Asian countries should pursue a Pacific trade pact even after the US walked away, and its standards should be incorporated into other regional deals, according to a report authored by half a dozen former trade envoys.
US President Donald Trump withdrew from the 12-nation Trans-Pacific Partnership (TPP) in one of his first acts in office, throwing an agreement that covered 40 percent of the global economy into disarray. That has left the other nations scrambling on what to do: Either try and proceed without the US, hope Trump changes his mind — or US Congress does — or prioritize a separate regional deal being championed by China.
The president has attacked trade deals in general and touted an “American First” doctrine that would punish countries whose policies are deemed by the administration to be undermining US jobs. However, the rest of the world should not embrace Trump’s protectionism, the Asia Society Policy Institute report said.
“Just because the United States is less supportive of trade and globalization does not mean that the rest of the world will follow suit,” said the report authored by Wendy Cutler, a nearly three-decade veteran of the Office of the US Trade Representative, and six former trade officials from Australia, China, Japan, South Korea, Indonesia, and the Philippines.
“Should protectionism and isolationism prevail, the Asia-Pacific region could become less open and integrated, upsetting the regional economic and security balance,” the writers said.
Trump has not announced specific actions against countries in Asia that he has previously singled out for their trade practices, including China, South Korea and Japan, but his administration has declared that the US is not bound by decisions made at the WTO and said the US plans to defend its “national sovereignty over trade policy.”
US Secretary of Commerce Wilbur Ross, who has described China as the “most protectionist” major nation, said last week the US was preparing cases against China and other nations and would pursue “tougher enforcement” of existing trade rules.
The clouded future for TPP — a higher-valued pact that included provisions for things such as intellectual property, state-owned enterprises and environmental and labor standards, has seen some Asian nations turn to the 16-nation Regional Comprehensive Economic Partnership (RCEP), seen as a more traditional deal.
The WTO and APEC should take the lead communicating the benefits of free-trade agreements “using concrete terms which are meaningful to the everyday interests and concerns of ordinary people,” the Asia Society report said.
The authors concluded that regional trade pacts are the best path for liberalizing trade, raising standards and promoting reforms.
“Regional agreements allow countries to simultaneously tap into a number of markets at scales often unattainable through bilateral deals,” they said.
They urged negotiators to take into account the growth of the digital economy and the increasing participation in the global economy of small-to-medium sized businesses.
They also called on the US to reconsider its participation in TPP and welcomed proposals by some TPP signatories to go ahead regardless.
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