Asia leaders defend trade deals despite Trump stance

This was the last global summit for U.S. President Barack Obama and he had been expected to promote the Trans-Pacific Partnership pact, a 12-nation trade deal.

Leaders of 21 Asia-Pacific nations ended their annual summit Sunday with a call to resist trade protectionism after the victory of U.S. President-elect Donald Trump.

Regional leaders responded on Sunday, saying they would “fight against all forms of protectionism” and push ahead on the TPP.

The Trans Pacific-Partnership (TPP), an agreement of 12 Pacific Rim economies, was the economic plank of President Barack Obama’s “pivot” to Asia, and notably excluded China as the USA sought to combat Beijing’s rising influence.

He said RCEP is a more traditional free trade deal, focused on reducing tariffs on goods and services, and admits it is not as far reaching and ambitious as the TPP. Last week, China indirectly chided Trump for his views on global warming, which he has called a Chinese hoax to hurt American manufacturing.

As the USA pushed ahead with the TPP in the last several years, China had been pushing for the Regional Comprehensive Economic Partnership, a deal negotiated among 16 Asian countries that is now close to completion, as well as the Free Trade Area of the Asia-Pacific (FTAAP), which is open to 21 economies along the Pacific Rim, including China, Russia, Indonesia, Canada, Mexico, Peru, Chile and the U.S. “Most participants have very different definitions of what constitutes open markets and protectionism”, he said.

Yet divisions remained on how to move forward. The agreement would include China, India, Indonesia and South Korea but no countries from the Americas have joined.

He said, however, that the TPP and RCEP were both valid paths to a broader Free Trade Area of the Asia-Pacific, which has always been a goal of the APEC bloc that represents 57 percent of the world economy.

FTAAP; The Free Trade Area of the Asia-Pacific is the big kahuna of trade deals in the region, linking the TPP and RCEP countries in one bloc – though it is the least developed option.

USA allies in Asia who backed the TPP are hedging their bets.

Shortly before Trump released his video, Japanese Prime Minister Shinzo Abe said the TPP would be “meaningless” without the involvement of the US.

Trade negotiations were undertaken by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, the United States and Vietnam.

Many in Obama’s own party – including senators Bernie Sanders and Elizabeth Warren – are against the trade deal, along with traditional Democratic party supporters such as trade unions and environmentalists.

“Tremendous talent – we’re seeing tremendous talent”, Trump said Saturday. “Any attempt to undercut or exclude each other must be rejected”.

Without the USA, the TPP is effectively done.

Trump described the 12-nation pact as a “potential disaster for our country”.

Asia’s trade surpluses with the United States were firmly in Trump’s sights during the election campaign. He also met with President Barack Obama and emphasized the importance of US-China relations as Obama’s unlikely successor is set to take office in a mere two months. China is now looking to fill that place by asserting its own considerable economic power in the Asia-Pacific region.

The TPP’s two biggest economies are the USA and Japan, and if Trump follows through on his promise to withdraw from the pact it would send remaining states scrambling to salvage it.

The Trans-Pacific Partnership is one of the most ambitious free trade pacts ever negotiated.

Investing in China is very hard, and RCEP is “low level” compared with the TPP, according to Jean-Pierre Cabestan, a professor in political science at Hong Kong Baptist University.