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Final version of Trans-Pacific trade deal out, rules pushed by US on ice

The deal will reduce tariffs in economies that together amount to more than 13 per cent of global GDP - a total of $10 trillion

Reuters  |  Wellington / Sydney 

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New Zealand’s Minister for Trade and Export Growth David Parker speaks to reporters during a news conference regarding the revised text for the recently agreed Trans-Pacific Partnership (Photo:Reuters)

The final version of a landmark deal aimed at cutting trade barriers in some of Asia-Pacific's fastest-growing economies was released on Wednesday, signalling the pact was a step closer to reality even without its star member the United States.

More than 20 provisions have been suspended or changed in the final text ahead of the deal's official signing in March, including rules around intellectual property originally included at the behest of Washington.

The original 12-member deal was thrown into limbo early last year when withdrew from the agreement to prioritize protecting US jobs.

The 11 remaining nations, led by Japan, finalized a revised trade pact in January, called the (CPTPP). It is expected to be signed in on March 8.

The deal will reduce tariffs in economies that together amount to more than 13 per cent of global GDP - a total of $10 trillion. With the United States, it would have represented 40 per cent.

"The big changes with 11 are the suspension of a whole lot of the provisions of the agreement. They have suspended many of the controversial ones, particularly around pharmaceuticals," said Kimberlee Weatherall, professor of law at the University of Sydney.

Many of these changes had been inserted into the original 12 at the demand of US negotiators, such as rules ramping up intellectual property protection of pharmaceuticals, which some governments and activists worried would raise the costs of medicine.

The success of the deal has been touted by officials in and other member countries as an antidote to counter growing US protectionism, and with the hope that Washington would eventually sign back up.

"has become more important because of the growing threats to the effective operation of the World Trade Organization rules," Trade Minister David Parker said on Wednesday.

Last month, Trump told the World Economic Forum in that it was possible Washington might return to the pact if it got a better deal.

However, Parker said on Wednesday that the prospect of the US joining in the next couple of years was "very unlikely" and that even if Washington expressed a willingness to join CPTPP, there was no guarantee that the members would lift all the suspensions.

Parker said the deal would likely come into force at the end of 2018 or the first half of 2019.

Governments were quick to tout the economic benefits of the agreement.

"The TPP-11 will help create new Australian jobs across all sectors - agriculture, manufacturing, mining, - as it creates new opportunities in a free trade area that spans the Americas and Asia," said Steven Ciobo, Australia's minister for trade, in an emailed statement.

The first attempt to agree to a deal last November stalled amid opposition from Canada, which was seeking protection of its cultural industries.

An economic analysis released by the Canadian government on Wednesday said the pact would provide exporters with tariff savings of C$428 million ($338 million) per year.

Total Canadian exports to other countries are projected to increase by C$2.7 billion, or 4.2 per cent, by 2040, compared to gains of C$1.5 billion under the original

New Zealand's government expected the to boost the island nation's by between NZ$1.2 billion ($881 million) to NZ$4 billion a year, with beef and kiwifruit exporters among the top beneficiaries of the deal.

The 11 member countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, and Vietnam.

($1 = 1.3615 dollars)

($1 = 1.2667 Canadian dollars)



First Published: Wed, February 21 2018. 22:29 IST