Asia closer to trade pact without US
Beijing-backed agreement would cover half the world’s population
Substantial progress had been made on hammering out a China-backed trade deal, Singapore’s leader said on Wednesday, driving ahead the world’s largest commercial pact from which the US is excluded.
World leaders gathered in Singapore this week for a summit where a massive Beijingbacked agreement covering half the world’s population dominated discussions.
Diplomats have been trying to nail down details as Beijing entices its neighbours to join a commercial alliance seen as an antidote to President Donald Trump’s “America First” protectionist trade policy.
The US has imposed tariffs on roughly half of its imports from China, prompting Beijing to retaliate with its own levies.
Beijing’s leaders have recast themselves as defenders of global commerce, sidelining the US under Trump.
China, Japan and India are among 16 Asia-Pacific countries negotiating the Regional Comprehensive Economic Partnership (RCEP).
“Substantial progress has been made this year to advance the RCEP negotiations,” Singapore’s Prime Minister Lee Hsien Loong said on Wednesday.
He said talks were “at the final stage”.
“With the strong momentum generated this year, I am pleased to note that the RCEP negotiations are poised for conclusion in 2019,” he added.
But he cautioned any further delays could risk “losing credibility” for a deal that has taken six years to negotiate.
This week’s meetings are the biggest in a series of annual gatherings organised by regional bloc the Association of Southeast Nations (Asean) and are attended by 20 leaders.
The RCEP was given extra impetus after Trump pulled the US out of the rival Trans-Pacific Partnership (TPP) in early 2017. That deal was spearheaded by his predecessor, Barack Obama, and aimed to bind fast-growing Asian powers into a US-backed order to counter China.
The TPP is still alive, even without Washington, and will come into effect in December. But the RCEP, if realised, will be the world’s biggest trade deal.
However, the Beijing-backed pact is much less ambitious than the TPP in terms of employment and environmental protection.
Beijing had hoped to have the meat of the deal done by the end of 2018, but this slipped to 2019. Still, that has not stopped Chinese leaders basking in the progress already made.
At a meeting with Southeast Asia leaders, Chinese Prime Minister Li Keqiang said he was hopeful talks would “break through the ceiling” and take regional trade “to new heights”.
Trump is not at the Singapore summit, nor will he attend a gathering of world leaders in Papua New Guinea at the end of the week, sending Vice-President Mike Pence in his place.
US national security adviser John Bolton, however, told reporters in Singapore that the president’s no-show should not be seen as a lack of commitment towards the region.
He blamed a “schedule crunch” after a frenetic few weeks that included the midterm elections, attending the World War 1 armistice commemorations in France and preparing for the Group of 20 meeting in Argentina later in November.
There are still major sticking points in RCEP talks, with India nervous about giving Chinese companies greater access to its markets, and wealthier nations wanting to see more progress on labour reform.
Disagreements on intellectual property rights, goods tariffs and financial services are also on a long list of issues that still need to be concluded. Also, the spectre of possible leadership changes with general elections early in 2019 in India, Thailand and Indonesia are complicating the timeline for a deal.
Aaron Connelly, an expert on Southeast Asian politics at the International Institute for Strategic Studies, said that not concluding RCEP talks at Asean 2018 could indicate China has some way to go to convince neighbours to sign up.
“It’s interesting that when Beijing is at its most vulnerable on trade, with US tariffs biting, they weren’t willing to concede enough to their neighbours in terms of market access to get a deal done,” he told AFP.
Trade ministers across the Asia Pacific sounded a largely positive tone this week, saying they expect the pact to be agreed sooner rather than later.
“The future lies in RCEP,” Indian trade minister Suresh Prabhu said earlier in the week. /
WITH US TARIFFS BITING, CHINA WAS NOT WILLING TO CONCEDE ENOUGH IN TERMS OF MARKET ACCESS TO GET A DEAL DONE