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‘Substantial progress’ made on massive China trade deal that excludes US
SINGAPORE, Nov 15, 2018 (BSS/AFP) – Substantial progress has been made on
hammering out a China-backed trade deal, Singapore’s leader said Wednesday,
driving ahead the world’s largest commercial pact which the United States is
excluded from.
World leaders gathered in the tropical city state this week for a summit
where a massive Beijing-backed agreement covering half the world’s population
has dominated discussions.
Diplomats have been trying to nail down details as Beijing entices its
neighbours to join a commercial alliance seen as an antidote to President
Donald Trump’s “America First” protectionist trade policy.
The US has imposed tariffs on roughly half of what it imports from China,
prompting Beijing to retaliate with its own levies.
Beijing’s leaders have recast themselves as the defenders of global
commerce — with the United States under Trump relegated to the sidelines.
China, Japan and India are among 16 Asia-Pacific countries negotiating the
Regional Comprehensive Economic Partnership (RCEP).
“Substantial progress has been made this year to advance the RCEP
negotiations,” Singaporean Prime Minister Lee Hsien Loong said Wednesday
evening, adding talks were now “at the final stage”.
“With the strong momentum generated this year, I am pleased to note that
the RCEP negotiations are poised for conclusion in 2019,” he added.
But he cautioned any further delays could risk “losing credibility” for a
deal — which has already taken six years to negotiate.
– Trump absent –
This week’s meetings are the biggest in a series of annual gatherings
organised by regional bloc the Association of Southeast Nations (ASEAN), and
are attended by 20 leaders.
RCEP was given extra impetus after US President Donald Trump pulled the US
out of the rival Trans-Pacific Partnership (TPP) in early 2017.
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That deal was spearheaded by his predecessor Barack Obama and aimed to
bind fast-growing Asian powers into an American-backed order to counter
China.
The TPP is still alive even without Washington — and will come into
effect in December — but RCEP, if realised, will be the world’s biggest
trade deal.
However, the Beijing-backed pact is much less ambitious than the TPP in
areas such as employment and environmental protection.
Beijing had hoped to have the meat of the deal done by the end of this
year, but the timetable has now slipped to 2019.
However, this has not stopped Chinese leaders from basking in the progress
already made.
During a meeting with Southeast Asia leaders, Chinese Premier Li Keqiang
said he was hopeful talks would “break through the ceiling” and take regional
trade “to new heights”.
Trump is not at the Singapore summit, nor will he attend a subsequent
gathering of world leaders in Papua New Guinea at the end of the week, having
sent Vice President Mike Pence instead.
National Security Advisor John Bolton, however, told reporters in
Singapore that the president’s no-show should not be seen as a lack of
commitment towards the region.
He blamed a “schedule crunch” after a particularly frenetic few weeks that
included the midterm elections, attending the World War I armistice
commemorations in France and preparing for the G20 in Argentina later this
month.
– Sticking points –
There are still major sticking points in RCEP talks — with regional rival
India particularly nervous about giving Chinese companies greater access to
its markets, and wealthier nations wanting to see more progress on labour
reforms.
Disagreements on intellectual property rights, goods tariffs and financial
services are also on a long list of issues that still need to be concluded.
Also, the spectre of possible leadership changes with several general
elections scheduled early next year — India, Thailand and Indonesia — have
also complicated the timeline for a deal.
Aaron Connelly, an expert on Southeast Asian politics at the International
Institute for Strategic Studies, said the fact that RCEP negotiations were
not concluded at this year’s ASEAN could indicate China has some way to go to
convince neighbours to sign up.
“It’s interesting that when Beijing is at its most vulnerable on trade,
with US tariffs biting, they weren’t willing to concede enough to their
neighbours in terms of market access to get a deal done,” he told AFP.
At the same time, trade ministers across Asia Pacific have sounded a
largely positive tone this week, saying they expect the pact to be agreed
sooner rather than later.
“The future lies in RCEP,” Indian trade minister Suresh Prabhu told
reporters earlier in the week.
BSS/AFP/HR/1005