Pacific rim leaders eye China lead on trade after Trump winPosted: November 18, 2016
Leaders of Pacific rim nations gathered in Peru on Friday, looking to China to salvage hopes for regional trade as prospects of a Donald Trump presidency in the United States sounded a possible death knell for the Trans-Pacific Partnership (TPP) free trade pact.
Discussions between the 21 members of the Asia-Pacific Economic Cooperation (APEC) summit were dominated by fears of rising anti-globalization sentiment in the West, with increasing signs that countries are looking to China to take up the slack in leading global trade.
“We have noticed that protectionist tendencies have begun to emerge,” Peru’s President Pedro Pablo Kuczynski said in an opening speech. “To anyone who wants to propose protectionism I suggest that you read the history books about the 1930s.”
U.S. President Barack Obama, Chinese President Xi Jinping, and Russian President Vladimir Putin are due to attend the summit that brings together leaders whose economies represent 57 percent of global gross domestic product.
While campaigning for the presidential election which he won, Trump labeled the TPP “a disaster” and called for curbs on immigration. His isolationist stance echoed sentiments in Britain, which voted in June to quit the European Union.
Though Obama championed the TPP, his administration has now stopped trying to win congressional approval for the deal that was signed by 12 economies in the Americas and Asia-Pacific, but excluded China. Without U.S. approval the agreement as currently negotiated cannot come to fruition.
But Alan Bollard, the APEC secretariat’s executive director, said it was premature to write the TPP off, though he expected it to be “put on the shelf” temporarily.
“I think at the minute they will sit on it and wait and see what the new U.S. administration looks like after a year or a couple of years,” Bollard said.
ROLE OF CHINA
China’s Xi is expected to sell an alternate vision for regional trade by promoting the Beijing-backed Regional Comprehensive Economic Partnership (RCEP), which as it stands excludes the Americas.
“We see people around the table here right now talking about if the TPP does not move forward then they’re going to have to put their eggs in the RCEP basket,” U.S. trade representative Michael Froman told Reuters.
Sun Xiao from China’s Chamber of International Commerce blamed unequal distribution of free trade’s benefits for rising protectionism, and suggested it would be different under Chinese leadership.
“If there was a bigger role for China we would promote the principle of joint participation and shared benefits to ensure free trade arrangements can benefit all,” he said.
Summit host Peru, one of the world’s most open economies, has already said it would like to join the Beijing-backed trade pact.
Others like Japan have expressed interest in moving forward with some sort of regional trade pact without the United States, Peruvian Vice President Mercedes Araoz said.
“We probably will have several paths we could take, always with the commitment of having a free trade agreement in the Asia-Pacific region,” Araoz told journalists.
Australia’s Trade Minister Steve Ciobo said he hoped negotiations on TPP would continue, but in the meantime believed the Chinese-led agreement presented a big opportunity.
“If we are able to successfully land it over the coming months or the year ahead it would create again a terrific opportunity for Australian businesses to export through a common set of rules across the region,” he told Australian Broadcasting Corp radio.
The world would need to wait and see what happened with a Trump presidency and Brexit but customers accustomed to enjoying the fruits of free trade were unlikely to support the effects of increased barriers, said Scott Price, Chief Administrative Officer of Wal-Mart International.
“The fact is that moms in Minnesota are still going to want blueberries in January, that your average consumer in England is still going to want the full assortment of products that they’ve been used to, and I have confidence that it will work out in a way that is practical and pragmatic.”
(Reporting by Rosalba O’Brien, Teresa Cespedes, Caroline Stauffer, Ursula Scollo and Mitra Taj in Lima, Additional reporting by Jamie Freed in Sydney; Writing by Caroline Stauffer and Rosalba O’Brien; Editing by Meredith Mazzilli and Alistair Bell)
Source: Reuters “Pacific rim leaders eye China lead on trade after Trump win”
Note: This is Reuters report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.