From: Talk to Al Jazeera

The new TPP trade deal: Going ahead without Trump

Despite the US exit from the Trans-Pacific Trade Partnership, the 11 other signatories are moving on with a new deal.

Just three days into his administration, US President Donald Trump withdrew from the Trans-Pacific Trade Partnership (TPP), calling it a “ridiculous trade deal”.

Most assume the deal, which was supposed to establish common trade, communications, and legal standards between 12 countries in the Pacific Rim, is now dead without the support of the United States, but, challenging US global leadership, the 11 remaining countries – led by Japan – are forging ahead regardless.

As Trump heightens fears of a trade war by imposing steel and aluminium tariffs, a revamped version of the TPP is signed in Santiago, Chile, sending a powerful message that free trade can and will go ahead without the US. 

I think this agreement serves as an antidote to the protectionist trend we're seeing in the world. I think the CPTPP is more important than it was a year ago. This rise of protectionism is worrisome ...

by David Parker, New Zealand trade minister

The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) – or TPP 11 for short – includes Canada, Mexico, Japan, Malaysia, Australia, Peru, New Zealand, Chile, Brunei, Singapore and Vietnam, in a deal that will dramatically lower tariffs and trade barriers between the signatories.

Together, they cover 500 million people in the most dynamic region of the world economy, which includes more than 13 percent of global gross domestic product (GDP), worth more than $10 trillion. 

With the US, it would have been 40 percent, but the new TPP is already attracting potential new members, like South Korea, Indonesia, the Philippines, Thailand and possibly even a post-Brexit UK.

A free trade deal once viewed by Washington and Japan as a counter-weight to China‘s growing economic might, is now being hailed as an antidote to US protectionism.

Four of the signatories of the new deal talk to Al Jazeera about free trade, Trump, and their hopes for the future.

Heraldo Munoz: ‘Open trade is alive’

Chile’s Foreign Minister Heraldo Munoz believes that CPTPP is “the most comprehensive and progressive trade agreement that has ever been signed … It is a better agreement, not because the United States left, but because we wanted to continue on. In order to continue on, we had to make it a more attractive agreement and I think we ended up with a better agreement.

“This deal is very timely because the world is witnessing an increase in protectionist measures, protectionist temptations, I would say on the part of some countries … I think it comes at the right time by saying ‘open trade is alive,'” he says, adding that the participating nations would have liked the US to stay, “but they took the sovereign decision, under President Donald Trump, to withdraw … It’s not what we would’ve expected from a Republican administration that, in the past, used to be always very pro-global trade. But times have changed and perhaps globalisation has not proven to be beneficial to everyone.

“What we have to do is to prove that globalisation is not a problem, that innovation is a key, is adding value, is including everyone into the benefits of trade.”

David Parker: ‘An antidote to the protectionist trend’

According to New Zealand‘s Trade Minister David Parker, the CPTPP is not as good as New Zealand’s agreement with Australia, and the trade benefits from the agreement aren’t as great as they would be with the US included.

But “there’s 500 million people in the CPTPP countries, New Zealand is only four and a half million of those, so 495 million of those people lie in the other CPTPP countries, and that’s an enormous market for New Zealand goods and services … So overall it’s a really good deal,” Parker says.

“I think this agreement serves as an antidote to the protectionist trend we’re seeing in the world. I think the CPTPP is more important than it was a year ago. This rise of protectionism is worrisome … Countries that are in the agreement have got a different route where they can club together in a friendly manner, and facilitate the growth of their own economies for the benefit of their people,” he explains.

“We were the first country in the world to have a free trade agreement with China and it’s worked for both New Zealand and for China. We don’t see China as a threat, we recognise them as being a superpower, that they have a proper place in the world and we, through our trading relationship with them, have improved our relationship with China, to our mutual benefit.”

Datuk Seri J. Jayasiri: ‘CPTPP not a geopolitical instrument’

“I hate to get into any discussions about geopolitics. For us, we are a trading nation, and for us, the global market is our market, so we don’t particularly say that we want to just have agreements with the US, or the EU, or Japan, or ASEAN,” the Malaysian International Trade and Industry Minister Datuk Seri J. Jayasiri tells Al Jazeera.

“We will use every opportunity to open up markets. We have been using free trade agreements, regional trade agreements and, to a certain extent, also the WTO to open up markets for our businesses, so we don’t necessarily see the CPTPP as a geopolitical instrument.”

He says he wouldn’t be surprised if the US wanted to rejoin the agreement “because we know that this is an agreement which actually benefits the US and we know that there are many quarters in the US, especially the business quarters and also US officials, who think that the TPP was a good deal for the US.”

But, according to him, not many countries would be in favour of renegotiations for the US. “After five years, we’ve got a very balanced package and, if you’re saying that package needs to be renegotiated, then it is almost like getting back to square one. Not just Malaysia wouldn’t be in favour of that, I don’t think anyone else would be looking for total renegotiations of the agreement.”

Francois-Philippe Champagne: ‘The economy is shifting’

“This deal will be different because it is the first trade agreement in the world where you have a dedicated chapter on small and medium-sized businesses, making sure that we recognise that they have a key role in our economy and that we should take every step possible to make sure that they can benefit from these new markets that are going to be open,” says Canada‘s International Trade Minister Francois-Philippe Champagne.

Whilst we recognise that the US will always be our first trading partner, the economy in the world is shifting, it's shifting towards Asia-Pacific.

by Francois-Philippe Champagne, Canada's international trade minister

Champagne says that the US will always be Canada’s first trading partner because of the geography and the size of the US economy, with more than 70 percent of the goods and services being exchanged with the US. “But we need to diversify and today is a very powerful message that, while we recognise that the US will always be our first trading partner, the economy in the world is shifting, it’s shifting towards Asia-Pacific.

“I think that you’ll see Canada and other nations continue to engage with China, it’s the second-largest economy, so those are not mutually exclusive. Clearly, we’re sending a message today that Canada is very much a Pacific nation, we want to engage; while we’re doing that with the CPTPP countries, we obviously remain open to trade negotiations with other countries in the region,” he says.

“Canada will always be there to promote fair, inclusive trade and making sure that trade really reflects the 21st century, reflects the values of our people, reflects what trade should be in this day and age: trade that relates to people, that each and every citizen we meet, each and every youth, each and every woman entrepreneur, in our case indigenous people, can say, ‘You know what? This is working for me.’ This is really the mission we have and this is a step in the right direction.” 

Editor’s note: These comments were made in individual interviews and have been edited for clarity and brevity.