Disagreement over TPP pact as ministers huddle in Vietnam
Japan, the world's third largest economy, is leading the charge to revive the TPP.
Trade ministers and delegates from the remaining members of the Trans Pacific Partnership (TPP) attend the
TPP Ministerial Meeting during the APEC 2017 in Da Nang, Vietnam November 9, 2017
Asia-Pacific nations struggled to salvage the sprawling TPP trade deal Friday following America's rejection of the original pact, with Canada refuting reports an agreement in principle had been struck.
The Trans-Pacific Partnership (TPP) was initially a U.S.-led initiative between 12 nations accounting for 40 percent of global GDP, but deliberately excluding Washington's regional rival China.
It was thrown into disarray when President Donald Trump abruptly pulled out of the deal at the start of the year, dismaying allies including Japan, Australia, Canada and Vietnam.
Trade ministers from the remaining members - dubbed the TPP-11 - are in Vietnam trying to save the pact on the sidelines of the annual APEC summit.
Reports in Japanese media late Thursday said an agreement in principle had been reached to press ahead with the TPP-11 without the U.S.
"We reached an agreement that has a high level of standard which also strikes a good balance," Japan's economic revitalization minister Toshimitsu Motegi, who co-chaired the meetings in Da Nang, told reporters.
But claims of a breakthrough were later denied by Canada's trade minister Francois-Philippe Champagne.
"Despite reports, there is no agreement in principle on TPP," he said in a tweet.
A Japanese government official in Tokyo on Friday told AFP that Motegi's remarks meant the TPP-11 group had reached "a basic agreement at the ministerial level" which would then need to go to the leaders of each country before being signed off.
Japan, the world's third largest economy, is leading the charge to revive the TPP, keen to demonstrate that multilateral trade pacts can thrive without U.S. support.
Other nations, including Canada, Malaysia and Vietnam, want tweaks of various points and are wrangling over whether some initial elements can be suspended to avoid the collapse of the pact.
Canada wants to keep the strong "gold standard" elements of the deal, including guarantees on upholding labor rights inside signatory countries.
But economies such as Malaysia and Vietnam, with its massive state sector, are less inclined to concede ground on testy areas like labor rights and the environment now the carrot of access to American markets has been taken from the table.
Without the U.S., 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.
In an interview with Bloomberg, Australian trade minister Steven Ciobo said Washington's withdrawal had "changed the metrics" for a number of the remaining TPP countries.
"That means there will be some aspects of it where we will agree to suspend the operation of certain parts of it, and that's been the basis upon which we've been able to get now, I hope, an agreement."
Trump's spectacular emergence has unpicked decades of U.S.-led work towards more open global trade and lower tariffs.
The original TPP deal was previously described by the U.S. 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 measures and required members to comply with a high level of regulatory standards in areas like labor law, environmental protection, intellectual property and government procurement.
Washington's withdrawal has paved the way for China to portray itself as the new global leader for free trade.
But critics say Chinese-led initiatives are much weaker on labor and environmental standards.