Pacific Trade Pact Abandoned by Trump Officially Set to Kick In
(Bloomberg) -- A trade deal among 11 Pacific nations, once envisioned as a check on China’s clout but abandoned by Donald Trump, will kick in on Dec. 30, Japan’s Economy Minister Toshimitsu Motegi said Wednesday.
Australia became the sixth country to ratify the Japan-led Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP -- the number required to trigger the 60-day countdown to its activation -- New Zealand said earlier in the day.
“I expect other signatories will come on board after the CPTPP enters into force, as many are working hard to progress their applicable domestic procedures,” New Zealand Trade Minister David Parker, whose nation is the depositary of the pact, said in a statement. “As a result, we could well see other signatories in a position to ratify over the coming weeks and months.”
The CPTPP nations, representing 14 percent of global gross domestic product, are trying to expand the status quo view of free trade amid a tariff fight between Washington and Beijing and a simmering Brexit battle in Europe. The deal’s enactment will be hailed by supporters as a victory for the global trading system bemoaned by Trump, who quit the original TPP deal.
Member nations were pushing to trigger the countdown this week so that the pact could come into provisional force before the end of the year. That would ensure an initial tariff cut followed by a second round on Jan. 1, when most of the nations make their annual tariff reductions. Japan’s reductions come on April 1 each year.
“The timing means there will be the added bonus of a second round of tariff cuts on Jan. 1, 2019 for New Zealand exporters into those markets which apply a calendar tariff year,” Parker said.
He said CPTPP marks the first free trade deal for New Zealand with Japan, the third largest economy in the world, as well as with Mexico and Canada, which are both G20 countries.
Japan’s Motegi told reporters in Tokyo the activation of the agreement was extremely meaningful for Japanese growth and Asian development.
Australia joined Canada, Mexico, Japan, Singapore and New Zealand in ratifying the deal. Countries yet to ratify are Brunei Darussalam, Chile, Malaysia, Peru and Vietnam. The other countries will each join after ratifying but will face a delayed schedule of tariff cuts.
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