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With US turning inward, China must push for free trade
With US turning inward, China must push for free trade
By Ei Sun Oh
Source:Global Times Published: 2016/12/4 19:53:39
The election of Donald Trump as the next president of the US has ushered in unchartered dimensions in global political and economic arrangements. At a time when free trade agreements are springing up around the world, a populist Trump seemed to have derived his electoral mandate mainly from those American communities most deprived of the fruits of the free flow of goods and services across national borders.
Trump has for example loudly proclaimed that upon his presidential inauguration, the US will withdraw from the much vaunted and previously championed Trans-Pacific Partnership (TPP), which brought together 12 Asia-Pacific countries (with more expressing interest) in a rigorous "free-trade plus" framework. The protracted negotiations on a "sister" Transatlantic Trade and Investment Partnership to open up more free trade between the US and the European Union will likely be shuttered under Trump. Even the decades-old North American Free Trade Agreement is under reconsideration.
The US can afford to, at least for the moment, essentially shut its doors and turn its back to the rest of the world, largely due to two factors. The first lies in the fact that the US is blessed with abundant natural and human resources. It would simply have to relax some of its stringent regulations on domestic resource extraction, as Trump has vowed to do, before it can achieve self-sufficiency in most of its energy and food needs, and can thus depend less on imports. The second factor is that the US middle class could absorb most products and services that would in turn spell lesser needs for exports to overseas markets. How long these isolationist stances could withstand the whirlwinds of market economy is of course another matter.
Yet American politics aside, the fact remains that at least the Asia-Pacific, which has traditionally been one of the most vibrant and successful trading regions in the world, simply cannot let the blessings of free trade slip away, especially now that the world economy continues to wallow in its doldrums. If not the US, some other large economy with a clear vision and resolute will on free trade must step up to continue to lead the Asia-Pacific on a fragile path toward greater degrees of free trade.
An obvious and prominent choice for such an arduous free-trade leadership role falls upon China, the world's second-largest economy and long a champion of free trade. And China can fulfill this lofty role by treading on one or more of three paths.
The first path is to speed up the negotiations on the Regional Comprehensive Economic Partnership (RCEP), which involves the Association of Southeast Asian Nations countries, Japan, Korea, India, Australia and New Zealand. This should not be an overly difficult task, as RCEP entails mostly alignment and coordination of existing bilateral and multilateral free trade agreements.
The second path, albeit slightly more complicated and perhaps even controversial, is for China to accede to the TPP and push for its ambitious regional economic harmonization and integration agenda. There are many salient TPP points, such as better protection of the environment and higher health standards that are essential for the modernization of regional economies, China's included, and which can now be more "palatable" with the imminent exit of the US.
And the third path is to build on RCEP and TPP to realize an Asia-Pacific Free Trade Area.
Some scholars argued that China is not ready to assume such a free-trade leadership role, and should instead focus more on domestic reform and development. While it is admittedly crucial for China to continue to develop its sizable economy, it cannot successfully do so without even further economic engagement with the rest of the world. China requires the import of a large quantity of natural resources to fuel its insatiable economic growth. China's unprecedented huge production capacity also necessitates large overseas markets. Free trade is crucial for China to navigate these requirements. China's joining the World Trade Organization and subsequent enlarging and reforming of its domestic economy should bear ample witness to the importance of pushing for free trade.
It is high time for China to step up to lead the regional if not the worldwide efforts toward greater free trade, and ensure that its fruits are enjoyed by all.
The author is adjunct senior fellow of S. Rajaratnam School of International Studies, Nanyang Technological University and principal adviser to Pacific Research Center, Malaysia. opinion@globaltimes.com.cn Follow us on Twitter @GTopinion
http://www.globaltimes.cn/content/1021841.shtml
