Carney constructs mega anti-Trump trade alliance

Two of the world's biggest trading blocs are cautiously eyeing closer ties to short-circuit Donald Trump"s tariffs, Report informs via Politico.

The European Union and a 12-nation Indo-Pacific bloc are opening talks to explore proposals to form one of the largest global economic alliances, multiple people with knowledge of the talks told POLITICO.

Canada is spearheading the discussions after Prime Minister Mark Carney called on middle powers to buck trade war coercion last month, days after Trump threatened to raise tariffs on Denmark's European allies if it didn't cede Greenland.

Ottawa is "championing efforts to build a bridge between the Trans-Pacific Partnership [CPTPP] and the European Union, which would create a new trading bloc of 1.5 billion people," Carney told world leaders and the global business elite in Davos.

The middle powers are taking action. The EU and CPTPP are starting talks this year to strike an agreement to intertwine the supply chains of members like Canada, Singapore, Mexico, Japan, Vietnam, Malaysia and Australia with Europe.

It would bring nearly 40 nations on opposite sides of the globe closer together with the aim of reaching a deal on so-called rules of origin.

These rules determine the economic nationality of a product. A deal would allow manufacturers throughout the two blocs to trade goods and their parts more seamlessly in a low-tariff process known as cumulation.

Earlier this month, Carney dispatched his personal representative to the European Union, John Hannaford, to Singapore to solicit the views of regional leaders on the potential deal.

"The work is definitely coming along," a Canadian government official told POLITICO. "We've had very fruitful discussions on it with other partners around the world." Like others in this story, they were granted anonymity to discuss the preliminary talks.