playing field. Canada, the official added, struck a bilateral deal with Japan to resolve non-tariff barriers on autos, including a binding dispute settlement mechanism. The official said it also reached a bilateral agreement with Malaysia to adjust auto rules-of-origin and is finalizing another one with Australia.

Canada, the second-largest economy among the partners, was widely considered the main holdout in the negotiations. Last fall, the pact was rebranded the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

The Tokyo negotiations were the first high-level talks since the leaders of the partner economies met in November on the sidelines of the Asia-Pacific Economic Co-operation summit in Danang, Vietnam.

Prime Minister Justin Trudeau made international headlines there by deciding not to sign an agreement-in-principle on what became known as TPP11 following the US withdrawal.

Trudeau’s decision in Vietnam to continue negotiating for a better deal, rather than striking an agreement, led to the abrupt cancellation of a TPP leaders’ meeting in Danang.

Many believed the original TPP has suffered a fatal blow when Donald Trump withdrew from the deal in one of his first acts as US president.

The agreement was reached Tuesday as Canada faces a tough renegotiation of the North American Free Trade Agreement. NAFTA negotiators from Canada, the United States and Mexico are meeting in Montreal this week.

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