Trudeau called the new deal the CPTPP, which stands for the Comprehensive and Progressive Trans-Pacific Partnership. The name was a reminder that Canada and other nations went forward with the Trans-Pacific Partnership (TPP) after Trump pulled out a year ago. The withdrawal from TPP was one of Trump's first acts as president. At the time, experts warned that leaving TPP probably would mean the United States would be outflanked on trade.
“In pulling out of TPP a year ago, the United States relinquished one of the most powerful tools at our disposal to shape the global trading environment,” says Matthew Rooney, director of economic growth at the George W. Bush Institute.
CPTPP drops tariffs on many goods flowing between the countries and sets up new rules for labor rights and environmental standards. The agreement involves Canada, Japan, Australia, Singapore, Mexico and six other nations that border the Pacific Ocean. China is not part of the deal, which was originally conceived as a way to counter China's growing economic power.
Anticipation is high in Davos that Trump will announce further trade measures in 2018 — and there is concern about the future of the North American Free Trade Agreement.
“What we want is fair trade,” Trump has said repeatedly. “We're gonna treat countries fairly, but they have to treat us fairly.”
American, Canadian and Mexican officials are meeting in Montreal this week for a sixth round of talks aimed at renegotiating NAFTA. Trump has said the trade agreement, in effect since 1994, hurts U.S. manufacturing and workers.
But numerous business leaders say NAFTA has created many jobs and they point out that there's no trade deficit between the United States and Canada. In fact, the United States ran a small trade surplus with Canada in 2016.
“We’re working hard to make sure our neighbor to the south understands the benefits of NAFTA,” Trudeau said with a smile to the Davos crowd.
But even in Davos, which is favored by champions of globalization, there is vocal opposition to trade from critics who say it has benefited the elites at the expense of the middle class in many parts of the world.
“The model of globalization has failed working people,” said Sharan Burrow, head of the International Trade Union Confederation, a global labor organization. “Eighty-five percent of people in our polls say they want to rewrite the rules of global trade.”
Burrow is calling for a “new social contract” in which governments and businesses give more protections to workers, including the ability to unionize. Her solution differs greatly from Trump's push to scale back regulations on businesses.
Many chief executives at Davos say they don't view Trump's recent tariffs as the start of a global trade war. They think that the U.S. president is looking to score political points with his base, but that he won't want to upset the stock market record highs and the faster economic growth by putting up too many trade barriers, a move that probably would spook businesses and investors.
“Trump is coming [to Davos] to show he's not the ogre he's been portrayed as,” said David Rubenstein, co-founder of the Carlyle Group, a top private equity firm.
Rubenstein has close ties to some Trump staff members, including Treasury Secretary Steven Mnuchin. Rubenstein predicted that Trump's message Friday will be: “I want to work with you, but you have to work on my terms.”