Equal negotiation on regional trade
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CHINA has ruled out seeking a leading role in regional trade arrangements and says trade rules should be based on equal negotiation.
Donald Trump’s upset in last week’s US presidential election had “created an opening” for China to extend its already massive economic clout in the Pacific Rim, a region hungry for free trade deals, experts said.
Trump vowed to scuttle US President Barack Obama’s key trade initiative in the region, the Trans-Pacific Partnership, and the near-certain death of the not-yet-ratified 12-nation agreement leaves a vacuum that China — which was excluded from the TPP — could fill with its own proposed deals.
Ahead of today’s summit of Asia-Pacific leaders, Trump’s protectionism has left the region looking to China for leadership on free trade.
President Xi Jinping is holding a “strong hand” as he meets Obama and other leaders from the 21-member Asia-Pacific Economic Cooperation group, observers say.
However, foreign ministry spokesman Geng Shuang told a press conference yesterday: “China does not seek a leading role in the Regional Comprehensive Economic Partnership and the Free Trade Area of the Asia-Pacific.”
He was commenting on the speculation that regional countries would turn to the RCEP, and that China might write the trade rules in the Asia-Pacific region.
The RCEP has ASEAN countries taking a leading role, while the FTAAP is a proposal of regional economic integration under APEC, Geng said.
China has been cooperating with all sides to push forward the RCEP on the basis of respecting ASEAN’s core role, he added.
During the APEC summit in Beijing in 2014, members agreed to begin a joint strategic study of the FTAAP, marking the official launch of the regionwide free trade area process.
“We hope to decide the next step with all relevant sides during the APEC summit in Peru to achieve more progress in building up the Asia-Pacific free trade zone,” Geng said.
China has always had an open attitude toward arrangements conducive to liberating and facilitating regional trade and investment, and the region’s common development and prosperity, he said, adding that China also believes trade arrangements should be in accordance with World Trade Organization rules.
“Trade arrangements should seek to work with, not against, each other,” Geng said, adding that all sides should prevent trade arrangements in the Asia-Pacific region from becoming fragmented or politicized.
Trade rules should be settled through equal negotiation by every side, not one or two countries, and take into consideration the differences of all members’ development stages, especially developing economies, Geng said.
He stressed that trade rules should be reciprocal and in the interests of all sides.
Earlier, Brian Jackson, a China economist at consultancy IHS Global Insight, said: “There is no doubt that if the TPP fails it will be a huge win for China, politically and economically.”
“On the political side, TPP negotiations took years and plenty of political capital in partner countries, so its failure would create a credibility gap,” he told reporters.
“Economically, it will provide China with a stronger negotiating position as one major alternative source of demand.”
Trump is not at the summit in Lima, but he looms large over APEC, a free-trade club founded in 1989 that represents nearly 40 percent of the world’s population and nearly 60 percent of the global economy.
The Republican president-elect successfully tapped the anger of working-class voters who feel left behind by globalization, vowing to protect American jobs against cheap labor in developing countries.
That, together with his attacks on immigration and the US role as “policeman of the world” — plus Britain’s surprise “Brexit” vote — has unleashed deep uncertainty about the postwar world order.
“Right now, uncertainty surrounds every issue on the international agenda,” said political analyst Carlos Malamud, of Madrid’s Elcano Institute.
Economists warn that Trump’s policies, if they follow through on his campaign pledges, would unleash chaos on the highly interconnected world economy.
A protectionist turn for the US would cause “huge adjustment difficulties for countries that have grown through trade,” said Robert Lawrence, a trade expert at Harvard University.
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