November 8, 2014, 6:03 am
The Asia-Pacific Economic Cooperation (APEC) Ministerial Meeting on Saturday decided to “launch and comprehensively and systemically push forward” the mammoth China-backed Asia Pacific FTA negotiations despite reported opposition from the US.
The proposal for the realization of the FTAAP will now be submitted to the upcoming Economic Leaders’ Meeting (AELM) on Monday and Tuesday, which will be attended by world leaders like Chinese President Xi Jinping, Russian President Vladimir Putin and US President Barack Obama.
The Beijing-backed roadmap for this ambitious FTA would be studied over the next two years.
The FTA, if implemented, will add an estimated $2.4 trillion to the global economy, says a new survey by Pacific Economic Cooperation Council (PECC).
The survey also said the US-led TPP trade pact, when completed, will add about $223 billion and the China-led Regional Comprehensive Economic Partnership (RCEP) about $644 billion.
“Although APEC is not a platform for trade negotiation, it clearly has an increasingly important role to play in facilitating the preparatory work and efforts towards materializing an FTAAP,” said Don Campbell, co-chair of PECC.
Beijing is trying to counter US’ progress in forming a Trans-Pacific Partnership that excludes China by this alternate mega Free Trade Agreement in the Asia Pacific.
Russian President Vladimir Putin said on Thursday Moscow will also support China’s push for a roadmap on the Asia Pacific FTA.
“Obviously, the Trans-Pacific Partnership is just another U.S. attempt to build an architecture of regional economic cooperation that the USA would benefit from. At the same time, I believe that the absence of two major regional players such as Russia and China in its composition will not promote the establishment of effective trade and economic cooperation,” said Putin on Thursday in Moscow.
“The multilateral system of economic relations in the APR can only be strong if the interests of all states of the region are taken into account. This approach is reflected in the draft of the Beijing road map for the establishment of an Asia-Pacific free trade area. The draft is to be discussed at the forthcoming meeting of APEC leaders,” he added.
A Wall Street Journal report earlier this week said the US was trying to block China’s efforts at introducing the Asia Pacific FTA negotiations.
Beijing is claiming that this mega Asia Pacific FTA, proposed as early as 2006, is “not in conflict” with the TPP or the RCEP as both are “possible routes to it” and will aim to lower trade barriers across the region.
The China-led RCEP is a 16-nation trade bloc which includes the ASEAN plus China, India, Japan, South Korea, Australia and New Zealand.
“We’re organising trade relations with countries other than China so that China starts feeling more pressure about meeting basic international standards,” Obama said referring to the TPP in a presidential debate in 2012.
The RCEP and TPP and a host of other FTA negotiations sprung up after a decade of talks failed to conclude a global trade deal, the so-called Doha Round.
By pushing for a wider deal in the Asia Pacific that would equal the EU, China would also steal a march over the TPP championed by President Barack Obama’s administration.
Writing for The BRICS Post, host of RT‘s flagship programme CrossTalk, Peter Lavelle says Washington is most interested in corralling its strategic military allies within the Pacific Rim into a trading bloc that is demonstratively at odds with Beijing’s trading interests.
“In a very meaningful way the US is creating a red line with the global trading system. China will not let this stand. But what is ahead will not be an all-out trade war embroiling Washington and Beijing. China didn’t become the second largest economy by accident – expect a robust (by Chinese standards) response to Washington,” says Lavelle.
However, if the Asia-Pacific FTA succeeds in materializing, it would finally bring the United States and China into an agreement to deepen trade liberalization, after more than a decade of failed talks.
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