TPP trade talks teeter on brink of collapse after Canada skips Friday’s negotiations

Negotiations on a Pacific Rim trade pact were on the verge of collapse Friday after Canada failed to show up at a leaders’ meeting for the Trans-Pacific Partnership framework, which was supposed to reach an agreement.

The surprise move came after Japan’s minister on economic revitalization, Toshimitsu Motegi, told reporters the day before that a revised TPP deal was reached. Even Prime Minister Shinzo Abe said he welcomed “a broad agreement” on the deal. Leaders from New Zealand and Australia, however, had said the discussions were continuing.

On Friday, the New Zealand Herald reported on its website that the TPP talks effectively collapsed after Canada pulled out.

The daily quoted New Zealand Prime Minister Jacinda Ardern as saying that Canada did not attend the meeting and the talks were postponed.

A government source said the meeting was postponed until Saturday, at the earliest.

The 11 remaining members of the TPP are trying to find a way forward without the U.S., the world’s biggest economy, after President Donald Trump withdrew the U.S. from the partnership.

The negotiations were being held in Danang, Vietnam, alongside meetings of the 21-member Asia-Pacific Economic Cooperation forum, where Trump’s markedly different stance from past U.S. leaders was being felt even before his arrival Friday in the coastal resort city.

While most APEC members say they remain committed to their multicountry approach in weaving their economies ever closer together, many acknowledge that open trade is a mixed bag, because not everyone benefits equally.

Ministers have been ironing out their differences over which clauses of the original text to suspend implementing until when Washington may return to the pact.

They did not make amendments to the original deal, signed in February 2016 by the 11 countries and the United States, in the hope Washington will be attracted once again.

The 11 TPP countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. With the U.S., the Pacific Rim trade pact covered around 40 percent of the global economy.

The 11-party TPP slashes the total of gross domestic product it covers by 13 percent from what the pact would have been with the United States, but trade experts say the deal still creates a free trade area with high-standard market liberalization.

Japan, the largest economy in the TPP framework after the United States, has led the way to salvage the deal after Trump pulled the world’s biggest economy from the free trade pact in January, saying Americans would lose jobs if the country joined the multilateral free trade deal and that he prefers pursuing bilateral trade agreements.

The pullout came as a shock to the other 11 members, given that the Pacific Rim deal was a landmark pillar of Trump predecessor Barack Obama’s policy of a strategic rebalance, or “pivot,” to the Asia-Pacific region and had significance not only economically but in security aspects, amid the rise of China.

Although Trump again rejected the idea of returning to the TPP during his earlier visit to Tokyo, Motegi said “Japan would like to tenaciously explain to the United States the significance of it returning to the pact.”

In Thursday’s ministerial meeting, a draft of the agreement that Japan, which chaired the meeting with Vietnam, had prepared was the basis of discussions, with a focus on sensitive issues that require political decisions.

Some countries remained cautious. Canadian Prime Minister Justin Trudeau told reporters Wednesday that “Canada will not be rushed into a deal that is not in the best interest of Canada and of Canadians.”

Mexico and Canada have called for the suspension of clauses regarding intellectual property, while Vietnam pushed for a review of a rule that cuts or eliminates tariffs on apparel products, the country’s major exports.

A change of government in New Zealand had also stoked fears that it may review its preceding administration’s stance that strongly advocated for the TPP.

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