Eleven Pacific nations sign their own agreement to lower tariffs.
11 nations, including some U.S. allies, back globalization
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 Donald 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 in Chile’s capital, Santiago, that challenges Trump’s view of trade as a zero-sum game filled with winners and losers.
Covering 500 million people on either side of the Pacific Ocean, the pact represents a new vision for global trade as the United States imposes steel and aluminum tariffs on even its closest friends.
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. The resuscitated deal is undeniably weaker without the participation of the world’s biggest economy, but it serves as a powerful sign of how countries that have previously counted on U.S. leadership are now forging ahead without it.
“Globally, there has been an increasing level of uncertainty, given the adoption of policies and measures by some key players that question the principles that have contributed to generating prosperity for our peoples,” President Michelle Bachelet of Chile said in a speech shortly before the pact was signed. “We need to stay on the course of globalization, yet learning from our past mistakes.”
In its original incarnation as the TPP, the accord was conceived as a counterweight to China, whose vast economy was drawing other Asian countries closer despite its state-driven model and steep trade barriers. Not only does the pact lower trade barriers, it could also prod Beijing to make changes to enjoy the same benefits.
When President Barack Obama was advocating the deal, he said that “America should call the shots” instead of China.
Now, signatories are opening the door for China to join. Heraldo Muñoz, Chile’s foreign minister, told reporters Thursday that Chinese officials had been weighing the possibility of signing on.
Trump went in the opposite direction, announcing tariffs on steel aluminum imports to the United States. He said that Canada and Mexico were being exempted for now, and that allies such as Australia could later be excluded. His order could affect Brazil, China, Germany, Japan, South Korea and Turkey, though he said he would have leeway to add or take countries off the list as he sees fit.