China dou­bles down on free trade as Trump leaves a void

The Myanmar Times - - International Business -

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.” –

Photo: AFP

US Pres­i­dent Barack Obama (right) ad­dressed China’s Pres­i­dent Xi Jin­ping (left) and oth­ers at a meet­ing in Lima.

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