Danang: Trade ministers from 11 Asia-Pacific countries agreed today to press ahead with a major trade deal without the United States, as the world’s largest economy seeks to go it alone under President Donald Trump’s ‘America First’ policy. Trump pulled his country from the Trans-Pacific partnership (TPP) at the start of the year, dismaying allies and casting into doubt an agreement heralded for tying lowertariffs to strong environmental and labour protections.
In a joint statement this morning, the remainingcountries — dubbed the TPP-11 — said they had “agreed on thecore elements” of a deal at the sidelines of the APEC summitin the Vietnamese city of Danang, after days of stalled talksraised fears it could collapse altogether. Francois-Philippe Champagne, Canada’s trade minister ,described the breakthrough in a tweet as “big progress”. Canada had held out to maintain environmental and labourprotections linked to freer markets in the deal.
Those elements were thrown into jeopardy by America’ssudden withdrawal from the deal earlier this year, whichforced the remaining countries to reconsider the merits of apact suddenly shorn of access to the world’s largest economy. Canada had dug in over those progressive clauses. Butthey are much less attractive to countries like Vietnam ,Malaysia, Chile and Peru now that the carrot of access to thehuge US market has been pulled. Trump’s election has upended years of American-led movesto open up global trade. The US president is among leaders attending the APECsummit in Danang and yesterday he ladled out more of histrademark ‘America First’ rhetoric.
In a strident address he said his country will “no longertolerate” unfair trade, closed markets and intellectualproperty theft. “We are not going to let the United States be takenadvantage of any more,” he added, taking a swipe atmultilateral trade deals. Shortly after, China’s leader Xi Jinping offered astarkly different vision, casting his country as the newglobal leader for free trade. Beijing is not included in the TPP, a deal initiallydriven through by the former US administration as acounterweight to surging Chinese power in Asia.
China has since sought to fill the free trade gap left bythe United States, even if much of its own market remainsprotected. Japan, the world’s third largest economy, has beenparticularly active in pushing for a swift consensus on TPP, fearful that delays could lead to the collapse of the pactafter years of negotiations and hand more regional influenceto China. Today, Trump and Xi will join leaders from across theAsia-Pacific region for closed door summit talks, includingRussia’s Vladimir Putin, Japan’s Shinzo Abe and Canada’s Justin Trudeau.
The original TPP deal was once described by the US as a”gold standard” for all free trade agreements because it wentfar beyond just cutting tariffs. It included removing a slew of non-tariff restrictionsand required members to comply with a high level of regulatorystandards in areas like labour law, environmental protection, intellectual property and government procurement. Without the US, TPP-11 only represents 13.5 percent ofthe global economy but the remaining countries are scramblingto avoid the deal’s collapse, especially given theincreasingly protectionist winds sweeping through the United States and Europe.