Asia bloc laments Trump re­jec­tion of trade pact

New Chi­nese ini­tia­tive may re­ceive a cold-shoul­der

Kuwait Times - - BUSI­NESS -

Pres­i­dent-elect Don­ald Trump says he wants to pull out of the Trans-Pa­cific Part­ner­ship but other Pa­cific Rim lead­ers are vow­ing to push mar­ket-open­ing ef­forts they say are vi­tal for growth.

The pos­si­ble de­cline of the 12-na­tion TPP could give a boost to al­ter­na­tive ini­tia­tives in­clud­ing one pro­moted by China in which the United States is not tak­ing part. Trump’s mes­sage, in a brief video, was is­sued af­ter Pres­i­dent Barack Obama and other lead­ers of the Asia-Pa­cific Eco­nomic Co­op­er­a­tion group, meet­ing in Peru, called Sun­day for fight­ing the back­lash against trade high­lighted by Trump’s vic­tory and Bri­tain’s vote to leave the Euro­pean Union.

Pro­mot­ers of the TPP say it is a step to­ward build­ing a wider, pan-Pa­cific free trade zone, though crit­ics ob­ject it would shift too much con­trol over reg­u­la­tion to com­pa­nies from gov­ern­ments and the pub­lic. “There is very strong sup­port among the other 11 par­ties to the TPP to rat­ify it and to seek to bring it into force,” said Aus­tralian Prime Min­is­ter Mal­colm Turn­bull.

Trump de­scribed the 12-na­tion pact as a “po­ten­tial dis­as­ter for our coun­try.” He has also said he wants to rene­go­ti­ate the North Amer­i­can Free Trade Agree­ment with Canada and Mex­ico. Obama has said he would give up seek­ing congressional ap­proval for the TPP. He had cham­pi­oned it as a way for the United States to lead the cre­ation of “gold stan­dard” rules for 21st cen­tury trade.

“I think not mov­ing for­ward would un­der­mine our po­si­tion across the re­gion,” Obama told re­porters in Lima. New Zealand Prime Min­is­ter John Key said Wash­ing­ton will need to think about what role it wants to play in Asia and its fast-grow­ing mar­kets.

The US not an is­land

“The United States isn’t an is­land. It can’t just sit there and say it’s not go­ing to trade with the rest of the world,” said Key af­ter re­turn­ing home. “At some point they’re go­ing to have to give some con­sid­er­a­tion to that. But nat­u­rally, we’re a bit dis­ap­pointed.”

The TPP, signed this year in New Zealand, would take ef­fect af­ter it is rat­i­fied by six coun­tries that ac­count for 85 per­cent of the com­bined gross do­mes­tic prod­uct of its mem­ber na­tions.

The United States is 60 per­cent of the com­bined GDP of that group and Ja­pan less than 20 per­cent, so those con­di­tions can­not be met with­out US par­tic­i­pa­tion.

“TPP is mean­ing­less with­out the United States,” said Ja­panese Prime Min­is­ter Shinzo Abe. Last week, he be­came the first for­eign leader to meet Trump since his Nov. 8 elec­tion vic­tory. As Ja­pan’s most pow­er­ful leader in a decade, Abe in­vested po­lit­i­cal cap­i­tal in over­com­ing op­po­si­tion to the TPP from farm­ers and the med­i­cal lobby. His rul­ing Lib­eral Demo­cratic Party pushed TPP rat­i­fi­ca­tion through the lower house of par­lia­ment and had been set to seek fi­nal ap­proval in the up­per house.

Rene­go­ti­at­ing the agree­ment would “dis­turb the fun­da­men­tal bal­ance of ben­e­fits,” said Abe, who was in Ar­gentina fol­low­ing APEC. Other TPP mem­bers in­clude Chile, Mex­ico, Canada, Peru, Brunei, Malaysia, Sin­ga­pore, Viet­nam and Aus­tralia.

China hopes for progress on the Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship, or RCEP, it is pro­mot­ing with the 10 gov­ern­ments of the As­so­ci­a­tion of South­east Asian Na­tions, a Chi­nese for­eign min­istry spokesman said.

The RCEP would re­quire fewer mar­ket-open­ing con­ces­sions than TPP. Crit­ics say that would let China shield its huge but in­ef­fi­cient sta­te­owned com­pa­nies from com­pe­ti­tion. The agree­ment would in­clude China, In­dia, In­done­sia and South Korea but no coun­tries from the Amer­i­cas have joined.

“We would like to push the ne­go­ti­a­tion process to make head­way at an early date,” said the spokesman, Geng Shuang, at a reg­u­lar brief­ing. China also called at APEC for progress on a sep­a­rate ar­range­ment, the Free Trade Agree­ment of the Asia Pa­cific. “We hope these free trade agree­ments can re­in­force rather than thwart each other,” said Geng. “We should pre­vent frag­men­ta­tion of eco­nomic and trade ar­range­ments or politi­ciz­ing such agree­ments.”

As­so­ci­ated Press writ­ers Liu Zheng in Bei­jing; Rod McGuirk in Can­berra, Aus­tralia; Nick Perry in Welling­ton, New Zealand, and Al­mu­dena Cala­trava and Luis An­dres He­nao in Buenos Aires, Ar­gentina, con­trib­uted to this re­port.

— AP

BEI­JING: A Chi­nese woman checks a hand­bag at an Amer­i­can fash­ion bou­tique at an up-scale shop­ping mall in Bei­jing yes­ter­day. US Pres­i­den­t­elect Don­ald Trump’s an­nounce­ment that he plans to quit the Trans-Pa­cific Part­ner­ship is draw­ing vows from other Pa­cific Rim coun­tries to push ahead with the trade pact while they also pur­sue free trade deals with China.

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