|The Election of Donald Trump Has ‘Killed’ Trans Pacific Partnership
China’s position as a global leader on free trade will be enhanced by the death of the Trans Pacific Partnership (TPP), experts told the Boao Forum for Asia in Melbourne Thursday.
Deming Chen, President of the Association for Relations Across the Taiwan Straits and China’s former commerce minister, said despite some optimism since the election of Donald Trump as the next President of the United States, the TPP is likely dead.
“I believe the TPP is dead before its birth,” Chen said.
“It cannot be replaced but in its place we promote multi-lateral trade.”
Chen said that should the United States becomes more isolated on a global scale, it would be up to China to lead the world on free trade.
He said that China’s Belt and Road Initiative, which will see a huge infrastructure network connecting European and Asian countries, is one way that China could play as the world’s foremost trading partner.
Ron Eddington, Chairman of Infrastructure Australia and guest at the Asia-Pacific Economic Cooperation (APEC) Summit in Peru in November, said the APEC Summit was buoyed by China’s affirmation that it would remain committed to free trade regardless of the sentiment overseas.
The death of the TPP will have little impact on Australia’s economy, as it is only a stepping stone for bigger deals such as the Free Trade Area of the Asia Pacific (FTAAP) and will be replaced by the Regional Comprehensive Economic Partnership (RCEP), Mr. Eddington said.
“Short term the focus will be on RCEP, longer term on FTAAP.”
“I think there will be real focus on bilateral agreements and smaller multilateral agreements.”
Frank-Jurgen Richter, Chairman of Horasis: The Global Visions Community, concurred that the rise of protectionism in the world which makes him “extremely concerned” paved the way for China to lead the world on free trade.
“The EU will not compromise on free trade and the free movement of people,” Mr. Richter said.
“China is the new engine of globalization. It will be very active in defining the new era of free trade.”
“We can all benefit from China’s trade.”
Dato Michael Yeoh, CEO of the Asian Strategy and Leadership Institute and secretary general of the Asian Business Forum, said Australia should look to join the Belt and Road Initiative.
“OBOR (the One Belt and One Road Initiative) will enhance regional connectivity as well as increasing investment from China to the region,” Yeoh said.
“Australia should become a part of OBOR and benefit from that increased connectivity.”
He said that negotiating a Commonwealth free trade agreement would provide great economic benefits for Australia, a notion that Linda Yueh, Director of the China Growth Centre at Britain’s Oxford University, agreed with.
Ms. Yueh said that contrary to belief, Britain’s vote to leave the EU could create greater free trade opportunities with Britain rather than the country isolating itself.
“It’s easier to do trade deals with a single country like the UK rather than the entire EU,” Ms. Yueh said.
“Market access is what matters.”
Mr. Eddington said the rising protectionist sentiment worldwide was misguided and that the United States has lost 80% of its jobs in the last decade to technology rather than globalization.
Mr. Richter said that rather than focusing on issues within the United States such as a median wage that has stagnated for 40 years, President Elect Trump was instead trying to blame other countries such as China.
He said that rather than withdraw from global trade the United States should instead be focused on education reforms that were up to date with technological advancements so that the robots that were taking US jobs were being built within the country rather than outside it.
Have a terrific weekend.
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