China try­ing for re­gional trade pact by 2015: Pre­mier

China Daily (Canada) - - BUSINESS - By LYUCHANG in Bei­jing and JIANG XUEQING in Boao, Hainan

Pre­mier LiKe­qiang said on Thurs­day that Bei­jing will work to speed up the pace of China-backed trade ne­go­ti­a­tions for the Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship, try­ing to have the pact inked by 2015.

Li, who spoke at the open­ing cer­e­mony of the 2014 Boao Fo­rum for Asia, called on all na­tions in the re­gion to unite to pro­mote trade lib­er­al­iza­tion and to fa­cil­i­tate in­vest­ments.

“An eco­nomic in­te­gra­tion is in the com­mon in­ter­ests of all the na­tions,” Li said. He also sug­gested a fea­si­bil­ity study be con­ducted on the pro­posed Free Trade Area of the Asia Pa­cific to max­i­mize trade and in­vest­ment in­ter­ests in the re­gion.

Li noted that China holds an open at­ti­tude to­ward the Trans-Paci­ficPart­ner­shipand the two agree­ments should com­ple­ment and re­in­force each other, al­though they shouldn’t con­tra­dict the multi­na­tional prin­ci­ples of the World Trade Or­ga­ni­za­tion.

“The prin­ci­ples of the RCEP, an in­ter­na­tional or­ga­ni­za­tion that has the most mem­ber coun­tries, are in line with the Asian in­dus­trial struc­ture, eco­nomic pat­tern and so­cial con­ven­tions,” he said.

Li Ruogu, chair­man and pres­i­dent of the Ex­port-Im­port Bank of China, said on Thurs­day that many bi­lat­eral and re­gional free trade talks are go­ing on si­mul­ta­ne­ously be­cause it is dif­fi­cult for a large num­ber of coun­tries to sit to­gether to reach an agree­ment.

“As a re­sult, many coun­tries started mul­ti­lat­eral or bi­lat­eral talks to en­joy the ben­e­fits of free trade sooner,” he said. “Some coun­tries could reach free trade agree­ments first and wel­come other coun­tries to join when con­di­tions are ripe.”

The TPP talks were ini­ti­ated by Sin­ga­pore, New Zealand, Chile and Brunei in 2005, but have been dom­i­nat­ed­bytheUnited States af­ter it joined the talks in 2008.

The RCEP will in­clude all 10 mem­bers of the As­so­ci­a­tion of the South­east Asian Na­tions and the six FTA part­ners — China, Ja­pan, South Korea, In­dia, New Zealand and Aus­tralia, in its ini­tial stage.

“It’s true that there’satrend of frag­men­ta­tion of free trade talks,” said Fi­nance Min­is­ter Lou Ji­wei. “Var­i­ous FTAs have dif­fer­ent tar­gets. Some are very am­bi­tious, which means the ne­go­ti­a­tions are at a high risk of fail­ing. The RCEP is not that am­bi­tious, but it does re­quire rel­e­vant coun­tries to com­pro­mise and prom­ise to un­der­take do­mes­tic struc­tural re­forms to fi­nal­ize the ne­go­ti­a­tion,” he said.

While the TPP and RCEP are fre­quently de­scribed as ri­val trad­ing blocs led by the US and China, re­spec­tively, some ex­perts said the TPP can be seen as aUSat­temptto de­rail China’s ac­com­mo­da­tion into the re­gional and global trad­ing sys­tem. Oth­ers warned that such treaties would re­shape the struc­ture of the Asia-Pa­cific econ­omy and could pos­si­bly af­fect po­lit­i­cal ties be­tween the United States and China.

“The RCEP and TPP are of quite dif­fer­ent scale and with very dif­fer­ent po­ten­tial. China is now a far more dy­namic force in world trade than the US, so an RCEP would have much greater po­ten­tial than the TPP,” said John Ross, a se­nior fel­low with the Chongyang In­sti­tute for Fi­nan­cial Stud­ies at Ren­minUniver­sity of China in Bei­jing.

In 2013, China’s im­ports rose by $132 bil­lion, com­pared with a rise of $30 bil­lion for the Euro­pean Union and drops of $8 bil­lion for the US and $53 bil­lion for Ja­pan, ac­cord­ing to data from the Or­ga­ni­za­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment. China’s im­ports, there­fore, rose four times as much as the EU, while the US and Ja­pan were de­clin­ing im­port mar­kets, Ross said.

“The TPP, even if it is con­cluded, will be a rel­a­tively stag­nant trade bloc, whereas an RCEP in­clud­ing China would be far more dy­namic,” he said.

When the RCEP is in place, it will be the largest free trade pact in the world. Con­tact the writ­ers at lvchang@chi­nadaily. com.cn and jiangx­ue­qing@ chi­nadaily.com.cn

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