New lease of life for Pacific trade pact

> 11 nations revamp deal, CPTPP seen as antidote to Trump’s growing US protectionism

SANTIAGO: 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 tomorrow aimed at slashing tariffs.

The agreement – rebranded as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – has been championed as an antidote to growing US protectionism under President Donald Trump.

“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 aluminium, 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 told AFP.

Last month, Trump told the World Economic Forum in Davos that the US might return if it got a better deal.

“Little by little, his advisors have managed to make Trump realise the role that the United States plays in Asia Pacific and the role played by the TPP in that region, not only in economic and trade terms, but in geopolitical terms,” said Bartesaghi.

But Japan, a key driver behind the revised pact, is sceptical.

“If the United States returns to a more positive attitude toward the TPP, it is something we will welcome (but) it would not be so easy” to change the agreement again, said Tokyo’s chief negotiator Kazuyoshi Umemoto. – AFP