(Bloomberg View) -- The most significant trade story of the year might be happening about 5,000 miles from Donald Trump.
Trump is pressing ahead with tariffs on steel and aluminum imports, widely seen as typical of America's retreat from the global order the U.S. had underwritten since 1945. Considering moves like tariffs and his threat to Nafta and Brexit, it can seem that free trade and integrated economies are on the run.
But look again: A very interesting thing just happened in Chile. On Thursday, eleven nations signed what is, in effect, the Trans-Pacific Partnership sans the U.S.
While it has a slightly different name and some provisions aren't the same, the message is clear and welcome. America's commitment to free trade is rightly questioned, but that doesn't mean that free trade or trade pacts are history. American support for free trade is often conflated with the future of free trade. That's understandable, but this new agreement disproves the connection.
That multilateral accords can happen without the U.S. is significant enough. At least as important is who took the lead: Japan. Kudos to Prime Minister Shinzo Abe. He did two huge things. First, he demolished the outmoded portrait of Japan as a protectionist fortress. Secondly, Abe showed that Japan can lead in the Asia-Pacific region without the U.S., often seen as Japan's protector and sponsor.
As with every trade deal, the usual caveats accompany the Comprehensive and Progressive Agreement for Trans-Pacific Partnership as it now calls itself. (More digestible versions are TPP-11 or CPTPP.)
A majority of the 11 members still need to ratify it. Without the U.S., the pact has diminished clout relative to the original group. Nor does the new collective include every Asian nation. Missing are South Korea, Indonesia and a few other American friends like the Philippines. Canada and Mexico, across the Pacific, are in. The accord excludes China, as did the original, which some observers said was the whole point -- to create a trade bloc that could act as a counterweight to China's huge influence.
A former Asian trade minister who was part of the original TPP discussions told me there's no way Abe would have gone out on a limb without at least some tacit understanding or hope that the U.S. would return to the fold. Trump has intimated he might return under certain circumstances, but there wasn't much conviction.
So TPP 2.0 isn't perfect. So what? It still shows that the world isn't going to wait for the U.S. The free-trade game isn't over just because America decided to fold its hand and walk away.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Daniel Moss writes and edits articles on economics for Bloomberg View. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.
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