TPP trade deal advances without United States

By Kiyoshi Takenaka and Mai Nguyen

DANANG, Vietnam (Reuters) - Countries in the Trans Pacific Partnership (TPP) trade deal have agreed on the core elements to move ahead without the United States, officials said on Saturday, after last minute resistance from Canada raised new doubts about its survival.

Taking the agreement forward is a boost for the principle of multilateral trade pacts after U.S. President Donald Trump ditched the TPP this year in favour of an "America First" policy he believes would save U.S. jobs.

Talks - often heated - have been held on the sidelines of an Asia-Pacific Economic Cooperation (APEC) summit in the Vietnamese resort of Danang, where Trump and other leaders held their main meeting on Saturday.

"We have overcome the hardest part," Vietnam's trade minister, Tran Tuan Anh, told a news conference.

The agreement, which still needs to be finalised, would now be called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), he said.

Japanese Economy Minister Toshimitsu Motegi said he hoped that moving ahead with the trade deal would be a step towards bringing back the United States.

Partly to counter China's growing dominance in Asia, Japan had been lobbying hard for the TPP pact, which aims to eliminate tariffs on industrial and farm products across the 11-nation bloc whose trade totalled $356 billion last year.

To reach agreement on pushing ahead with the deal, 20 provisions of the original agreement will be suspended, Motegi said. The agreement will take effect after ratification by six of the 11 members.

Any kind of deal looked doubtful on Friday, when a summit of TPP leaders was called off after Canadian Prime Minister Justin Trudeau did not attend. Canada's trade minister later blamed Trudeau's absence on "a misunderstanding about the schedule".

CANADIAN DOUBTS

Canada, which has the second biggest economy among remaining TPP countries after Japan, had said it wanted to ensure an agreement that would protect jobs.

Besides the tariff cuts, the TPP agreement has provisions for protecting the environment, workers' rights and intellectual property - one of the major sticking points after the departure of the United States.

Canada's position has been further complicated by the fact that it is simultaneously renegotiating the North American Free Trade Agreement with the Trump administration.

At a speech in Danang, Trump set out a strong message making clear he was only interested in bilateral deals in Asia that would never put the United States at a disadvantage.

China's President Xi Jinping used the same forum to stress multilateralism and said globalisation was an irreversible trend.

APEC has itself been buffeted by the changes under Trump.

APEC trade and foreign ministers released a joint statement on Saturday, three days later than planned because of wrangling over traditional language the United States wanted to change.

The statement still refers to free and open trade, but it also refers to fair trade and to members "improving adherence to rules agreed upon".

A reference to strengthening the multilateral trading system was dropped. The ministers also said they would work to improve the functioning of the World Trade Organisation (WTO) - which Trump criticised in Friday's speech.

(Additional reporting by David Ljunggren in OTTAWA; Writing by Matthew Tostevin; Editing by Clarence Fernandez)