Published: Sat, March 10, 2018
World News | By Laverne Osborne

11 nations to sign Pacific trade pact as US plans tariffs

11 nations to sign Pacific trade pact as US plans tariffs

Elsewhere, a number of other countries signed a multi-lateral trade deal that will actually REDUCE tariffs in the Asia Pacific. Although there is widespread agreement that China has produced and exported too much steel worldwide, other nations and even Republican leaders on Capitol Hill asked Trump not to impose the tariffs, fearing it would risk retaliation.

The new agreement - known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership - drops tariffs drastically and establishes sweeping new trade rules in markets that represent about a seventh of the world's economy.

Fernando Estenssoro, of Chile's University of Santiago, says snubbing the pact is "a type of suicide" for the United States.

"Today, we can proudly conclude this process, sending a strong message to the global community that open markets, economic integration and worldwide cooperation are the best tools for creating economic opportunities and prosperity", he is understood to have said.

Chile's foreign minister called the Pacific trade agreement a strong signal "against protectionist pressures, in favor of a world open to trade".

"It leaves the U.S.at a disadvantage from both a trade and a broader strategic perspective", said Joshua Meltzer, senior fellow in the global economy and development program at the Brookings Institution.

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Eleven countries including Australia have signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP-11) today, a move that has been welcomed by the Winemakers' Federation of Australia (WFA). "The U.S.is really delivering the region to China at the moment", Mr. Wilson said. The deal is aimed at reducing import taxes and putting in place trade rules for member nations. The agreement signed on Thursday suspends 20 provisions of the original pact, many of which dealt with intellectual property rights.

The signatories at the event included Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

"In a world that is so upside-down, especially for companies, companies will need to seek out growth and stability wherever they can", said Deborah Elms, founder and executive director of the Asian Trade Center, a consulting firm in Singapore.

Once implemented, the 11 countries hope to expand the framework to other countries, in particular the United States, whose return would mean the pact covers almost 40 percent of global economic output and add security significance to the deal to counter China's rising clout in the Asia-Pacific region. However, New Zealand's trade minister said that was unlikely in the near term, while Japan has said altering the agreement now would be very hard.

"Chile is a very good platform to base operation here and from here take it to another other main markets like Brazil, Peru, Argentina, which are bigger markets in terms of consumers", Cristian Blanco of Casas del Bosque said.

Moody's baseline expectation is that Mexico, the US and Canada will reach an agreement and revise the treaty into a NAFTA 2.0.

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