Beijing eyes new regional free-trade deal as US-led pact falters
Talks under way on regional pact after Obama failed to make headway on a US-led agreement
Beijing has sought to take the lead in kick-starting the formation of a regional free-trade agreement as a US-led pact, which does not include China, faces uncertainty.
Wang Shouwen, an assistant commerce minister, said yesterday that discussions were under way to set up a working group that would explore the feasibility of an Asia-Pacific Free Trade Agreement (FTAAP).
"This year, as the host of Apec [Asia Pacific Economic Co-operation forum], China wishes to turn the FTAAP from a long-cherished wish into action," Wang was quoted by mainland media as saying. The concept of an FTAAP was first floated in 2006 at an Apec summit in Hanoi but has not taken off.
Wang said the feasibility study would assess the FTAAP's possible economic benefits and probe ways to make use of existing free-trade agreements.
But he added the study would only seek to provide suggestions and would not necessarily result in an immediate start of negotiations to set up a free-trade agreement. "Apec members would have to decide whether to start the negotiations," he said.
Regional trade ministers will meet later this month in Qingdao to prepare for the Apec summit in Beijing in November.
Premier Li Keqiang raised the possibility of such a feasibility study at the Boao Forum in Hainan on April 10.
Wang's comments on the possible regional trade agreement came just a day after US President Barack Obama concluded a four-nation Asia tour without securing an important bilateral trade accord with Japan. Without such a deal, the fate of the 12-nation Trans-Pacific Partnership (TPP) free-trade agreement remains uncertain.
The TPP is seen as the centrepiece of Obama's efforts to boost US influence in Asia in the face of China's rising clout. The pact does not include China and is seen by some analysts as an effort to economically contain Beijing. But Chinese officials have since last year expressed interest - both publicly and privately - in joining the transpacific deal.
"This came on the heels of Obama's not so successful trip to Asia … one could not help but wonder if China is taking advantage of the lost TPP momentum and trying to push for a region-wide alternative free-trade agreement," said Oh Ei Sun, a senior fellow at the S. Rajaratnam School of International Studies in Singapore.
But He Maochun, director of the Research Centre for Economic Diplomacy Studies at Tsinghua University, said China's initiative to kick-start the FTAAP was part of Beijing's drive to promote regional integration.
"This [FTAAP] is not a rival to TPP. The FTAAP could potentially benefit from TPP," He said.
Both Oh and He said the FTAAP could attract more support from regional countries if its thresholds were not as strenuous as the TPP. Negotiations for the TPP have run into an impasse as countries refuse to make concessions on issues such as intellectual property rights and market access.
Chinese Foreign Minister Wang Yi has stated economic diplomacy is one of the five major focuses for Beijing's foreign policy this year. Wang has also targeted wrapping up negotiations for a free-trade zone with Japan and South Korea.