China doubles down on free trade as Trump leaves a void
CHINESE President Xi Jinping pushed Beijing’s free trade plans at a summit of Asia-Pacific leaders, stepping up to fill the void left by US President-elect Donald Trump’s protectionism.
Mr Trump’s victory is making it a rocky ride into the sunset for Barack Obama, whose last foreign visit as US president – to the annual summit of the Asia-Pacific Economic Cooperation (APEC) group in Lima, Peru – has been full of awkward questions from fellow leaders.
Mr Trump’s attacks on free trade deals and vows to cut back the US role as “policeman of the world” are causing jitters across the Pacific Rim, where the United States and China battle for influence.
Mr Obama met on November 19 with leaders of the 12 countries in the Trans-Pacific Partnership, or TPP, a vast US-led trade accord that Mr Trump opposes and which now faces an uncertain future.
The billionaire mogul campaigned against the proposal as a “terrible deal” that would “rape” the United States by sending American jobs to countries with cheaper labour.
In a Pacific region hungry for trade, that has left even longtime US allies looking to China – which was notably excluded from the TPP – to fill the void.
Beijing is pushing two alternatives: the 21-member Free Trade Area of the Asia-Pacific (FTAAP) and a 16-member Regional Comprehensive Economic Partnership (RCEP), which notably includes India but not the United States.
Mr Xi urged regional leaders to advance both deals at the summit.
“We should firmly pursue FTAAP,” he said in a keynote address. “Openness is vital for the prosperity of the Asia-Pacific.”
In the face of Mr Trump’s protectionist rhetoric, he vowed China “will not shut its door to the outside world, but open it even wider”.
“We will fully involve ourselves in economic globalisation by supporting the multilateral trading regime, advancing the FTAAP and working for the early conclusion of the negotiations on the Regional Comprehensive Economic Partnership,” he said.
From Mr Obama down, US officials have stressed the election has not changed the country’s economic and strategic interests, and that Mr Trump may yet recalibrate his views.
“How you campaign isn’t always the same as how you govern,” Mr Obama told a town hall meeting of young Latin Americans in Lima.
Many leaders seem to be hoping as much within APEC – a 21-member free trade club that accounts for nearly 40 percent of the world’s population and nearly 60 percent of the global economy.
New Zealand’s Prime Minister John Key said he was banking on Mr Trump taking a pragmatic turn away from the extremes of his campaign.
“I personally think that President Trump will be like chairman of the corporation Trump,” he said.
Mr Obama has urged his fellow leaders to continue to work together to advance the TPP.
But many experts say Mr Trump’s attacks on the deal and his Republican allies’ control of Congress mean it is dead in the water.
The demise of the TPP will hit especially hard in emerging economies like Vietnam and Malaysia, said Gareth Leather, an economist at consultancy Capital Economics.
“The benefits of a China-led regional trade deal are likely to be much smaller,” he said in a note.
“The retreat on the part of America has created an opportunity for China, which was not part of the TPP negotiations, to expand its influence in Asia.” –
US President Barack Obama (right) addressed China’s President Xi Jinping (left) and others at a meeting in Lima.