Obama de­fends free trade as Trump’s shadow looms large

The Myanmar Times - - International Business -

US Pres­i­dent Barack Obama de­fended free trade as fel­low Asia-Pa­cific lead­ers vowed to fight pro­tec­tion­ism af­ter Don­ald Trump’s shock elec­tion vic­tory sparked fears for the fu­ture of global com­merce.

Mr Trump’s tri­umph in the US pres­i­den­tial poll has raised con­cerns that years of rolling back trade bar­ri­ers could be re­versed af­ter the pop­ulist bil­lion­aire vowed to tear up a series of key deals.

His vic­tory over­shad­owed a sum­mit of the Asia-Pa­cific Eco­nomic Co­op­er­a­tion (APEC) group held in Peru last week where lead­ers, in­clud­ing Mr Obama, China’s Xi Jin­ping and Rus­sia’s Vladimir Putin, found them­selves un­der fierce pres­sure to de­fend free trade.

Glob­al­i­sa­tion and trade deals have been in­creas­ingly blamed in Europe and Amer­ica for send­ing jobs abroad and erod­ing liv­ing stan­dards, con­cerns re­flected in both the elec­tion of Trump and Bri­tain’s “Brexit” vote in June to leave the Euro­pean Union.

At the APEC gath­er­ing there was par­tic­u­lar con­cern about the fu­ture of a ma­jor US-backed ac­cord – the Trans-Pa­cific Part­ner­ship (TPP), which Mr Trump has vowed to kill off – and that China was po­si­tion­ing it­self to forge ahead with its own trade deals and fill a vac­uum left by any Amer­i­can with­drawal.

But af­ter the sum­mit closed on Novem­ber 20, Mr Obama said that the 12-na­tion trans-Pa­cific deal, a key part of his much-vaunted “pivot” to Asia, was far from dead and those in­volved still wanted to move for­ward with the United States. He also in­sisted trade was pos­i­tive as long as it was car­ried out in the right way and sought to an­swer ris­ing con­cerns about glob­al­i­sa­tion, con­ced­ing that “his­toric gains in pros­per­ity” had not been evenly dis­trib­uted.

“That can re­ver­ber­ate through our pol­i­tics,” Mr Obama said.

“That’s why I firmly be­lieve one of our great­est chal­lenges in the years ahead across our na­tions and within them will be to make sure that the ben­e­fits of the global econ­omy are shared by more peo­ple.”

And he sent a mes­sage to a world in­creas­ingly wary of glob­al­i­sa­tion: “The an­swer is to do trade right.”

Mr Obama’s con­cerns about grow­ing in­equal­ity were echoed by other lead­ers at the gath­er­ing, with Sin­ga­porean Prime Min­is­ter Lee Hsien Loong say­ing steps must be taken to en­sure that “no groups in so­ci­ety are left be­hind”.

“Only then can we push ahead with trade and eco­nomic co­op­er­a­tion,” he said.

APEC’s 21 mem­bers from ei­ther side of the Pa­cific of­fered their own staunch de­fence of free trade as the sum­mit ended, pledg­ing to “fight against all forms of pro­tec­tion­ism”.

In ad­di­tion the group vowed to re­frain from com­pet­i­tive de­val­u­a­tion of their cur­ren­cies, af­ter Mr Trump re­peat­edly ac­cused China of keep­ing the yuan un­der­val­ued to boost ex­ports and threat­ened to de­clare Bei­jing a cur­rency ma­nip­u­la­tor.

But an­a­lysts were not con­vinced, with se­nior an­a­lyst Jef­frey Hal­ley at forex bro­ker Oanda say­ing it sounded like “empty rhetoric”.

“Most par­tic­i­pat­ing na­tions have very dif­fer­ent def­i­ni­tions of what con­sti­tutes open mar­kets and pro­tec­tion­ism,” he said.

While Mr Obama sought to be up­beat about the TPP’s prospects, some ex­perts say Mr Trump’s at­tacks on the agree­ment – which he called a “ter­ri­ble deal” – and his Repub­li­can al­lies’ con­trol of Congress mean it is dead in the wa­ter.

Other ob­servers have sug­gested that the deal-mak­ing real es­tate mogul may seek to ne­go­ti­ate changes to the agree­ment once he takes of­fice in Jan­uary, and then claim a vic­tory if a new ver­sion is passed.

A fail­ure of the TPP would likely be wel­comed by China, which was ex­cluded from the deal and saw it as an at­tempt by the US to in­crease its clout in Bei­jing’s backyard.

As the sum­mit con­cluded, Chi­nese for­eign min­istry of­fi­cial Tan Jian took a veiled swipe at Amer­ica, say­ing that coun­tries “should not politi­cise free trade ar­range­ments”.

Mr Trump’s vic­tory and the po­ten­tial demise of the TPP means that even long­time US al­lies may soon be turn­ing to Bei­jing in a re­gion hun­gry for trade. Pres­i­dent Xi set him­self up as the anti-Trump at this week’s sum­mit, de­fend­ing open mar­kets and push­ing two ri­val agree­ments – an APEC-wide deal and a 16-mem­ber ac­cord that ex­cludes the US. –

Photo: AFP

US Pres­i­dent Barack Obama speaks dur­ing a press con­fer­ence af­ter the Asi­aPa­cific Eco­nomic Co­op­er­a­tion Sum­mit in Lima on Novem­ber 20.

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