Trump’s ‘America First’ stance roils Apec free trade accord
DA NANG, VIETNAM— Asia-Pacific ministers struggled on Thursday to agree on a joint statement on free trade, a rare tussle over a normally routine document that highlights how US President Donald Trump’s protectionist “America First” stance is knotting up global trade relations.
World leaders are gathering in the Vietnamese city of Da Nang this week for the annual Asia-Pacific Economic Cooperation (Apec) forum.
Russia’s Vladimir Putin, Trump and China’s Xi Jinping are among the power players who will attend the 21-member summit, with the latter pair giving speeches likely to present divergent visions on the future of global trade on Friday.
But even before Trump’s Friday touchdown in Vietnam, regional diplomats found themselves in a wrangle sparked by the United States’ new policy direction.
Better deal
Apec, which has long championed free trade, has itself been convulsed by Trump’s “America First” policy, which he says is needed to give a better deal to American workers.
Asia-Pacific nations scrambled to salvage the sprawling Trans-Pacific Partnership (TPP) trade deal on Friday following the US rejection of the original pact.
Trump’s ascent to the White House has upended years of US-led pushes for more open global trade and lower tariffs.
One of his first moves after taking office was to pull US support for the TPP, an Americanled initiative among 12 Pacific countries, excluding the Philippines, that deliberately excluded Washington’s big regional rival, China.
Trade and foreign ministers from the remaining 11 countries, which include Japan, Australia, Malaysia and Vietnam, and accounts for 40 percent of global gross domestic product (GDP), have since struggled to reboot the deal.
Over the last 48 hours, the socalled TPP-11 has been in talks over issuing a joint statement detailing their common goals, normally something of a formality.
But this year they have so far been unable to reach a consensus.
Protectionist wording
Three diplomatic sources with knowledge of the talks said the cause was US negotiators sticking to their “America First” lines and pushing for more protectionist wording.
“We are now feeling the Trump effect at Apec,” one source told Agence France-Presse (AFP), requesting anonymity.
Trump has railed against free trade deals, describing them as bad for US jobs, and instead favoring a rebalanced “fair” trade system, a message he has reiterated in Tokyo, Seoul and Beijing during visits this week.
“The US has concerns about references to free trade and protectionism,” added a second diplomatic source at Apec.
“It’s the same as G20,” a third source added, referencing a global gathering of finance ministers in March when leaders there bowed to US pressure and dropped a routine pledge to keep world trade free and open.
Australian Trade Minister Steven Ciobo played down reports of discord, saying “each country wants it to reflect their values,” he said. “I’m confident we’ll get a good statement.”
Salvaging TPP?
China has stepped into the void, portraying itself as the world’s global free trade leader and pushing its own version of TPP.
Ministers from the TPP-11 nations on Friday made little headway crafting a new deal without access to US markets.
Malaysian Trade Minister Mustapa Mohamed said there were “many contentions” remaining.
“At one stage we consider it difficult for the TPP to be revived, but some countries led by Japan feel that TPP-11 is still worth it,” he added.
“There’s a lot of sentiment for deglobalization,” Victoria Kwakwa, vice president of the World Bank’s East Asia and Pacific department, told delegates.
Globalization, she said, “has really brought unprecedented economic prosperity globally” including helping to double global GDP between 1990 and 2015, and lift a billion people out of poverty over the same period.
Reports in Japanese media late on Thursday said an agreement in principle had been reached to press ahead with the TPP-11 without the United States.
But claims of a breakthrough were later denied by Canada’s Trade Minister Francois-Philippe Champagne.
“Despite reports, there is no agreement in principle on TPP,” he said in a tweet.
Japan, the world’s third-largest economy, is keen to demonstrate that multilateral trade pacts can thrive without US support.
Other nations are wrangling over whether some initial elements can be suspended to avoid the collapse of the pact.
‘Gold standard’
Canada wants to keep the strong “gold standard” elements of the deal.
Without the United States, TPP-11 only represents 13.5 percent of the global economy.
Trump’s spectacular emergence has unpicked decades of US-led work toward more open global trade and lower tariffs.
The original TPP deal was previously described by the United States as a gold standard for all free trade agreements because it went far beyond just cutting tariffs.
It included removing a slew of nontariff measures and required members to comply with a high level of regulatory standards in areas like labor law, environmental protection, intellectual property and government procurement.
Trump has said he will set out a vision for a “free and open Indo-Pacific region” likely to touch on both security and trade.
He broke early with the “Pivot to Asia” of the Obama administration, worrying some traditional allies that hewould allow China to extend its increasing dominance.
Da Nang has a special place in US-Vietnamese history: It was where the first US ground troops disembarked in 1965 in the escalation of a war that would last another decade before the communist victory.