Eleven countries signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP) on March 8 that will reduce tariff and non-tariff barriers on more than 13% of world trade - shortly before the United States, which withdrew from the agreement a year ago, announced the imposition of tariffs on steel and aluminum.
This is "a strong sign against the protectionist pressures, and in favour of a world open to free trade, without unilateral sanctions and the threat of trade wars", Chilean Foreign Minister Heraldo Munoz said.
Extraneous adjectives aside, its supporters say it's hugely significant, and could be a model for future trade deals.
"The value of the TPP 11 is reinforced by the U.S. tariff decision".
The new trade agreement, named the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and involving Japan, Australia, Malaysia and eight other Asia-Pacific countries, covers 13% of the world's gross domestic product.
Vietnam was represented by Minister of Industry and Trade Tran Tuan Anh.
The signing of the CPTPP is another important step for the agreement, which will enter into force after it has been ratified by six countries.
The CPTPP is, in effect, the original Trans-Pacific Partnership struck during the Barack Obama presidency minus the U.S. On the campaign trail, Mr. Trump had promised to pull the U.S. out of the TPP, and went on to do precisely that within weeks of assuming office. Japan led the way in working out a new version of the deal, finalizing negotiations in January this year.
The CPTPP will do away with virtually all tariffs and other barriers to trading goods, and help shipments clear Customs more easily.
New Zealand has to pass legislation before it can ratify the agreement, although the previous government did that with the original TPP, which needed redrafting when the USA withdrew a year ago. E-commerce rules can also ensure that data moves freely across borders.
The agreement is expected to be signed today in Chile.
Joining the CPTPP will require unanimous consent of all member states, as stipulated in the TPP, meaning that interested parties will have to win the support of all the existing member states. "Along with Canada and Chile, we have pledged to work together to promote transparency", Parker said.
They said it would provide a buffer against China's rising global economic presence. With the USA it would have represented 40%, but even without, the Asia Pacific trade pact will become one of the world's three largest trade deals.
America is a notable absentee after President Donald Trump withdrew from the process - this has raised fears that medical products may become dangerously expensive given the advantage TPP potentially offers to U.S. pharma companies.