Trade ministers agree Asia-Pacific trade pact without US

Trump continues with ‘America First’ policy, China’s Xi casts his country as the new global leader for free...

DANANG, VIETNAM: Ministers from 11 Asia-Pacific countries agreed on Saturday to press ahead with a major trade deal without the United States, as the world's largest economy seeks to go it alone under President Donald Trump's “America First” policy.

Trump pulled his country from the Trans Pacific Partnership (TPP) at the start of the year, dismaying allies and casting into doubt an agreement heralded for tying lower tariffs to strong environmental and labour protections.

He has been something of a lone protectionist voice at the APEC summit in the Vietnamese city of Danang where world leaders, including China's Xi Jinping, have been keen to promote the virtues of free trade and multilateral deals.

In a joint statement Saturday morning, the remaining countries – dubbed the TPP-11 – said they had “agreed on the core elements” of a deal at the sidelines of the APEC summit in the Vietnamese city of Danang, after days of stalled talks raised fears it could collapse altogether.

The ministers said further talks would be needed to reach a full consensus before inking the deal, which now carries an even longer official name – the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).



Japan's lead negotiator Toshimitsu Motegi said the remaining members would still welcome the United States back into their pact.

“This time all the 11 countries are on board and this would send out a very strong positive message to the United States and other Asia Pacific countries in the region,” he said.

Francois-Philippe Champagne, Canada's trade minister, described the breakthrough as “big progress” in a tweet.

Canada had held out to maintain environmental and labour protections linked to freer markets in the deal.

Those elements were thrown into jeopardy by America's sudden withdrawal from the deal earlier this year.

Canada had dug in over those progressive clauses. But they are much less attractive to countries like Vietnam, Malaysia, Chile and Peru now that the carrot of access to the huge US market has been pulled.

Trump's election has upended years of American-led moves to open up global trade.

The US president is among leaders attending the APEC summit in Danang and on Friday he ladled out more of his trademark "America First" rhetoric.

In a strident address he said his country will "no longer tolerate" unfair trade, closed markets and intellectual property theft.

"We are not going to let the United States be taken advantage of anymore," he added, taking a swipe at multilateral trade deals.

Shortly after, China's Xi offered a starkly different vision, casting his country as the new global leader for free trade.

Beijing is not included in the TPP, a deal initially driven through by the former US administration as a counterweight to surging Chinese power in Asia.

China has since sought to fill the free trade gap left by the United States, even if much of its own market remains protected.



Japan, the world's third largest economy, has been particularly active in pushing for a swift consensus on TPP, fearful that delays could lead to the collapse of the pact after years of negotiations and hand more regional influence to China.

But Canada has pushed back against a quick fix.

“This is about setting the terms of trade for generations,” a Canadian delegation source told AFP.

Analysts say the provisional deal reached in Danang will breathe new life into global free trade deals at a time when the United States is turning its back on them.

Deborah Elms, executive director of the Asian Trade Centre, told AFP that even without the US, TPP-11 is "the most important trade agreement signed in the last 20 years".

"Companies had largely given up on the TPP after the withdrawal of the United States," she said. "Now firms will need to scramble to figure out how the agreement matters to their business."

At the APEC summit on Saturday Trump faces a long day of meetings with world leaders who are all pushing for more open trade.

As well as Xi, Russia's Vladimir Putin, Japan's Shinzo Abe and Canada's Justin Trudeau are among those attending.

The original TPP deal was once described by the US as a "gold standard" for all free trade agreements because it went far beyond just cutting tariffs.

It included removing a slew of non-tariff restrictions and required members to comply with a high level of regulatory standards in areas like labour law, environmental protection, intellectual property and government procurement.

Without the US, TPP-11 only represents 13.5% of the global economy but the remaining countries are scrambling to avoid the deal's collapse, especially given the increasingly protectionist winds sweeping through the United States and Europe.