The US withdrawal is a body-blow to the Trans-Pacific Partnership ((TPP) agreement. But other nations involved are not about to abandon their commitment to free trade.
Japan is the only country to have actually ratified the TPP.
Having led the push for the partnership, Prime Minister Shinzo Abe said he believed President Donald Trump also recognises the importance of free and fair trade.
He told parliament of his hopes to appeal to the Trump administration for their understanding on the TPP’s strategic and economic significance.
But, fulfilling a campaign pledge, Trump signed an executive order in the Oval Office on Monday pulling the United States out of the deal and distancing the US from its Asian allies.
Japan’s PM Abe has touted the deal as an engine of economic reform, as well as a counter-weight to a rising China, which is not a member of the pact – for now.
China has proposed a counter pact, the Free Trade Area of the Asia Pacific (FTAAP) and has championed the Southeast Asian-backed Regional Comprehensive Economic Partnership (RCEP).
Australian Prime Minister Malcolm Turnbull said he had held discussions with Abe, New Zealand Prime Minister Bill English and Singaporean Prime Minister Lee Hsien Loong about the possibility of proceeding with the TPP without the United States.
He has raised the prospect of China, the world’s top exporter, joining a revised deal.
“We want to have more opportunities with more markets,” Turnbull said.
“We already have a China-Australia Free Trade Agreement. Certainly there is the potential for China to join the TPP.”
One of the world’s biggest multinational trade deals, covering 40 percent of the world economy, the Trans-Pacific Partnership was signed by 12 member nations early last year after tough negotiations.
It was a pillar of former US President Barack Obama’s pivot to Asia.
Malaysia’s Trade Minister Mustapa Mohamed says negotiators from the remaining TPP countries would be in “constant communication” to decide the best way forward.
Nonetheless, where the deal goes from here is far from clear.