APEC

Trans-Pacific Partnership

Apec summit leaders warn of dangers posed by Trump’s economic protectionism

Donald Trump’s pledge to end trade deals has led to countries that signed up to them looking to Beijing to take up the mantle from Washington

PUBLISHED : Monday, 21 November, 2016, 11:39pm
UPDATED : Tuesday, 22 November, 2016, 9:55am

As the world’s biggest economy, the US is used to dominating and even directing the agenda at Asia-Pacific Economic Cooperation meetings. In that respect, the ­latest summit in Lima, Peru, was business as usual.

We reaffirm our commitment to keep our markets open and to fight against all forms of protectionism
Members’ closing declaration

However, the focus was entirely different, with members of the group that thrives on free trade addressing US president-elect Donald Trump ’s pledge to scrap deals some countries have spent years trying to put together. Outgoing US President Barack Obama appears set to leave office without adding the Trans-Pacific Partnership (TPP) to his patchy legacy, allowing China to expand its own deals throughout the Asia-Pacific region.

Leaders at the weekend meeting warned against anyone adopting the same deal-destroying economic ideologies they say are embraced by Trump. Washington’s allies, as well as President Xi Jinping, took aim at his anti-globalisation views.

The Apec forum took place in Peru less than two weeks after Trump won America’s top job following a most bitter, divisive and unpredictable race for the White House. While campaigning, he pledged to protect US jobs by scrapping the TPP and renegotiating the North American Free Trade Agreement (Nafta) with Canada and Mexico.

“We reaffirm our commitment to keep our markets open and to fight against all forms of protectionism ... and to roll back protectionist and trade-distorting measures, which weaken trade and slow down the progress and recovery of the international economy,” the 21 members said in their closing declaration.

“To achieve sustainable growth in the Asia-Pacific region we must continue working with a renewed sense of urgency and through Asia-Pacific partnership featuring mutual respect and trust, inclusiveness and win-win cooperation in implementing our commitments and achieving our goals,” it went on.

As soon as attendees started arriving on Friday, the veiled attacks on Trump began.

On Saturday, Xi delivered a forceful defence of free trade in his speech, saying the best response to rising protectionism would be for Apec’s 21 members – which include China, Hong Kong, the US and Russia – to come up with a free-trade area encompassing the entire Pacific Rim.

New Zealand Prime Minister John Key was less restrained, insisting “tremendous despair” was triggered by Trump’s trade views.

“Even if the United States doesn’t want to engage in free trade, president Trump needs to know other countries do,” he said.

Mexican President Enrique Pena Nieto, who met Trump when he was still campaigning, expressed concern in Peru that the US could turn its back on Nafta, which sees about US$1.2 million in trade every minute. “In the face of Trump’s positioning, we are now in a stage of favouring dialogue as a way to build a new agenda in our bilateral relationship,” he said. While the future of the TPP hangs in the balance, ­officials from the other 11 countries ­involved vowed to press on with it.

Leaders said they would keep seeking ratification back in their home countries and affirmed the deal’s economic and strategic ­importance, said ­Yasuhisa ­Kawamura, spokesman for Japanese Prime Minister Shinzo Abe after a meeting of TPP leaders on the sidelines of the Apec summit. According to ­Kawamura, the US also stated its intention to raise awareness about the trade agreement’s importance. Japan is counting on the successful passage of the TPP – which will eliminate more than 18,000 taxes and other trade barriers – to revive its flagging economy while it seeks to tap export markets in developing economies such as Vietnam.

In a bid to salvage the TPP – a trade deal that excludes China and part of Washington’s so-called pivot to Asia to counter China’s growing influence – Abe became the first leader to meet the US president-elect when he travelled to Trump Tower in New York on his way to Peru.

Other countries, like Singapore and New Zealand, are also trying to ratify the trade deals ­domestically, but whether their determination will amount to anything meaningful without the ­policy direction of next US administration is ­unclear.

While Obama’s administration has been enthusiastically ­trying to sell the TPP, China has not been pushing its proposed Regional Comprehensive Economic Partnership (RCEP) as aggressively. But Xi portrayed ­Beijing as a guardian of global free trade.

Asia-Pacific summit closes with call to work for free trade and push back against protectionism

“China will not shut the door to the outside world – but will open it even wider,” Xi told business leaders on Saturday. He also revived calls for Apec members to implement the Free Trade Area of the Asia-Pacific, a decade after the idea for economic integration in the Pacific Rim was first floated.

TPP leaders at Apec meeting vow efforts to implement pact despite Trump's opposition

Though he stopped short of naming the US president-elect, Xi used a meeting with Obama to warn that ties between the two countries were at a critical juncture. “We meet at a hinge moment in the China-US relationship,” Xi said. “I hope the two sides will work together to focus on co-operation, manage our differences, and make sure there is a smooth transition in the relationship and that it will continue to grow.”

Taipei hails ‘positive’ exchange with China’s President Xi Jinping at Apec meeting

Key noted that if Trump removed America from the TPP, it would pave the way for China to play a bigger role in the region. “The TPP was all about the United States showing leadership in the Asia-Pacific region. We like the US being in the region. But if the US is not there that void needs to be filled, and it will be filled by China,” he said.