A landmark 11-country trade deal, a revamped version of the Trans-Pacific Partnership (TPP), came into force yesterday with New Zealand's trade minister hailing the opportunities it presented for exporters.
The deal, which will slash tariffs across much of the Asia-Pacific region, does not include the United States after Washington pulled out of the TPP negotiations in 2017.
"The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) provides New Zealand with trade agreements for the first time with three significant economies: Japan, Canada and Mexico," Trade Minister David Parker said in a statement. "The CPTPP has the potential to deliver an estimated NZ$222 million ($149.01 million) of tariff savings to New Zealand exporters annually once it is fully in force."
The pact came into effect yesterday for Australia, New Zealand, Canada, Japan, Mexico and Singapore, with Vietnam to follow on January 14, Australia's Department of Foreign Affairs and Trade said on its website. Brunei, Chile, Malaysia and Peru will begin 60 days after they complete their ratification process.
Investment bank HSBC said in a press release that 90 percent of tariffs on goods in the first six countries were removed yesterday in the first round of cuts. Australia is looking forward to favorable conditions for its agricultural exports including wheat, prompting U.S. competitors to warn they will need help to compete.
The deal will reduce tariffs in economies that together amount to more than 13 percent of global gross domestic product (GDP) - a total of $10 trillion. If the United States were included, it would have represented 40 percent.
U.S. President Donald Trump said in April that he would consider rejoining the trade agreement if the terms were more favorable to the United States.