CANBERRA, Australia – A trade pact between eleven Pacific countries will come into force this year after Australia has ratified the sixth country, almost two years after President Trump withdrew the US from the negotiations.
The Trans-Pacific Partnership Trade Agreement, signed in March, is the largest free trade agreement in Asia and comes at a time of increasing trade tensions between the US and China.
Dealers of the deal say it is the most important trade agreement reached in more than two decades and modernized contracts to include the rise of digital commerce, services and copyright in a fast-growing region that includes Japan and long-standing US allies To take account.
Mr. Trump pulled the US out of the original negotiation last year as President in one of his first acts, saying it would put American workers at a disadvantage. The agreement was supported by the Obama administration and many Republicans in Congress, but died in the 2016 election season.
The eleven remaining nations that agreed to a revised agreement – Japan, Canada, Mexico, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam – pledged to reduce barriers to trade in goods and services that protect intellectual property rights in a region of nearly 500 million people, accounting for about 13% of global GDP.
New Zealand Trade Minister David Parker, whose country coordinates the process, said the trade agreement would begin tariff reductions in December. It is estimated that 95% of goods traded between Member States, with a combined GDP of approximately $ 10 trillion, will be abolished.
Brunei, Chile, Malaysia, Peru and Vietnam have not yet ratified the agreement. The approval of Australia – the sixth after Canada, Singapore, New Zealand, Japan and Mexico – was the necessary trigger for two tariff reductions from 30 December and early next year.
The agreement will also phase out tariffs on sensitive products such as agricultural imports in countries such as Japan and Mexico. Many tariffs drop to zero on the first day, while agricultural products go duty-free within three to seven years.
"I expect other signatories to come aboard after the agreement comes into force, as many are working hard to develop their existing national procedures," Parker said in a statement on Wednesday.
Long-time allies in the US, including Japan, have driven the business forward to counter China's economic impact in the region.
The US president told legislators in April that he had asked his advisors to study whether the US should be re-admitted to the TPP. However, he pointed to a difficult path in all negotiations and said in a tweet that he would "only join TPP if the deal was much better than the deal offered", which was addressed to Obama.
Write to Rob Taylor at firstname.lastname@example.org