DANANG, VIETNAM – Trade ministers from 11 Pacific Rim countries said they reached an agreement Saturday to proceed with the free-trade Trans-Pacific Partnership deal that was in doubt after U.S. President Donald Trump abandoned it. However, an immediate formal endorsement by the countries’ leaders meeting in Vietnam appeared unlikely.
A statement issued in the early hours Saturday said an accord was reached on “core elements” of the 11-member pact. The compromise was delayed by last-minute disagreements that prevented the TPP leaders from meeting to endorse a plan on Friday.
“Ministers are pleased to announce that they have agreed on the core elements of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership,” the 11 nations said in a statement.
Japan’s delegate to the talks, Economy Minister Toshimitsu Motegi, told reporters that disagreements that cropped up Friday had been resolved in five hours of talks that stretched late into the night.
“We have confirmed there was no mistake about us having reached a basic agreement,” Motegi said.
Asked by reporters if the deal had the support of Canada, whose Prime Minister Justin Trudeau did not show up for the meeting planned for Friday, Motegi said “yes.”
“Canada did agree, and that means the ‘top’ also agreed,” he said. Japanese media reported that the Japanese and Vietnamese co-chairs of the ministerial meetings would hold a news conference Saturday on the sidelines of the summit of the Asia-Pacific Economic Cooperation forum, which wraps up later in the day.
Canadian Trade Minister Francois-Philippe Champagne defended the delay, saying he had refused to be rushed into an agreement on what he now called the Comprehensive Progressive TPP. The frictions in talks — which saw the chief Vietnamese trade negotiator walk out late Thursday night in frustration — had raised concerns the deal, which took years to negotiate, might collapse entirely.
“What we’ve been able to achieve is to preserve market access in Japan, we’ve been able to improve the progressive elements and we’ve also been able to suspend key sections like intellectual property which our Canadian stakeholders thought would have an impact on innovation,” Champagne said late Friday in an interview in Vietnam.
“We did what’s right for Canadians,” he said. “This was never about this Friday, this was about the next decade, this is about shaping the terms of trade in the Asia-Pacific region.”
Champagne cautioned there was months of work ahead to bring the TPP to completion. “We made progress, but we clearly identified the things we still need to work on,” he said.
“We have a framework that has been established, so in the sense that we know the elements that people wanted to preserve,” Champagne said. “We’ve also identified a number of work programs, including from the Canadian side, the one on cultural diversity. That means over the next six to eight months we need to work on that.
Despite enthusiasm for sticking with the plan following the U.S. withdrawal under Trump in January, criticism over various issues persists. Detractors of the TPP say it favors corporate interests over labor and other rights. Trudeau said days before arriving in Danang that he would not be rushed into signing an agreement that did not suit Canada’s interests.
The TPP, which would have covered 40 percent of the global economy, was thrown into disarray when Trump withdrew the U.S. in one of his first acts as president due to a perceived risk to American jobs, leaving other countries scrambling to keep the deal alive. The TPP discussions in Vietnam centered around suspending some parts of the agreement in a bid to move forward without America’s involvement.
The trade deal was seen as a hallmark of U.S. engagement with Asia under the prior administration and a buffer against China’s rising clout. Then-Defense Secretary Ash Carter called it more strategically important than having another aircraft carrier battle group in the Pacific. It would go beyond traditional deals by including issues like intellectual property, state-owned enterprises and labor rights.
Aspects of the trade pact have raised hackles also over a requirement that companies be allowed to sue governments for lack of enforcement of related laws.
The proposed basic agreement reached in Danang said that the ministers maintained “the high standards, overall balance and integrity of the TPP while ensuring the commercial and other interests of all participants and preserving our inherent right to regulate, including the flexibility of the parties to set legislative and regulatory priorities.”
The TPP member countries are trying to find a way forward without the U.S., the biggest economy and, before Trump took office, one of its most assertive supporters. Trump has said he prefers country-to-country deals and is seeking to renegotiate several major trade agreements to, as he says, “put America first.”
Trump reiterated his markedly different stance on trade before the 21-member APEC summit convened late Friday with a gala banquet.
The U.S. president told an APEC business conference that “we are not going to let the United States be taken advantage of anymore.” He lambasted the World Trade Organization and other trade forums as unfair to the United States and reiterated his preference for bilateral trade deals, saying “I am always going to put America first.”
Trump said he would not enter into large trade agreements, alluding to U.S. involvement in the North American Free Trade Agreement and the TPP.
In contrast, Chinese President Xi Jinping told the same group that nations need to stay committed to economic openness or risk being left behind.
The Chinese president drew loud applause when he urged support for the “multilateral trading regime” and progress toward a free-trade zone in the Asia-Pacific. China is not part of the TPP.
APEC operates by consensus and customarily issues nonbinding statements. TPP commitments would eventually be ratified and enforced by its members.
But even talks this week on a declaration to cap the APEC summit had to be extended for an extra half day as ministers haggled over wording. It’s unclear what the exact sticking points were, but officials have alluded to differences over the unequal impact more open trade has had on workers and concerns over automation in manufacturing that could leave many millions in a wide array of industries with no work to do.
As a developing country with a fast-growing export sector, this year’s host country, Vietnam, has a strong interest in open trade and access for its exports to consumers in the West. The summit is an occasion for its leaders to showcase the progress its economy has made thanks largely to foreign investment and trade. Danang, Vietnam’s third largest city, is in the midst of a construction boom as dozens of resorts and smaller hotels pop up along its scenic coastline.
APEC’s members are Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Taiwan, Thailand, the U.S. and Vietnam.