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With the death of TPP, China is to lead against protectionism
   2016-11-23 09:23:21    CRIENGLISH.com      Web Editor: Liang Tao

By Xu Qinduo

The US President-elect Donald Trump has just announced the official death of TPP ¨C Trans-Pacific Partnership, a 12-member trade group led by the outgoing Obama Administration. Thanks to Mr. Trump, the uncertainty about the fate of TPP has concluded.

During the weekend APEC summit in Lima, the capital of Peru, there's suggestion that, TPP can go ahead even without the participation of the United States. But that has also been put to an end as Japanese Prime Minister Shinzo Abe said Monday that TPP would be meaningless without the presence of the US, which is the largest economy in the group. 

Alternatives to TPP

Anyway, TPP is now finished and it's the time to look at alternatives.

Addressing the Lima summit, Chinese President Xi Jinping called on the APEC economies to stay committed to globalization and openness. He noted that "building a free trade area of the Asia-Pacific is a strategic initiative critical for long-term prosperityˇ­. and it is regarded by the business community as the 'APEC dream'".

The free trade area referred to by the Chinese leader is better known as FTAAP ¨C Free Trade Area of the Asia-Pacific, which was launched at the 2014 APEC summit in Beijing. The trade deal is so ambitious that it includes all the 21 APEC economies.

Though a collective feasibility study has been completed this year, FTAAP's future is not that promising. For one thing, the United States is one of the members. Under the watch of Donald Trump, many believe that Washington is unlikely to sign up to any multi-lateral free trade deal in the wake of TPP. Therefore, the hope for the conclusion of FTAAP in the next four years is simply unrealistic.

In contrast, the Regional Comprehensive Economic Partnership, or RCEP, which is led by ASEAN and supported by China, is relatively more achievable. Tan Jian, a senior Chinese diplomat to APEC, says the RCEP, could be a fast track to promote Asia Pacific region-wide free trade, as all members are "willing to speed up negotiations to reach a deal as early as possible".
 
There's no lack of criticism of the RCEP such as that it's "far less ambitious, focusing on the basic business of cutting tariffs rather than more complex regulations" by The Economist.

But that criticism is a bit mis-targeted. What's critical at the moment is to maintain the momentum of free trade and globalization amidst strong surge of protectionism in many developed countries. The low threshold of RCEP is actually making it possible for an earlier conclusion of the negotiation.

China in a leadership role

The failure of TPP had been expected for some time, in particular, with the election victory of Donald Trump, who campaigned partly on the US withdrawal from the deal. In a larger picture, TPP has been a victim of the rising populism which is against free trade and globalization.

Such a trend has led to tremendous sense of frustration, anxiety and even despair in the Asia-Pacific region, which hosts the most dynamic and growing economies. With the absence of the US, the responsibility to fight for free trade and globalization is now left on the shoulders of the Chinese.

China is a natural choice. It has advocated for more investment in infrastructure and better connectivity in Asia under the funding of Asia Infrastructure Investment Bank. It launched "One Belt One Road" initiative ¨C the Silk Road Economic Belt and the 21st Century Maritime Silk Road, which link China to countries in central Asia, Southeast Asia, Europe as well as Africa.

Chinese leader Xi Jinping said that "China will not shut its door to the outside world but will open them more." The message is reassuring.

Beijing has been in the driver's seat for RCEP. Now its role is getting more critical in turning the tables for the sake of free trade and globalization.

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