Eleven countries signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP) on March 8 that will reduce tariff and non-tariff barriers on more than 13% of world trade -- shortly before the US, which withdrew from the agreement last year, announced the imposition of tariffs on steel and aluminum.
“Today, we can proudly conclude this process, sending a strong message to the international community that open markets, economic integration and international cooperation are the best tools for creating economic opportunities and prosperity,” said Chilean President Michelle Bachelet, in a pointed reference to US President Donald Trump's protectionist moves. The agreement would have covered 40% of world trade with the Americans in it.
The CPTTP member countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, representing a combined population of 500 million people. The pact comes into force when the legislatures of six of the 11 members ratify it, which is likely to happen before the end of 2018.
The 11 member countries will be helping their companies take advantage of the expanded market access for their products, including agricultural produce such as meat, grains and processed food, fish and seafood, lumber, automotive parts, chemicals and plastics, metals and minerals, and cosmetics.
Singapore, for example, will now gain preferential market access to Canada and Mexico, with which it has no free trade agreement. Low-cost Vietnam could see intensified interest from companies in Australia, Japan and Canada as a production base.
The US has said it may join the CPTTP, and other countries including South Korea and the UK have expressed interest. The US under Barack Obama had spearheaded the original Trans-Pacific Partnership agreement in a bid to create a counterweight to China.