Pacific summit closes with call to work for free trade

China will position itself as free trade’s new champion at an Asia-Pacific summit this weekend, with the Communist government seeking to project economic leadership as a US -led Pacific Rim trade pact languishes under President-elect Donald Trump.

Our biggest trade relationship, with China, has multiple problems.

That’s Communist Party-controlled media lecturing the USA president-elect on the benefits of free trade and capitalism. It broadens and deepens existing cooperation among members of the Association of Southeast Asian nations, although it is not as comprehensive as the so-called “high level” TPP.

China is not part of the TPP but it has been pushing an alternative vision of free trade in Asia under the so-called Regional Comprehensive Economic Partnership (RCEP), which does not now include countries in the Americas.

Leaders of the Trans-Pacific Partnership nations are openly considering going it alone, without the United States, in a so-called “TPP minus one” in the wake of Donald Trump’s election. “But at the same time we know that trade is good for the middle class and those working hard to join it”.

Alan Bollard, the APEC secretariat’s executive director, said it was premature to write the TPP off, and that excluding the United States could prove hard.

He made the comments just before heading into a meeting with the other TPP leaders, including US President Barack Obama, who are now debating whether to stick to the agreement if the US does drop out as Trump has signalled.

Killing off the TPP is a great deal less complicated and immediate for Trump than any attempt to pull out of the long-standing North American Free Trade Agreement between Mexico and Canada and the US.

Turnbull emphasized the views he shares with Obama, noting that “on trade we are quite of the same mind, on the importance of open markets”.

“We see people around the table here right now talking about if the TPP does not move forward then they’re going to have to put their eggs in the RCEP basket”, U.S. Trade Representative Michael Froman told journalists. TPP’s not part of that process but it’s a step in that direction.

“Instead, we will negotiate fair, bilateral trade deals which bring jobs and industry back onto American shores”.

Tokyo is certainly not eager to renounce the TPP.

The four-minute discussion, which a White House official described as “brief and informal”, represented the first time the leaders had spoken in person since the Group of 20 convened in China in September. Japanese Prime Minister Shinzo Abe, who flew to NY last week to discuss free trade with Trump, told Xi at APEC that he wanted to improve ties.

“He is being wooed by the siren song on populism, he thinks he’s picked up something from the American election and he can tap into”, Mr Turnbull said. A substantial part of the cost is borne by host countries. Japan pays about $2 billion a year, about half of the non-personnel costs of stationing the US troops, while South Korea pays about $860 million a year for about 28,000 American troops based there. But now that the TPP appears to be dead, China and other countries are pushing ahead with FTAAP.

The prime minister told the APEC audience while he wanted the United States to be part of the TPP, New Zealand would still get about two-thirds of the $NZ3 billion in benefits of the agreement if the USA pulled out, because of gains from other members Japan and Mexico.

Anthony Rowley is a former business editor and global finance editor of the Far Eastern Economic Review and is now field editor (Japan) for Oxford Analytica and Tokyo correspondent of the Singapore Business Times.