While the administration of U.S. President Donald Trump is considering slapping another $200 billion in tariffs on Chinese goods, 16 economies in Asia Pacific are racing to conclude a mega trade deal that would become the largest trading bloc in the world.

What's happening in the U.S. "has actually given us the urgency" to press on with negotiations to reach an agreement, Ramon Lopez, the Philippines' secretary of trade and industry, told CNBC's Sri Jegarajah on Friday.

When completed, the Regional Comprehensive Economic Partnership, or RCEP, would account for about one-third of the global economy.

The 16 countries are made up of the 10 Association of Southeast Asian Nations, plus China, Japan, South Korea, India, Australia and New Zealand.

"By the end of this year, everybody is looking at a very good outcome. In other words, we're referring to a possible substantial conclusion given the momentum that we're all having right now," Lopez said on the sidelines of a meeting of ASEAN economic ministers in Singapore.

The countries involved have made inroads in ironing out differences and resolving previously contentious issues, he said. While the deal may not be signed in 2018, the end is in sight and negotiations could conclude this year, he added.

"That is a good development, with all these protectionism woes that we see around," said Lopez, adding that RCEP countries want to show the world that discussions on multilateral trade are still progressing in Asia Pacific.

Tensions between the U.S. and its major trading partners have rattled markets and clouded the global economic outlook. In addition to renegotiating what he sees as unfair trade deals, Trump also said he would pull the U.S. out of the World Trade Organization if the international trading group doesn't "shape up."

"Nobody wins in a trade war," Lopez said, expressing a sentiment shared by many country leaders, investors and analysts. "Eventually, if the world economy gets affected and it slows down, then definitely it impacts everyone."