Championing all shades of trade
Source: By Amitendu Palit: The Financial Express
The 29th APEC Ministerial Meeting at Da Nang in Vietnam would be recalled in the future as an occasion that witnessed all three major approaches to global trade—bilateral, regional and multilateral—championed by their proponents. All these proponents, interestingly, belong to the same forum of the Asia-Pacific Economic Cooperation (APEC) reflecting the great diversity among countries in their attitudes to global trade. Bilateralism is the way forward on trade for his country, as far as US President Donald Trump is concerned. As on other earlier occasions, he did not make any bones about the US interest in revising existing trade relations and working on bilateral FTAs with American interest as the uppermost priority.
Emphasising on ‘America first’ and that other countries would not be allowed to take advantage of the US any more, Trump criticised the WTO for not safeguarding US interests, insisted the US would not enter large trade agreements like the TPP (Trans-Pacific Partnership) and spoke of his country in exploring country-to-country deals. For those taken aback by his mellow demeanour in Beijing during his ‘state-visit-plus’ trip to China before he reached Vietnam, Trump at Da Nang was his vintage self, not pulling any punches at all those he considers perpetrators of trade abuses and inflictors of large trade deficits on the US. It was ironical that Trump’s tirade against multilateralism and regionalism took place at a venue and on a day that saw heads of states and trade ministers of eleven members of the APEC negotiating furiously to salvage the TPP that Trump had pulled the US out of in January 2017.
Eleven months later, the remaining TPP members formally came together to announce that they would go ahead and implement the deal. The US withdrawal had created a void in the TPP, which was rather substantial given the strong leadership that the US had provided to it under the Obama administration. The leaderless TPP was rudderless for some time trying to settle down to the reality of surviving without the US. Japan and Australia decided to take things forward and initiated several meetings in the run-up to the APEC Ministerial. Members put forward their reservations over some of the provisions in the negotiated TPP text.
Prospects of countries turning back on the deal arose as New Zealand elected a new government with different views on some aspects of the deal. However, all these issues were thrashed out through negotiations. There was no shortage of drama though as Canadian Prime minister Justin Trudeau stayed away from the TPP11 Heads of States meeting that was to announce the go-ahead. Eventually however, Canada came on board and the eleven APEC members announced their decision to proceed with the ‘Comprehensive and Progressive Agreement for Trans-Pacific Partnership’.
The formalisation of the TPP by its members, notwithstanding the US, is an affirmation of a considerable part of the Asia-Pacific’s faith in regional trade agreements. With the TPP ‘including the flexibility of the parties to set legislative and regulatory priorities’ more countries from the region would be looking to join the TPP. While the Philippines, Thailand, Taiwan and Colombia had, as it is, shown interest in joining the TPP, some others earlier uncomfortable at the TPP’s insistence on having same quality of rules for all members, might become interested now. Furthermore, the TPP11 also marks the successful conclusion of a deal that would now be led by prominent global middle-powers like Japan, Australia and Canada and could become the template for similar middle- and rising-power-led regional trade blocs in other parts of the world.
The biggest champion of multilateralism at the APEC was China. Fresh from the invincibility granted by the 19th Party Congress, president Xi Jinping lauded the multilateral trade regime and asked APEC members to support the same wholeheartedly. At the same time, he repeated his call for a Free Trade Area for the Asia-Pacific (FTAAP), a notion, which he has articulated in earlier APEC Ministerials. While not a part of the TPP, China’s repeated efforts on providing leadership to the latest phase of economic globalisation by highlighting the importance of countries to be ‘free and open’ to trade, is pretty much in contrast to the narrow vision of the US, as well as the more definite and structured framework of the TPP. Now that the TPP has revived again, it would be interesting to see whether China expresses an interest to join it at some stage as the first step towards moving towards the FTAAP. China’s willingness to accept the high-standard regulations and clauses of the TPP would indicate its inclination to abide by and commit to trade rules that are different from those that it has been accustomed to. Time to wait and watch.
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