In challenge to Trump, allies sign big trade deal
SANTIAGO, Chile — A trade pact originally conceived by the United States to counter China’s growing economic might in Asia now has a new target: President Trump’s embrace of protectionism.
A group of 11 nations — including major U.S. allies such as Japan, Canada and Australia — signed a broad trade deal Thursday that challenges Trump’s view of trade as a zero-sum game filled with winners and losers.
Covering 500 million people on both sides of the Pacific Ocean, the pact represents a new vision for global trade as the United States threatens to impose steel and aluminum tariffs on even its closest friends and neighbors.
Trump withdrew the United States from an earlier version of the agreement, then known as the Trans-Pacific Partnership, a year ago as one of his first acts in office. It will undeniably be weaker without the participation of the world’s biggest economy, but the resuscitated deal serves as a powerful sign of how countries that have previously counted on U.S. leadership are now forging ahead without it.
“Only free trade will contribute to inclusive growth of the world economy,” Taro Kono, Japan’s foreign minister, told a group of ministers from Southeast Asian countries in Tokyo on Thursday. “Protectionism isn’t a solution.”
The new agreement — known as the Comprehensive and Progressive Agreement for TransPacific Partnership — drops tariffs drastically and establishes sweeping new trade rules in markets that represent about a seventh of the world’s economy. It opens more markets to free trade in agricultural products and digital services around the region. While U.S. beef faces 38.5 percent tariffs in Japan, for example, beef from Australia, New Zealand and Canada will not.
Once it goes into effect, the agreement is expected to generate an additional $147 billion in global income, according to an analysis by the Peterson Institute for International Economics. Its backers say it also bolsters protections for intellectual property and includes language that could prod members to improve labor conditions.
Other members include Mexico, Vietnam, New Zealand, Chile, Malaysia, Peru, Singapore and Brunei. Officials signed the deal Thursday in Santiago, Chile.