Global trade on the block as Trump heads to APEC
Pacific Rim countries seek accord on open markets
DANANG, Vietnam, Nov 8, (Agencies): The future of global trade comes under the microscope this week as Donald Trump addresses Asia-Pacific leaders in Vietnam, a visit that will be carefully examined for clues as to how his “America First” mantra will guide US engagement with the world.
During a sweep through Asia, the US president has sought to build a consensus against North Korean nuclear ambitions.
But he has also raised loud objections to what he calls “unfair” trade, an election campaign cornerstone that saw him scoop up votes by promising to rewrite the rules of global trade in America’s favour.
Analysts expect him to put meat on the bones of his “America First” rhetoric in the Vietnamese city of Danang on Friday when he arrives for the AsiaPacific Economic Cooperation (APEC) summit, a forum of 21-nations representing 60 percent of global GDP.
Shortly after landing he will address a room packed with global CEOs — a speech that will be closely watched for details on how he intends to engage with the world’s economy.
Trump wants to “ensure that governments do not unfairly subsidise their industries, discriminate against foreign business, or restrict foreign investment”, his national security adviser H.R McMaster told reporters ahead of his trip.
Previously the US president has said America’s powerhouse economy means it can write its own terms of trade bilaterally with its partners.
He has railed at multilateralism for supposedly pinching American jobs by giving an advantage to countries with cheap labour and heavy subsidies, pulling the US from the sprawling TransPacific Partnership (TPP) pact.
The TPP was conceived as a 12-nation deal linking low tariff trade across the Asia-Pacific region to labour and environmental protections.
It was chiselled out under Barack Obama’s administration during a “pivot” to Asia, presented as a counterpoint to China’s growing regional heft.
Threat
But the ascent of the combative billionaire Trump — and the accompanying threat of an American retreat — has allowed China to stake out its ground as the new architect of global commerce.
When Trump speaks on Friday the “indications are he’ll elaborate on this idea of an open and free Indo-Pacific region,” said David Dollar, an analyst at the Brookings Institution.
“I think they’re still trying to figure out exactly what this concept is. But it would be easy to interpret this as something of an anti-China effort.”
At the APEC summit, which begins on Saturday, he is likely to encounter other resistance to his trade narrative.
The block, which has a combined GDP of some $45 trillion, brings in 21 Pacific Rim economies, from giants like the US, China and Japan, to poorer but booming nations like Vietnam and Indonesia.
A stream of world leaders — including Japan’s Shinzo Abe and China’s Xi Jinping — are expected to champion multilateralism in speeches bookending Trump’s address on Friday.
Meanwhile, foreign and trade ministers of 21 Pacific Rim economies were working Wednesday to reach a consensus on open markets despite the US pushback on “free trade” ahead of summit meetings in a Vietnamese coastal resort city this week.
Vietnamese Foreign Affairs Minister Pham Binh Minh told delegates to the Asia-Pacific Economic Cooperation summit that shifting global and regional conditions come with “intertwining opportunities and challenges” as they began working out details of a declaration their leaders customarily issue at end of the annual gathering.
“Economic recovery is firming but projected growth rates are still below pre-crisis averages,” he said.
Many in the region worry about how efforts to boost productivity through automation might affect their own lives, he added.
Vietnam, the host of this summit, is using the occasion to showcase the progress its economy has made thanks largely to opening to foreign investment and trade. Danang, Vietnam’s third largest city and the summit venue, is in the midst of a construction boom as dozens of resorts and smaller hotels pop up along its scenic coastline.
The country is a major garment exporter and the largest production base for Samsung Electronics’ mobile phones.