image

Trade

Asian nations form united front as Donald Trump goes it alone on trade

The Regional Comprehensive Economic Partnership, or RCEP, is currently being negotiated among the 10 Asean members, China, Japan, Australia, India, New Zealand and South Korea

PUBLISHED : Sunday, 01 July, 2018, 11:48am
UPDATED : Sunday, 01 July, 2018, 9:57pm

Japan’s Prime Minister Shinzo Abe on Sunday called for an early conclusion of a China-backed regional trade pact that ensures free and rules-based commerce in the face of an increasingly protectionist United States under US President Donald Trump.

At a meeting of the Regional Comprehensive Economic Partnership, or RCEP, which is co-chaired by Japan and Singapore, trade ministers and officials from 16 countries renewed their commitment to speed up negotiations on outstanding issues by the end of the year.

Japan seeks to take leadership in shaping the pact as an alternative to a Pacific Rim free-trade grouping that Trump abandoned early this year.

At a joint news conference after the talks, Japanese Trade Minister Horoshige Seko and his Singaporean counterpart, Chang Chun Sing, said the 16 participants agreed to reach a basic conclusion at a year-end Singapore meeting.

They noted that the participants see it as a chance to show Asia’s commitment to defend free trade.

In a joint statement, the ministers said achieving a pact was important especially “in view of the current global trade environment, which faces serious risks from unilateral trade actions and reactions, as well as their debilitating implications on the multilateral trading system.”

They also pledged to seek breakthroughs in politically challenging areas.

Earlier Sunday in his opening remarks, Abe said a pact among the countries that together make up half the global population has an enormous growth potential.

“As we are faced with concerns of the rise of protectionism in the world, all of us in Asia must unite, and our future depends on whether we can keep hoisting our flagship principle of free and fair trade,” Abe told the meeting in Tokyo.

“Let us be as one and achieve a free, fair and rules-based market in this region.”

Trump, who says he prefers bilateral deals, has pulled the US out of the Trans-Pacific Partnership, leaving the remaining 11 countries from Chile to New Zealand to work on a revamped version of that pact.

Explainer: how well do you know your TPPs from your RCEPs and OBORs?

Trump has imposed high tariffs on steel and aluminium imports and has threatened to add automobiles to reduce America’s trade deficit. He has singled out China’s products, prompting fears of a trade war.

Japan, already hit by increased US steel and aluminium tariffs, has told the World Trade Organisation it may retaliate against US goods totaling about 50 billion yen (US$450 million). Japan’s government on Friday warned the US Department of Commerce that a higher US tariff on auto imports could backfire, jeopardising hundreds of thousands of American jobs created by Japanese automobile industry-related companies, raising prices for US consumers and causing a disaster for the US and global economy.

Trump’s moves have resonated in Asia, where many countries have prospered thanks to free trade and the expansion of global supply chains.

Japan hopes to conclude the RCEP pact by the end of this year.

RCEP is often described as China’s answer to TPP because it noticeably excludes the US.

Members of the initiative, launched in 2013, however still struggle with issues including tariffs, trade in services and investment rules, as well as protection for intellectual property rights.

Japan is also cautious about China’s influence. China, which is not part of the TPP, plays a key role in RCEP.

RCEP also includes Southeast Asia, Australia, New Zealand, India and South Korea.

Additional reporting by Kyodo