Rival free trade pacts may cause ‘fragmentation,’ China warns
China’s President Xi Jinping yesterday urged Asian economies to sign up to its free trade agreement, warning that rival pacts risked causing “fragmentation” among regional nations.
Both China and the United States are pushing their own free trade visions for the economically vibrant and populous region.
Last month 12 Pacific nations finally reached an agreement on the US-led Trans-Pacific Partnership (TPP) pact, a major diplomatic coup for Washington.
The United States has promised to assist the Philippines in the possibility of joining the TPP after the Philippines expressed interest in joining the US-led “open and inclusive” trade deal that seeks to boost economies and lower barriers to trade and investment.
President Barack Obama welcomed the interest of the Philippines and directed his trade ministers to help Manila in the process.
China is pointedly excluded from the TPP, part of Washington’s attempt to ramp up influence in the region with its “pivot” to Asia.
China-led free trade Beijing has instead pushed its own agreement,
the Free Trade Area of the Asia Pacific (FTAAP)
“With various new regional free trade arrangements cropping up there have been worries about the potential of fragmentation. We therefore need to accelerate the realization of FTAAP and take regional economic integration forward,” Xi said.
The Chinese leader gave his remarks to business leaders in Manila, hours before he is due to meet Obama on stage at the regional Asia Pacific Economic Cooperation (APEC) summit in the Philippine capital.
The gathering is supposed to focus on trade but has already been sidetracked by the contest for the South China Sea, where Beijing’s program of island building on disputed shoals and reefs has rattled neighbors.
On Tuesday Obama offered the Philippines a warship as part of a $250million aid package to Southeast Asian allies worried about Chinese efforts to control strategic sea.
Dialogue, consultation Beijing insists APEC is a trade forum and not a place to discuss regional security issues.
Xi made no mention of the South China Sea in his speech but he did call on Pacific nations to “resolve our differences through dialogue and consultation.”
“We must focus on development and spare no effort to foster an environment of peace conducive to development and never allow anything to disrupt the development process,” he added.
He also said the world’s second largest economy was still in good health despite recent scares.
“In general China’s positive economic fundamentals and long-term trajectory remain unchanged,” he said.
Growth in the world’s second-largest economy has slowed to its lowest rates since the aftermath of the global financial crisis.
Apart from offering to help the Philippines join the TPP, Obama also discussed with President Aquino the strengthening of trade and investment relations and boosting cooperation on defense and security during a bilateral meeting yesterday.
“We also had a chance to discuss the Trans-Pacific Partnership, which is a pillar of America’s rebalance in the region. We welcome the Philippines’ interest in TPP and we have directed our Trade Ministers to have discussions about how TPP is going to be implemented among the original 12 countries and how we can work with the Philippines to follow through on their interest,” Obama said in a joint press conference with Aquino.
“TPP is designed to be an open and inclusive trade pact for countries that can meet its high standards,” the US leader added.
11 TPP signatories Last October, the United States reached an accord with 11 other countries to lower trade barriers to goods and services and set common standards in trade. The trade deal, which covers about 40 percent of the world economy, is one of Obama’s priorities in the final years of his presidency.
The signatories of the TPP are Brunei, Chile, Singapore, New Zealand, United States, Australia, Peru, Vietnam, Malaysia, Mexico, Canada, and Japan.
In his meeting with Obama, President Aquino conveyed the country’s “keen interest” in the TPP. “We hope that the United States, as one of our most important economic partners, can assist us in the process,” Aquino added.
Strong opposition vs TPP
In the face of strong opposition from some allies in the US Democratic party, Obama, meantime, acknowledged that the implementing the 12-nation TPP deal would not be easy.
The US leader is trying to secure the approval from Congress on the trade pact but US presidential hopeful Hillary Clinton has opposed the pact due to concerns on the protection
“There has not a trade deal that has been done in modern American politics that is not occasionally challenging but we get it done, and I’m confident we are going to be able to get it done,” Obama said.