Canada hunting for Asian trading partners

OTTAWA — Canada is searching for a new “coalition of the willing” to forge trade links in Asia after U.S. President Donald Trump’s decision to kill the Trans-Pacific Partnership, said the new Liberal trade minister.

Trump followed through on his promise to pull the U.S. out of the 12-country Pacific Rim pact in the days after his inauguration last month, a decision that has effectively killed the TPP. The sweeping trade deal in goods would have accounted for 40 per cent of the global economy and included several Asian and Western Hemisphere countries, Canada among them.

But now it is back to the drawing board because the TPP can only be ratified if six countries, totalling 85 per cent of the deal’s combined GDP, approve the deal. Only the U.S. and Japan had the sole power to veto the TPP because of the size of their economies.

Japanese Prime Minister Shinzo Abe had been hoping to persuade Trump to change his mind, but that appears futile.

Prime Minister Justin Trudeau spoke by phone with Abe on Wednesday and their conversation suggested the possibility of pursing a separate deal between the two countries.

“The leaders discussed the importance of deepening trade links between Canada and Japan and developing the untapped potential in the bilateral relationship,” Trudeau’s office said.

That’s significant, because Japan has steadfastly refused for years to restart bilateral free trade talks with Canada, saying the TPP would serve the same purpose as a country-to-country agreement.

After meeting Trump this month in Washington, Abe affirmed the need for a “free and fair common set of rules” on trade, and said a bilateral trade agreement between the U.S. and Japan might be possible.

A Japan-Canada bilateral deal would be just one piece of the larger trading puzzle of how Canada engages with Asia, said International Trade Minister François-Philippe Champagne, who took office last month.

Champagne said he will explore “whether there is the possibility to pursue something on the multilateral level with the coalition of the willing or bilaterally.”

The work on that begins in three weeks when Champagne is in Chile for talks with the 11 remaining TPP countries, as well as two significant countries not in the pact — China and South Korea.