As Trump kills TPP, China eyes December talks to fill trade void posted 23-November-2016Bloomberg | November 23, 2016
As Trump kills TPP, China eyes December talks to fill trade void
Even before Donald Trump enters the White House and formally abandons a U.S.-led trade deal that represented a cornerstone of his country’s economic policy in Asia, Chinese President Xi Jinping will get a chance to prove his willingness to step into the leadership vacuum.
The U.S. withdrawal from the 12-nation Trans-Pacific Partnership — reaffirmed by Trump in a videotaped speech Monday — has focused attention on a competing set of trade talks planned for Indonesia next week. The negotiations, which unlike TPP include China and not the U.S., aim to synchronize existing pacts across much of Asia and would cover 30 percent of the global economy and almost half the world’s population.
The proposed Regional Comprehensive Economic Partnership, or RCEP, has become the next best hope for trade-hungry Asian nations after Trump’s surprise presidential win signaled a shift toward more protectionist policies in the U.S. Securing a deal would help cement China’s role as a geopolitical leader and further enmesh the world’s second-largest economy in the region.
“Unless the U.S. steps up its economic game, all the countries of this region will be pulled into the orbit of China economically,” said Kishore Mahbubani, a former diplomat and now dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore. “As long as China becomes the economic center of gravity, its political influence will grow.”
The next round of RCEP talks will be held in Bumi Serpong Damai city, near Jakarta, from Dec. 2 to Dec. 10. Unlike TPP, which was sold by U.S. President Barack Obama, Japanese Prime Minister Shinzo Abe and other proponents as the prototype for a new generation of trade deals, RCEP doesn’t try to impose higher standards in areas such as labor and environmental protection. The 16-member pact would level tariffs and rules governing the region’s complicated supply chains, while improving market access and introducing dispute-resolution mechanisms.
The talks would amalgamate agreements already hashed out between the 10-member Association of Southeast Asian Nations and Australia, China, India, Japan, South Korea and New Zealand. China is the largest trading partner for most of the participants, a distinction it achieved with South Korea in 2003, Japan in 2005, India in 2008 and Asean in 2009