11 NATIONS SET TO SIGN CPTPP TOMORROW

Deal targets to slash tariffs among members, foster trade to boost growth

AYEAR after an abrupt United States withdrawal left a fledgling 12-nation Pacific trade pact to die, 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 (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 among the 11 members and foster trade to boost growth.

“It will send a political signal to the world and to the US 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 as striking a blow against protectionism.

Washington’s exit meant a drastic downsizing of the original agreement which with US involvement represented 40 per cent of the global economy.

But the pact — though a diminished one involving 13.5 per cent of global gross domestic product, remains hugely significant, according to Ignacio Bartesaghi of the Catholic University of Uruguay’s business school.

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

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

“If the US returns to a more positive attitude towards 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.

Chile said membership of the new pact will improve access to markets responsible for 17 per cent of its total exports. The other two Latin American countries, Mexico and Peru, will improve their access to countries on the other side of the Pacific, such as Vietnam and Malaysia.

The 11 states represent a market of 500 million people, greater than that of the European Union’s single market.

The pact will come into force 60 days after it is fully ratified by six of the 11 members.

The 11 TPP nations are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.