SANTIAGO, Chile: March 08, 2018. Eleven Pacific-Rim countries with a combined GDP of US$13.7 trillion and controlling 15.3 percent of world trade, have signed an amended Trans-Pacific Partnership (TPP-11) today.
Speaking at the event, Chilean president Michelle Bachelet declared: “Today, we can proudly conclude this process, sending a strong message to the international community that open markets, economic integration and international cooperation are the best tools for creating economic opportunities and prosperity.”
The new free trade deal (FTA), renamed the ‘Comprehensive and Progressive Agreement for Trans-Pacific Partnership’ (CPTPP) following Donald Trump’s decision to withdraw the U.S., was agreed on January 21, 2018 between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam.
Once ratified over the next two years, the CPTPP is expected to eliminate 98 percent of tariffs between the 11 countries.
The agreement provides a framework of rules and commitments that will remove key barriers to providing a more transparent and predictable trade environment throughout the Pacific Rim.
For logistics and transport companies, the tariff-free entry of containers is expected to eliminate considerable costs for exporters who pay up to 20 percent duty in some countries.
The deal also includes new rules on government airlines to ensure they are not subsidized while in competition with privately-owned carriers.
According to Steven Ciobo, Australia’s minister for Trade, Tourism and Investment, the CPTPP gives the country preferential access to Canada and Mexico for the first time as nearly one quarter of Australia’s total exports, worth nearly A$88 billion, went to TPP-11 countries in 2016-2017.
“The signing is a significant moment for open markets, free trade and the rules-based international system. It sends an important message to the world that prosperity is achieved through breaking down trade barriers, not building them,” declared Ciobo.
The move comes as the British government continues to ignore the danger of Brexit on the timely delivery of food and goods from Europe, and Trump signs new U.S. trade barriers on steel products worldwide.
Australia is expected to present the CPTPP to its Parliament later this month for ratification. When implemented, it will be the third largest trade agreement in the world after CETA, the Comprehensive Economic and Trade Agreement between Canada and the EU, and NAFTA.
