CPTPP to come into force end of December
WELLINGTON: A landmark 11-country deal that will slash tariffs across much of the Asia-Pacific will come into force at the end of December, New Zealand said yesterday, a rare bright spot for global commerce as the US-China trade war intensifies.
The deal moved forward after Australia become the sixth nation to formally ratify the deal, alongside Canada, Japan, Mexico, New Zealand and Singapore.
“This triggers the 60-day countdown to entry into force of the Agreement and the first round of tariff cuts,” said New Zealand Trade and Export Growth Minister David Parker. His country is responsible for official tasks such as receiving and circulating notifications made by members of the pact.
The five member countries still to ratify the deal are Brunei, Chile, Malaysia, Peru and Vietnam.
While most of the remaining parties to the agreement have vowed to ratify the deal, Malaysian Prime Minister Tun Dr Mahathir Mohamad said he was still weighing its benefits.
Peru’s deputy trade minister Edgar Vasquez told Reuters he expects Lima will ratify the agreement before 2019. “One of the countries that will benefit the most is Peru,” he said.
The original 12-member deal was thrown into limbo early last year when US President Donald Trump withdrew from the agreement to prioritise protecting US jobs.
The remaining nations, led by Japan, finalised a revised trade pact in January, called the Comprehensive and Progressive Agreement for TransPacific Partnership (CPTPP).
The deal will reduce tariffs in economies that together amount to more than 13% of global gross domestic product (GDP) – a total of US$10 trillion (RM41.8 trillion). With the United States, it would have represented 40%.
The success of the deal has been touted by officials in Japan and other member countries as an antidote to counter growing US protectionism. They hope that Washington would eventually recommit to the pact.
Trump’s economic agenda, however, remains focused on China as a trade war between the world’s two largest economies shows little sign of abating.
The trade war threatens to check global economic growth, though signatories to CPTPP said the deal would be a boon for several sectors. – Reuters