The agreement, renegotiated after the United States pulled out and now called the Comprehensive Progressive Trans-Pacific Partnership (CPTPP) brings together countries whose combined economies are worth $US10 trillion (NZ$14 trillion).
The CPTPP incorporates all commitments from the original Trans-Pacific Partnership (TPP), except for a limited number of provisions which have been temporarily suspended.
There's still a lot of work to do before the new Trans-Pacific Partnership free trade agreement comes into force, Prime Minister Jacinda Ardern says.
The new arrangement, known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, will include about 500 million people, and cover nations that account for about an eighth of global GDP.More news: Know The History Of International Women's Day
Member countries would still welcome the United States back into the pact, he said, adding that the deal opens door to any country that wants to join and accepts all of its principles. "It is now a trade bloc that discriminates against the U.S". However, the US abruptly abandoned the trade deal when President Trump chose to withdraw from it just three days after he was inaugurated as president.
The president has said he prefers country-to-country deals and is seeking to renegotiate several major trade agreements, including the North American Free Trade Agreement that includes the US, Mexico and Canada.
Chilean foreign minister Heraldo Munoz said the agreement was a strong signal "against protectionist pressures, in favour of a world open to trade".
Trump vowed on Thursday to impose a 25 per cent tariff on steel imports and 10 per cent tariff on aluminum imports, although he said there would be exemptions for Nafta partners Mexico and Canada.More news: NDPP to stake claim to form the Govt
It not only cut tariffs, but required members to comply with a high level of regulatory standards in areas such as labor law and environmental protection.
Speaking at the signing ceremony, she expressed her delight over the birth of the free trade agreement which is billed as an ambitious and strategic multi-lateral cooperation deal in the context of globalisation. However, the ratio goes up to 37% and the partnership becomes the largest economic bloc in the world if the USA takes part. The thinking was that China would have an incentive to open its market and liberalize its policies in an effort to eventually qualify for TPP membership.
The 11 states are closely gauging Trump's intentions after he suggested a possible return to the framework in Davos, Switzerland, in January, if the United States could strike a "substantially better deal".
"It's a worrisome trend and it's one of the reasons why the [agreement] has become more important over the a year ago, because there are these protectionist measures starting to pop up in quite a widespread way around the world". Officials signed the deal Thursday in Santiago, Chile.More news: Oculus Rift headsets hit with 'runtime service' error