Trade ministers from 11 Asia-Pacific countries agreed today to press ahead with a major trade deal without the United States, as the world's largest economy seeks to go it alone under President Donald Trump's 'America First' policy.
Trump pulled his country from the Trans Pacific Partnership (TPP) at the start of the year, dismaying allies and casting into doubt an agreement heralded for tying lower tariffs to strong environmental and labour protections.
In a joint statement this morning, the remaining countries -- dubbed the TPP-11 -- said they had "agreed on the core elements" of a deal at the sidelines of the APEC summit in the Vietnamese city of Danang, after days of stalled talks raised fears it could collapse altogether.
Francois-Philippe Champagne, Canada's trade minister, described the breakthrough in a tweet as "big progress".
Canada had held out to maintain environmental and labour protections linked to freer markets in the deal.
Those elements were thrown into jeopardy by America's sudden withdrawal from the deal earlier this year, which forced the remaining countries to reconsider the merits of a pact suddenly shorn of access to the world's largest economy.
Canada had dug in over those progressive clauses. But they are much less attractive to countries like Vietnam, Malaysia, Chile and Peru now that the carrot of access to the huge US market has been pulled.
Trump's election has upended years of American-led moves to open up global trade.
The US president is among leaders attending the APEC summit in Danang and yesterday he ladled out more of his trademark 'America First' rhetoric.
In a strident address he said his country will "no longer tolerate" unfair trade, closed markets and intellectual property theft.
"We are not going to let the United States be taken advantage of any more," he added, taking a swipe at multilateral trade deals.
Shortly after, China's leader Xi Jinping offered a starkly different vision, casting his country as the new global leader for free trade.
Beijing is not included in the TPP, a deal initially driven through by the former US administration as a counterweight to surging Chinese power in Asia.
China has since sought to fill the free trade gap left by the United States, even if much of its own market remains protected.
Japan, the world's third largest economy, has been particularly active in pushing for a swift consensus on TPP, fearful that delays could lead to the collapse of the pact after years of negotiations and hand more regional influence to China.
Today, Trump and Xi will join leaders from across the Asia-Pacific region for closed door summit talks, including Russia's Vladimir Putin, Japan's Shinzo Abe and Canada's Justin Trudeau.
The original TPP deal was once described by the US as a "gold standard" for all free trade agreements because it went far beyond just cutting tariffs.
It included removing a slew of non-tariff restrictions and required members to comply with a high level of regulatory standards in areas like labour law, environmental protection, intellectual property and government procurement.
Without the US, TPP-11 only represents 13.5 percent of the global economy but the remaining countries are scrambling to avoid the deal's collapse, especially given the increasingly protectionist winds sweeping through the United States and Europe.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)