Eleven countries in the Pacific region have signed a major Asia-Pacific free trade agreement in Santiago, Chile. The deal is a new version of the Trans-Pacific Partnership from which the U.S. withdrew last year.
The agreement is called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP. The deal is aimed at reducing import taxes and putting in place trade rules for member nations.
The countries represent 500 million people and more than 13 percent of the world economy. With the U.S., the agreement would have covered 40 percent of the world economy.
US withdrawal from Trans-Pacific deal
U.S. President Donald Trump announced the withdrawal from the TPP trade pact soon after he took office. The move was a main campaign promise he made during the 2016 presidential election.
In January, Trump signaled the U.S. was reconsidering its policy at the World Economic Forum in Davos, Switzerland. He said the U.S. would be willing to rejoin the agreement if the U.S. could get "a much better deal than we had."
The Trump administration is currently renegotiating another trade deal, The North American Free Trade Agreement with Canada and Mexico. It is also set to approve taxes of 25 percent on steel and 10 percent on aluminum imports in an effort to protect those industries.
The president has said he is willing to show flexibility to nations that are "real friends" on the proposed tariffs. Leaders of many nations, however, have criticized developing U.S. trade policy saying it is becoming increasingly protectionist.
Canada, Japan lead changes to trade deal
Protesters opposed to the signing of the Trans-Pacific Partnership, TPP, stage a demonstration outside La Moneda presidential palace, in Santiago, Chile, March 7, 2018.In the last year, Canada and Japan led the remaining 11 countries involved in the TPP to a revised agreement in January. The final version of the deal was released in New Zealand on February 21.
Reuters news service reports that more than 20 provisions have been suspended or changed in the final version of the CPTPP agreement.
These include rules on intellectual property which the U.S. objected to during the earlier TPP negotiations.
Kimberlee Weatherall is a professor of law at the University of Sydney. She says many changes have been made to provisions in the new CPTPP.
"They have suspended many of the controversial ones, particularly around pharmaceuticals," she said.
New rules are believed to increase intellectual property protections for drug companies. Some governments and activists object to such rules because of concerns about increasing the cost of medicines.
Other countries signing the deal are Australia, Brunei, Chile, Malaysia and Mexico. New Zealand, Peru, Singapore and Vietnam are also included.
Heraldo Munoz is Chile's minister of foreign affairs. He called the agreement a strong signal "against protectionist pressures, in favor of a world open to trade, without unilateral sanctions and without the threat of trade wars."
Once signed, lawmakers in each of the countries will have to approve the trade agreement. It will go into effect 60 days after at least six countries have approved the deal.
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