quarta-feira, 25 de janeiro de 2017

As Trump retreats on trade, China moves in


As Trump retreats on trade, China moves in
America’s traditional partners already are turning to Beijing.

By HANS VON DER BURCHARD AND SIMON MARKS 1/24/17, 8:49 PM CET Updated 1/25/17, 7:34 AM CET

U.S. President Donald Trump’s crusade against China seemed to backfire on Day One.

Throughout his election campaign, Trump made clamorous promises to challenge Beijing’s ascent to global dominance. He vowed to hold the country to account over currency manipulation and cozied up to Taiwan. He accused Beijing of saber-rattling in the South China Sea and of supine support for nuclear-armed North Korea.

But Trump’s first big move on trade policy — an executive order to withdraw from the Trans-Pacific Partnership, a trade deal among 12 Pacific Rim countries — is set to play straight into China’s hands as it seeks to become the undisputed regional power. Angry over the move, America’s traditional trade partners have already this week reached out to Beijing to forge closer commercial ties.

China is perfectly placed to move into the empty space created by the U.S. withdrawal.

Ironically, one of the overriding strategic goals of the Trans-Pacific Partnership had been to triangulate a U.S.-led trade policy that would set technological and regulatory standards in Asia, which China would be forced to follow. The accord was a key plank of President Barack Obama’s “pivot to Asia.”

European Trade Commissioner Cecilia Malmström also criticized Trump’s protectionist policies on trade and said his policies were “doomed to fail.”

For the U.S., the biggest risk now is not that China joins the Trans-Pacific agreement itself, but that Washington loses leverage over China to tackle the very business practices that Trump repeatedly criticized during his election campaign.

“TPP is an agreement designed for the U.S. way of doing business, with strong rules on state-owned enterprises, electronic commerce and enforceable provisions on labor and environmental standards,” said Chad P. Bown from the Peterson Institute for International Economics. The TPP withdrawal “is losing a lot of leverage toward China.”

Carrying on without Trump

Trump’s departure from TPP has sparked howls of protest from the other 11 members, and Australia immediately mentioned that there could be room for China to play a role. “The original architecture was to enable other countries to join,” Australian Trade Minister Steven Ciobo said Tuesday, adding that “there would be scope for China.”

Only hours after the executive order, Chile announced that it would invite China and South Korea to a meeting of the TPP countries in the coastal resort of Viña del Mar in March to discuss the future of the agreement without the U.S.

“The TPP as it was going forward is off the table. That doesn’t mean that Chile is going to change tack. We are going to press on in opening up of the world … as we did in the past, with bilateral deals, and regional deals,” Chilean Foreign Minister Heraldo Muñoz said.

Singapore, Malaysia and Mexico all insisted they would continue to explore ways to keep the Trans-Pacific Partnership alive among the remaining members.

Chinese Foreign Ministry spokeswoman Hua Chunying said Beijing’s priority would now be to forge ahead with its own alternative to TPP, known as the Regional Comprehensive Economic Partnership (RCEP), Chinese state media reported. After Trump signed the order, both Singapore and Malaysia said that they would look to deepen trade ties with China.

In Washington, alarm bells sounded.

Republican Senator John McCain warned that Trump’s move risked handing the Asia-Pacific region to the Chinese.

“They have now a very significant economic role, where 60 percent of the world’s economy is in the Asia-Pacific region, and we are stepping back,” he said in an interview with CBS News.

“I have talked to leaders of Asian countries who have all said that this will cede the field to China. And that, to me, is not good for the United States of America,” he added.

Countries such as Japan and Vietnam have strong strategic and security worries about China that could make a broad deal unlikely.

European Trade Commissioner Cecilia Malmström also criticized Trump’s protectionist policies on trade and said his policies were “doomed to fail.”

Peter Chase, a senior fellow at the German Marshall Fund of the United States, agreed that Trump had made “a strategic mistake taken for the wrong reasons.”

“With Mr. Trump talking about China not playing by the rules, the whole idea of TPP was trying to encourage and nudge China in that direction and now that leverage is gone,” he added.

China would be reluctant to sign up to TPP itself as it would not welcome such rigorous trading standards, said Chase, who described RCEP as “a relatively thin deal. It doesn’t have anywhere near the disciplines that TPP has.”

The Trans-Pacific Partnership could also prove a difficult format for Beijing for other reasons: Countries such as Japan and Vietnam have strong strategic and security worries about China that could make a broad deal unlikely.

But Karel De Gucht, the former European trade commissioner, told Belgian television on Tuesday that Trump’s decision would leave countries in Asia no choice about which way to shift their trade policy.

“The countries in the region now have no choice but to rely on China. They have no alternative,” he said.

Jakob Hanke contributed reporting.

Authors:


Hans von der Burchard and Simon Marks  

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