HANOI: Asia-Pacific nations will try to rescue a massive trade deal scuppered by the pullout of the United States, a source involved in discussions told AFP on Friday (May 19), as delegates meet in Hanoi for key talks this weekend.
US President Donald Trump abandoned the 12-nation Trans-Pacific Partnership (TPP) in January calling it a “job killer” and throwing the pact’s future into doubt.
The deal covered 40 per cent of the world economy before the US withdrawal, and with its notable exclusion of China was intended to counter Beijing’s economic prowess in the region.
Several remaining members have championed its revival, namely New Zealand and Japan, the only two countries that have formally ratified the deal.
Trade ministers from the 11 remaining TPP countries will meet on Sunday, where they are expected to agree to keep the deal alive.
“The big announcement if it all holds together will be that there will be agreement to move forward as TPP 11,” the source said.
The door would “absolutely” remain open for the United States to return to the agreement in the future, the source added.
TPP members are expected to make an announcement Sunday on the sidelines of a meeting of trade ministers from the Asia-Pacific Economic Cooperation (APEC) bloc, which will also be attended by newly appointed US trade chief Robert Lighthizer.
Japan has also lobbied for the so-called TPP 11, and the minister in charge of the deal said Friday Tokyo was seeking its implementation.
“TPP has not only economic benefits but also strategic significance. We will firmly seek its realisation,” Japan’s minister in charge of TPP, Nobuteru Ishihara, told reporters Friday, according to state media.
Under the original terms of the TPP the deal could not come into effect unless ratified by six countries accounting for 85 percent of the group’s combined GDP. Without the US, the deal cannot be ratified.
To move ahead without the US, members will have to agree to amend the ratification clause, but reopening talks could risk unearthing what were years of gruelling negotiations.
“The challenge will be if you start adjusting the balance within the agreement others will also need to take things out and then at what point does the agreement lose its relevance for the 11?” the source said.
The aim is to come to a final agreement by November when APEC leaders meet in Hanoi for a summit, which Trump is scheduled to attend.
The Republican leader has vowed to focus on bilateral deals and push for “free and fair” trade with its partners, a message Lighthizer is expected to carry with him at the two-day APEC meeting that kicks off in Hanoi Saturday.