With the U.S. sitting out, the new TPP is expected to have half of the economic impact of the original; aims to set standards
By Paul Kiernan in Santiago, Chile, and William Mauldin in Washington – Updated March 8, 2018 2:45 p.m. ET
For the second time in two years, countries around the Pacific are coming together to form a bloc aimed at boosting trade and putting pressure on China’s economic system.
This time, they are doing it with one key country absent: the U.S.
Japan, Canada, Mexico and eight other Pacific nations signed a new version of the Trans-Pacific Partnership, or TPP, on Thursday. The Trump administration, which was expected later in the day to announce unilateral tariffs on global imports of steel and aluminum, pulled the U.S. out of the original TPP a year ago, fulfilling a promise in a 2016 election campaign dominated by skepticism about the benefits of global trade.
The goal of the pact is to open borders to more trade in the rapidly growing Asia-Pacific region and to set international standards, which many free-trade advocates see as crucial to managing the encroaching dominance of China, the second-biggest economy in the region and in the world.
Officials involved said the pact shows some countries are eager to liberalize trade at a time when the administration of U.S. President Donald Trump and some other governments are wary of economic integration.
“There’s rising protectionism around the world at the moment,” said David Parker, New Zealand’s trade minister. “It’s not just harmful for our own economies. An open world makes for a peaceful world.”
Mr. Trump and his advisers have made it clear they prefer bilateral trade agreements in which the U.S. can better leverage the influence of its large economy, potentially winning more concessions from a single partner than from a trading bloc. The TPP is also strongly opposed by U.S. labor, environmental and other left-leaning groups who say the deal favors multinational corporations over workers and consumers.