Asia-Pa­cific lead­ers to talk trade af­ter Trump vic­tory

Lead­ers to look for sig­nals on fu­ture of Obama’s ‘re­bal­ance’

Kuwait Times - - BUSINESS -

Top world lead­ers will meet this week to chart a fu­ture for free trade-al­most a dirty word in a world up­ended by Don­ald Trump’s vic­tory in the US pres­i­den­tial elec­tion.

US Pres­i­dent Barack Obama, China’s Xi Jin­ping, Ja­pan’s Shinzo Abe and Rus­sia’s Vladimir Putin will be among the lead­ers in the room in Lima, Peru for the an­nual Asia-Pa­cific Eco­nomic Co­op­er­a­tion sum­mit from to­mor­row to Sun­day.

APEC sum­mits, which gather lead­ers from 21 Pa­cific Rim economies, are meant to forge unity on free trade in a re­gion that ac­counts for nearly 60 per­cent of the global econ­omy and nearly 40 per­cent of the world’s pop­u­la­tion. But this year’s event may be un­like any other, com­ing on the heels of Trump’s shock win in the Novem­ber 8 elec­tion.

The brash bil­lion­aire has un­leashed deep un­cer­tainty about the post­war world order with his at­tacks on free trade, im­mi­gra­tion and the US role as “po­lice­man of the world.”

By suc­cess­fully tap­ping the anger of work­ing­class whites who feel left be­hind by glob­al­iza­tion, Trump has am­pli­fied a sense of malaise that be­gan in June with Bri­tain’s “Brexit” vote to leave the Euro­pean Union-another shock vic­tory for a pop­ulist pol­i­tics of dis­il­lu­sion­ment with an in­creas­ingly bor­der­less world.

Pres­i­dent-elect Trump will not be at the APEC sum­mit, but he may well be the dom­i­nant pres­ence in the room. “I think APEC will be about two things-huge ques­tions about what a Trump pres­i­dency will mean for trade and work on all non-US path­ways for­ward to ad­vance free trade,” said Deb­o­rah Elms, ex­ec­u­tive di­rec­tor of the Asian Trade Cen­tre in Sin­ga­pore.

“The US has ap­par­ently cho­sen to hun­ker down, raise bar­ri­cades and re­turn to a glo­ri­ous past of splen­did iso­la­tion.”

Obama’s ‘re­bal­ance’ in doubt

It risks be­ing an awk­ward sum­mit for Obama, who will wrap up his fi­nal for­eign tour as pres­i­dent in Peru af­ter stops in Greece and Ger­many. Obama, who cam­paigned against Trump as “un­fit” to suc­ceed him, must now re­as­sure col­leagues that a Trump pres­i­dency will not in fact spell dis­as­ter.

Lead­ers will be look­ing for sig­nals on the fu­ture of Obama’s much-vaunted “re­bal­ance” to Asia and the Pa­cific. Amer­i­can al­lies such as Ja­pan and South Korea are wor­ried the Repub­li­can pres­i­dent-elect will cut back the US mil­i­tary, eco­nomic and di­plo­matic pres­ence in the re­gion-leav­ing them ex­posed to a dom­i­nant China and bel­liger­ent North Korea.

Trump has caused con­cern in the re­gion by sug­gest­ing Ja­pan and South Korea get nu­clear weapons to de­fend them­selves, call­ing cli­mate change a Chi­nese “hoax,” and warmly em­brac­ing Putin. The Latin Amer­i­can lead­ers in the room, in­clud­ing Mex­i­can Pres­i­dent En­rique Pena Ni­eto, will also be look­ing ner­vously to the new US ad­min­is­tra­tion. On the cam­paign trail, Trump in­sulted Mex­i­can im­mi­grants as “crim­i­nals” and “rapists,” vowed to build a bor­der wall with Mex­ico to keep out il­le­gal mi­grants and threat­ened mass de­por­ta­tions.

TPP obit­u­ary?

Obama’s sig­na­ture trade ini­tia­tive in the Asi­aPa­cific, the Trans-Pa­cific Part­ner­ship (TPP), mean­while faces near-cer­tain death. Trump has called the pro­posal a “ter­ri­ble deal.”

China, which was point­edly ex­cluded from the 12-mem­ber TPP, will be push­ing its own al­pha­bet soup of pro­posed trade deals: the APEC-wide Free Trade Area of the Asia-Pa­cific (FTAAP) and the 16-mem­ber Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship (RCEP), which notably in­cludes In­dia but not the United States. Both are seen as giv­ing China an edge over the US in the bat­tle for re­gional in­flu­ence.

Whither free trade?

The very fu­ture of free trade will be up for dis­cus­sion in Lima, an­a­lysts say. The world will be look­ing to the sum­mit for “a strong state­ment” to counter Trump’s anti-trade ar­gu­ments, said Ed­uardo Pedrosa, sec­re­tary gen­eral of the Pa­cific Eco­nomic Co­op­er­a­tion Coun­cil. “The ev­i­dence is not that strong that free trade is re­spon­si­ble for tak­ing away jobs from coun­tries, but that’s how peo­ple feel and you have to deal with that per­cep­tion,” he said.

Trump’s win means free trade is “in trou­ble,” said Robert Lawrence, a trade ex­pert at Har­vard Univer­sity. Not only is the US role in pro­mot­ing eco­nomic in­te­gra­tion “se­verely com­pro­mised,” he told AFP, Amer­i­can pro­tec­tion­ism could now be­come a brake on world trade. “Trump trade pol­icy, if it pro­ceeds as ad­ver­tised, is go­ing to be very dis­rup­tive,” he said. — AFP

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