Canada, TPP members agree to revised deal without the U.S.


Prime Minister Justin Trudeau. Eleven countries aiming to forge a new Asia-Pacific trade pact will hold a signing ceremony in Chile in March.

Canada and the remaining members of the Trans-Pacific Partnership agreed Tuesday to a revised trade agreement without the United States.

The deal, confirmed by Singapore's government, follows two days of high-level talks in Tokyo between Canada and the 10 other remaining TPP economies. The partners will now work toward signing the agreement by early March, Singapore trade and industry ministry said in a statement.

The deal was announced just hours after a Canadian government official said Ottawa was optimistic that a revised TPP pact would be reached as early as Tuesday.

The official, who spoke on condition of anonymity, told The Canadian Press that Ottawa believed a deal could be struck, even though it would still like to see more progress on negotiations surrounding the automotive and cultural sectors.
Prime Minister Justin Trudeau was asked as he brushed past reporters in Davos, at the World Economic Forum whether he was aware of the TPP deal.
"Who do you think has been working hard at it behind the scenes," Trudeau said, but did not stop to take further questions.
News of the deal infuriated Flavio Volpe, president of the Automotive Parts Manufacturers Association of Canada, whose organization opposed the changes in the automotive rules of origin in the initial TPP and the subsequent deal negotiated without the Americans.

"We're signing a bad deal because we hope to sell more products that grow on four legs," Mr. Volpe said. "A progressive trade agreement that sells products we've been mastering since Samuel de Champlain."
He said he has been told by federal government officials that the rules of origin in the TPP deal, which say that automotive parts containing between 35 per cent and 45 per cent content from TPP countries can enter the markets of other countries duty-free, don't matter. That compares with North American free-trade agreement rules requiring that vehicles contain 62.5 per cent North American content in order to be travel duty-free between the three NAFTA countries.  NAFTA negotiators from Canada, the United States and Mexico are meeting in Montreal this week.
"If the rules of origin don't matter, which is the argument I continue to hear, that flies in the face of the fact that the Japanese won't relent on them," Mr. Volpe said. "And if they don't matter, what are we negotiating on NAFTA right now?"

Canada opposes U.S. proposals to automotive rules of origin in NAFTA and has called those proposals non-starters.
In the auto and auto parts sectors, the Japan Automobile Makers Association of Canada and Linda Hasenfratz, chief executive officer of Linamar Corp. have supported TPP.
A senior Canadian official says the agriculture sector in the U.S. will increase pressure to stay in NAFTA as a result of the TPP deal. The official added the deal also opens Canada's beef exports to Japan at the expense of America cattle farmers.
John Manley, head of the Business Council of Canada, praised the Trudeau government for signing on to the TPP. It sends a message that Canada believes in liberalized trade with the fastest growing region of the world, he said.
"It shows we favour a set of rules with Asia. And by saying Canada is part of TPP - without saying so - the prime minister is saying 'I am not Donald Trump' and that is a good thing," Manley told reporters in Davos.

The pact was also rebranded the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Canada, the second-largest economy among the TPP partners, was widely considered the main holdout in the negotiations.
The Tokyo talks were the first high-level talks since the leaders of the TPP economies met in November on the sidelines of the APEC summit in Danang, Vietnam.
Trudeau made international headlines there by deciding not to sign an agreement-in-principle on what has become known as TPP11.
Trudeau's decision in Vietnam to continue negotiating for a better deal, rather than striking an agreement, led to the abrupt cancellation of a TPP leaders' meeting in Danang.

Many believed the original TPP took a fatal blow when Donald Trump withdrew from the deal in one of his first acts as U.S. president.

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