Canada's Minister of International Trade Francois-Philippe Champagne, Chile's Foreign Minister Heraldo Munoz and New Zealand's Trade Minister David Parker, pose for a photograpghers before a signing ceremony of the Comprehensi...

SANTIAGO, Chile (AP) - Trade ministers from 11 Pacific Rim countries signed a sweeping free trade agreement Thursday to streamline trade and slash tariffs just hours before President Donald Trump announced his plans to impose new tariffs on aluminum and steel to protect U.S. producers. The original 12-member agreement, known as the Trans-Pacific Partnership (TPP), was thrown into limbo early last year when Trump withdrew from the deal just three days after his inauguration in a bid to protect U.S. jobs. But the remaining 11 members pressed ahead, saying they were showing resolve against protectionism through global trade. Those include rules ramping up intellectual property protection of pharmaceuticals, which governments and activists of other member nations worried would raise the costs of medicine. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will reduce tariffs in countries that together amount to more than 13 per cent of the global economy — a total of US$10 trillion (RM39.1 trillion) in gross domestic product. The pact that covers 500 million people includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which together account for 13 percent of the global economy. Its success highlights the isolation of the U.S. under Trump’s protectionist rhetoric on trade and his “America first” philosophy. “It leaves the U.S. at a disadvantage from both a trade and a broader strategic perspective,” said Joshua Meltzer, senior fellow in the global economy and development program at the Brookings Institution. “It is now a trade bloc that discriminates against the U.S.”

Meltzer said the United States’ ability to shape the rules of trade in the Asia-Pacific region “is very much diminished.”

The U.S., originally the biggest TPP economy, was one of the trade deal’s strongest supporters before Trump took office. In January, Trump, who also has threatened to pull the United States out of the North American Free Trade Agreement, told the World Economic Forum in Switzerland that it was possible Washington might return to the TPP pact if it got a better deal. This is “a strong sign against the protectionist pressures, and in favour of a world open to free trade, without unilateral sanctions and the threat of trade wars,” Chilean Foreign Minister Heraldo Munoz said. The European Union said this week that it is ready to retaliate against Trump’s tariffs — of 25 per cent on imported steel and 10 per cent on aluminum imports — with counter-measures against iconic U.S. products like Harley Davidson motorcycles, Levi’s jeans and bourbon. The EU threat and Trump’s impending announcement on the tariffs were expected to escalate the risk of a trade war, in which nations try to punish each other by hiking taxes on traded goods. Experts say that tends to harm both exporting nations as well as importing countries’ consumers, who face higher costs. “It becomes a modest liberalization measure.”

China’s foreign minister, Wang Yi, commented Thursday on the deal before it was signed.
Eleven countries in Asia, North America, Oceania, and South America sign the revised Trans-Pacific Partnership trade agreement.